Decentralization Policy and Equality: A Theil Analysis of Indonesian Income Inequality

Djoni Hartono () and Tony Irawan ()
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Tony Irawan: Department of Economics,Faculty of Economics and Management; Bogor Agricultural University

No 200810, Working Papers in Economics and Development Studies (WoPEDS) from Department of Economics, Padjadjaran University

Abstract: The decentralization policy has been implemented for almost 8 years in Indonesia. One of the main purposes of decentralization policy was to increase economic growth followed by equality. In this paper, we construct gini coefficient and Theil indices of sector income distribution to evaluate the trend of Indonesian income inequality during the implementation of the policy. We will analyze the equality between sector and within sector (e.q. agriculture, industry and services) both in the country and province level data. The output of this study is expected could answer the question whether there is a growth with equality during the implementation of decentralization both between and within sector.

Keywords: Decentralization; Inequality; Theil indices (search for similar items in EconPapers)
JEL-codes: E62 I32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac and nep-sea
Date: 2008-10, Revised 2008-10
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