We investigate the effect of resource dependence on district level income in a rare within-country study for Indonesia, one of the largest resource producing countries in Asia. We follow 390 districts between 2006 and 2015, consider four alternative measures of resouce dependence, and instrument for the potential endogeneity of each using historical measures of oil, gas and coal reserve locations, and changes in the physical production of each resource. Using annual fixed effects and first differenced regressions with and without various instruments, we find no evidence of a "resource curse". Instead, we find robust evidence across all models that dependence as measured by mining's share of output is positively associated with district real per capita income. We find a similar positive relationship between dependence as measured by the share of district government revenues from oil and gas or mining overall, and income in our most credible specifications with instruments. For example, a standard deviation increase in change in district government dependence on oil/gas revenues increases real per capita income by 16 percent over a nine year period.

Previous research has found that in Indonesia, a resource giant in South East Asia, resource dependence is positively associated with economic growth, contrary to a 'resource curse' hypothesis. We test four potential causal mechanisms for this positive effect: spill overs to manufacturing, higher education provision, improvements in institutional quality, and investment in public capital. We follow 390 districts within Indonesia from 2006 to 2015, using four alternative measures of resource dependence, and instrumenting for their potential endogeneity. We first confirm a positive overall effect of resource dependence on real per capita Gross Regional Domestic Product. We then test the extent to which resource dependence positively affects manufacturing, education, public investment, and district institutional quality. We finally test the extent to which these factors contribute to growth. We find that resource dependence aids growth in part by raising measures of district institutional quality. Resource dependence also raises net high school enrolment rates, though we do not find that this in turn raises growth. Conversely, while higher capital spending by districts raises growth, we find no evidence that this share is affected by resource dependence. In auxiliary analysis, we find little support for the hypothesis that resource dependence benefits growth more (or only) for districts that begin with higher institutional quality.

Mining sector plays important roles for Indonesian economic performance, especially in East Kalimantan. This study investigates: (a) whether economic linkages of the mining sector related with other economic sectors in East Kalimantan, (b) who gets benefit from such mining activities; (c) how is the impact of mining sector for rural and urban households; and (d) what happens if coal mining, oil and gas productions are completely depleted. The quantitative analysis framework using Input-Output and Social Accounting Matrix Tables in period 2009-2010 has been implemented as main data set. The result shows that mining sector was underdeveloped sector in East Kalimantan, including Kutai Kartanegara district. Activities from mining sector tended to give benefit for the owners of capital, which is larger than that benefit for workers employed. Structural Path Analysis (SPA) shows that urban households gain the greatest advantages from the activities of this sector. The result also shows that the total output decreased by 65.12% when the mining, oil and gas dissapeared. A drastic reducing income after mining and oil and gas era will have an impact on the decline in the purchasing power in the region. However, the interesting finding of this research shows that the loss of mining and oil or gas sectors actually increases the strength of employment multiplier by 19%.

This article aims to analyse the effects of coal and minerals on human development index (HDI) in South and East Kalimantan provinces of Indonesia. Historically, Kalimantan was famously known as the largest contributor of coal and mineral production in Indonesia. Under Indonesia's fiscal decentralization policy which effectively ran since 2004, we test: Do revenues from coal and minerals negatively affect HDI? By focusing on nine coal giant areas within these two provinces that have longer mining histories, and linking it with the coal boom event since the 2000's, and using panel data analysis with fixed effects controlled, we find that coal and mineral revenues have a positive effect on HDI, contrary with resource curse hypothesis. The results remain consistent regardless of inclusion of other important covariates such as the past level of institutional quality and net student enrolment ratio, or whether revenues in all non-renewable resources are used. However, the positive impact found is small in magnitude. For example, for every 10% points increase in the share in coal and mineral revenues in local government budgets, HDI increases by 0.0085 points, Ceteris paribus.