Political Determinants of Regional Economic Growth in Indonesia

This article seeks to explain the different progress of each region in Indonesia in terms of economic growth. The changes in decentralisation and democratisation are variables of interest in driving economic growth. The neoclassical growth model is the underlying theory used in the study. Cross-region regression is employed using political and institutional indicators. The results show that democratisation has a positive impact on decentralised regions, as the increases in the effective number of parties and total number of seats in the representative councils lead to faster economic growth. It is expected that this condition can be maintained to drive high growth rates in all regions.