Understanding regional poverty in Indonesia: is poverty worse in the East than in the West

This paper aims to investigate whether or not poverty is worse in the Eastern than in the Western part of Indonesia; and to understand the determinants of poverty in those regions. In this paper, cross-sectional and panel data techniques are applied to a provincial level data set for 1993 to 1996. The main findings of this paper are as follows. First, poverty is significantly worse in the Eastern than in the Western part of Indonesia. Second, an improvement in regional growth for the short- and medium-term does translate to poverty reduction, and third regional income inequality is the crucial factor determining regional poverty