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    Does better local governance improve district growth performance in Indonesia

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    Wp369.pdf (218.4Kb)
    Date
    2011
    Author
    McCulloch, Neil
    Malesky, Edmund
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    Abstract
    A large literature suggests that countries with better governance have higher growth rates. We explore whether this is also true at the sub-national level in Indonesia. We exploit a new dataset of firm perceptions of the quality of economic governance in 243 districts across Indonesia to estimate the impact of nine different dimensions of governance on district growth. Surprisingly, we find relatively little evidence of a robust relationship between the quality of governance and economic performance. However, we do find support for the idea that structural variables, such as economic size, natural resource endowments and population, have a direct influence on the quality of local governance as well as on economic growth. This suggests that efforts to improve local governance should pay greater attention to understanding how such structural characteristics shape the local political economy and how this in turn influences economic performance. Keywords: economic growth; Indonesia; decentralisation; investment climate; governance; private sector.
    URI
    https://opendocs.ids.ac.uk/opendocs/handle/20.500.12413/4219
    Citation
    McCulloch, N. & E. Malesky (2011) Does better local governance improve district growth performance in Indonesia. Working paper series, 369. Brighton: IDS.
    Is part of series
    IDS working papers;369
    Rights holder
    Institute of Development Studies
    Rights details
    http://www.ids.ac.uk/files/dmfile/IDSOpenDocsStandardTermsOfUse.pdf
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    • IDS Research [1593]

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