Growth, Growth Accelerations and the Poor: Lessons from Indonesia

Sambit Bhattacharyya and Budy Resosudarmo

No 2013-14, CSAE Working Paper Series from Centre for the Study of African Economies, University of Oxford

Abstract: We study the impact of growth and growth accelerations on poverty and inequality in Indonesia using a new panel dataset covering 26 provinces over the period 1977-2010. This new dataset allows us to distinguish between mining and non-mining sectors of the economy. We find that growth in non-mining significantly reduces poverty and inequality. In contrast, overall growth and growth in mining appears to have no effect on poverty and inequality. We also identify growth acceleration episodes defined by at least four consecutive years of positive growth in GDP per capita. Growth acceleration in non-mining reduces poverty and inequality whereas growth acceleration in mining increases poverty. We expect that the degree of forward and backward linkages of mining and non-mining sectors explain the asymmetric result. Our results are robust to state and year fixed effects, state specific trends, and instrumental variable estimation with rainfall and humidity as instruments.

Keywords: growth; growth accelerations; mining, non-mining, poverty; inequality (search for similar items in EconPapers)
JEL-codes: I32 N15 O11 O13 O49 (search for similar items in EconPapers)
Date: 2013
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Related works:
Journal Article: Growth, Growth Accelerations, and the Poor: Lessons from Indonesia (2015)
Working Paper: Growth, Growth Accelerations and the Poor: Lessons from Indonesia (2013)
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