THE JOKOWI’S “TO DEVELOP FROM THE PERIPHERY” POLICY: HOW EFFECTIVE?

D.S Priyarsono

Abstract


This paper reports the result of a study on the effectiveness of the current public policy adopted by President Joko Widodo that is called “membangun dari pinggiran” (to develop from the periphery).  The indicators for the effectiveness are regional economic growth and interregional per capita income (GRDP) equality.  The economic growth is approximated by regional economic multiplier coefficient, whereas the interregional per capita income equality is measured by the Williamson index.  The data of regional and sectoral output are taken from Statistics Indonesia (BPS) 2010-2015.  We find that the effectiveness of the policy, especially when its criterion is economic growth, depends on how we define "center" and "periphery'. If center means urban (municipalities and non-agriculture dominated regions) and periphery means rural (districts and agriculture dominated regions), then the policy is effective.  However, if center means Java Island or Western Indonesia and periphery means Outer Islands or Eastern Indonesia, then the policy is ineffective. If the criterion is equality, then it is conclusive that the policy effectively reduces interregional per capita income inequality. More specifically, it is very effective in reducing inequality between Western and Eastern Indonesia

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References


McCann, P. (2001), Urban and Regional Economics. Oxford University Press. New York.

Stimson, R. J., R. R. Stough, and B. H. Roberts (2006), Regional Economic Development: Analysis and Planning Strategy. Springer-Verlag. Berlin Heidelberg New York.

Thompson, M. J. (downloaded on June 23, 2016), Measuring Inequality in Space:

An Index for Measuring Regional Dispersion. Department of Political Science, William Paterson University. New Jersey.

Williamson, J. (1965), “Regional Inequalities and The Process of National Development,” Economic Development and Cultural Change, Volume 13.


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