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The Effects of Decentralization on Economic Growth in the Political Periphery in Indonesia

Gunawan, Devita Kristianti LU (2018) NEKN01 20181
Department of Economics
Abstract
Does decentralization promote economic growth? This paper attempts to shed light upon this rather debatable topic by measuring the real effects of decentralization on economic growth in the political periphery in Indonesia. Indonesia issued decentralization laws that were implemented in 2001, which affected all districts except those in the special province of DKI Jakarta. Therefore, the effects of decentralization on economic growth of districts in (control group) and outside (treatment group) of DKI Jakarta pre- and post-decentralization can be compared using difference-in-difference estimation method. This statistical method used is appropriate to mitigate selection bias and other external factor effects, thus capturing the real effects... (More)
Does decentralization promote economic growth? This paper attempts to shed light upon this rather debatable topic by measuring the real effects of decentralization on economic growth in the political periphery in Indonesia. Indonesia issued decentralization laws that were implemented in 2001, which affected all districts except those in the special province of DKI Jakarta. Therefore, the effects of decentralization on economic growth of districts in (control group) and outside (treatment group) of DKI Jakarta pre- and post-decentralization can be compared using difference-in-difference estimation method. This statistical method used is appropriate to mitigate selection bias and other external factor effects, thus capturing the real effects of decentralization. The empirical results of this study find evidence that decentralization contributes to overall economic growth in the political periphery. The results, regardless of the presence of oil and gas, are robust to changes in control group specifications. (Less)
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author
Gunawan, Devita Kristianti LU
supervisor
organization
course
NEKN01 20181
year
type
H1 - Master's Degree (One Year)
subject
keywords
decentralization, economic growth, Indonesia, political periphery, difference-in- difference
language
English
id
8945927
date added to LUP
2018-07-03 14:20:46
date last changed
2018-07-03 14:20:46
@misc{8945927,
  abstract     = {Does decentralization promote economic growth? This paper attempts to shed light upon this rather debatable topic by measuring the real effects of decentralization on economic growth in the political periphery in Indonesia. Indonesia issued decentralization laws that were implemented in 2001, which affected all districts except those in the special province of DKI Jakarta. Therefore, the effects of decentralization on economic growth of districts in (control group) and outside (treatment group) of DKI Jakarta pre- and post-decentralization can be compared using difference-in-difference estimation method. This statistical method used is appropriate to mitigate selection bias and other external factor effects, thus capturing the real effects of decentralization. The empirical results of this study find evidence that decentralization contributes to overall economic growth in the political periphery. The results, regardless of the presence of oil and gas, are robust to changes in control group specifications.},
  author       = {Gunawan, Devita Kristianti},
  keyword      = {decentralization,economic growth,Indonesia,political periphery,difference-in- difference},
  language     = {eng},
  note         = {Student Paper},
  title        = {The Effects of Decentralization on Economic Growth in the Political Periphery in Indonesia},
  year         = {2018},
}