Village Level Institutional Change and Ethnic Majorities: Evidence from Decentralising Indonesia

Abstract

This paper studies the variation in village head selection rules across Indonesia using panel data over 1997-2007. The selection of village heads is often thought of as being determined by national level legislation, with elections in villages located in kabupaten and directly appointed village heads for villages within kota. However, existing legislation allows a degree of autonomy by villages to determine their own village's institutional structure. I find that a larger majority of an ethnic group within Indonesian villages is associated with having elected village heads. Further, evidence is found that the changing composition of governments at the district level, as well as changes in village level ethnic majority size is associated with village level institutional change. I argue that the results provide valuable empirical evidence into constitutional change and further evidence on the role of ethnicity in political economy. Show more