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Decentralisation and Citizen Happiness: A Multilevel Analysis of Self-rated Happiness in Indonesia

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Abstract

The effect of decentralisation reform on citizen happiness in the context of a developing country remains under-investigated. We study this effect by examining the experience of Indonesia. Data comes from the Indonesian Family Life Survey 2007 which comprises face-to-face interviews with the adult population in Indonesia (N individuals = 29,024, N districts = 262). Multilevel analysis is used to examine the effect of fiscal and political decentralisation on citizen happiness, and shows that fiscal decentralisation is significantly associated with citizen happiness, while political decentralisation is not; these are robust to the inclusion of individual and district variables related to happiness. The findings suggest that decentralisation increases the happiness of citizens through the improved capacity of districts to deliver public services, rather than through the improved opportunities of citizens to engage in direct political participation.

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Notes

  1. In 2009, Freedom House classified 119 out of 193 countries as electoral democracies. There is a significant difference between an ‘electoral democracy’ and a ‘liberal democracy’. In the former, reasonably open elections can coexist with serious defects in the implementation of individual rights, the rule of law and other preconditions crucial for a free society. Liberal democracies, by contrast, enjoy free, fair and competitive elections, but also a large catalogue of civil liberties. According to Freedom House, only 89 of the 119 electoral democracies were classed as liberal democracies in 2009. Interestingly, this included Indonesia.

  2. Podes census is conducted by the Indonesian Central Bureau Statistics every 2 years. We use Podes 2006 as there is no Podes census in 2007.

  3. The percentage of unemployment in IFLS 2007 is lower compare with the World Bank 2007 unemployment data (9.1 %). One explanation could explain these differences are that both IFLS and World Bank use difference measure of unemployment. In the IFLS survey respondent is asked during the past week, did you do work for pay. This question is used to measure unemployed status. We checked this number with the Indonesian Socio economic survey (Susenas) 2007 which also used the same question. The result is same.

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Acknowledgments

We would like thank to Directorate of Higher Education, Ministry of Education and Culture, Indonesia for providing funding of this study and the Indonesian Family Life Survey team for providing the survey available. We would also like thank to Adi Pierewan, Devi Femina and the anonymous reviewers for their help in improving this manuscript. Thanks Frances Hunt editing this manuscript.

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Correspondence to Sujarwoto Sujarwoto.

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Sujarwoto, S., Tampubolon, G. Decentralisation and Citizen Happiness: A Multilevel Analysis of Self-rated Happiness in Indonesia. J Happiness Stud 16, 455–475 (2015). https://doi.org/10.1007/s10902-014-9518-3

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