This paper estimates the local welfare impacts of road maintenance investments. We instrument road quality exploiting Indonesia's two-step budgeting process for allocating funding to local road authorities. Using comprehensive data on road quality from 1990-2007, we find that better roads help...

Indonesia is Southeast Asia's largest economy and freest democracy yet vested interests and local politics serve as formidable obstacles to infrastructure reform. In this critical analysis of the politics inhibiting infrastructure investment, Jamie S. Davison utilizes evidence from his research,...