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Was It Really “Growth with Equity†under Soeharto? A Theil Analysis of Indonesian Income Inequality, 1961-2002

  • Frankema, Ewout
  • Marks, Daan

    (Groningen University)

For over three decades (1966-1998) socio-economic policies in Indonesia were founded on Soeharto?s development trilogy ?growth, stability and equity?. Literature agrees that the policy goals of growth and stability were met by and large, but remains inconclusive about equity. In this paper we estimate Theil indices of sector income distribution to evaluate the impact of structural change on the trend of Indonesian income inequality for the period 1961-2002. Where conventional Gini-coefficients based on household expenditure surveys suggest that Indonesian income equality is comparatively confined and reveals no long run tendency in either upward or downward direction, our results indicate that inter and intra-sector income inequality increased rapidly under Soeharto, as well as the share of the labour force engaged in informal sector activities.

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File URL: http://irs.ub.rug.nl/ppn/30375947X
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Paper provided by Groningen Growth and Development Centre, University of Groningen in its series GGDC Research Memorandum with number GD-93.

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Date of creation: 2007
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Handle: RePEc:dgr:rugggd:gd-93
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