Corruption, Public Spending, and Education Outcomes: Evidence from Indonesia

30 Pages Posted: 9 Apr 2008

See all articles by Daniel Suryadarma

Daniel Suryadarma

Australian National University (ANU) - Arndt-Corden Department of Economics; SMERU Research Institute

Date Written: March 31, 2008

Abstract

This paper takes advantage of a new corruption measure across regions within a country to measure the influence of corruption on public spending efficacy in the education sector in Indonesia, one of the most corrupt countries in the world. I find that public spending has a negligible effect on education outcomes in highly corrupt regions, while it has a statistically significant, positive, and relatively large effect in less corrupt regions. I do not find any direct effect of corruption on education outcomes, hence implying that one channel through which corruption adversely affects the education system is through reducing the effectiveness of public spending.

Keywords: corruption, public spending, education, Indonesia

JEL Classification: D73, H75, I21, O1

Suggested Citation

Suryadarma, Daniel, Corruption, Public Spending, and Education Outcomes: Evidence from Indonesia (March 31, 2008). Available at SSRN: https://ssrn.com/abstract=1118323 or http://dx.doi.org/10.2139/ssrn.1118323

Daniel Suryadarma (Contact Author)

Australian National University (ANU) - Arndt-Corden Department of Economics ( email )

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