Villanueva: Economics of sexual harassment



THE most recent controversy that unfolded which shocked the whole academic community in the Philippines is sexual harassment allegations against professors of the Ateneo de Manila University, and the alleged inaction of the university’s leadership to resolve the issue as well as the minor penalties given to the abusers.

This came as a surprise for everyone especially that the Ateneo is one of the bastions of Catholic Christian Education here in the Philippines, which is owned and run by one of the most influential Religious Orders worldwide, the Jesuits. Whatever teachings of the religion and of the Order are inculcated to all members of their community, from the Jesuit priests’ administrators down to their grade school students, including all their employees.

What is more surprising for me is that another high profile Catholic institution of higher learning nearer to home also have cases like these yet no action has been done against the abuser(s) as of the time of writing. Nevertheless, Baguio City has a small academic community so when scandals like these spread like wildfire, but this one case that I have knowledge of was kept under the radar by the university.

Most cases do not prosper because victims chose not to report them. If they do report, and the university turns a blind eye, they will get discouraged and just remain silent about it. So it got me thinking, why would victims choose this over having the abuser face the music?

In economics, when making choices, there will always be an opportunity cost involved. Opportunity cost is the cost of foregoing the next best alternative. So, I believe when victims chose to be silent, they have contemplated on the opportunity costs.

One is they are giving up their privacy. The victims’ lives will become subject to the public’s scrutiny. Whether positive or negative, they will be the talk of the town. Another one is reliving what should be forgotten. The sad thing about sexual harassment is that it is something that one would not want to happen again. Coming out to the public saying that one was harassed makes one relive the events over and over again which will create more trauma on the victim.

Another opportunity cost is hope for justice. More often than not, the abusers are prominent or powerful and it would lead to cover up by the institution or by the abuser him/herself. The purpose of a victim when coming out is to find justice for the abuse they received, but the chances are slim that their efforts will just go to waste, so they just choose to be silent.

Many victims think that the costs are more than the benefits when coming out and admitting the abuse. However, there are many benefits when they come out in the open. One is that justice, no matter how elusive this is, the hope of bringing to justice the abuser is a benefit that the victim will receive along with peace of mind and love from the public.

Another benefit, albeit not for the victim’s own is that the public gets to be more aware of sexual abuses, and with this awareness, the occurrence of these cases decrease because more victims will be vocal about abuses and abusers will be afraid to act on their lust. Therefore, keeping the schools and workplaces safe from sexual harassment.

On the other hand, what could be the possible reasons why institutions would want to cover up these sexual harassment perpetrators?

An economic theory that can explain this is the agency theory. In this theory, there are two parties: the principal and the agent. In the case that we are talking about, the institution is the Principal, while the say, the administrator is the agent. The agent is an official representative of the principal, in such a way that whatever action that the agent does is also deemed as the action of the principal. The institution would, of course, like to protect itself from bad reputation and/or publicity, and when the agent does a wrong action, the immediate reaction of the principal is to protect the agent.

But in economics, there occurs the principal-agent problem or information asymmetry. When an agent knows more than the principal needs to know because they choose only the information that the principal needs to know, theoretically known as adverse selection, then the problem happens. This means that the agent is not acting in representation of the principal. Cases like sexual harassment are information that is kept by the agent from the principal. Therefore, these should not be tolerated by the institution. These agents should be made accountable for their actions.

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