Populism, Rule of Law, and the Economy: Counterfactual Evidence from the Philippines

This study examines the presidency of Rodrigo Duterte (2016-2022) in the Philippines, who became internationally known due to his populist agenda and violent approach to law and order. To evaluate the impact of his presidency on the rule of law and economic performance, this study uses data from 2006 to 2022 and creates a counterfactual Philippines, using the synthetic control method. The results suggest that the presidency of Rodrigo Duterte has had a significant and decreasing effect on the rule of law in the Philippines. Additionally, the study discusses his major policies that have led to this decay, while also considering other dimensions of institutional quality. As a large part of his policies aimed at improving economic performance, this study also evaluates the economic outcomes of his efforts using the synthetic control method. The results show that, in particular, the foreign direct investment inflows have significantly increased during his presidency. With the approach used, this study provides counterfactual evidence of how the populist Duterte presidency has significantly deteriorated the rule of law and improved some aspects of economic performance in the Philippines.