Mohamad Ikhsan - Academia.edu (original) (raw)

Papers by Mohamad Ikhsan

Jurnal Ekonomi dan Pembangunan Indonesia, Jul 1, 2022

Applied Economics Letters

RePEc: Research Papers in Economics, 2021

Economics and Finance in Indonesia, 1989

Economics and Finance in Indonesia, 2002

While most of theoretical and empirical assessments of privatization considered as a success, it ... more While most of theoretical and empirical assessments of privatization considered as a success, it remains widely and increasingly un popular, partly because of the perception that it is fundamentally unfair both in conception and execution. This article is a literature review of the debate over the ownership of public vis a vis private sectors both from micro and macro economic perspectives. We find that in the context of Indonesia the economic rationale for privatization is very compiling. Therefore, the main reason for a slow the privatization process is more political rather than economic. We then identify some key issues for a successful privatization. First, the design of privatization must be part of an integral economic policy aimed at achieving stability and sustainable growth. In this context, the opening the economy for foreign competion is of utmost importance; Privatization without increased international competition could lead to oligopolistic practices in th economy. Th...

Economics and Finance in Indonesia, 2005

This paper attempts to analyze the impact of rice price policy changes on the poor. It is shown t... more This paper attempts to analyze the impact of rice price policy changes on the poor. It is shown that contrary to widespread opinion, an increase in the price of rice, particularly through protection policies, will negatively impact the poor. In other words, protective rice price policies are anti-poor. Each 10% increase in the price of rice will lead to a 1% increase in the poor population, in other words more than two million Indonesians will fall below the poverty line as a direct effect of a 10% increase in the price of rice. Rice price increases also contain undesired distribution dimensions: income transfer from populations outside Java to populations in Java, transfer from urban to rural populations, and income transfers from populations in poor provinces to populations in rich provinces, or from the poor to the rich.

This paper argued that critical analysis on current development strategy is important in order to... more This paper argued that critical analysis on current development strategy is important in order to reach the goal of development, that is, to promote growth and to reduce unemployment. Past policies and economic situation, combined with theories on productivity improvement, would provide material to formulate estimation strategy. If small enterprises were projected to play important role in the economic development, small enterprises must be seen as a central object of the economic policies. This article laid out two grand policies in economic development, i.e. to improve the environment for investor and to abolish discrimination to small enterprises, especially discrimination resulted from market failure. The next step will be building the primary foundation in promoting investment, included macroeconomic stability and predictable policies.

The ASEAN Region in Transition, 2019

Economies

Road quality plays an important role, especially in rural areas where most poor households are si... more Road quality plays an important role, especially in rural areas where most poor households are situated. This study aims to calculate the Rural Access Index (RAI), an indicator of rural road quality (SDG indicator 9.1.1), at the district level, to evaluate the implementation of the Nawacita programme in Indonesia from 2014–2020. The RAI describes the proportion of rural residents who live within 2 km of an all-season road. This study recommends the utilisation of road network maps, urban–rural boundary maps, three road network condition datasets, and WorldPop data to calculate the RAI. The results show that during this period, the RAI increased and its inequality decreased, specifically in the regions of priority for this programme (Papua and West Papua). The results also capture a strong pattern of regional convergence. To ensure the future success of this implementation, the government can create regulations to designate several road infrastructure projects as a national strategy,...

Economies

Narrowing the development gap has long been and continues to be a key element of government aspir... more Narrowing the development gap has long been and continues to be a key element of government aspiration worldwide. Since 2015, the Government of Indonesia has implemented the village fund (VF) transfer to enhance its rural economy, especially in remote areas. The impact of the VF on village development may vary greatly depending on the village’s location. This study examines the causal effects of VF transfer on the rural economic growth of underdeveloped villages in Indonesia. Using a nighttime light dataset at the village level as a proxy for rural economic growth and a regression discontinuity design in time, we found a significant improvement in rural economic growth in underdeveloped villages after the implementation of VF transfer. Our study confirms that the underdeveloped villages in East Indonesia are growing faster than those in West and Central Indonesia. The average growth of nightlight after the implementation of VF is approximately 156% in East Indonesia, 141% in Central...

Local Power & Politics in Indonesia, 2003

Cogent Economics & Finance, 2021

Abstract This study analyzes the impact of real exchange rate undervaluation on Indonesia’s manuf... more Abstract This study analyzes the impact of real exchange rate undervaluation on Indonesia’s manufacturing exports in 22 manufacturing industries throughout 1990–2015. The study was undertaken by modifying a partial equilibrium model of monopolistic competition for exporting firms and using the augmented mean group (AMG) method. This study confirms that the real exchange rate, both misalignment and changes in levels (depreciation/appreciation), are insignificant in affecting Indonesia’s manufacturing exports. In addition, this study finds that manufactured exports are significantly determined by the manufactured exports in the previous period, real interest rates, real wages, labor productivity, and firm growth. This finding indicates that the exchange rate manipulation policy is not an important factor in strengthening the competitiveness of Indonesia’s manufacturing exports. We suggest policies that play more important roles in driving manufacturing exports are creating a competitive and conducive business climate, lowering domestic interest rates, and reforming the labor system.

303 p.Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 1999.Focussing on the rural eco... more 303 p.Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 1999.Focussing on the rural economy remains the first priority of any poverty alleviation strategies.U of I OnlyRestricted to the U of I community idenfinitely during batch ingest of legacy ETD

Orthodox theories of international and trade were developed based on two key assumptions: perfect... more Orthodox theories of international and trade were developed based on two key assumptions: perfect competition and constant return to scale. According to these theories, the main deteerminants of international trade are differentials in either technology or resource endouments. New theories of international trade, on the other hand, we based on assumptions of market imperfections and increasing returns to scale. These theories provide a ground for government intervention to promote export growth. Unfortunately; thessse theories still contain some weaknesses, in bath their robustness and policy implementations. Implementing these theories withoutsufficient knowledge abaout international trade theories and industrial organization will only create new distortions which will be very costly in longer term.

Economics and Finance in Indonesia, 2021

The management of fiscal balance determines public debt sustainability, where a positive response... more The management of fiscal balance determines public debt sustainability, where a positive response of primary balance towards the debt ratio indicates a sustainable path. However, there might be asymmetry in the government’s fiscal management between different phases of the debt trajectory and business cycle. This study examines the sustainability of fiscal imbalance and public debt in Indonesia using the fiscal reaction function with annual fiscal data from 1976 to 2019. We incorporate asymmetry by decomposing the lagged debt ratio and cyclical output variables into their positive and negative partial sums. We find that Indonesia’s fiscal imbalance is on a path of weak sustainability as revenue grows more slowly than expenditure in the long run, with the bi-directional Granger causality between the two indicating fiscal synchronization. Long-run public debt sustainability is on a more sustainable path as primary surplus responds positively to the debt ratio. However, our asymmetric ...

Economics and Finance in Indonesia, 1993

Tahun 1993 ini tampaknya akan menjadi tahun di mana siklus perekonomian Indonesia berada dalam ce... more Tahun 1993 ini tampaknya akan menjadi tahun di mana siklus perekonomian Indonesia berada dalam celah yang terendah dalam era deregulasi. Penyebahnya tidak hanya berasal dari dalam negeri tetapi Juga merupakan gejala global. Hanya saja bagi Indonesia seperti yang terjadi di negara Asia Timur lainnya gejala ini baru dirasakan sejak tahun lalu. Sebagai contoh penurunan investasi asing yang terjadi sejak tahun 1991 bukanlah merupakan gejala yang terjadi di Indonesia tetapi juga berlangsung di hampir semua negara. Walaupun demikian harus diakui bahwa faktor domestik seperti ketidakpastian yang meningkat akibat proses deregulasi yang belum sepenuhnya terakomodasikan secara semestinya serta masalah infrastruktur yang belum juga dapat diperbaiki merupakan faktor yang menurunkan tingkat investasi asing di Indonesia. Di satu pihak terlihat penawaran dana investasi cenderung menurun sementara di pihak lain permintaannya semakin besar. Akibatnya persaingan untuk mendapatkan dana investasi asing...

Buletin Ekonomi Moneter dan Perbankan, 2021

This paper analyses the equilibrium price of the Indonesian Rupiah using the Synthetic Control Me... more This paper analyses the equilibrium price of the Indonesian Rupiah using the Synthetic Control Method (SCM) and assesses its misalignments. We find evidence of Rupiah misalignment, as the currency was undervalued for most periods, except for 1993-1996. This finding is robust across model specifications, predictors, and weighting. Our finding implies that keeping the exchange rate at its equilibrium level is ideal, and that policymakers can take advantage of the undervalued currency to promote economic growth via exports.

World Development Perspectives, 2020

The conventional wisdom of Arthur Lewis's dual sector model says that households in the agricultu... more The conventional wisdom of Arthur Lewis's dual sector model says that households in the agricultural (traditional) sector who can move out to a non-agricultural (modern) sector will become better off. We then scrutinize the last three waves of the Indonesia Family Life Survey (IFLS) to analyze the existence of the dual theorem. Our study uses Difference in Difference (DiD) regressions and ordered logit regressions to confirm that moving out of agriculture sectors has significantly increased the welfare of poor agricultural households, especially in the period of 2000-2007, but this is not the case of 2007-2014. Movement out of agricultural sectors decreases the probability of being always poor by 13.5 percentage points. However, when the economy transforms into a more advanced economy, simply moving out of agriculture does not guarantee that farmers, especially landless farmers, will become better off. Welfare improvement requires a shifting to formal non-agricultural sectors, but unfortunately farmers might not be readily equipped with the skills required in formal sectors. Our study also obviously confirms that farmland is an important asset for agricultural households. Agricultural households experiencing a decrease of agricultural land also decreased their expenditure per capita by IDR 36,833 in 2000 and IDR 68,683 in 2007. These findings suggest that, currently, moving out of agriculture is not the solution to improve the well-being of farmers. Keeping farmland ownership, raising investment in human capital, and the modernization of agriculture should be the main concerns in agricultural development.

Jurnal Ekonomi dan Pembangunan Indonesia, Jul 1, 2022

Applied Economics Letters

RePEc: Research Papers in Economics, 2021

Economics and Finance in Indonesia, 1989

Economics and Finance in Indonesia, 2002

While most of theoretical and empirical assessments of privatization considered as a success, it ... more While most of theoretical and empirical assessments of privatization considered as a success, it remains widely and increasingly un popular, partly because of the perception that it is fundamentally unfair both in conception and execution. This article is a literature review of the debate over the ownership of public vis a vis private sectors both from micro and macro economic perspectives. We find that in the context of Indonesia the economic rationale for privatization is very compiling. Therefore, the main reason for a slow the privatization process is more political rather than economic. We then identify some key issues for a successful privatization. First, the design of privatization must be part of an integral economic policy aimed at achieving stability and sustainable growth. In this context, the opening the economy for foreign competion is of utmost importance; Privatization without increased international competition could lead to oligopolistic practices in th economy. Th...

Economics and Finance in Indonesia, 2005

This paper attempts to analyze the impact of rice price policy changes on the poor. It is shown t... more This paper attempts to analyze the impact of rice price policy changes on the poor. It is shown that contrary to widespread opinion, an increase in the price of rice, particularly through protection policies, will negatively impact the poor. In other words, protective rice price policies are anti-poor. Each 10% increase in the price of rice will lead to a 1% increase in the poor population, in other words more than two million Indonesians will fall below the poverty line as a direct effect of a 10% increase in the price of rice. Rice price increases also contain undesired distribution dimensions: income transfer from populations outside Java to populations in Java, transfer from urban to rural populations, and income transfers from populations in poor provinces to populations in rich provinces, or from the poor to the rich.

This paper argued that critical analysis on current development strategy is important in order to... more This paper argued that critical analysis on current development strategy is important in order to reach the goal of development, that is, to promote growth and to reduce unemployment. Past policies and economic situation, combined with theories on productivity improvement, would provide material to formulate estimation strategy. If small enterprises were projected to play important role in the economic development, small enterprises must be seen as a central object of the economic policies. This article laid out two grand policies in economic development, i.e. to improve the environment for investor and to abolish discrimination to small enterprises, especially discrimination resulted from market failure. The next step will be building the primary foundation in promoting investment, included macroeconomic stability and predictable policies.

The ASEAN Region in Transition, 2019

Economies

Road quality plays an important role, especially in rural areas where most poor households are si... more Road quality plays an important role, especially in rural areas where most poor households are situated. This study aims to calculate the Rural Access Index (RAI), an indicator of rural road quality (SDG indicator 9.1.1), at the district level, to evaluate the implementation of the Nawacita programme in Indonesia from 2014–2020. The RAI describes the proportion of rural residents who live within 2 km of an all-season road. This study recommends the utilisation of road network maps, urban–rural boundary maps, three road network condition datasets, and WorldPop data to calculate the RAI. The results show that during this period, the RAI increased and its inequality decreased, specifically in the regions of priority for this programme (Papua and West Papua). The results also capture a strong pattern of regional convergence. To ensure the future success of this implementation, the government can create regulations to designate several road infrastructure projects as a national strategy,...

Economies

Narrowing the development gap has long been and continues to be a key element of government aspir... more Narrowing the development gap has long been and continues to be a key element of government aspiration worldwide. Since 2015, the Government of Indonesia has implemented the village fund (VF) transfer to enhance its rural economy, especially in remote areas. The impact of the VF on village development may vary greatly depending on the village’s location. This study examines the causal effects of VF transfer on the rural economic growth of underdeveloped villages in Indonesia. Using a nighttime light dataset at the village level as a proxy for rural economic growth and a regression discontinuity design in time, we found a significant improvement in rural economic growth in underdeveloped villages after the implementation of VF transfer. Our study confirms that the underdeveloped villages in East Indonesia are growing faster than those in West and Central Indonesia. The average growth of nightlight after the implementation of VF is approximately 156% in East Indonesia, 141% in Central...

Local Power & Politics in Indonesia, 2003

Cogent Economics & Finance, 2021

Abstract This study analyzes the impact of real exchange rate undervaluation on Indonesia’s manuf... more Abstract This study analyzes the impact of real exchange rate undervaluation on Indonesia’s manufacturing exports in 22 manufacturing industries throughout 1990–2015. The study was undertaken by modifying a partial equilibrium model of monopolistic competition for exporting firms and using the augmented mean group (AMG) method. This study confirms that the real exchange rate, both misalignment and changes in levels (depreciation/appreciation), are insignificant in affecting Indonesia’s manufacturing exports. In addition, this study finds that manufactured exports are significantly determined by the manufactured exports in the previous period, real interest rates, real wages, labor productivity, and firm growth. This finding indicates that the exchange rate manipulation policy is not an important factor in strengthening the competitiveness of Indonesia’s manufacturing exports. We suggest policies that play more important roles in driving manufacturing exports are creating a competitive and conducive business climate, lowering domestic interest rates, and reforming the labor system.

303 p.Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 1999.Focussing on the rural eco... more 303 p.Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 1999.Focussing on the rural economy remains the first priority of any poverty alleviation strategies.U of I OnlyRestricted to the U of I community idenfinitely during batch ingest of legacy ETD

Orthodox theories of international and trade were developed based on two key assumptions: perfect... more Orthodox theories of international and trade were developed based on two key assumptions: perfect competition and constant return to scale. According to these theories, the main deteerminants of international trade are differentials in either technology or resource endouments. New theories of international trade, on the other hand, we based on assumptions of market imperfections and increasing returns to scale. These theories provide a ground for government intervention to promote export growth. Unfortunately; thessse theories still contain some weaknesses, in bath their robustness and policy implementations. Implementing these theories withoutsufficient knowledge abaout international trade theories and industrial organization will only create new distortions which will be very costly in longer term.

Economics and Finance in Indonesia, 2021

The management of fiscal balance determines public debt sustainability, where a positive response... more The management of fiscal balance determines public debt sustainability, where a positive response of primary balance towards the debt ratio indicates a sustainable path. However, there might be asymmetry in the government’s fiscal management between different phases of the debt trajectory and business cycle. This study examines the sustainability of fiscal imbalance and public debt in Indonesia using the fiscal reaction function with annual fiscal data from 1976 to 2019. We incorporate asymmetry by decomposing the lagged debt ratio and cyclical output variables into their positive and negative partial sums. We find that Indonesia’s fiscal imbalance is on a path of weak sustainability as revenue grows more slowly than expenditure in the long run, with the bi-directional Granger causality between the two indicating fiscal synchronization. Long-run public debt sustainability is on a more sustainable path as primary surplus responds positively to the debt ratio. However, our asymmetric ...

Economics and Finance in Indonesia, 1993

Tahun 1993 ini tampaknya akan menjadi tahun di mana siklus perekonomian Indonesia berada dalam ce... more Tahun 1993 ini tampaknya akan menjadi tahun di mana siklus perekonomian Indonesia berada dalam celah yang terendah dalam era deregulasi. Penyebahnya tidak hanya berasal dari dalam negeri tetapi Juga merupakan gejala global. Hanya saja bagi Indonesia seperti yang terjadi di negara Asia Timur lainnya gejala ini baru dirasakan sejak tahun lalu. Sebagai contoh penurunan investasi asing yang terjadi sejak tahun 1991 bukanlah merupakan gejala yang terjadi di Indonesia tetapi juga berlangsung di hampir semua negara. Walaupun demikian harus diakui bahwa faktor domestik seperti ketidakpastian yang meningkat akibat proses deregulasi yang belum sepenuhnya terakomodasikan secara semestinya serta masalah infrastruktur yang belum juga dapat diperbaiki merupakan faktor yang menurunkan tingkat investasi asing di Indonesia. Di satu pihak terlihat penawaran dana investasi cenderung menurun sementara di pihak lain permintaannya semakin besar. Akibatnya persaingan untuk mendapatkan dana investasi asing...

Buletin Ekonomi Moneter dan Perbankan, 2021

This paper analyses the equilibrium price of the Indonesian Rupiah using the Synthetic Control Me... more This paper analyses the equilibrium price of the Indonesian Rupiah using the Synthetic Control Method (SCM) and assesses its misalignments. We find evidence of Rupiah misalignment, as the currency was undervalued for most periods, except for 1993-1996. This finding is robust across model specifications, predictors, and weighting. Our finding implies that keeping the exchange rate at its equilibrium level is ideal, and that policymakers can take advantage of the undervalued currency to promote economic growth via exports.

World Development Perspectives, 2020

The conventional wisdom of Arthur Lewis's dual sector model says that households in the agricultu... more The conventional wisdom of Arthur Lewis's dual sector model says that households in the agricultural (traditional) sector who can move out to a non-agricultural (modern) sector will become better off. We then scrutinize the last three waves of the Indonesia Family Life Survey (IFLS) to analyze the existence of the dual theorem. Our study uses Difference in Difference (DiD) regressions and ordered logit regressions to confirm that moving out of agriculture sectors has significantly increased the welfare of poor agricultural households, especially in the period of 2000-2007, but this is not the case of 2007-2014. Movement out of agricultural sectors decreases the probability of being always poor by 13.5 percentage points. However, when the economy transforms into a more advanced economy, simply moving out of agriculture does not guarantee that farmers, especially landless farmers, will become better off. Welfare improvement requires a shifting to formal non-agricultural sectors, but unfortunately farmers might not be readily equipped with the skills required in formal sectors. Our study also obviously confirms that farmland is an important asset for agricultural households. Agricultural households experiencing a decrease of agricultural land also decreased their expenditure per capita by IDR 36,833 in 2000 and IDR 68,683 in 2007. These findings suggest that, currently, moving out of agriculture is not the solution to improve the well-being of farmers. Keeping farmland ownership, raising investment in human capital, and the modernization of agriculture should be the main concerns in agricultural development.