Direct Democracy and Local Public Goods in IndonesiaPDF version
Basic public goods such as dependable roads and clean water infrastructure are routinely underprovided in much of the developing world. While the provision of these services is often centrally administered, many now advocate for decentralization and community involvement as a more effective approach. Local communities can have better information on what goods and services are needed, and may thus be better positioned to recognize and quickly respond to inefficiency or corruption in implementation. This increase in local participation in government decision-making has been facilitated by a wide variety of political reforms, but the implications of these political mechanisms are yet to be well understood.
With nearly 20 percent of the population living below the poverty line1, improving the infrastructure in marginalized areas is a priority for the Indonesian government. An Indonesian government program supported by a loan from the World Bank, the Kecamatan Development Program (KDP), funds projects in approximately 15,000 villages each year. Each village receives an average of US$8,800, which they often use to surface existing dirt roads. Participating subdistricts, typically containing 10-20 villages, receive an annual block grant for three years. Each village makes two proposals – one on behalf of the whole village and one proposed by women’s groups – for small scale infrastructure projects.
Typically, representatives from various areas come together to discuss the merits of, and to decide on, the village’s two project proposals. While the program has effectively improved local infrastructure in many of these villages, it is unclear whether current procedure makes projects easily dominated by elites and under-provides for those community members who need improved services the most.
To investigate these issues, researchers conducted a randomized evaluation in 48 villages, all of which were preparing to apply for infrastructure projects. Each village followed one of two participatory processes that resulted in two proposals, one proposed by the village as a whole, and one exclusively by women. Each village was randomized into one of two different political processes through which they determined which project to propose.
Thirty-one villages followed the traditional representative meeting-based process described above. In a randomly selected subset of 17 villages, two direct elections substituted the representative meeting. Villagers could directly vote on a list of potential projects. In one of the elections all adults voted, and on the woman-specific proposal, only women voted. Data was collected on the project preferences of all villagers, including the elite, as well as the location and type of projects selected.
Impact on Project Type: The direct election process had relatively little effect on the ultimate decisions, but had substantial positive effects on other measures of citizen satisfaction with the political process. The elections did not change the probability that the general project would be located in a poor area. Direct elections on women’s projects, on the other hand, did result in projects that were located in poorer areas of the villages.
Impact on Satisfaction Measures: Direct elections resulted in villagers being 5 percentage points more likely to perceive the project was selected fairly and legitimately, and increased overall satisfaction with the program by 10 percentage points. The elections also raised the probability that individuals stated they would contribute something to the project by 18 percentage points. Additionally, villagers in treatment locations were 22 percentage points more likely to correctly identify the type and location of the general village project, and 29 percentage points more likely to know these things about the woman’s project.
[1] CIA World Factbook, “Indonesia,” https://www.cia.gov/library/publications/the-world-factbook/geos/id.html (accessed August 31, 2009).
