Reclamation is a great idea. Both deus ex machina and manna from heaven for our lovely City by the Sea, it confers gargantuan benefits.
But what about losses? What if there are losers?
It seems hard to imagine the negative side of a good thing, even if those opposing reclamation cite environmental concerns, the loss of the lovely view of the sea, the commercialization of the Boulevard, the erosion of land values adjacent to reclamation, and the alleged lack of transparency in the City’s planning process. Should we listen?
A cynic should be forgiven for sighing a prayer for those who dream of the golden age of Dumaguete, that City of Gentle People when it had no crime, people didn’t lock their doors at night, and the biggest concerns were simple ones like how to get a nice broiled chicken from Jo’s. Prayer is good for the soul but does not bring in local government revenues.
It’s also pretty much irrelevant to the dream of emulating Singapore with its clean streets and sidewalks, comfortable and affordable public transport, disciplined population, and very high standard of living. In this context, Dumaguete is somehow a uniquely- positioned candidate.
Allow me then to underscore and support the views of experts who have their urban planning thinking caps tucked on pony-tail tight, on high alert and on overdrive.
We need the most progressive ideas we can import from California, that beacon of innovative designs by Apple, Facebook, Netflix, or Tesla.
There’s more, and we’re not talking marshmallows. There is, in fact, a famous rule in economics called the Kaldor-Hicks Compensation Criterion (KHCC). KHCC was invented in 1939-40, and has become the bedrock of cost-benefit analyses used by such eminent institutions as the World Bank.
The authors, eminent economists, would go on to be recognized as such. Hicks won the Nobel in economics in 1972. Kaldor advised prime ministers, and solved thorny problems in business cycle theory.
What does KHCC say? At its simplest, it states that a proposal is good for the economy if, on balance, the winners could overcome the objections of losers by compensating the latter’s losses.
Thus, Dr. Efren Padilla (“Marketplace of Ideas,” in People’s Corner, Metropost, July 14) is quite correct. He said “…the trick is to find the Kaldor-Hicks option where the net gain produces more benefits than costs for the City. Theoretically, it will also enable the City to compensate potential losers from the net gain.”
The idea of compensation attracts. It harks back to the days of Hippocrates. “Do no harm” translates into the idea that reclamation must be good if no one is made worse off, and this means, of course, that compensation is given.
Aristotle once classified the various kinds of justice, one of which was rectificatory or compensatory.
The 1987 Constitution has adopted the same principle in the requirement of just compensation when the State takes or converts private property for public use.
So, there we are. The basic law of the land requires us to give compensation. The eminent economists say the same. Dr. Padilla eloquently agrees. Kudos to him for that.
Even more, we can and should have our beautiful sea and swim in it, too, while our yuppie friends from LA enjoy a mochaccino at our local Starbucks. The infamous e. coli problem would have been solved along the way. The traffic at Rizal Boulevard has quieted, having been re-routed through the wide-open reclamation highway, since re-named MLQ Drive, pretty much like FDR Drive east of Manhattan. What a glorious sight.
The nagging Hamlet question remains once we awaken from the dream. How clear or large is the public benefit, and how small (enough) the private cost?
If the calculations are not at all clear, especially when environmental considerations are apparent, there’s good reason to go slow, as suggested by Myrna Peña-Reyes (in her article “Enough Already” in Madahan, MetroPost on July 14).
The problem is complicated by the fact that reclamation results in a non-rival non-excludable (public) good (or even a public “bad”), and those who benefit or are harmed are unlikely to be honest about the benefits or hardships they derive or face.
The public good/bad aspect is also complicated by a related issue of what in economics is called an “externality.”
If reclamation also results in an erosion of current land values near the sea, reclamation operates pretty much like the state’s exercise of eminent domain, in which case an aggrieved “by-stander” party has a constitutional right to just compensation. It is arguable that reclamation without compensation violates the Bill of Rights.
Economics is not a hard and fast science. It delves into political decisions amidst difficulties in quantifying information and transaction costs.
Prayer is no good. Dreaming is better. Transparent urban planning works. Environmentalists, economists, and constitutional experts are nonetheless a pesky lot. (So was Socrates.) Bully for them.
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Author’s email: [email protected]; Twitter: @ORoncesvalles
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