village governance rumayya

7/31/2019 Village Governance Rumayya

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Decentralization &

Quality of Local Governance in Indonesia


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Research Question

How does the impact of decentralization on

local governance quality in Indonesia,

especially at village level?


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Indonesia Big Bang Decentralization Reform

History

Economic, social and political crisis 1997/98

Severe inter-regional inequalities A threatened national unity

East Timor independence in 1999

June 1999: first free and fair elections (legislative)

August 1999: Law 22/1999 and Law 25/1999 passed

Fully implemented in 2001


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Dimension

Fiscal (more on spending than expenditure)

Administrative (function) Political (local election)

Local council & district head

First direct election in 2005

Indonesia Big Bang Decentralization Reform


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Imbalanced Fiscal Decentralization

Source: Eckardt & Shah (2006) based on data of 294 Indonesias local governments in 2005


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Source: Akita and Subkhan (2004)


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Source: Akita and Subkhan (2004)


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What have been done

Growth (Pepinsky & Wihardja 2011) --> Neutral


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What have been done (cont.)

Inter-jurisdictional competition (del Granado et al. 2008

Yardstick competition and expenditure spillover effect

Not tax competition

Public goods and service provision (Chowdury et al. 2009;2010; Simatupang 2009; Skoufias et al. 2011; Sjahrir & Kis-Kastos 2011) health, education and infrastructure

Improvement in outcome and deliveries/availability Responsiveness and preference matching increased

No evidence in local capture

Fiscal decentralization matters more than politicaldecentralization


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What have been done (cont.)

Corruption (Henderson & Kuncoro, 2004; 2011)Politics matters


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However

Most study is using district level data

Governance and political economy aspects is

under-researched


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Why governance?

The puzzle behind public spending & outcome

Cross country (Rajkumar & Swaroop 2008)

Indonesia (Sumarto et al2004; Suryadarma 2012)


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Why governance?

The puzzle behind public spending & outcome

Cross country (Rajkumar & Swaroop 2008)

Indonesia (Sumarto et al2004; Suryadarma 2012)

Definitionthe institution by which authority is exercised and public

resource are managed... (de Mello & Barenstein 2001)


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Why governance? (cont.)

Measurement

World Bank

voice & accountability, political stability,

government effectiveness, regulatory quality, rule

of law, control of corruption.

Political Risk Services Group

corruption, bureaucratic quality, rule of law, risk ofexpropriation of property.


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Why village?

Policy planning and implementation

Ex: Poverty program

Targeting

Disbursement

Unique nature of village governance in

Indonesia

Urban village (Kelurahan) Appointed Leader

Rural village (Desa) Elected leader


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Related works

Elected vs. Appointed Leader

Mu & Zhang (2011) public resource distribution

Election and accountability

Martinez-Bravo et al (2011) policy change in

favour of voter preferencere-election incentive

Leaders characteristics

More educated leaders generate higher growth

(Besley 2011)


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Data

Indonesia Family Life Survey (IFLS).

A longitudinal socioeconomic and health survey.

4 waves:

IFLS1 (1993), IFLS2(1997), IFLS3(2000), IFLS4(2007). Representing 83% of the population in 1997.

13 provinces from 27 provinces in 1997.

312 communities in rural and urban.

IFLS1 7,224 households and 22,000 individuals. Re-contact rate above 90% in each wave.

Individual household community.


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Descriptive Statistics


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Village leader selection methods 1997/2007


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Village Fiscal Autonomy


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Corruption change 2000/07


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Empirical Model

GQ = f ( LSM, FA, PE, POV, X)

GQ = change in governance quality; LSM = change in leader selection method;

FA = change in fiscal autonomy;

PE= a group of political economy variables (voterbehaviour/characteristics and leader education);

POV= initial poverty rate;

X= a group control variables.

village governance rumayya

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