Shifting economic regimes for retail in the Philippines: external impetus amidst the workings of domestic politics

Abstract

In the prevailing globalized world order, economic regime shift is principally understood via the overriding-external-impetus lens where international demand holds sway over domestic policymaking. Considering the complexity of the process and the possibility of varying outcomes, the perspective evidently limits the function of domestic politics in changing regimes. In elucidating how the dynamics of domestic politics respond to external impetuses and play out in relation to regime shifts, this paper looks into the two cases of regime shifts in retail in the Philippines: Republic Act (RA) 1180, a protectionist regime enacted in 1954 and RA 8762, a liberalized regime legislated in 2000. The study examines the interface and convergence of three salient factors – external–internal impetus, presidential intervention, and the changing dynamics in the retail sector – that were pivotal in both regime shifts. Specifically, the external–internal impetus helped set off the move for regime shift; the sitting President played a crucial role in the success of the legislation in Congress, and the retail sector exemplified varying dynamics (e.g., consolidation in RA 1180 and fragmentation in RA 8762) which facilitated the enactment of the laws. The study also underscores two key points: (1) while the initiative to adopt or change economic regimes for a government will continue to have external impetus, the success of regime shift as well as the substance of its specific policy will be essentially determined by the workings of domestic politics and (2) the legislative experience characterizes the contemporary link between global influence and domestic dynamics in policy making. The paper closes with a note on the case study's implications for retail globalization in Southeast Asia.