Corruption in Indonesia, Challenges for a Sustainable Development Strategy

Abstract This study extends the literature by investigating the relationship between sustainable development and corruption in a panel of thirty-three provinces in Indonesia during 2004-2012. In measuring sustainable development, this study employs composite indices consist of 20 indicators covering economic, social, environmental, and institutional aspects in Indonesia's regional economies. The findings show a significant negative relationship between sustainable development and corruption. This study suggests that anti-corruption initiatives by the government should focus on improving governance and maximizing the social value of natural resource exploitation. Besides, the government should address the issues of productivity and sustainable population growth to ensure economic development sustainability.JEL codes: C33, C43, D73, Q01