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Did Industrialization Destroy Social Capital in Indonesia?

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  • Edward Miguel

    (University of California, Berkeley & NBER)

  • Paul Gertler

    (University of California, Berkeley & NBER)

  • David Levine

    (Haas School of Business, University of California, Berkeley)

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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Bibliographic Info

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
Date of revision:
Handle: RePEc:wpa:wuwpdc:0407006

Note: 65 pages
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Web page: http://128.118.178.162

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Citations

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Cited by:
  1. Maya Federman & David I. Levine, 2004. "Does Industrialization = "Development"? The Effects of Industrialization on School Enrollment and Youth Employment in Indonesia," Development and Comp Systems 0407007, EconWPA.
  2. Esther Duflo, 2002. "The Medium Run Effects of Educational Expansion: Evidence from a Large School Construction Program in Indonesia," NBER Working Papers 8710, National Bureau of Economic Research, Inc.
  3. Keefer, Philip & Knack, Stephen, 2003. "Social capital, social norms and the New Institutional Economics," MPRA Paper 25025, University Library of Munich, Germany, revised 2004.
  4. Barron, Patrick & Kaiser, Kai & Pradhan, Menno, 2009. "Understanding Variations in Local Conflict: Evidence and Implications from Indonesia," World Development, Elsevier, vol. 37(3), pages 698-713, March.
  5. Baliamoune-Lutz, Mina & Lutz, Stefan H., 2004. "The contribution of income, social capital, and institutions to human well-being in Africa," ZEI Working Papers B 07-2004, ZEI - Center for European Integration Studies, University of Bonn.
  6. Federman, Maya & Levine, David I., 2005. "Industrialization and Infant Mortality," Center for International and Development Economics Research, Working Paper Series qt85j7s6s6, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
  7. 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.
  8. Guido Tabellini, 2008. "The Scope of Cooperation: Values and Incentives," CESifo Working Paper Series 2236, CESifo Group Munich.
  9. 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.
  10. 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.
  11. Leonard, Tammy & Croson, Rachel T.A. & de Oliveira, Angela C.M., 2010. "Social capital and public goods," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 39(4), pages 474-481, August.

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