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Political Business Cycles in Local Indonesia

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Author Info

  • Bambang Suharnoko Sjahrir
  • Krisztina Kis-Katos
  • Guenther G. Schulze

    ()
    (Department of International Economic Policy, University of Freiburg)

Abstract

We study political business cycles (PBC) in newly democratized and decentralized Indonesia at the local level. As the timing of indirect and later on direct elections of district heads differs exogenously across jurisdictions, the political business cycle effect is clearly identified. Our data allow distinguishing PBCs for indirect and direct elections. We find significant budget cycles for discretionary budget categories at the disposal of the district head (not for the overall budget) only for direct elections, not for indirect elections. These cycles are much larger if the incumbent runs for reelection. Our results underline the conditional nature of PBC.

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File URL: http://www.vwl.uni-freiburg.de/iwipol/REPEC/fre/wpaper/DP23_Sjahrir_Kis-Katos_Schulze_Political_Business_Cycles_in_Local_Indonesia.pdf
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Bibliographic Info

Paper provided by Department of International Economic Policy, University of Freiburg in its series Discussion Paper Series with number 23.

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Length: 9 pages
Date of creation: Apr 2013
Date of revision: Apr 2013
Handle: RePEc:fre:wpaper:23

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Related research

Keywords: Political business cycles; Indonesia; local elections; direct and indirect elections;

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Cited by:
  1. Skoufias, Emmanuel & Narayan, Ambar & Dasgupta, Basab & Kaiser, Kai, 2014. "Electoral accountability and local government spending in Indonesia," Policy Research Working Paper Series 6782, The World Bank.

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