Indonesia

We study Indonesia’s Integrated Economic Development Zone program, which provided taxbreaks for firms locating in poorer districts.

Despite the importance of agglomeration externalities in theoretical work, evidence for their nature, scale, and scope remains elusive, particularly in developing countries.

We study the impact of Indonesia’s KAPET programme, which provided incentives to firms to locate in specific districts.

Examining how agglomeration, or clustering, among Indonesian manufacturing firms has changed over the past 30 years, we found that its most robust drivers have been natural resources and supply chain linkages, especially with respect to explaining long-term changes in spatial concentration.

Beyond the role of economic forces, many theories of economic geography emphasize the way politics can shape the spacial configuration of economic activity.

This paper, published in World Development reviews competing theories about the causes of informality in developing countries and uses new data to determine which theory best explains the persistence and scale of Indonesia’s informal sector.

An estimation of the aggregate economic harm caused by cartels in developing countries provides evidence that it can be substantial irrespective of the scale of the economy in question.

What is the nature of competition amongst densely-located, largely similar microenterprises in the developing world?