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The road to pro-poor growth: the Indonesian experience in regional perspective

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  • C. Peter Timmer

Abstract

Indonesia's long-run 'pro-poor growth' record is among the best in Asia. It shows that appropriate policies can free societies from poverty's worst manifestations in a generation, a crucial message as democracy begins to influence the policy process. This paper places Indonesia's record in regional perspective, analysing determinants of income distribution in Asia and connecting this analysis to Indonesia's pro-poor growth process and the policy mechanisms that encourage pro-poor growth. Using a data set for eight Asian countries, it examines patterns of change in incomes and distribution across countries and over time. Building on Indonesian experience, the paper presents a pro-poor growth model encompassing three levels: improving the 'capabilities' of the poor, lowering transactions costs in the economy, especially between rural and urban areas, and increasing demand for goods and services produced by the poor. It finds that rapid pro-poor growth requires simultaneous and balanced interaction between growth and distribution processes.

Suggested Citation

  • C. Peter Timmer, 2004. "The road to pro-poor growth: the Indonesian experience in regional perspective," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 40(2), pages 177-207.
  • Handle: RePEc:taf:bindes:v:40:y:2004:i:2:p:177-207 DOI: 10.1080/0007491042000205277
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    References listed on IDEAS

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    1. Hadi Soesastro & M. Chatib Basri, 1998. "Survey of Recent Developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 34(1), pages 3-54.
    2. Calomiris, Charles W & Kahn, Charles M, 1991. "The Role of Demandable Debt in Structuring Optimal Banking Arrangements," American Economic Review, American Economic Association, pages 497-513.
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    Citations

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    Cited by:

    1. Leigh, Andrew & van der Eng, Pierre, 2009. "Inequality in Indonesia: What can we learn from top incomes?," Journal of Public Economics, Elsevier, pages 209-212.
    2. Axelsson, Tobias & Palacio, Andrés, 2017. "Transforming Indonesia: Structural change in a regional perspective 1968-2010," Lund Papers in Economic History 164, Lund University, Department of Economic History.
    3. Andy Sumner & Peter Edward, 2013. "From Low Income, High Poverty to High-Income, No Poverty? An Optimistic View of the Long-Run Evolution of Poverty in Indonesia By International Poverty Lines, 1984–2030," Working Papers in Economics and Development Studies (WoPEDS) 201310, Department of Economics, Padjadjaran University, revised Jun 2013.
    4. Sumarto, Sudarno & de Silva, Indunil, 2013. "Poverty-growth-Inequality Triangle: The Case of Indonesia," MPRA Paper 57135, University Library of Munich, Germany.
    5. Bardhan, Pranab, 2006. "Globalization and rural poverty," World Development, Elsevier, vol. 34(8), pages 1393-1404, August.
    6. Asian Development Bank Institute, 2017. "Eradicating Poverty and Promoting Prosperity in a Changing Asia-Pacific," Working Papers id:11706, eSocialSciences.
    7. Indunil De Silva & Sudarno Sumarto, 2015. "Dynamics Of Growth, Poverty And Human Capital: Evidence From Indonesian Sub-National Data," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 40(2), pages 1-33, June.
    8. Rashid, Shahidur & Cummings, Ralph Jr. & Gulati, Ashok, 2005. "Grain marketing parastatals in Asia," MTID discussion papers 80, International Food Policy Research Institute (IFPRI).
    9. Pranab Bardhan, 2006. "Globalization, Inequality, and Poverty," IDB Publications (Working Papers) 9126, Inter-American Development Bank.
    10. Pranab Bardhan, 2006. "Globalization, Inequality, and Poverty," IDB Publications (Working Papers) 2329, Inter-American Development Bank.
    11. Foldvari, Peter & van Leeuwen, Bas & Marks, Daan & Gall, Jozsef, 2013. "Indonesian regional welfare development, 1900–1990: New anthropometric evidence," Economics & Human Biology, Elsevier, pages 78-89.
    12. Bas van Leeuwen & Peter Foldvari, 2012. "The development of inequality and poverty in Indonesia, 1932-1999," Working Papers 0026, Utrecht University, Centre for Global Economic History.
    13. Mwangi S. Kimenyi, 2005. "Economic Rights, Human Development Effort and Institutions," Working papers 2005-40, University of Connecticut, Department of Economics.
    14. Tomokazu Arita & Chie Iguchi & Philip McCann, 2011. "Foreign Direct Investment, Knowledge Assets and the Economic Geography of Growth in the Asian BRIICS Countries," Chapters,in: Endogenous Regional Development, chapter 9 Edward Elgar Publishing.
    15. Sumarto, Sudarno & De Silva, Indunil, 2014. "Being Healthy, Wealthy, and Wise: Dynamics of Indonesian Subnational Growth and Poverty," MPRA Paper 57824, University Library of Munich, Germany.
    16. C. Timmer Peter, 2017. "Working Paper 259 - Structural Transformation and Food Security: Their Mutual Interdependence," Working Paper Series 2370, African Development Bank.
    17. Saleem, Zahabia & Donaldson, John A., 2016. "Pathways to poverty reduction," LSE Research Online Documents on Economics 67523, London School of Economics and Political Science, LSE Library.

    More about this item

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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