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Public Goods and Ethnic Diversity: Evidence from Deforestation in Indonesia

Listed author(s):
  • Alberto Alesina
  • Caterina Gennaioli
  • Stefania Lovo

This paper shows that the level of deforestation in Indonesia is positively related to the degree of ethnic fractionalization at the district level. To identify a casual relation we exploit the exogenous timing of variations in the level of ethnic heterogeneity due to the creation of new jurisdictions. We provide evidence consistent with a lower control of politicians, through electoral punishment, in more ethnically fragmented districts. Our results bring a new perspective on the political economy of deforestation. They are consistent with the literature on (under) provision of public goods and social capital in ethnically diverse societies and suggest that when the underlying communities are ethnically fractionalized decentralisation can reduce deforestation by delegating powers to more homogeneous communities.

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File URL: http://webspace.qmul.ac.uk/pmartins/CGRWP80.pdf
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Paper provided by Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research in its series Working Papers with number 80.

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Date of creation: Dec 2016
Handle: RePEc:cgs:wpaper:80
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  1. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," Journal of Law, Economics and Organization, Oxford University Press, vol. 15(1), pages 222-279, April.
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  3. Alberto Alesina & Stelios Michalopoulos & Elias Papaioannou, 2016. "Ethnic Inequality," Journal of Political Economy, University of Chicago Press, vol. 124(2), pages 428-488.
  4. Alesina, Alberto & La Ferrara, Eliana, 2005. "Preferences for redistribution in the land of opportunities," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 897-931, June.
  5. Alberto Alesina & Reza Baqir & Caroline Hoxby, 2004. "Political Jurisdictions in Heterogeneous Communities," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 348-396, April.
  6. Samuel Bazzi & Matthew Gudgeon, 2015. "Local Government Proliferation, Diversity, and Conflict," HiCN Working Papers 205, Households in Conflict Network.
  7. 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.
  8. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods and Ethnic Divisions," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1243-1284.
  9. Paul Collier & Anke Hoeffler, 2004. "Greed and grievance in civil war," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 563-595, October.
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  11. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2013. "The Determinants of Attitudes toward Strategic Default on Mortgages," Journal of Finance, American Finance Association, vol. 68(4), pages 1473-1515, 08.
  12. repec:hrv:faseco:4553034 is not listed on IDEAS
  13. Alberto Alesina & Eliana La Ferrara, 2003. "Ethnic Diversity and Economic Performance," Harvard Institute of Economic Research Working Papers 2028, Harvard - Institute of Economic Research.
  14. Tommaso Nannicini & Andrea Stella & Guido Tabellini & Ugo Troiano, 2013. "Social Capital and Political Accountability," American Economic Journal: Economic Policy, American Economic Association, vol. 5(2), pages 222-250, May.
  15. William Easterly & Ross Levine, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1203-1250.
  16. Fitria Fitrani & Bert Hofman & Kai Kaiser, 2005. "Unity in diversity? The creation of new local governments in a decentralising Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 41(1), pages 57-79.
  17. repec:hrv:faseco:30747160 is not listed on IDEAS
  18. Stelios Michalopoulos, 2012. "The Origins of Ethnolinguistic Diversity," American Economic Review, American Economic Association, vol. 102(4), pages 1508-1539, June.
  19. Neil McCulloch & Edmund Malesky, 2011. "Does better local governance improve district growth performance in Indonesia?," Working Paper Series 1711, Department of Economics, University of Sussex.
  20. Casson, Anne & Obidzinski, Krystof, 2002. "From New Order to Regional Autonomy: Shifting Dynamics of "Illegal" Logging in Kalimantan, Indonesia," World Development, Elsevier, vol. 30(12), pages 2133-2151, December.
  21. Christian von Luebke, 2009. "The political economy of local governance: findings from an Indonesian field study," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 45(2), pages 201-230.
  22. Arianto A. Patunru & Neil McCulloch & Christian von Luebke, 2011. "A Tale of Two Cities: The Political Economy of Local Investment Climates in Indonesia," Journal of Development Studies, Taylor & Francis Journals, vol. 48(7), pages 799-816, July.
  23. Alesina, Alberto & La Ferrara, Eliana, 2002. "Who trusts others?," Journal of Public Economics, Elsevier, vol. 85(2), pages 207-234, August.
  24. Skoufias, Emmanuel & Narayan, Ambar & Dasgupta, Basab & Kaiser, Kai, 2014. "Electoral accountability and local government spending in Indonesia," Policy Research Working Paper Series 6782, The World Bank.
  25. Engel, Stefanie & Palmer, Charles, 2006. "Who owns the right? The determinants of community benefits from logging in Indonesia," Forest Policy and Economics, Elsevier, vol. 8(4), pages 434-446, June.
  26. 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.
  27. Lisa Cameron & Manisha Shah, 2014. "Can Mistargeting Destroy Social Capital and Stimulate Crime? Evidence from a Cash Transfer Program in Indonesia," Economic Development and Cultural Change, University of Chicago Press, vol. 62(2), pages 381-415.
  28. Miguel, Edward & Gugerty, Mary Kay, 2005. "Ethnic diversity, social sanctions, and public goods in Kenya," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2325-2368, December.
  29. Alesina, Alberto, 2003. "The Size of Countries: Does it Matter?," Scholarly Articles 4551794, Harvard University Department of Economics.
  30. Olken, Benjamin A., 2006. "Corruption and the costs of redistribution: Micro evidence from Indonesia," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 853-870, May.
  31. Alberto Alesina, 2003. "Joseph Schumpeter Lecture: The Size of Countries: Does it Matter?," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 301-316, 04/05.
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