Publications

    Muhamad Chatib Basri, June 2016

    In this paper, Dr. Muhamad Chatib Basri, who was Indonesia’s Minister of Finance during the Taper Tantrum (TT) period, analyzes the response to the TT of the five hardest-hit countries, dubbed the “Fragile Five” (Brazil, India, Indonesia, South Africa, and Turkey), and describes how Indonesia was able to mitigate the negative effects of the TT so quickly and effectively. Dr. Basri’s account provides many insights in the realm of macroeconomic management amidst external shocks that should be quite useful to emerging markets as the Fed now contemplates raising interest rates, which could have the same impact as the TT. Dr. Basri wrote this paper while a Senior Fellow at the Ash Center for Democratic Governance and Innovation and is now in the Department of Economics at the University of Indonesia. 

    Rema Hanna, October 2012 

    This paper uses a unique data-set from Indonesia on what individuals know about the income distribution in their village to test theories such as Jackson and Rogers (2007) that link information aggregation in networks to the structure of the network. The observed patterns are consistent with a basic diffusion model: more central individuals are better informed, and individuals are able to better evaluate the poverty status of those to whom they are more socially proximate. To understand what the theory predicts for cross-village patterns, this paper estimates a simple diffusion model using within-village variation, simulate network-level diffusion under this model for the over 600 different networks in our data, and use this simulated data to gauge what the simple diffusion model predicts for the cross-village relationship between information diffusion and network characteristics (e.g. clustering, density). The coefficients in these simulated regressions are generally consistent with relationships suggested in previous theoretical work, even though in our setting formal analytical predictions have not been derived. This paper then shows that the qualitative predictions from the simulated model largely match the actual data in the sense that we obtain similar results both when the dependent variable is an empirical measure of the accuracy of a village’s aggregate information and when it is the simulation outcome. Finally, this paper considers a real-world application to community based targeting, where villagers chose which households should receive an anti-poverty program, and show that networks with better diffusive properties (as predicted by our model) differentially benefit from community based targeting policies.