The Impact of Private Sector Growth on Poverty Reduction: Evidence from Indonesia

Daniel Suryadarma and Asep Suryahadi

Development Economics Working Papers from East Asian Bureau of Economic Research

Abstract: This paper assesses the effect of public and private sector growth on poverty in Indonesia. We use fixed capital formation growth as the proxy for the private sector and growth in government spending as the indicator of the public sector. We find that growth in both sectors significantly reduces poverty; moreover, they have the same elasticity. Therefore, growth in both public and private sector spending will reduce poverty twice as fast as just relying on public spending. The implication is that it is crucial for governments to improve the business climate in their countries so that the private sector will be able to flourish and in the end expedite poverty reduction.

Keywords: private sector; investment; government expenditure; poverty reduction; Indonesia (search for similar items in EconPapers)
JEL-codes: H50 I32 O49 (search for similar items in EconPapers)
Date: 2007-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.eaber.org/node/21914 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 301 [REDIRECT LOOP] Moved Permanently (http://www.eaber.org/node/21914 [301 Moved Permanently]--> https://www.eaber.org/node/21914 [301 Moved Permanently]--> https://www.eaber.org/node/21914 [301 Moved Permanently]--> https://www.eaber.org/node/21914 [301 Moved Permanently]--> https://www.eaber.org/node/21914 [301 Moved Permanently]--> https://www.eaber.org/node/21914 [301 Moved Permanently]--> https://www.eaber.org/node/21914 [301 Moved Permanently]--> https://www.eaber.org/node/21914)

Related works:
Working Paper: The Impact of Private Sector Growth on Poverty Reduction: Evidence from Indonesia
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eab:develo:21914

Access Statistics for this paper

More papers in Development Economics Working Papers from East Asian Bureau of Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Shiro Armstrong ().