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How corruption diminishes the effectiveness of public spending on education in Indonesia

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  • Daniel Suryadarma

Abstract

This paper takes advantage of a regional corruption measure to assess the impact of corruption on the effectiveness of public spending in the education sector in Indonesia, one of the most corrupt countries in the world. Two sets of outcomes are considered: school enrolment rates and school performance in national examinations. Public spending appears to have a negligible effect on school enrolment in highly corrupt regions, but a statistically significant, positive and relatively large effect in less corrupt regions. In contrast, public spending has no significant effect on school performance. The main lesson from this paper is that pouring more public funds into the education system is unlikely to bring about improvement unless it is accompanied by efforts to improve governance in the sector.

Suggested Citation

  • Daniel Suryadarma, 2012. "How corruption diminishes the effectiveness of public spending on education in Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 48(1), pages 85-100, April.
  • Handle: RePEc:taf:bindes:v:48:y:2012:i:1:p:85-100
    DOI: 10.1080/00074918.2012.654485
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    Citations

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    Cited by:

    1. Giuseppe Coco & Raffaele Lagravinese, 2012. "Incentive Effects on Efficiency in Education Systems’ Performance," Working Papers 270, ECINEQ, Society for the Study of Economic Inequality.
    2. Shah, Ritesh & Lopes Cardozo, Mieke, 2014. "Education and social change in post-conflict and post-disaster Aceh, Indonesia," International Journal of Educational Development, Elsevier, vol. 38(C), pages 2-12.
    3. Coco, Giuseppe & Lagravinese, Raffaele, 2014. "Cronyism and education performance," Economic Modelling, Elsevier, vol. 38(C), pages 443-450.
    4. Leer, Jane, 2016. "After the Big Bang: Estimating the effects of decentralization on educational outcomes in Indonesia through a difference-in-differences analysis," International Journal of Educational Development, Elsevier, vol. 49(C), pages 80-90.
    5. Suryadarma, Daniel & Yamauchi, Chikako, 2013. "Missing public funds and targeting performance: Evidence from an anti-poverty transfer program in Indonesia," Journal of Development Economics, Elsevier, vol. 103(C), pages 62-76.
    6. Krisztina Kis-Katos & Günther G. Schulze, 2013. "Corruption in Southeast Asia: a survey of recent research," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 27(1), pages 79-109, May.
    7. Patrice Ollivaud, 2017. "Improving the allocation and efficiency of public spending in Indonesia," OECD Economics Department Working Papers 1381, OECD Publishing.
    8. Pradhan, Menno & de Ree, Joppe, 2014. "District Governance and Student Learning in Indonesia," ADB Economics Working Paper Series 397, Asian Development Bank, revised 24 Oct 2014.
    9. Warning, Susanne & Dürrenberger, Nicole, 2015. "Corruption and education: Does public financing of higher education matter?," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112836, Verein für Socialpolitik / German Economic Association.
    10. Phimwalun Srithongkul & Pathairat Pastpipatkul, 2013. "Impacts of economic variables and the corruption perception index on human development," The Empirical Econometrics and Quantitative Economics Letters, Faculty of Economics, Chiang Mai University, vol. 2(1), pages 71-78, March.

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