Has Decentralization in Indonesia Led to Elite Capture or Reflection of Majority Preference?

Elite capture in the context of decentralization and democratization is a general concern in public good provision in developing countries. In this paper, we have empirically examined this hypothesis using a large rural household survey conducted in Indonesia concerning access of households to road and electricity services. In Indonesia, prior to decentralization, local infrastructure was supplied by a centralized authority that had the potential to provide infrastructures that did not match heterogeneous local preferences. After the introduction of the decentralization, local infrastructure decision is taken by elected local authorities. It, however, runs the risks of elite capture. We have examined if access to infrastructure reflects’ majority’s preference or results in elite capture in the decentralized period taking the allocation under the centralized regime duly into account.