corruption, governance, and inequality in indonesia · · 2017-10-31corruption, governance, and...
Post on 26-Apr-2018
218 Views
Preview:
TRANSCRIPT
Corruption, Governance, and
Inequality in IndonesiaMayang Rizky, Ahmad Zuhdi, Veto Tyas, Teguh Dartanto
Forum Kajian Pembangunan
31 October 2017
Outline
� Background
� Stylised Facts
� Empirical Evidence
� Preliminary Conclusion
Decentralisation
� Responsibility to manage its fiscal capacity; assume it brings
government closer to the people; improving efficiency; matching
local preference.
26
27
28
29
30
31
32
33
34
35
19
99
20
01
20
03
20
05
20
07
20
09
20
11
20
13
20
15
Nu
mb
er
of
pro
vin
ces
Provinces
0
100
200
300
400
500
600
19
99
20
01
20
03
20
05
20
07
20
09
20
11
20
13
20
15
Nu
mb
er
of
dis
tric
ts
Districts
Inequality during decentralisation
� The rise in inequality is predominantly visible in democratisation
period, as before it was relatively stable (Yusuf, 2017).
4
8
3336
18
8
0
5
10
15
20
25
30
35
40
45
0
1
2
3
4
5
6
7
8
9
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
Growth, Inequality, and Poverty in Indonesia (%)
Growth Gini Index Poverty RateSource: BPS, Bappenas.
- - - - - - Target
Motivation of study
� Studies on reducing inequality rely mostly on monetary aspects �economic expansion, progressive tax, social assistance.
� Corruption studies: corruption reduces the effectiveness of social assistance (Dartanto et al, 2016) and less corrupt environment is a necessary condition for the public spending to have effect on enrollment rates (Suryadarma, 2012).
� 3,099 corruption cases, 135.88 trillion rupiahs of total loss, and 13.5 trillion rupiahs of total fines during 2001-2015 (Monitor Corruption, UGM).
� Losses in public trust � business environment, tax revenue, and participation of the poor in social assistance programme.
� Governance studies: on poverty reduction (Sumarto et al, 2004) and on growth and HDI (Patunru and Rahman, 2014).
Corruption perception index - TII
� There is an increased efforts to combat corruption as well as a
stronger need to completely eliminate corrupt practices in the
public sector.
4.12
4.52
4.84
3.6
3.8
4
4.2
4.4
4.6
4.8
5
2006 2008 2010
Sco
re
Corruption Perception Index - Indonesia
Governance index - Kemitraan
4.454.48
4.81
4.87
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
5
Maluku
Utara
Papua Barat Bengkulu NTT
Worst provinces in IGI 2012
6.24
6.376.43
6.8
5.9
6
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
6.9
Jambi DKI Jakarta Jawa Timur DI
Yogyakarta
Best provinces in IGI 2012
Corruption, Governance, and Inequality-.
05
0.0
5.1
3 4 5 6 7 8bureauc
chgini Fitted values
-.0
50
.05
.1
2 3 4 5 6cpi
chgini Fitted values
-.0
50
.05
.1
3 4 5 6 7govindex
chgini Fitted values
-.0
50
.05
.1
-.5 0 .5 1silpa
chgini Fitted values
Corruption Perception Index Governance Index
Bureaucracy Aspect Unspent Budget
This paper
� Research questions
� Does less corruption lead to a reduced inequality?
� Does good governance lead to a reduced inequality?
� Which aspect of good governance that lead to a reduction in
inequality?
� Variables
� Outcomes = f(corruption, governance, controls)
� Outcomes: change in consumption-based Gini coefficient
� Corruption: Corruption Perception Index (CPI)
� Good governance: Governance Index (IGI), unspent budget
� Controls: degree of decentralisation, BPK audit opinion, spending on
health, education, infrastructure, and social protection, average per
capita expenditure, poverty rate.
Regression resultsChange in Ginit Model 1 Model 2 Model 3 Model 4 Model 5 Model 6
Ginit-2 -0.229**
(0.089)
-0.194**
(0.084)
-0.234**
(0.086)
-0.235**
(0.089)
-0.309***
(0.090)
-0.328***
(0.098)
CPIt-2 -0.005*
(0.003)
-0.006*
(0.003)
-0.006*
(0.004)
-0.004*
(0.003)
-0.004*
(0.004)
Governancet-2 -0.013***
(0.004)
-0.013***
(0.004)
-0.008***
(0.003)
-0.009***
(0.003)
Unspent budgett-2 0.002*
(003)
Average PCEt-2 -0.130
(0.014)
-0.118
(0.015)
0 of decentralisationt-2 0.199**
(0.094)
0.154**
(0.127)
BPK auditt-2 0.006*
(0.004)
0.006*
(0.004)
Constant 0.102***
(0.032)
0.139***
(0.032)
0.160***
(0.036)
0.143**
(0.058)
0.315*
(0.181)
0.256*
(0.212)
Additional controls No No No No No Yes
Observations
R2
66
0.1204
66
0.2199
66
0.2455
66
0.1849
66
0.2769
66
0.2803
Aspect of governance
� Government: not significant
� Policy making bodies consists of the executive and legislative branches.
� Bureaucracy: highly significant
� The executing body that serves as a bridge between government and the
public. Government offices and agencies at the provincial level which its key
functions in the area public service such as local revenue collection and
regulation of the local economy.
� Civil society: highly significant
� Constitutes of NGOs, associations, labour unions, education, and research
institutes with public policy advocacy function as the key.
� Economic society: not significant
� Participation of economic actors in government tender and project
implementation.
On the mechanism
� Interaction with more governed region dummy
� Spending on health, education, infrastructure, social protection,
PAD, and DAU: significantly negative
Preliminary conclusion
� A first step to understand the effects of corruption (perceived) on
inequality reduction.
� Also whether good governance has a role in explaining the effects.
� Less corrupt environment is important to policies on reducing
inequality especially good governance in the arena of bureaucracy
and civil society.
� A higher unspent budget (SILPA) in government budget allocation
tend to be associated with a positive change in inequality.
� Signs on degree of decentralisation are unexpected.
� Obtaining bad opinion from BPK � positively increase the change
in inequality.
� Effects may still unfold.
Drawbacks
� Need to look at district level
� Measure of corruption
� Unspent budget � equity vs efficiency
� Political variable: divided/unified government
� Obsolete year of analysis
Thank you
Your comments and suggestions are welcome.
top related