Sick of Local Government Corruption? Vote Islamic
AbstractIndonesia has a tradition of corruption among local officials who harass and collect bribes from firms. Corruption flourished in the Suharto, pre-democracy era. This paper asks whether local democratization that occurred after Suharto reduced corruption and whether specific local politics, over and above the effects of local culture, affect corruption. We have a firm level data set for 2001 that benchmarks bribing activity and harassment at the time when Indonesia decentralized key responsibilities to local democratically elected governments. We have a second data set for 2004 on corruption at the end of the first democratic election cycle. We find that, overall, corruption declines between these time periods. But specific politics matter. Islamic parties in Indonesia are perceived as being anti-corruption. Our data show voting patterns reflect this belief and voters' perceptions have some degree of accuracy. In the first democratic election, localities that voted in legislatures dominated by secular parties, including Megawati's party, experienced significant relative increases in corruption, while the reverse was the case for those voting in Islamic parties. But in the second election in 2004, in those localities where corruption had increased under secular party rule, voters "threw the bums out of office" and voted in Islamic parties.
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Date of creation: Mar 2006
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Find related papers by JEL classification:
- H7 - Public Economics - - State and Local Government; Intergovernmental Relations
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
- R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-04-01 (All new papers)
- NEP-LAB-2006-04-01 (Labour Economics)
- NEP-POL-2006-04-01 (Positive Political Economics)
- NEP-SEA-2006-04-01 (South East Asia)
- NEP-SOC-2006-04-01 (Social Norms & Social Capital)
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