Inpresand Inequality: A Distributional Perspective on the Centre's Regional Disbursements1
- 1 December 1988
- journal article
- research article
- Published by Taylor & Francis in Bulletin of Indonesian Economic Studies
- Vol. 24 (3) , 53-71
- https://doi.org/10.1080/00074918812331335449
Abstract
Central government funding of local expenditures under the Inpres programs is a potentially important policy instrument for redressing regional inequalities in Indonesia. This paper examines the implicit distributional objectives underlying Inpres. The scheme is modelled as the outcome of a constrained social choice problem facing the centre. An econometric model of Inpres allocations is used to identify the centre's implicit social preferences over alternative regional distributions of consumption. Mild absolute-inequality aversion is revealed, although it is somewhat swamped by province-specific preference factors related to population size and density. No other local welfare indicators appear to influence Inpres allocations.Keywords
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