Corruption, Governance, and Inequality in Indonesia
Ever since the rapid transformation of a decentralised system in Indonesia, income distribution in the country has become much more unequal as shown by an increase of consumption-based Gini coefficient from 0.31 in 2001 to 0.4 in 2016. Existing literatures on efforts to reduce inequality in Indonesia rely mostly on economic factors. It still lacks investigation on non-economic aspects particularly with respect to governance including effective bureaucracy and anti-corruption mainstreaming policies. A high quality institution taking the power could accelerate basic service provision, economic growth, and poverty reduction. If it is properly applied, decentralisation could become an avenue for the local states to practice good governance that promotes accountability and abolishes heavy bureaucracy and corruption. Good governance and less rent-seeking practices may expedite efforts on reducing inequality. Using multiple datasets combining Corruption Perception Index (CPI), Governance Index (IGI), and budget realisation data at provincial level. This study then aims at examining the impact of good governance on inequality in Indonesia. This evidence would provide valuable and insightful information for policy makers that tackling inequality needs a comprehensive approach not only relying on economic issues.