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The road to pro-poor growth: the Indonesian experience in regional perspective

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  • C. Peter Timmer

Abstract

Indonesia's long-run 'pro-poor growth' record is among the best in Asia. It shows that appropriate policies can free societies from poverty's worst manifestations in a generation, a crucial message as democracy begins to influence the policy process. This paper places Indonesia's record in regional perspective, analysing determinants of income distribution in Asia and connecting this analysis to Indonesia's pro-poor growth process and the policy mechanisms that encourage pro-poor growth. Using a data set for eight Asian countries, it examines patterns of change in incomes and distribution across countries and over time. Building on Indonesian experience, the paper presents a pro-poor growth model encompassing three levels: improving the 'capabilities' of the poor, lowering transactions costs in the economy, especially between rural and urban areas, and increasing demand for goods and services produced by the poor. It finds that rapid pro-poor growth requires simultaneous and balanced interaction between growth and distribution processes.

Suggested Citation

  • C. Peter Timmer, 2004. "The road to pro-poor growth: the Indonesian experience in regional perspective," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 40(2), pages 177-207.
    • Handle: RePEc:taf:bindes:v:40:y:2004:i:2:p:177-207
    DOI: 10.1080/0007491042000205277
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    References listed on IDEAS

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    1. Manning,Chris, 1998. "Indonesian Labour in Transition," Cambridge Books, Cambridge University Press, number 9780521594127.
    2. Elsa V. Artadi & Xavier Sala-i-Martin, 2003. "The Economic Tragedy of the XXth Century: Growth in Africa," NBER Working Papers 9865, National Bureau of Economic Research, Inc.
    3. Robert J. Barro, 1998. "Determinants of Economic Growth: A Cross-Country Empirical Study," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522543, December.
    4. Kraay, Aart, 2004. "When is growth pro-poor? Cross-country evidence," Policy Research Working Paper Series 3225, The World Bank.
    5. Hill,Hal, 2000. "The Indonesian Economy," Cambridge Books, Cambridge University Press, number 9780521663670.
    6. Aart Kraay, 2004. "When is Growth Pro-Poor? Cross-Country Evidence," IMF Working Papers 2004/047, International Monetary Fund.
    7. Cornia, Giovanni Andrea (ed.), 2004. "Inequality, Growth, and Poverty in an Era of Liberalization and Globalization," OUP Catalogue, Oxford University Press, number 9780199271412.
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    More about this item

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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