Norms, Culture and Local Infrastructure: Evidence from a Decentralised Economy

Sarmistha Pal (s.pal@surrey.ac.uk)
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Sarmistha Pal: University of Surrey

No 5281, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Culture as reflected in social and religious norms may be pivotal to social organization in a decentralised economy where local authorities are responsible for the provision of local public goods. We distinguish between individualist and collectivist cultures to argue that collectivist culture may promote rules to indulge in family, social and religious values at the cost of individual values promoting material objects and may thus result in inefficient choice of pubic goods. We use Indonesia as a case in point to classify communities strictly adhering to traditional adat laws and Islamic religion as promoting collectivist culture. Results using 1997 and 2007 Indonesian Family Life Survey community-level panel data highlight that, even after controlling for other variables, traditional collectivist communities strongly adhering to adat and Islam tend to have significantly greater access to social (rather than physical) infrastructural goods; similar pattern is reflected in the allocation of community spending to these goods.

Keywords: decentralization; collectivist culture; adat law; Islam; social and physical infrastructure; allocation of spending; community development; Indonesia (search for similar items in EconPapers)
JEL-codes: D02 H41 O43 P51 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2010-10
New Economics Papers: this item is included in nep-evo, nep-pbe, nep-sea, nep-soc and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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