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Fiscal Decentralisation, Local Institutions and Public Goods Provision: Evidence from Indonesia

Pal, S and Wahhaj, Z (2017) Fiscal Decentralisation, Local Institutions and Public Goods Provision: Evidence from Indonesia Journal of Comparative Economics.

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Abstract

Using data from the Indonesian Family Life Surveys, we study the impact of fiscal decentralisation in Indonesia on local public spending across communities characterised by different types of informal and formal institutions. Our results provide new evidence that fiscal decentralisation led to a significant increase in community spending on social infrastructure (health and education) in communities which observed strict adherence to customary laws and had a tradition of local democracy. We argue that investment in transport and communication facilitates exchange with outsiders and improves the outside options of community members, thus making it more difficult to sustain intra-community cooperation. Consequently, communities which enjoy a high level of cooperation in collective activities benefit less from investing in transport and communication and are more inclined to invest in social infrastructure.

Item Type: Article
Subjects : Surrey Business School
Divisions : Faculty of Arts and Social Sciences > Surrey Business School
Authors :
AuthorsEmailORCID
Pal, SUNSPECIFIEDUNSPECIFIED
Wahhaj, ZUNSPECIFIEDUNSPECIFIED
Date : 1 March 2017
Copyright Disclaimer : © 2016. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
Uncontrolled Keywords : Decentralisation; Democratisation; Collective activities; Mutual Co-operation; Traditional laws; Social and physical infrastructure; Local public spending; Indonesia
Related URLs :
Depositing User : Symplectic Elements
Date Deposited : 01 Sep 2016 08:34
Last Modified : 01 Sep 2016 08:34
URI: http://epubs.surrey.ac.uk/id/eprint/811941

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