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How corruption diminishes the effectiveness of public spending on education in Indonesia

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  • Daniel Suryadarma

Abstract

This paper takes advantage of a regional corruption measure to assess the impact of corruption on the effectiveness of public spending in the education sector in Indonesia, one of the most corrupt countries in the world. Two sets of outcomes are considered: school enrolment rates and school performance in national examinations. Public spending appears to have a negligible effect on school enrolment in highly corrupt regions, but a statistically significant, positive and relatively large effect in less corrupt regions. In contrast, public spending has no significant effect on school performance. The main lesson from this paper is that pouring more public funds into the education system is unlikely to bring about improvement unless it is accompanied by efforts to improve governance in the sector.

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File URL: http://hdl.handle.net/10.1080/00074918.2012.654485
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Bibliographic Info

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

Volume (Year): 48 (2012)
Issue (Month): 1 (April)
Pages: 85-100

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Handle: RePEc:taf:bindes:v:48:y:2012:i:1:p:85-100

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Cited by:
  1. Coco, Giuseppe & Lagravinese, Raffaele, 2014. "Cronyism and education performance," Economic Modelling, Elsevier, vol. 38(C), pages 443-450.
  2. Suryadarma, Daniel & Yamauchi, Chikako, 2013. "Missing public funds and targeting performance: Evidence from an anti-poverty transfer program in Indonesia," Journal of Development Economics, Elsevier, vol. 103(C), pages 62-76.

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