Institute for Research on Economics and Society – Faculty of Economics and Business – University of Indonesia

Aid, Social Capital and Rural Public Goods: After the Sunami Disaster

February 21, 2014

(This scientific article is only available in English.)

Abstract:

Using survey data on fishing and fishing villages in Aceh, Indonesia from 2005 and 2007, this paper examines the effect of the December 2004 tsunami and resulting massive aid effort on local public good provision, in particular on public labor inputs, but also public capital choices . Also analyzed are the roles of and changes in local social and political institutions and participation in political and social activities. Such an examination informs not only our understanding of the impacts of aid on villages, but also our understanding of how villages allocate resources to public goods. For public labor inputs, volunteerism is lower in villages with more aid projects, but that is offset if the dominant donor mitigates agency problems by doing its own implementation. Volunteerism is lower in villages with more 'democratic' activity such as elections, although that effect is mitigated in villages with higher levels of social capital pre-tsunami. Evidence suggests volunteerism is lower not because of changes in types of leaders with village elections per se, but rather due to increased internal divisions associated with elections. Correspondingly for public capital, villages with more democratic activity combined with more aid projects tend to prioritize garnering private aid (eg, houses) at the expense of public aid (eg, public buildings).

For full article, click the following link: http://mpra.ub.uni-muenchen.de/23877/

Latest Publications

BI Board of Governors Meeting, April 2025 – Macroeconomic Analysis Series

April 23, 2025

MSME Resilience in the Face of COVID-19 and Beyond: A Meta-Analysis of Factors that Influence MSME Resilience

April 14, 2025

Monthly Inflation, April 2025 : Macroeconomic Analysis Series

April 10, 2025

Indonesia’s Employment Risks in the Shadow of US Reciprocal Tariffs – Labor Market Brief, April 2025

April 10, 2025

Related Publications

trade war

BI Board of Governors Meeting, April 2025 – Macroeconomic Analysis Series

Indonesian MSMEs

MSME Resilience in the Face of COVID-19 and Beyond: A Meta-Analysis of Factors that Influence MSME Resilience

April inflation

Monthly Inflation, April 2025 : Macroeconomic Analysis Series

Positive SSL Wildcard