Publications

This paper describes the construction of the East Asia inter-regional social accounting matrix (EA-IRSAM). The first section describes the basics of the social accounting matrix. The next section presents procedures to construct EA-IRSAM based on the Global Trade Analysis Project (GTAP) Power version 9 database. The last section describes two extensions of IRSAM analyses used in this paper, namely inter-regional constrained fixed price multiplier (IR-CFPM) and microsimulation of household income. Download

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This paper provides detail of the inter-regional system of analysis of East Asia (IRSA-EA). IRSA-EA is a static and multi-country computable general equilibrium (CGE) model. IRSA-EA has a flexible production structure that allows substitutions among electricity and energy intermediate inputs. Hence, the model can simulate the impacts of changes in energy and electricity prices. Also, the model incorporates several recycling mechanisms to simulate the impacts of renewable electricity development and decarbonisation in the East Asia region. This paper provides a technical guide for the IRSA-EA model that will be useful to analyse the socio-economic and environmental impacts of policy instruments in the subsequent two papers. Download

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The textile and clothing industry is an important sector because of its contribution to the economy. It becomes an important industry which absorbs most workers, especially in the low labor-cost countries. The United States (U.S.) is the biggest market for textile and clothing products worldwide. Distorted by some protections, the trend in the U.S. textile and clothing market changes rapidly. One of the most influential agreements was The Multi-Fiber Agreement (MFA) with its quota restriction from 1974 to 1994. After the end of MFA, The Agreement on Textile and Clothing (ATC) toke into effect. This agreement set by the World Trade Organization (WTO) to eliminate the quota restriction gradually within 10 years (1995-2005) and use the tariff restriction. After the end of the ATC, the trade in textile and clothing becomes governed by the general rules and the multilateral trading system. Meanwhile, the tariff still becomes a burden for some countries, especially the ones which do not get a special tariff rate because of the lack of trade agreement with the U.S. Another challenge is the use of imported raw materials as the main input of production. This makes the cost of production sensitive to international price volatility. According to […]

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Women’s representation in Indonesia like many other countries in the world, remain considerably low. Therefore, both women activists and the government have been trying to increase women’s descriptive representation in order to increase their substantive representation, since it has been argued that females as lawmakers are more concerned about well-being issues. This paper focuses on the impacts of the descriptive representation of women in local politics. It examines the impacts of having more female in politics on the proportions of budget allocation in the municipalities budget by using data from municipalities in Indonesia between 2010 and 2017. This study also observes the gender effect on policies related to infrastructure access which women, as homemakers, strongly care about, namely household access to safe water, safe sanitation and electricity. The results indicate that the gender of a politician matters in terms of the policy outcomes. Women in the Regional House of Representatives are more likely to increase the budgets for environment, housing and public facility and health, but reduce the proportions allocated for economy and education. Likewise, a female leader is a statistically significant factor in the allocation of more government spending on health, but reduces funding for education. In terms of […]

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This paper aims to explore communities’ contribution toward and identify the factors affecting the availability of sanitation facilities. Sanitation has an important role in human life because it correlates with the fulfillment of basic human needs such as wastewater and solid waste management. This research employed two models as follows: First, the hedonic price model was used to estimate the willingness to pay for improved sanitation facilities. Second, it also utilizes the logistic model to understand the correlation between socio-economic characteristics and availability of improved sanitation facilities. Using the fifth wave of Indonesia Family Life Survey (IFLS) data, the results show that the availability of toilet with septic tank influences the value of the property in urban areas. Hence, people living in urban areas are willing to pay more for facilities. Moreover, the awareness of people in urban and rural areas affect their willingness to pay (WTP) for appropriate garbage handling. However, drainage facilities do not significantly influence the value of the property in urban and rural areas. Related with the presence of improved sanitation facilities, socio-economic characteristics such as education level and residential area influence in Indonesia compared to other characteristics. Download

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The main objective of this research is to examine the effect of government expenditures on the transportation sector and that effect on economic growth in Indonesia from 1986 to 2016. The research employed long time series data, utilizing the Ordinary Least Square (OLS) regression method to analyze the data collected. The data analyzed show that government expenditures on transportation as a physical capital and government expenditures on education as human capital significantly affect economic growth in Indonesia. On the contrary, the expenditures on housing and health indicated no contribution for national economic activity. This study recommended that government must ensure the budget for transportation development. The government must pay more attention to the allocation of the education budget for regions outside Java, by building educational facilities in areas that are still in the poor category that will improve their standard of living. Lastly, government should pay more attention to bureaucratic system specifically the procurement of goods and services and give punishment to those who divert and embezzle public funds. Download

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This study analyzed the effect of Early Childhood Education on Academic Achievement in Indonesia. This study used kindergarten education and National Test Score of Indonesian Language and Math as the main subject of research. This study obtained the sample from Indonesian Family Life Survey (IFLS) 2007. The econometric method, that this study used, was Ordinary Least Square (OLS). This study presented the estimation based on school level, primary and secondary. This study founded that kindergarten education (formal Early Childhood Education) affected National Test Score of Indonesian Language and Math significantly if other factors did not add in the regression. This finding caused the effect of kindergarten education to National Test Score became not valid or biased. The problems like high cost of early childhood education and lack of teacher could be the reason why the effect of early childhood education was not maximal. This problems can be the the next subject of research about early childhood education. DOWNLOAD

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In this paper, I examine the sustainability of Indonesian fiscal policy by looking at how the primary balance-to-GDP ratio has responded to variations of the debt-to-GDP ratio, as suggested by Bohn’s (1998) Model Based Sustainability approach. This approach is motivated by dissatisfaction with most of the literature that use unit root and cointegration tests in combination with the intertemporal budget constraint. It is argued that unit root or cointegration tests have low power in rejection unit root from near unit root alternatives. Furthermore, Bohn (2005) shows that the consistency with the intertemporal budget constraint (IBC) is not a sufficient condition for debt stationary. It is possible to satisfy the IBC while simultaneously having a mildly explosive path of debt-to-GDP ratios. Using a data set covering the period 1990 – 2010 and controlling for measures of cyclical variations in GDP and temporary government expenditure, I find a significantly positive response of the primary balance-to-GDP ratio to variations in the debt-to-GDP ratio, and that response has been stable since 2000.  Moreover, I also find that the debt-to-GDP ratio tends to be mean-reverting due to a nominal growth dividend. These results suggest that the government have significant and strong fiscal response to changes […]

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Level of economic development has been found to be among the strongest determinants of corruption level in cross-country studies. Those studies use income per capita as a measure of level of development and found that higher level of corruption is associated with lower level of income. We argue that, at any given income level, education is also a very important determinant of the level of corruption and failing to include education may bias or over-estimate the importance of income. We estimated an empirical model of individual’s attitude toward anti-corruption using a large sample of 9,020 individuals that represent Indonesian population and find that the effect of income (proxied by expenditure) is either weakened or eliminated when we control for the level of education. The effect of education is also found to exhibit a non-linear pattern which implies that investing in education will have increasing returns in the form of anti-corruption attitude. This finding supports the view that increasing access to education is an effective measure of reducing corruption norms particularly in developing countries. DOWNLOAD

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Social interactions may encourage the cooperative behaviours by triggering either self-image concerns (when one sees others’ decisions without being seen) or social-image concerns (when one’s decision is seen by others). A laboratory experiment is designed to compare these two concerns directly, using a four-players finitely repeated public goods experiment on two directed star networks, self-image and social-image networks. The comparison of the players voluntary contributions in both types of networks reveals that their contributing behaviours are statistically indistinguishable. However, the players who belong to the self-image network are more willing to conform with the group behaviours, meaning that they will increase (reduce) the contributions if theirs are below (above) their groups average. Furthermore, I also find evidence that the contributing behaviours are more stable in the self-image networks than in the social-image network. DOWNLOAD

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