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

Author

Listed:
  • Julia, Tobias
  • Sumarto, Sudarno
  • Moody, Habib

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.

Suggested Citation

  • Julia, Tobias & Sumarto, Sudarno & Moody, Habib, 2014. "Assessing the Political Impacts of a Conditional Cash Transfer: Evidence from a Randomized Policy Experiment in Indonesia," MPRA Paper 59091, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:59091
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    File URL: https://mpra.ub.uni-muenchen.de/59091/1/MPRA_paper_59091.pdf
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    References listed on IDEAS

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    2. Bjorkman, Martina & Svensson, Jakob, 2007. "Power to the people : evidence from a randomized field experiment of a community-based monitoring project in Uganda," Policy Research Working Paper Series 4268, The World Bank.
    3. Marco Manacorda & Edward Miguel & Andrea Vigorito, 2011. "Government Transfers and Political Support," American Economic Journal: Applied Economics, American Economic Association, vol. 3(3), pages 1-28, July.
    4. Stiglitz, Joseph E, 2002. "Participation and Development: Perspectives from the Comprehensive Development Paradigm," Review of Development Economics, Wiley Blackwell, vol. 6(2), pages 163-182, June.
    5. James D. Fearon & Macartan Humphreys & Jeremy M. Weinstein, 2009. "Can Development Aid Contribute to Social Cohesion after Civil War? Evidence from a Field Experiment in Post-conflict Liberia," American Economic Review, American Economic Association, vol. 99(2), pages 287-291, May.
    6. Hastings, Justine S. & Kane, Thomas J. & Staiger, Douglas O. & Weinstein, Jeffrey M., 2007. "The effect of randomized school admissions on voter participation," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 915-937, June.
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    8. Ariel Fiszbein & Norbert Schady & Francisco H.G. Ferreira & Margaret Grosh & Niall Keleher & Pedro Olinto & Emmanuel Skoufias, 2009. "Conditional Cash Transfers : Reducing Present and Future Poverty," World Bank Publications, The World Bank, number 2597.
    9. Anne Daly & George Fane, 2002. "Anti-Poverty Programs in Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 38(3), pages 309-329.
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    More about this item

    Keywords

    Conditional Cash Transfer; Political behavior; Indonesia;

    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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