Urbanization as if people mattered: why the rural urbanization-industrialization complex does not bring its promised welfare impact--three alternative explanations

This dissertation is a collection of three essays related to the urbanization-industrialization nexus and its welfare impact in Indonesia. In the first essay I evaluate whether farmers' loss of access to productive farm lands negatively affect their livelihood in rapidly urbanizing rural areas. I hypothesize that for farming households, the unfortunate event of losing farm landholding directly results in a medium term reduction in household income and consumption. Using data from Indonesian Family Livelihood Survey (IFLS), I test whether farming households who lose landholdings and live in urbanizing regions have significantly worse livelihood condition compared to their peers in similar situation. Tested with double difference and propensity score matching techniques, I find that the event of losing land, especially under the circumstance of rapid urbanization, often leads to a shock in farming households' income and consumption. In the second essay, I test the hypothesis that in the short term, rapid and more clustered urbanization of rural areas predicts the incidence of poverty. Using enhanced vegetation index (EVI), I classify land satellite imageries to evaluate land-cover changes in Salatiga, Indonesia and visualize the rural urbanization process. Using spatial regression techniques, I find that urbanization rate was not correlated to new poverty incidence, but the clustering rate was very positively correlated to it. This research provides an empirical support to spatial policies with a social policy insight: protection of farmlands during rapid rural urbanization, protection of farming jobs and public/communitarian access to farming lands, and selective implementation to land use changes by major developers. The third essay concerns the discrepancy between bureaucratic planning's vision on the region's economic future and the economic needs of their constituents. Using mixed-methods approach with interviews, focus group discussions, and reviews of planning documents and regional statistics, I explore the multidimensional mismatches between planning and the public's perspective. I argue that such mismatch is a result of required transformations demanded by the interest of capital—I call this "capital conditioning". Planning plays a key role in making sure that the locality meets capital conditions through four processes: alteration of perceived future and vision, compression of time frame for expected change, restructuring of legal and perceptual definition of locality, and redefining the role(s) of the State