Urbanization and Economic Growth in Indonesia: Good News, Bad News and (Possible) Local Government Mitigation

• Published in: Regional studies Vol. 48; no. 1; pp. 192 - 207
• Main Author: Lewis, Blane D.
• Format: Journal Article
• Language: English
• Published: Cambridge Routledge 02-01-2014; Taylor and Francis; Taylor & Francis Ltd
• Subjects: Administration locale; Correlation analysis; Crecimiento económico; Croissance économique; Cálculo del método generalizado de momentos; Economic development; Economic growth; Generalized method of moments (GMM) estimation; Gobierno local; Indonesia; Indonesien; Indonésie; Infrastructure; Investigation; Kommunalbehörden; Local government; Modelos vectoriales de corrección de errores; Modèle vectoriel à correction d'erreurs; Méthode des moments généralisés; News; Political economy; Population growth; Public infrastructure; Regional studies; Schätzung durch verallgemeinerte Momentenmethode (GMM); Studies; Time series; Urbanisation; Urbanisierung; Urbanización; Urbanization; Vector error correction (VEC) models; Vektorielles Fehlerkorrekturmodell (VECM); Wirtschaftswachstum; 印度尼西亚; 向量误差修正（VEC）模型; 地方政府; 城市化; 广义矩（ＧＭＭ）估计; 经济成长; Indonesia
• ISSN: 0034-3404; 1360-0591
• DOI: 10.1080/00343404.2012.748980

Lewis B. D. Urbanization and economic growth in Indonesia: good news, bad news and (possible) local government mitigation, Regional Studies. Time-series analysis for Indonesia over the period 1960-2009 suggests that the level of urbanization is positively associated with economic growth but that the rate of change of urbanization is negatively correlated with growth of economic output. A sub-national dynamic panel investigation provides additional evidence of the positive and negative level and rate effects, respectively. The panel analysis also implies that the harmful impact of urban population growth is linked to insufficient local public infrastructure spending. Local governments that invest more heavily in infrastructure are better able to cope with the apparent detrimental effects of rapid urbanization on economic growth.