The objective of this study is to assess whether living in a community that has a more democratic decision making system or in a society with a higher degree of participation and cooperation has any effect on household income changes and poverty reduction in Indonesia. Constructing an empowerment index and a participation index, we find that a household would have had a two percentage point higher income growth from 1993 to 2000 if it had been in a society with a high degree of cooperation compared to a society with the lowest degree of cooperation, if our results imply causality. This is substantial, since the average household per capita real income growth between 1993 and 2000 was 11 %. The participation index was found to be insignificant.

Recent CMI publications: