PUBLIC GOODS TRANSFERS AND NATIONAL UNITY: EVIDENCE FROM POST-SOEHARTO INDONESIA.

There is little question whether politicians at times use public goods services for political gains. The driving political factors -- and the subsequent pattern of allocation -- of public goods distribution are less certain, however. This paper examines the factors that influenced the provision of public goods in post-Soeharto Indonesia (1999-2005). Using an original district-level dataset, I find that the practical effect of electoral competition on public goods allocation is at best miniscule. Instead, a district's threat to separate from the country appears to determine its portion of public goods. Separatism increases a district's public goods funds by 27%. Compared to the meager almost-zero percent increase in funds that electoral competition adds to a district, this effect is remarkably large. This finding suggests that in countries such as Indonesia where the imperative of holding the country together dominates government concerns and priorities, the central government focuses and distributes their resources primarily to ensure national unity. [ABSTRACT FROM AUTHOR]