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Democratization, leader education and growth: firm-level evidence from Indonesia

Author

Listed:
  • Paul Pelzl

    (NHH Norwegian School of Economics)

  • Steven Poelhekke

    (CEPR, and CESifo)

Abstract

Does the economic success of democratization depend on newly elected leaders’ characteristics? We exploit the unique Indonesian democratization process, where districts exogenously democratized in different years. In a census of manufacturing plants, employment drops by 5% in districts that elect a non-college educated mayor, while employment stays constant under college graduates. Non-college educated mayors substantially raise taxation but provide less infrastructure, do not spend more on social programs, and are more often involved in corruption cases. Other leader attributes and district characteristics, as well as tests for pre-treatment trends, for selection on unobservables, and for close elections do not explain away the important role of leaders’ education in shaping local policies and growth.

Suggested Citation

  • Paul Pelzl & Steven Poelhekke, 2023. "Democratization, leader education and growth: firm-level evidence from Indonesia," Journal of Economic Growth, Springer, vol. 28(4), pages 571-600, December.
    • Handle: RePEc:kap:jecgro:v:28:y:2023:i:4:d:10.1007_s10887-022-09221-5
    DOI: 10.1007/s10887-022-09221-5
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    More about this item

    Keywords

    Democratization; Political leader education; Manufacturing; Indonesia;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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