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Elite Capture in Urban Development: Evidence from Indonesia

Author

Listed:
  • Rivayani Darmawan

    (Georg-August-University Göttingen)

  • Stephan Klasen

    (Georg-August-University Göttingen)

Abstract

It has been argued that the potential gains of community-driven development (CDD) poverty programs are large as these can foster sustained poverty reduction. However, recent literature shows that community involvement can increase the risk of elite capture, particularly in more unequal communities. The risk is higher when the gap between the poor and the non-poor is larger with limited mobility between groups, the poor find it difficult to increase their bargaining power or voice their preferences. This paper contributes to the limited empirical literature on the existence of elite capture in social programs. Using community and household data from the Second Urban Poverty Project in Indonesia, we find robust evidence for the existence of elite capture under unequal communities. We further find that only when decision makers share similar characteristics with non-elites in terms of wealth, education and social networks, the share of pro-poor projects increases.

Suggested Citation

  • Rivayani Darmawan & Stephan Klasen, 2013. "Elite Capture in Urban Development: Evidence from Indonesia," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 145, Courant Research Centre PEG.
    • Handle: RePEc:got:gotcrc:145
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    More about this item

    Keywords

    Elite capture; Community-driven Development; Inequality; Poverty; Indonesia;
    All these keywords.

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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