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The Impact of Fiscal and Political Decentralization on Local Public Investments in Indonesia

Description of the project:
The project investigates the effects of the Indonesian decentralization and democratization on budget allocation at the sub-national level. Based on panel data for 271 Indonesian districts over 13 years, we address the determinants of local investment expenditures in education, health, and infrastructure. We find that local governments’ responsiveness considerably increased with decentralization: districts with relatively lower levels of public service delivery increased their investments relatively more after decentralization. Fiscal and administrative decentralization had a clear impact on local budget allocation, however, there is no evidence for additional improvements in responsiveness of local governments due to the political decentralization and democratization process. Our evidence thus reflects improvements in local targeting irrespective of the strength of the political competition at the local level.

contact person: Dr. Krisztina Kis-Katos
Phone: 0761 203-2344
Email: krisztina.kis-katos@vwl.uni-freiburg.de
Runtime:
Start of project: 01.01.2010
End of project: 30.06.2015
Project Management:
Albert-Ludwigs-University Freiburg
Kis-Katos K, Sjahrir Putra B

Actual Research Report

Contributors:
  • Kis-Katos K
  • Sjahrir Putra B
Keywords:
    local public investments, decentralization, local budget structure
project-related publications: