Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/296824 
Year of Publication: 
2024
Series/Report no.: 
ADBI Working Paper No. 1432
Publisher: 
Asian Development Bank Institute (ADBI), Tokyo
Abstract: 
People's trust in state and political institutions is a key foundation of a well-functioning economy. We estimate the impact of direct elections on people's trust in state and political institutions, using a major political reform in Indonesia as the source of exogenous variation. Prior to 2005, regents, mayors, and governors were elected by the local legislative assembly. Since 2005, however, they have had to compete in an open election where voters directly choose their preferred leader. The historically and institutionally driven staggered implementation of these local direct elections allow us to identify the causal impact of the reform. We find that district direct elections increase trust in all state and political institutions, except for the police. However, our finding does not hold in districts that experienced moderate or high hostility during the elections, implying that trust is strongly influenced by the political situation. We also empirically show that the increase in trust took place simultaneously with improvements in economic outcomes.
Subjects: 
democracy
direct election
trust
institution
Indonesia
JEL: 
D72
H10
K16
P51
Z13
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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