The local economy and Re-election of incumbent district leaders in Indonesia

This paper tests whether economic growth and unemployment rates matter in the re-election of incumbent district leaders in Indonesia. Applying the Probit and Hekcprobit model on Indonesia's local direct elections during 2005–2013, we find that both unemployment and GDP per capita growth has an impact on election outcomes in the election year. However, for incumbent district leaders' it is only the average annual GDP per capita growth that matters for re-election. However, when we separate luck (district's performance due to regional or national economy) from competence (district's own economic performance), we find that competence matters for re-election in the election year, while luck matters for re-election in the average annual performance of the incumbents' tenure. The findings suggest that voters put more attention and vigilance on the incumbents' performances in the last year of their tenure, rather than on their whole tenure.