The extension of mass education not only affects the level of education of the labor force, but also raises the average education of local politicians. This paper investigates the impact of a large program of school construction in Indonesia on local governance and public good provision. By using a panel dataset of 10,000 villages and exploiting the staggered timing of local elections, I isolate the effects driven by changes in local governance. The results suggest that the school construction program led to important increases in the provision of public goods. Furthermore, the results are heterogeneous across villages: public goods experienced stronger increases in villages where there was a particular demand for that type of public good. I provide evidence that the results are driven by the increase in the level of education of the village head, which suggests that the level of human capital of local politicians is a key ingredient of public good provision in developing countries.
Mónica Martínez-Bravo is an Assistant Professor at CEMFI (Centro de Estudios Monetarios y Financieros), in Madrid, Spain. She received her Ph.D. in Economics from MIT in 2010. Her research interests are in the fields of Political Economy and Economic Development.