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Growth, Growth Accelerations and the Poor: Lessons from Indonesia

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  • Sambit Bhattacharyya
  • Budy P. Resosudarmo

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.

Suggested Citation

  • Sambit Bhattacharyya & Budy P. Resosudarmo, 2013. "Growth, Growth Accelerations and the Poor: Lessons from Indonesia," CSAE Working Paper Series 2013-14, Centre for the Study of African Economies, University of Oxford.
    • Handle: RePEc:csa:wpaper:2013-14
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    Cited by:

    1. Iván González Gordón & Budy P. Resosudarmo, 2019. "A sectoral growth‐income inequality nexus in Indonesia," Regional Science Policy & Practice, Wiley Blackwell, vol. 11(1), pages 123-139, March.
    2. Edwards, Ryan B., 2016. "Mining away the Preston curve," World Development, Elsevier, vol. 78(C), pages 22-36.
    3. Koopman, Eline & Wacker, Konstantin M., 2023. "Drivers of growth accelerations: What role for capital accumulation?," World Development, Elsevier, vol. 169(C).
    4. M. Niaz Asadullah & Jeron Joseph & James Chin, 2023. "The Political Economy of Poverty Reduction in Malaysia," Progress in Development Studies, , vol. 23(2), pages 127-151, April.
    5. Zabsonré, Agnès & Agbo, Maxime & Somé, Juste, 2018. "Gold exploitation and socioeconomic outcomes: The case of Burkina Faso," World Development, Elsevier, vol. 109(C), pages 206-221.
    6. Deepak Kumar Behera & Viswanathan Pozhamkandath Karthiayani, 2022. "Do globalization progress and sectoral growth shifts affect income inequality? An exploratory analysis from India," Regional Science Policy & Practice, Wiley Blackwell, vol. 14(2), pages 352-375, April.
    7. Yessi Vadila & Budy P. Resosudarmo, 2020. "Tariff reform and income inequality in Indonesia," Regional Science Policy & Practice, Wiley Blackwell, vol. 12(3), pages 455-475, June.
    8. Broad, Robin & Cavanagh, John, 2015. "Poorer Countries and the Environment: Friends or Foes?," World Development, Elsevier, vol. 72(C), pages 419-431.

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    More about this item

    Keywords

    growth; growth accelerations; mining; non-mining; poverty; inequality;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O49 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other

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