Inequality and Political Trust in Indonesia

Eldes Natalya Hutagalung (), Takahiro Akita and Mohamad Fahmi
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Eldes Natalya Hutagalung: Master of Applied Economics, Padjadjaran University

No 201904, Working Papers in Economics and Development Studies (WoPEDS) from Department of Economics, Padjadjaran University

Abstract: Inequality persists across the world. Numerous social and political consequences emerge due to the wide gap between the rich and the poor. For politics, previous empirical studies confirm that higher inequality is associated with a decline of political trust, which may hurt a country’s democratic legitimacy. In a highly unequal society, poor citizens feel worse off and are likely to blame the government for their situation. They judge the government as unfair for giving special treatment to the rich, as its policies mostly reflect the preferences of upper-income groups. This pattern should be particularly accentuated in Indonesia. Given the country’s large income inequality, the issue of political trust has been attracting public concern. This study therefore aims to verify the negative effect of inequality on political trust at the district level. We look at five different governmental entities–the presidency, the house of representatives, governors, police, and the court system–to analyze political trust. Unexpectedly, our results do not agree with previous studies. They show that there is no evidence that inequality dampens political trust in Indonesia. The coefficients of inequality measurements are positive, implying that households in unequal districts on average exhibit more trust in government. The change in inequality shows, however, the negative effect on political trust because as inequality decreases or increases, households’ level of trust in government will increase or decrease in turn.

Keywords: Political Trust; Inequality; Change of Inequality (search for similar items in EconPapers)
JEL-codes: I3 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2019-11, Revised 2019-11
New Economics Papers: this item is included in nep-pol and nep-sea
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