Norms, Culture and Local Infrastructure: Evidence from Indonesia

The present paper explores the role of religious and social norms on a community’s access to public infrastructure. Distinguishing between social and physical infrastructure, we argue that investment in social infrastructural goods (e.g., health, education) could contribute to exchange both within and outside the community, while that in physical infrastructure (e.g., road, transport, communications) could only improve exchange outside the community. Accordingly, traditional communities may prefer to invest in social infrastructure goods at the cost of physical infrastructure goods in an attempt to preserve their indigenous identity. Using three rounds of Indonesian family life survey data, we find some support to this central hypothesis, even after controlling for all other possible covariates.