Abstract

This article aims to re-examine the regional convergence hypothesis on income in Indonesia over the 2000–2017 period. By applying a non-linear dynamic factor model, this article tests the club convergence hypothesis using a novel dataset of income at the district level. The results show significant five convergence clubs in Indonesian districts’ income dynamics, implying the persistence of income disparity problems across districts even after implementing the decentralization policy. The subsequent analysis reveals two appealing features regarding the convergence clubs. First, districts belonging to the same province tend to be in the same club, and second, districts with specific characteristics (i.e. big cities or natural resources-rich regions) dominate the highest income club. Overall, our findings suggest some insightful policy implications, including the importance of differentiated development policies across convergence clubs and inter-provincial development strategies.

摘要

本文旨在重新审视印度尼西亚在2000–2017年期间的收入区域收敛假设。通过应用非线性动态因素模型，本文使用地区水平的新收入数据集测试了俱乐部会聚假设。结果显示，在印度尼西亚地区的收入动态中，有五个重要的趋同俱乐部，这意味着即使实施了分权政策，各地区之间的收入差距问题仍然存在。随后的分析揭示了关于融合俱乐部的两个吸引人的特征。首先，属于同一省的地区往往属于同一俱乐部，其次，具有特定特征的地区（即大城市或自然资源丰富的地区）主导着最高收入的俱乐部。总体而言，我们的发现表明一些具有深刻见解的政策含义，