This thesis broadens our understanding of poverty, inequality and economic mobility in the context of a developing country by analysing the welfare of individuals in Indonesia over the last two decades. The analysis is split into three main periods, with very contrasting macroeconomic conditions: rampant economic growth under an authoritarian regime (1993-1997); an economic and political collapse following the East Asian Financial Crisis (1997-2000); and finally a recovery period in a new democratic era (2000-2007). In particular, we focus on investigating the robustness of poverty trends and associations, the chronic and transient nature of poverty, and the interaction between changes in inequality and economic mobility. Poverty trends emerging from repeated cross-sections are shown to be robust to the choice of poverty line, poverty measure, equivalence scale and regional price index, although some well-established poverty associations with education and region are not. Using longitudinal data we find that different methodological practices cause the relative importance of estimated chronic and transient poverty to vary substantially. Stable inequality in Indonesia over time is shown to be the net result of increasing income among poorer individuals and the re-ranking of individuals across the whole income distribution. Income changes during the crisis period were the most income equalising, while they were more dis-equalising in the democratic era. Together, findings will help policy makers, economists and other social scientists in general gain a better understanding of new measurement practices in describing welfare dynamics and how they can inform policy decisions. The results, while consistent with previous research, provide new insights into welfare in Indonesia from both cross-sectional and longitudinal perspectives.

This thesis focuses on local economic development in developing countries and, on the basis of research conducted in Indonesia, it examines how local governments balance ‘public entrepreneurialism’ with ‘democratic values’. Through four case studies, the thesis explores how the values of innovation and development are matched by concern for democratic accountability and respect for local cultures and traditions. The case-studies provide complementary and contrasting perspectives on local leadership and its impacts on local economic development, focusing respectively on development of the informal economy, exploitation of the potential of technology and the creative industries, modernisation of agriculture, and the securing of increased foreign investment. The key finding from these case-studies is that effective leadership in local economic development does indeed call for the spirit of entrepreneurialism and innovation to be balanced by sensitivity towards local democratic values and principles. However, rather than it being necessary for the formal head of the local government personally to provide the required leadership in both respects, it may equally be feasible for two (or more) different individuals within the hierarchy of the organisation and with respective strengths in entrepreneurialism and democratic values to work together to ensure that the desired balance is indeed achieved.