What Drives Regional Proliferation in Indonesia? Assessing the Role of Institutions

Abstract

Regional proliferation (pemekaran) is still a major issue of debate in the Indonesian public policy forums. In this article, we investigate the factors that contribute to pemekaran and analyze whether the quality of institutions can explain the number of regional proliferation events in Indonesia. Based on observations for the period 2007 to 2014, we find that the levels of both administrative approvals and social capital have a positive and significant effect on the number of regional-proliferation events. We also find that fiscal transfers and income do not constitute motives for regions in Indonesia to proliferate. In addition, there is a significant and positive association between ethnic fractionalization and the occurrence of regional proliferation in Indonesia. Meanwhile, the qualitative findings in West Java and Banten show that territorial coalitions do matter and that there are political, economic, and bureaucratic rent-seeking motives behind pemekaran.