Corruption in Indonesia
By: J. Vernon Henderson, Ari Kuncoro.
Contributors: Kuncoro, Ari.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10674; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10674.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Political corruption -- Indonesia.
Description: "Bribes by firms in Indonesia arise principally from regulations --licenses and levies --imposed by local government officials.  Regulations generate direct revenues (fees) plus indirect revenues in the form of bribes.  The expected value of the latter is capitalized into lower salaries needed by localities to compensate public officials.  Localities in Indonesia are hampered by insufficient revenues from formal tax and transfer sources to pay competitive salaries plus fund demanded' levels of public services, because local tax rates are capped by the center and inter-governmental transfers are limited.  Thus the direct and indirect revenues from local regulations are critical to local finances.  The paper models and estimates the key aspects of corruption -- the relationship between bribes, time spent with local officials, and different forms of regulation.  It models how inter-jurisdictional competition for firms limits the extent of local regulation and how greater sources of tax or inter-governmental revenues reduce the need for regulation and corruption.  The paper estimates a large reduction in regulation in better funded localities.  The findings are directly relevant to Indonesia where corruption is high and the country is in the throes of major decentralization and local democratization efforts"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 1/11/2005.
Also available in print.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.