Democratisation Under Diversity: Theory and Evidence from Indonesian Communities
نویسندگان
چکیده
We study the effect of ethnic diversity on local public spending following fiscal decentralisation in a setting where institutions are salient. Specifically, latter affects coordination costs and thereby cooperative behaviour across constituent groups. Our theory highlights role elite lobbying for policies which favour them decentralised setting. The differences preferences over good allocations along with salience groups relevant determining equilibrium behaviour. This results having detrimental developmental is aggravated by increased levels costs. test these predictions using Indonesian community-level data. Utilising 1997 2007 Family Life Survey (IFLS) rounds, we able to construct various measures diversity. exploit an institutional feature communities - namely, observance traditional Adat laws proxy Overall, find that depresses development post-decentralisation at community level particularly (which promote ethic mutual co-operation) not followed. opposite obtains non-developmental items, all consistent our theory.
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ژورنال
عنوان ژورنال: Social Science Research Network
سال: 2021
ISSN: ['1556-5068']
DOI: https://doi.org/10.2139/ssrn.3775978