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Did Industrialization Destroy Social Capital in Indonesia?

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Author Info
Edward Miguel (University of California, Berkeley & NBER)
Paul Gertler (University of California, Berkeley & NBER)
David Levine (Haas School of Business, University of California, Berkeley)

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Abstract

This paper examines the effect of industrialization on social capital in Indonesia during 1985 to 1997 using repeated cross-sections of nationally representative surveys. We analyze a rich set of social capital measures including multiple measures of voluntary associational activity, levels of trust and informal cooperation, and family outcomes. There are three main findings. First, districts that experienced rapid industrialization showed significant increases in most social capital measures. Second, districts that neighbor rapidly industrializing areas exhibited high rates of out-migration, significantly fewer community credit cooperatives, and a reduction in "mutual cooperation" as assessed by village elders. Finally, initial social capital in a district did not predict subsequent industrial development. We present a model of social capital investment and migration consistent with these patterns. The empirical findings challenge existing results in the social capital literature, and may have implications for social instability in Indonesia since 1997.

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Paper provided by EconWPA in its series Development and Comp Systems with number 0407006.

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Length: 65 pages
Date of creation: 07 Jul 2004
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Handle: RePEc:wpa:wuwpdc:0407006

Note: 65 pages
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Find related papers by JEL classification:
O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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References listed on IDEAS
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Munasib, Abdul B.A. & Jordan, Jeffrey L., 2006. "Are Friendly Farmers Environmentally Friendly? Environmental Awareness as a Social Capital Outcome," 2006 Annual Meeting, February 5-8, 2006, Orlando, Florida 35281, Southern Agricultural Economics Association. [Downloadable!]
  2. Maya Federman & David Levine, 2003. "Does Industrialization = "Development"? The Effects of Industrialization on School Enrollment and Youth Employment in Indonesia," Center for International and Development Economics Research, Working Paper Series 1048, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley. [Downloadable!]
    Other versions:
  3. Tabellini, Guido, 2007. "The Scope of Cooperation: Values and incentives," CEPR Discussion Papers 6534, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  4. Stefano Bartolini & Luigi Bonatti, 2006. "How Can the Decline in Social Capital be Reconciled with a Satisfactory Growth Performance?," Department of Economics University of Siena 477, Department of Economics, University of Siena. [Downloadable!]
  5. Barron, Patrick & Kaiser, Kai & Pradhan, Menno, 2004. "Local conflict in Indonesia : Measuring incidence and identifying patterns," Policy Research Working Paper Series 3384, The World Bank. [Downloadable!]
  6. repec:bep:maccon:v:5:y:2005:i:1:p:1243-1243 is not listed on IDEAS
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