This article examines the role played by local governments in shaping resistance to reforming fiscally and environmentally disastrous fuel subsidies. Shifting from universal-access social programs, like fuel subsidies, to targeted programs requires vesting authority with local politicians and bureaucrats, whom the state relies on to identify poor households and to deliver benefits. Where local governments are corrupt, citizens find promises to replace fuel subsidies with targeted spending less credible and resistance to reform is higher. Using household survey data from Indonesia, this article finds that corruption in the implementation of targeted transfer programs increases resistance to fuel subsidy reform among the poor citizens who consume the least fuel and who stand to benefit the most from targeted programs. Findings suggest that improving capacity within subnational governments to deliver social programs is important in developing public support for reform.
AldermanH. (2002). Subsidies as a social safety net: Effectiveness and challenges (Social Protection Discussion Paper Series). Washington, DC: The World Bank.
3.
AndersonC.TverdovaY. (2003). Corruption, political allegiances, and attitudes towards governments in contemporary democracies. American Journal of Political Science, 47, 91-109.
4.
Arze del GranadoJ.CoadyD.GillinghamR. (2012). The unequal benefits of fuel subsidies: A review of evidence for developing countries. World Development, 40, 2234-2248.
5.
AuerbachA. (2016). Clients and communities. World Politics, 68, 111-148.
6.
Badan Pusat Statistik [Central Bureau of Statistics]. (2011). Pendataan Potensi Desa [Data on Village Potential]. Jakarta, Indonesia: Badan Pusat Statistik.
7.
BanerjeeA.HannaR.KyleJ.OlkenB.SumartoS. (in press-a). The role of competition in effective outsourcing: Subsidized food distribution in Indonesia. Journal of Political Economy.
8.
BanerjeeA.HannaR.KyleJ.OlkenB.SumartoS.(in press-b). Tangible information and citizen empowerment: Identification cards and food subsidy programs in Indonesia. Journal of Political Economy.
9.
BardhanP.MookherjeeD. (2005). Decentralizing antipoverty program delivery in developing countries. Journal of Public Economics, 89, 675-704.
10.
BatesR. (1981). Markets and states in tropical Africa: The political basis of agricultural policies. Berkeley: University of California Press.
BeatonC.LontohL.Wai-PoiM. (2017). Indonesia: Pricing reforms, social assistance, and the importance of perceptions. In InchausteG.VictorD. (Eds.), The political economy of energy subsidy reform (Chapter 4). Washington, DC: The World Bank.
13.
BellemareM. (2015). Rising food prices, food price volatility, and social unrest. American Journal of Agricultural Economics, 97, 1-21.
Bril-MascarenhasT.PostA. (2015). Policy traps: Consumer subsidies in post-crisis Argentina. Studies in Comparative International Development, 50, 98-120.
16.
BurgoonB. (2009). Globalization and backlash: Polanyi’s revenge?Review of International Political Economy, 16, 145-177.
17.
CameronL.ShahM. (2014). Can mistargeting destroy social capital and stimulate crime? Evidence from a cash transfer program in Indonesia. Economic Development and Cultural Change, 62, 381-415.
18.
CampbellA. L. (2012). Policy makes mass politics. Annual Review of Political Science, 15, 333-351.
19.
CheonA.LacknerM.UrpelainenJ. (2015). Instruments of political control: National oil companies, oil prices, and petroleum subsidies. Comparative Political Studies, 48, 370-402.
20.
CheonA.UrpelainenJ.LacknerM. (2013). Why do governments subsidize gasoline consumption? An empirical analysis of global gasoline prices, 2002-2009. Energy Policy, 56, 382-390.
21.
ClausenB.KraayA.NyiriZ. (2011). Corruption and confidence in public institutions: Evidence from a global survey. World Bank Economic Review, 25, 212-249.
22.
ClementsB.CoadyD.FabrizioS.GuptaS.AlleyneT.SdralevichC. (Eds.). (2013). Energy subsidy reform: Lessons and implications. Washington, DC: International Monetary Fund.
23.
ClementsB.JungH.-S.GuptaS. (2007). Real and distributive effects of petroleum price liberalization: The case of Indonesia. The Developing Economies, 45, 220-237.
24.
DavisL. (2014). The economic cost of global fuel subsidies. American Economic Review: Papers & Proceedings, 104, 581-585.
25.
HadizV. (2010). Localising power in post-authoritarian Indonesia: A Southeast Asia perspective. Palo Alto, CA: Stanford University Press.
26.
HaggardS.BirdsallN. (2000). The social fallout: Safety nets and recrafting the social contract. In HaggardS. (Ed.), The political economy of the Asian financial crisis (Chapter 5). Washington, DC: Peterson Institute for International Economics.
27.
HainmuellerJ. (2012). Entropy balancing for causal effects: A multivariate reweighting model to produce balanced samples in observational studies. Political Analysis, 20, 25-46.
28.
HainmuellerJ.XuY. (2013). ebalance: A stata package for entropy balancing. Journal of Statistical Software, 54(7), 1-18.
29.
HakhverdianA.MayneQ. (2012). Institutional trust, education, and corruption: A micro-macro interactive approach. Journal of Politics, 74, 739-750.
30.
HetheringtonM. (2005). Why trust matters: Declining political trust and the demise of American liberalism. Princeton, NJ: Princeton University Press.
31.
HoD.ImaiK.KingG.StuartE. (2007). Matching as nonparametric preprocessing for reducing model dependence in parametric causal inference. Political Analysis, 15, 199-236.
32.
IacusS.KingG.PorroG. (2012). Causal inference without balance checking: Coarsened exact matching. Political Analysis, 20, 1-24.
33.
International Institute for Sustainable Development. (2012). A citizen’s guide to energy subsidies in Indonesia: 2012 update. Winnipeg, CA.
34.
International Institute for Sustainable Development. (2015). Indonesia energy subsidy briefing (November 2015). Winnipeg, CA.
35.
JacobsA.MatthewsJ. S. (2017). Policy attitudes in institutional context: Rules, uncertainty, and the mass politics of public investment. American Journal of Political Science, 61, 194-207.
36.
JasparsS.ShohamJ. (1999). Targeting the vulnerable: A review of the necessity and feasibility of targeting vulnerable households. Disasters, 23, 359-372.
37.
Jones LuongP.WeinthalE. (2010). Oil is not a curse: Ownership structures and institutions in Soviet successor states. Cambridge: Cambridge University Press.
38.
KraayA.MurrellP. (2016). Misunderestimating corruption. Review of Economics and Statistics, 98, 455-466.
39.
LadislawS.CuylerZ. (2015). Adjusting to low prices: Prospects for fossil-fuel subsidy reform in oil-producing and exporting countries. Washington, DC: Center for Strategic & International Studies.
40.
LupuN.RiedlR. B. (2013). Political parties and uncertainty in developing democracies. Comparative Political Studies, 46, 1339-1365.
NossiterA. (2012, January9). Nigerians protest rise in oil prices. The New York Times, A9.
43.
OlkenB. (2006). Corruption and the costs of redistribution. Journal of Public Economics, 90, 853-870.
44.
OlkenB. (2009). Corruption perceptions vs. corruption reality. Journal of Public Economics, 93, 950-964.
45.
PierskallaJ. (2016). The politics of urban bias: Rural threats and the dual dilemma of political survival. Studies in Comparative International Development, 51, 286-307.
46.
PoppeleJ.SumartoS.PritchettL. (2000). Social impacts of the Indonesian crisis: New data and policy implications. Jakarta, Indonesia: The SMERU Research Institute.
47.
RehmP.HackerJ.SchlesingerM. (2012). Insecure alliances: Risk, inequality, and support for the welfare state. American Political Science Review, 106, 386-406.
48.
RodrikD. (1998). Globalisation, social conflict, and economic growth. The World Economy, 21, 143-158.
49.
RossM.HazlettC.MahdaviP. (2017). Global progress and backsliding on gasoline taxes and subsidies. Nature Energy, 2, Article 16201.
50.
RudolphT.EvansJ. (2005). Political trust, ideology, and public support for government spending. American Journal of Political Science, 49, 660-671.
51.
SeligsonM. (2002). The impact of corruption on regime legitimacy: A comparative study of four Latin American countries. Journal of Politics, 64, 408-433.
SiddigK.AguiarA.GretheH.MinorP.WalmsleyT. (2014). Impacts of removing fuel import subsidies in Nigeria on poverty. Energy Policy, 69, 165-178.
54.
SlaterD.SimmonsE. (2013). Coping by colluding: Political uncertainty and promiscuous powersharing in Indonesia and Bolivia. Comparative Political Studies, 46, 1366-1393.
55.
SmithT. G. (2014). Feeding unrest: Disentangling the causal relationship between food price shocks and sociopolitical conflict in urban Africa. Journal of Peace Research, 51, 679-695.
56.
SossJ. (1999). Lessons of welfare: Policy design, political learning, and political action. American Political Science Review, 93, 363-380.
TimmerP. (1993). Rural bias in the East and South-East Asian rice economy: Indonesia in comparative perspective. Journal of Development Studies, 29, 149-176.
59.
VictorD. (2009). The politics of fossil-fuel subsidies. Winnipeg, CA: International Institute for Sustainable Development.
60.
WeaverV.LermanA. (2010). Political consequences of the carceral state. American Political Science Review, 104, 817-833.
61.
Weitz-ShapiroR. (2008). The local connection: Local government performance and satisfaction with democracy in Argentina. Comparative Political Studies, 41, 285-308.
62.
WlezienC. (1995). The public as thermostat: Dynamics of preferences for spending. American Journal of Political Science, 39, 981-1000.
63.
The World Bank. (2009). Tapping a hidden resource: Energy efficiency in the Middle East and North Africa. Washington, DC: Author.
64.
The World Bank. (2012a). Raskin subsidized rice delivery: Social assistance program and public expenditure review. Jakarta, Indonesia: Author.
65.
The World Bank. (2012b). Targeting poor and vulnerable households in Indonesia. Jakarta, Indonesia: Author.
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
