Impact Evaluation of Decentralization in Indonesia through Natural Experiment

2017 Fiscal Year Final Research Report

• Project/Area Number: 25871152
• Research Category: Grant-in-Aid for Young Scientists (B)
• Allocation Type: Multi-year Fund
• Research Field: Public finance/Public economy; Economic policy
• Research Institution: Institute of Developing Economies, Japan External Trade Organization
• Principal Investigator: Higashikata Takayuki 独立行政法人日本貿易振興機構アジア経済研究所, 地域研究センター東南アジアI研究グループ, 研究員 (70450533)
• Project Period (FY): 2013-04-01 – 2018-03-31
• Keywords: 地方分権 / インドネシア / 影響評価 / 自然実験 / 公共財 / 都市化 / 地方分立

Outline of Final Research Achievements

Indonesia implemented a radical decentralization during its rapid democratization after the Asian Financial Crisis. I made an analysis of an impact evaluation of the decentralization on the welfare of residents and showed that ethnically diverse jurisdictions experienced relatively poor level of infrastructure development and slow growth of the urban population rates after the introduction of the decentralization. Then, I utilized administrative village/town level panel data, which I prepared for the above analysis, to construct an original urban area dataset and identified positive causal effects of the population growth of urban areas on the per capita expenditure of rural villagers around those areas, especially that of the poor households during the period of 2000 to 2010, by exploiting earthquakes in Java island as quasi-experimental events.

Free Research Field

開発経済学、インドネシア経済