Recent studies of large-scale "headline" conflicts have excluded consideration of local conflict, in large part due to the absence of representative data at low levels of geographic specification. This paper is a first attempt to correct for that by assessing the incidence, impacts, and patterns of local conflict in Indonesia. We employ a combination of qualitative fieldwork with an exploratory statistical analysis of the 2003 Village Potential Statistics collected by the Bureau of Statistics (Potensi Desa-PODES), which maps conflict across all of Indonesia's villages/neighborhoods. Violent conflict can be observed throughout the archipelago. The qualitative analysis shows that local conflicts vary in form and impacts across districts, and that local factors are key. The quantitative analysis, which excludes high conflict areas of Indonesia, confirms the importance of economic factors, with positive correlations between violent conflict and poverty, inequality, and variables measuring economic development. Clustering of ethnic groups and ill-defined property rights were also positively associated with violence.
This paper tests whether the behavior of corrupt officials is consistent with standard industrial organization theory. We designed a study in which surveyors accompanied Indonesian truck drivers on 304 trips, during which they observed over 6,000 illegal payments to police, soldiers, and weigh station attendants. Using plausibly exogenous changes in the number of checkpoints, we show that market structure affects the level of illegal payments. We further show that corrupt officials use complex pricing schemes, including third-degree price discrimination and a menu of two-part tariffs. Our findings illustrate the importance of considering the market structure for bribes when designing anticorruption policy.