MOA, Jewel Patricia Y.

PA 131- FRU
2018-21724 Essay Assignment

The escalation of social/moral , political, economic/market issues are just some of the many negative and
positive facts that we inevitably face every day. With that, comes, how the government would intervene and address
these kinds of issues on hand. Furthermore, government intervention takes place in the forms of the execution and
existence of public fiscal policies in the state. There are numerous of proposed theories on the root, basis and how
the system of public fiscal policies is constructed. Throughout all the studies proposed, the common variable from
all the theories that I’ve read and learned is on their formulation and construction basis of the public fiscal policies
being based on the needs of the people or it reflecting the different struggles that the society face.

The public fiscal policies serves as the platform of the government on their attempt to balance and address
the negative escalation of social/moral, political, economic/market issues. There are four main functions of the
different types of policies. The first one which is caused or is done for the reason of market failure is the allocation
of resources. Being able to divide the total amount of resources which are from the social goods and private. Next is
the distribution function which is concerned with the distribution of income and wealth that is to assure the
conformance with the what is in the eyes of the society in considering what is fair or just in the distribution of the
state. This is with the involvement of the tax transfer policies, reducing the existing inequality that is present in the
distribution of the income and wealth. Moving on, the stabilization function which is focused on stabilizing the rate
of full employment and its price level that do not come about automatically in a market economy. That is, its absence
may cause the economy to remain in being be the subject to substantial fluctuations, and as an effect will cause a
suffering from the sustained periods of unemployment or inflation. Lastly, is the development or transformation
function that is immersed with being able to maintain a high employment rate within a given level of capacity output
even given the presence of fiscal policy that may affect the rate of the saving and the willingness to invest, which,
can influence the rate of capital formation in the state.

Government failures and lapses are unavoidable, thus, there is not only one but numerous different types of
fiscal policy made to address a specific problem in a sector or issue that the state is facing. Moreover, as fiscal policy
are made to address the lapses, negative externalities and issue that the state is facing, there are still conflicts and
complementariness that arises along with it which includes models of development. Let’s now first delve into the
types of different policies. There are four types of policies discussed which are regulatory, distributive, redistributive,
and constituent policy. The regulatory policy is intended to limit and manage the actions of the parties involved given
that it is to protect the substantial portion of the public. This is to avoid the uprise of monopoly, inequality and un
just treatment with the non-elites and elites in the society. What follows is the distributive policy which is involved
with the usage of tax revenues in provision of the benefits to the people who are qualified in being granted to receive
the grants or subsidies. Often, this is in relation of the distribution function and is reflected on the policies and
programs that we have which involves distributing and allocating the needed resources of the people who are in the
level of society or economy who receives a low income and wealth pay. The next one is the redistributive policy that
its system is constructed with being able to take taxes from certain groups then also pass or give them to another
group. With the consideration of income stabilization, being able to support the unemployed and retired. Then the
social welfare, the capacity on providing direct payments to the labelled indigents and the health care programs which
is concerned with the welfare or overall health of an individual. The practice of redistributive policy can be seen on
how our country today is addressing the on-going covid-19. That when it comes to health programs, income
stabilization, social welfare, it can be evidently seen how the government has its eyes more on how the elites are
doing, not being able to consider or put more action into those who are in the lower level or sector of the economy
and society. The lack of immediate aid, quality service and attention that the government is currently showing is
already a reflection on how the government continuously fails to perform or adhere to the said just and equal
allocation, distribution, stabilization and development of policies and programs for the mass. The last of the four
types of policies is the constituent policy, which is concerned with policies that affects the structure and function of
the government agencies and with its intention to benefit the public. With and without those fiscal policies, the
negative issues and externalities that our country is facing may worsen which adds up to the cause on the delay and
hinderance for our country to grow and develop but it doesn’t mean that there is no difference made. The fiscal
policies are made to slowly correct the existing problem that the state is facing and with that little progress though it
is not enough is still a progress that gives us hope to the future leaders to make a greater mark and change that the
un just structure and system that we have now.

Throughout the years, there has been several conducted studies that suggests and supports the government
officials and professionals who are involved with the development of the state. Moreover, those existing and on-
going tests conducted studies are part of the ways on being able to understand the system and steps that is needed in
being able to develop strategies that is appropriate in the development of the country. With that, the models of
development such as the Rostow-Stages of Growth, Market based, International Dependence, and Structural Change
are some of the highlighted models that is considered in constructing the movement of the government towards
achieving their goals on developing the state into a better one. The Rostow-Stages of Growth, states that countries
can be categorized in the different stages of growth. The traditional society, consisting of a subsistence economy and
high levels of agriculture and the labor of intensive agriculture. The Pre-conditions, which involves the development
of mining industries and being able to increase their capital through agriculture. The Take off, having the increase of
industrialization but there is a decline in the number of employed in the sector of agriculture. The Drive to Maturity,
which is described having the industry being more diverse and its growth becoming more of a dependent or self-
sustaining- wealth generation that enables further investment in value adding industry and development. Lastly, the
High mass consumption that has its high output levels, mass consumption of consumer durables and a high rate on
the employment in the service sector. The proposed model of Rostow-Stages of Growth still needs to explore, include
and invest on pursuing other infrastructure in order to increase opportunities in the income and growth of the people
and state. The next on the models of development is the market based, that is having development distinguished
through the extent of which the market can allocate such resources. The government in this case, limits its
involvement in the working of the economy because they here promote and encourage the enterprise and tries to
reduce the regulation and inefficiencies in free markets in establishing ownership of property rights. Moreover, there
are still lapses in this kind of model such as the uncontrolled variables of negative externalities to the economy that
is part of the possible occurrence of a market failure, lack of infrastructure, and the presence of the problem in equity
of the allocation of income and wealth. Furthermore, there is the International Dependence that enables the state to
have its international division of labor perform in a high rate on the value of activity, low in value and that is all
traces in the existing colonial and imperial dominance. Having a more biased decision-making given that political
moves are on the hands of the people who are in power. Given that, the International Dependence operates an
economy that is unable to address the financial and un-just structure of system is still at play. Lastly, the Structural
Change that delves in incentives, having the less developed nations to be led by primary industries with low value
added and the difficulty on generating wealth that affects the sources of investment. On the other hand, the developed
nations are diverse economies, containing a high value added and high levels of investment. The criticism in this
model is having the wealth being not re-invested locally and that the status on labor re-allocation is not always
productive. Consequently, that builds up the highlights of the models of development. Among the four models
of development, I find market based and international dependence most applicable to the Philippines today.
The presence of how our political climate is greatly affects the movements of our government officials, may it
be towards the development on fiscal policies, programs, structures on certain project and more. With the
existing colonial and imperialism setup that we have, the state of our country still focuses its basis on the facts
of other countries instead of our own. With that, for the development and growth of our country to happen,
our government should be able to stand on its own feet. Being able to raise its own flag with the construction
of its own fact-based, pro-people and just policies. All concerns being able to be aligned with the needs of the
country’s’ own citizen.