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Bulletin of Indonesian Economic Studies
ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20
Abstracts of doctoral theses on the Indonesian
economy
To cite this article: (2010) Abstracts of doctoral theses on the Indonesian economy, Bulletin of Indonesian Economic Studies, 46:1, 111-114, DOI: 10.1080/00074911003642278
To link to this article: http://dx.doi.org/10.1080/00074911003642278
Published online: 17 Mar 2010.
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ISSN 0007-4918 print/ISSN 1472-7234 online/10/010111-4 DOI: 10.1080/00074911003642278
ABSTRACTS OF DOCTORAL THESES
ON THE INDONESIAN ECONOMY
The Impact of the Decentralization Program on Poverty Reduction in Indonesia: A Macro and Micro Level Analysis
Ali Said (ali@bps.go.id)
Accepted2009, The Flinders University of South Australia, Adelaide
This thesis represents an effort to examine the impact of the implementation of regional autonomy on poverty reduction in Indonesia at both the macro and micro levels of analysis. At the macro level, the study addressed the relationship between decentralisation and poverty by focusing on districts in Java–Bali. At the micro level, it focused on comparing the performance of the decentralisation program, especially with respect to poverty reduction, in two selected districts (Purbalingga and Purworejo).
The macro level analysis shows that nearly half of the selected districts in Java–Bali experienced a more rapid reduction in poverty after than before decen-tralisation, while in a similar proportion the recorded reduction in poverty was slower than before decentralisation. The remaining districts (8.25%) recorded an increase in poverty after decentralisation. In other words, decentralisation has assisted poverty reduction in a large number of districts, but certainly not in all. The implementation of regional autonomy has also led to a considerable rise in real per capita public spending at the district level, suggesting that decentralisa-tion may have helped poverty reducdecentralisa-tion by increasing the funds available for spending on programs that assist poor people.
The macro level analysis shows that there are three main challenges facing the success of the decentralisation program in reducing poverty more rapidly. First, in many districts, a high rate of economic growth has not benefi ted the poor. Second, the challenge facing local governments during the decentralisation era is how to target public spending so that it benefi ts the poor population and is effective in poverty reduction, since there has been a tendency for the poor to gain less from public spending, especially in health care and higher education, than the rich. Third, the widespread corruption that emerged during the fi rst fi ve years of decentralisation reduced the effort to improve public services in general and poverty in particular.
Because the macro level analysis failed to explain why poverty reduction improved under decentralisation in some districts but not in others, and could not identify the mechanisms through which the implementation of decentrali-sation has helped poverty reduction, a case study of two districts was under-taken. This micro level analysis reveals that decentralisation has had a positive impact on poverty reduction in Purbalingga, while the rate of poverty decline in
112 Abstracts of doctoral theses on the Indonesian economy
Purworejo has slowed. Despite a higher economic growth rate in Purworejo than in Purbalingga since decentralisation, this growth has given less benefi t to the poor in Purworejo than in Purbalingga. The signifi cant progress achieved by the local government of Purbalingga in reducing poverty during the autonomy era, and the weaker impact of decentralisation on poverty reduction in Purworejo, can be explained by government performance in public spending and public service delivery, the performance of local economic development, and governance qual-ity. Among these three main factors, good governance seems to be the key to suc-cessful implementation of decentralisation for poverty reduction.
© 2010 Ali Said
Three Essays on Econometric Evaluation of Public Health Interventions
Meliyanni Johar (Meliyanni.Johar@uts.edu.au) Accepted 2009, University of New South Wales, Sydney
This dissertation consists of three independent essays evaluating the impact of public health interventions in Indonesia and Australia.
The fi rst two essays concern the health card program in Indonesia. The pro-gram aims to allow poor households access to primary health care by providing a price subsidy for treatment at public health facilities. The data are derived from a longitudinal study of households, the Indonesian Family Life Survey (IFLS).
The fi rst essay evaluates the effectiveness of the program. The quantitative approach combines the difference-in-differences (DID) estimator and propensity score matching (PSM–DID) to construct the unobserved counter-factuals: the out-comes of the program recipients had they not been exposed to the intervention. The health card program uses administrators to identify recipients on the basis of their welfare characteristics, as opposed to relying on the voluntary participa-tion of households. This, together with the availability of many covariates, sup-ports this strategy in providing accurate estimates of the program’s effect on its recipients. The results indicate that the presence of a health card has only a limited impact on the utilisation of primary health care. The ineffectiveness of the health card program suggests the presence of other factors counteracting the demand incentive.
The second essay investigates whether public health facilities in a commu-nity are affected by the health card program. The mechanism through which this can occur is the program’s weak means of compensating existing public health workers, who are paid on a salary basis, for the increased workload and other undesirable changes in the work environment that the program might cause. The outcomes of interest include infrastructure conditions and the availability of full-time health personnel in these facilities. Focus is placed on health centres that provide outpatient care and have no waiting list to ration demand. Identifi cation of program effects is achieved through variations over time and in the intensity of health card distribution across communities. Using a regression DID method, the study fi nds some evidence that the program affects the availability of full-time GPs, and has no signifi cant effect on other outcomes.
The third essay uses discrete choice experiments to elicit women’s preferences for cervical screening. In 2007, Australian women saw both a screening promo-tion campaign and a vaccinapromo-tion program (HPV vaccine). As screening and vac-cination are both preventive measures, the two interventions may support one another, but the vaccination program may also counteract the screening cam-paign’s effectiveness, for example, through the misconception that vaccination can substitute for screening. A mixed logit model is used to capture heterogene-ity in observed behaviour for women with similar observed characteristics. This model also accommodates the panel structure of the data, allowing for a respond-ent providing multiple responses and for unproportional substitution patterns across screening test alternatives. The results indicate that there was an overall reduction in preference for screening, with indications that this trend is associated with HPV-related events. The interventions have a minor impact on how women value various screening attributes (for example, price, test accuracy), however. A simulation exercise is performed to assess the plausibility of several strategies to increase the screening rate.
© 2010 Meliyanni Johar
Essays on Political and Fiscal Decentralization
Riatu M. Qibthiyyah (prcrmqx@gmail.com) Accepted 2008, Georgia State University, Atlanta GA
Indonesia as a developing country in transition is a useful case study on how gov-ernment might response to institutional change. The 1999 decentralisation policy in Indonesia introduced a more fl exible procedure for creating new jurisdictions. At the same time, major changes occurred in the central–local fi scal system, and specifi cally in the intergovernmental transfer system. Implemented in 2001, Indo-nesian decentralisation policies have been characterised by rapid formation of new jurisdictions across the various levels of sub-national government. The objec-tive of this dissertation is to examine the effect of intergovernmental transfers on the proliferation of political jurisdictions at the local level in Indonesia, and to investigate the impact of proliferation on outcomes in education and health, the two sectors that have been decentralised most extensively to local government level.
The fi rst essay asks what determines local government proliferation and what is the impact of intergovernmental transfers on proliferation. In exploring the determinants of proliferation, the study provides a more elaborate empirical tech-nique than exists in the literature, by employing panel binary outcomes, survival regressions and count analysis to capture the effect of variations in the level of inter governmental transfers over time.
On the determinants of local government formation, the fi ndings show that there are probably competing effects across fi scal transfer types on the decision to proliferate and on the extent of fragmentation. The results indicate that: (1) the lump-sum conditional grants positively infl uence the probability of proliferation; (2) a higher median share of equalisation grants in a province is associated with a
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higher number of local governments; (3) higher equalisation grants are associated with a longer duration to the proliferation event; and (4) higher tax sharing in proliferated local governments is associated with higher stability (a longer dura-tion to a subsequent or sequential proliferadura-tion event). The fi ndings suggest that tactical central–local behaviour may be present, but support for the hypothesis that proliferation is driven by rent-seeking should not be generalised to the over-all system of transfers.
The second essay examines the impact of proliferation on service delivery out-comes, specifi cally in education and health. I apply panel difference-in-difference (DID) estimation and differentiate the units of observation into new and original local governments. The fi ndings show that the impact of proliferation on educa-tion and health outcomes is not uniform.
The education estimations show support for the existence of improved edu-cation outcomes in new local governments as represented by a reduction in the drop-out rate but not by higher student test scores. This is despite relatively higher conditional grants being allocated to proliferated local governments. The fi ndings may imply that the benefi ts of proliferation tend to cater to local prefer-ences rather than to mandated national programs. Meanwhile, on the estimation of health outcomes, the study fi nds evidence of improvement in infant mortal-ity only in originating local governments and not in new ones. Controlling for selectivity and production function covariates did not change the pattern of the impact.
© 2010 Riatu M. Qibthiyyah
