Revisiting growth and poverty reduction in Indonesia: what do subnational data show?

Abstract

Indonesia has an impressive record of economic growth and poverty reduction over the past two decades. The growth-poverty nexus appears strong at the aggregate level. However, newly constructed panel data on the country's 285 districts reveal huge differences in poverty change, subnational economic growth and local attributes across the country. The results of econometric analysis show that growth is not the only factor to affect the rate of poverty change; other factors also directly influence the welfare of the poor, as well as having an indirect effect through their impact on growth itself. Among the critical ones are infrastructure, human capital, agricultural price incentives and access to technology. While fostering economic growth is crucial, a more complete poverty reduction strategy should take these relevant factors into account. In the context of ecentralisation, subnational analysis can be an instructive approach to examining local governance in relation to growth and poverty reduction.

Have economic growth and institutional quality contributed to poverty and inequality reduction in Asia?

“…Many economists argue that economic growth, through increasing per capita incomes or expenditures, can ameliorate the situation of the poor [1][2][3][4]. However, this view has been subject to debate for many years as other researchers have contended that growth and globalization have led to increasing income disparities, thereby impeding the rate of poverty reduction [5,6].…”

“…Among the remedies for improving the poverty situation is economic growth, which has been widely cited as being significant in improving the lives of the poor [1][2][3][4]. Many economists argue that economic growth, through increasing per capita incomes or expenditures, can ameliorate the situation of the poor [1][2][3][4].…”

Livelihood Strategy of Coastal Community: A Case Study in Tanjung Saleh Islands, Kubu Raya District, Indonesia

“…Generally, the poverty zone in Indonesia can be divided into three categories that are poverty in urban, inland, and coastal area. In this study, the poverty problems in coastal area become main attention (Fauzi, Savitri and Shohibuddin 2009;Balisacan, Pernia and Asra 2003;Cassels, Curran and Kramer 2005). This study is important in the way it empirically lays out th problems of poverty in coastal area.…”

The Linkages between Hard Infrastructure, Poverty Reduction, and Rice Prices

“…Other significant types of hard infrastructure which have significant impacts on poverty are water infrastructure [8] and electricity [9]. Poverty as a dependent variable is best viewed from target 1A of goal 1 of the Millennium Development Goals which requires poverty reduction not only in headcount but also in reducing the poverty gap and the multidimensional poverty index (MPI) which has lately replaced human poverty index (HPI).…”