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Contributions in heterogeneous communities: Evidence from Indonesia

Author

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  • Cagla Okten

    ()

  • Una Okonkwo Osili

    ()

Abstract

Using household-level data from Indonesia, we investigate the importance of community characteristics: ethnic diversity and central government transfers, inter alia, in determining monetary and time contributions to community organizations. We present a framework in which ethnic diversity affects contributions through three channels: (1) diversity of preferences (2) transaction costs, and (3) inter-household considerations in the form of altruism towards one’s ethnic group. Our empirical findings provide evidence that ethnic diversity has a negative and significant effect on contributions, and the prevalence of community organizations. We find evidence that government spending crowds out private monetary contributions, with a less robust effect on time contributions. Copyright Springer-Verlag 2004

Suggested Citation

  • Cagla Okten & Una Okonkwo Osili, 2004. "Contributions in heterogeneous communities: Evidence from Indonesia," Journal of Population Economics, Springer;European Society for Population Economics, vol. 17(4), pages 603-626, December.
  • Handle: RePEc:spr:jopoec:v:17:y:2004:i:4:p:603-626
    DOI: 10.1007/s00148-004-0189-y
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    Citations

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    Cited by:

    1. Rougier, Eric, 2016. "“Fire in Cairo”: Authoritarian–Redistributive Social Contracts, Structural Change, and the Arab Spring," World Development, Elsevier, vol. 78(C), pages 148-171.
    2. Nikolaj A. Harmon, 2010. "The End of the European Welfare States? Migration, Ethnic Diversity and Public Goods," Working Papers 1277, Princeton University, Department of Economics, Industrial Relations Section..
    3. Gerard Padro i Miquel & Nancy Qian & Yang Yao, 2012. "Social Fragmentation, Public Goods and Elections: Evidence from China," NBER Working Papers 18633, National Bureau of Economic Research, Inc.
    4. Daniel M. Hungerman, 2007. "Diversity and Crowd-out: A Theory of Cold-Glow Giving," NBER Working Papers 13348, National Bureau of Economic Research, Inc.
    5. Alberto Alesina & Caterina Gennaioli & Stefania Lovo, 2014. "Public Goods and Ethnic Diversity: Evidence from Deforestation in Indonesia," NBER Working Papers 20504, National Bureau of Economic Research, Inc.
    6. Lücke, Matthias & Omar Mahmoud, Toman & Peuker, Christian, 2012. "Identifying the motives of migrant philanthropy," Kiel Working Papers 1790, Kiel Institute for the World Economy (IfW).
    7. Andreoni, James & Payne, A. Abigail & Smith, Justin & Karp, David, 2016. "Diversity and donations: The effect of religious and ethnic diversity on charitable giving," Journal of Economic Behavior & Organization, Elsevier, vol. 128(C), pages 47-58.
    8. Bandiera, Oriana & Levy, Gilat, 2010. "Diversity and the Power of the Elites in Democratic Societies: A model and a test," CEPR Discussion Papers 7985, C.E.P.R. Discussion Papers.
    9. Pande, Rohini, 2008. "Understanding Political Corruption in Low Income Countries," Handbook of Development Economics, Elsevier.
    10. Kotera, Go & Mizuno, Nobuhiro & Okada, Keisuke & Samreth, Sovannroeun, 2015. "Ethnic diversity, democracy, and health: Theory and evidence," Research in Economics, Elsevier, vol. 69(3), pages 353-376.
    11. Benos, Nikos & Kammas, Pantelis, 2018. "Workers of the world unite (or not?) The effect of ethnic diversity on the participation in trade unions," MPRA Paper 84880, University Library of Munich, Germany.
    12. repec:pri:indrel:dsp01c247ds102 is not listed on IDEAS
    13. Labonne, Julien & Chase, Robert S., 2009. "Who is at the Wheel When Communities Drive Development? Evidence from the Philippines," World Development, Elsevier, vol. 37(1), pages 219-231, January.
    14. Mohd Isa Rohayati & Youhanna Najdi & John C. Williamson, 2016. "Philanthropic Fundraising of Higher Education Institutions: A Review of the Malaysian and Australian Perspectives," Sustainability, MDPI, Open Access Journal, vol. 8(6), pages 1-20, June.
    15. Nikolaj A. Harmon, 2012. "Immigration, Ethnic Diversity and Political Outcomes: Evidence from Denmark," Working Papers 1383, Princeton University, Department of Economics, Industrial Relations Section..
    16. Oguzhan C. Dincer & Peter J. Lambert, 2006. "Taking care of your own: Ethnic and religious heterogeneity and income inequality," Working Papers 48, ECINEQ, Society for the Study of Economic Inequality.
    17. repec:eee:chieco:v:46:y:2017:i:c:p:1-9 is not listed on IDEAS
    18. Hungerman, Daniel M., 2009. "Crowd-out and diversity," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 729-740, June.
    19. Habyarimana, James P. & Humphreys, Macartan & Posner, Daniel N. & Weinstein, Jeremy, 2006. "Why Does Ethnic Diversity Undermine Public Goods Provision? An Experimental Approach," IZA Discussion Papers 2272, Institute for the Study of Labor (IZA).
    20. Dimitrova-Grajzl Valentina & Grajzl Peter & Guse A. Joseph & Smith J. Taylor, 2016. "Racial Group Affinity and Religious Giving: Evidence from Congregation-Level Panel Data," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(2), pages 689-725, April.
    21. Bandiera, Oriana & Levy, Gilat, 2011. "Diversity and the power of the elites in democratic societies: Evidence from Indonesia," Journal of Public Economics, Elsevier, vol. 95(11), pages 1322-1330.

    More about this item

    Keywords

    O12; H41; J16; Z13; Ethnic diversity; contributions; transfers; community organizations;

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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