Decentralization and public service provision in Indonesia : influence of the middle class
Nataatmadja, Ronnie Rahman
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This study examines the role of the middle class in influencing local government spending and political turnovers in a decentralized Indonesia. It analyzes the changes in pattern of education and infrastructure spending in the pre and post decentralization era, specifically the changes due to the implementation of direct mayoral election in municipalities that began in 2005. The study finds that in the post direct election era, education and infrastructure spending are higher. For education spending, the increase is amplified by the presence of the middle class. As the size of the middle class in a city increases, the effect of decentralization on education spending becomes stronger. On the other hand, the effect of decentralization on infrastructure spending is attenuated by the size of the middle class in cities. In addition, the middle class amplifies the effect of local government performance on political turnover of mayors. The effect of elementary school enrollment rate on mayors' votes is stronger as the size of the middle class in a city increases. This study finds no conclusive results on the effect of the middle class on political turnovers of city council members. Last, the study qualitatively explores the role of nongovernmental organizations in influencing local government decision-making and building the capacity of the citizens in ensuring local government accountability.