Decomposed Impact of Democracy on Indonesia’s Economic Growth

Authors

  • Irsan Hardi Economic Modeling and Data Analytics Unit, Graha Primera Saintifika, Aceh Besar 23371, Indonesia
  • Edi Saputra Ringga Department of Economics, Faculty of Business, Economics and Social Development, Universiti Malaysia Terengganu, Terengganu 21030, Malaysia
  • Ade Habya Fijay Industry and Trade Office of Aceh, Banda Aceh 23123, Indonesia
  • Ar Razy Ridha Maulana Statistics of Aceh Province, Banda Aceh 23121, Indonesia
  • Rahmilia Hadiyani Department of Economics Education, Faculty of Teacher Training and Education, Universitas Syiah Kuala, Banda Aceh 23111, Indonesia
  • Ghalieb Mutig Idroes Energy and Green Economics Unit, Graha Primera Saintifika, Aceh Besar 23371, Indonesia

DOI:

https://doi.org/10.60084/eje.v1i2.80

Keywords:

Indonesian democracy index, Gross domestic product, Solow growth model, Robust least squares

Abstract

Indonesia's democratic performance is still classified as a 'moderate' and 'flawed democracy' according to the latest report, even though the ongoing progress of national democracy continues to advance every year. This study addresses the issue by offering a more comprehensive perspective and distinguishes itself by employing a decomposition approach that incorporates 25 indicators of the Indonesian democracy index to assess their individual effects on economic growth, which no prior Indonesian study has explored. The study classifies these indicators into six distinct categories: freedom and civil rights issues, discrimination issues, political and electoral issues, social and cultural issues, law and justice issues, and demonstration and community participation issues. The findings reveal that five out of the six categorized indicators have a crucial role and significantly impact economic growth. This evidence suggests that policymakers should prioritize a multifaceted approach, which includes bolstering the protection of civil rights and freedoms, combating discrimination, as well as reforming electoral and political processes. If implemented with transparency and inclusivity, this approach can pave the way for a more robust and prosperous democracy, leading to better and sustainable economic growth in Indonesia.

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Published

2023-09-19

How to Cite

Hardi, I., Ringga, E. S., Fijay, A. H., Maulana, A. R. R., Hadiyani, R. and Idroes, G. M. (2023) “Decomposed Impact of Democracy on Indonesia’s Economic Growth”, Ekonomikalia Journal of Economics, 1(2), pp. 51–60. doi: 10.60084/eje.v1i2.80.

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Vol. 1 No. 2 (2023): November 2023

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Articles

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Copyright (c) 2023 Irsan Hardi, Edi Saputra Ringga, Ade Habya Fijay, Ar Razy Ridha Maulana, Rahmilia Hadiyani, Ghalieb Mutig Idroes

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