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Assessing the Political Impacts of a Conditional Cash Transfer: Evidence from a Randomized Policy Experiment in Indonesia

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  • Julia E. Tobias
  • Sudarno Sumarto
  • Habib Moody

Abstract

Several developing nations, including Indonesia, have experimented with conditional cash transfers (CCTs) to poor households during recent years. Since 2007, Indonesia has been carrying out a randomized CCT pilot program (PNPM Generasi) in 1,625 villages where funds are disbursed to communities rather than households, and local councils allocate the funds to public projects following community input. In this paper, we explore political outcomes associated with the program, including electoral rewards for incumbents, and political participation. By comparing regions receiving the program with a control group, we estimate the CCT’s effects on political behavior in the 2009 elections for President and the national legislative assembly, and we also explore its effects on local politics. We find that the CCT program increases vote shares for legislative candidates from the incumbent president’s party, improves households’ satisfaction with district-level government administrative services, and decreases competition among presidential candidates as measured by the Herfindahl- Hirschman Index (HHI). We do not find conclusive evidence to support the hypothesis that the program increases votes for the incumbent President, and we find no evidence that the program significantly increases voter turnout or affects village-level politics.
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Suggested Citation

  • Julia E. Tobias & Sudarno Sumarto & Habib Moody, "undated". "Assessing the Political Impacts of a Conditional Cash Transfer: Evidence from a Randomized Policy Experiment in Indonesia," Working Papers 262, Communications Section.
    • Handle: RePEc:agg:wpaper:262
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    References listed on IDEAS

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    2. Ankush Goyal & Rajender Kumar, 2022. "Does Social Welfare Programmes Influence Households Trust in Local Administration and Their Political Participation? Evidence from the MGNREG Scheme in India," Indian Journal of Human Development, , vol. 16(3), pages 602-617, December.
    3. Duchoslav, Jan & Kenamu, Edwin & Thunde, Jack, 2023. "Targeting hunger or votes? The political economy of humanitarian transfers in Malawi," World Development, Elsevier, vol. 165(C).

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    Keywords

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    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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