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Why Do Differences in Provincial Incomes Persist in Indonesia?

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  • Jorge Garcia Garcia
  • Lana Soelistianingsih
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    Abstract

    Despite 20 years of sustained economic growth that saw provincial GDPs rise and inequalities in per capita provincial GDPs fall, per capita income disparities among provinces persist. In this paper we present evidence that poor provinces have tended to catch up with middle- and high-income provinces, hut that regions at the top and bottom of the distribution in 1975 finished. In similar positions in 1993 lnvestments in human capital (education and health) seem to be the most effective way of increasing provincial incomes and reducing the disparities in provincial GDP per capita. The poorer provinces and rural areas can grow faster than the richer ones because they can gain the most from better health and education, they have the highest rates of illiteracy, fertility, and infant, child and maternal mortality.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/00074919812331337290
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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Bulletin of Indonesian Economic Studies.

    Volume (Year): 34 (1998)
    Issue (Month): 1 ()
    Pages: 95-120

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    Handle: RePEc:taf:bindes:v:34:y:1998:i:1:p:95-120

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    References

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    1. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May.
    2. Takahiro Akita, 2002. "Income Inequality in Indonesia," Working Papers EMS_2002_02, Research Institute, International University of Japan.
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    Cited by:
    1. McCulloch, Neil & Sjahrir, Bambang Suharnoko, 2008. "Endowments, location or luck ? evaluating the determinants of sub-national growth in decentralized Indonesia," Policy Research Working Paper Series 4769, The World Bank.
    2. Takahiro Akita, 2002. "Regional Income Inequality In Indonesia And The Initial Impact Of The Economic Crisis," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 38(2), pages 201-222.
    3. Hal Hill & Budy Resosudarmo & Yogi Vidyattama, 2007. "Indonesia’s Changing Economic Geography," Working Papers in Economics and Development Studies (WoPEDS) 200713, Department of Economics, Padjadjaran University, revised Nov 2007.
    4. Takahiro Akita & Puji Agus Kurniawan & Sachiko Miyata, 2011. "Structural Changes and Regional Income Inequality in Indonesia: A Bidimensional Decomposition Analysis," Asian Economic Journal, East Asian Economic Association, vol. 25(1), pages 55-77, 03.
    5. Jorge Garcia Garcia, 2000. "Indonesia's Trade and Price Interventions: Pro-Java and Pro-Urban," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 36(3), pages 93-112.
    6. Shankar, Raja & Shah, Anwar, 2003. "Bridging the Economic Divide Within Countries: A Scorecard on the Performance of Regional Policies in Reducing Regional Income Disparities," World Development, Elsevier, vol. 31(8), pages 1421-1441, August.
    7. Bert Hofman & Susana Cordeira Guerra, 2004. "Ensuring Inter-regional Equity and Poverty Reduction," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0411, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.

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