Distributive Politics behind the Veil of Indigence: A Study of Targeted Community-Based Development Programmes in Indonesia

This paper studies the targeted distribution of public spending based on the probabilistic voting model. The model predicts that office-motivated politicians tactically allocate economic benefits to win elections. I use the largest community-driven development (CDD) programme in Indonesia, PNPM Mandiri, to show that the allocation of this anti-poverty block grant is not politically neutral. This article finds strong evidence that presidential politics does matter in the distribution of the grant. In particular, districts that were major supporters of the incumbent president in the 2009 presidential election are largely rewarded, whereas swing districts are not targeted. Looking at the types of PNPM Mandiri, it is revealed that PNPM-Mandiri Urban is more inclined to tactical redistribution. These results are consistent with the core voter hypothesis, suggesting that risk-averse incumbent governments will over-invest in their own supporters.