261680-contemporary-studies-on-suburban-indones-eb393619.pdf

Avalaible online at http://journals.ums.ac.id, Permalink/DOI: 10.23917/jep.v19i1.5701 Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan, 19 (1), 2018, 80-93 Contemporary Studies on Suburban (Indonesia) Today: Critique on Classical-Neoclass...

Avalaible online at http://journals.ums.ac.id, Permalink/DOI: 10.23917/jep.v19i1.5701 Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan, 19 (1), 2018, 80-93 Contemporary Studies on Suburban (Indonesia) Today: Critique on Classical-Neoclassical Regional Economics Based Institutional Economics Perspectives 1 Pitri Yandri, 2D.S. Priyarsono, 3Akhmad Fauzi, 4Arya Hadi Dharmawan 1 STIE Ahmad Dahlan Jakarta, P.hD Student of Regional & Rural Development Planning Sciences, Bogor Agricultural University (IPB) 2 Dept. of Economics, Faculty of Economics and Management IPB 3 Dept. of Resource and Environmental Economics, Faculty of Economics and Management IPB 4 Dept. of Socio-Economic Sciences, Faculty of Human Ecology IPB Corresponding Author: [email protected], Recieved: January 2018 | Revised: April 2018 | Accepted: July 2018 Abstract The current trend shows that the growth of suburban area is increasingly massif, both its total areas as well as quantity. However, the phenomenon is not followed with the attention of researchers to conduct the study on it. Even if there is, their attention escape on an important approach in the analysis. Their analysis rests on old theories which assume that the space planning and land just triggered by the company’s and household’s behavior. Nonetheless, the fact remains that land use planning involves complex functions of institution. Therefore, this brief article reports the results of a literature review about the condition of suburban areas in Indonesia. The approach is conducted by critical review using institutional analysis to elaborate classical and neoclassical regional economic theories, as well as comparing and synthesizing the literature. To sharpen the argument, I also present the relevant descriptive data. Through institutional perspective, I argue that the real question of land use planning and its development in the suburbs exists beyond land and infrastructure issues. Keyword: von Thunen; land rent; suburbia; formal institution; informal institution; decentralization JEL Classification: B12, B13, B15, R11, R110 How to Cite: Yandri, P., Priyarsono, D., Fauzi, A., & Dharmawan, A. (2018). Contemporary Studies on Suburban (Indonesia) Today: Critique on Classical-Neoclassical Regional Economics Based Institutional Economics Perspectives. Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan, 19(1), 80-93. doi:https://doi.org/10.23917/jep.v19i1.5701 DOI: https://doi.org/10.23917/jep.v19i1.5701 1. Introduction especially food. That situation makes rural areas In Indonesia, the study of suburban area are considered very important in contributing to is relatively uncommon because the attention the sustainability of food availability in Indonesia. of many academics is focused on either rural or Therefore, any attempt to solve the problems of urban issues. The reason why most discourse the countryside through a variety of research is phenomenon and empirical research are only highly regarded. focused on those areas is rural areas are regarded On the other hand, in the perspective of as main resources provider for cities and towns, structural transformation, urban areas are 80 Jurnal Ekonomi Pembangunan, ISSN 1411-6081, E-ISSN 2460-9331  Avalaible online at http://journals.ums.ac.id, Permalink/DOI: 10.23917/jep.v19i1.5701 Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan, 19 (1), 2018, 80-93 considered as a major factor for economic growth; term“desakota”. The concept of a desakota hence, resolving various problems of urban areas is a “mixture of intensive agricultural and will thus contribute to the efforts of helping nonagricultural located along the corridor of big economic growth. Observing the situation, we cities”, and “residents along the corridor is moving can clearly see the suburb as an ‘intermediary’ (engaging) in agriculture”. This concept was later between the two areas (rural-urban), and thus used by Hudalah & Firman (2012) in their studies serious attention for the suburb becomes crucial. in Jakarta Metropolitan City. Other terms for Moreover, in the context of the implementation of the suburbs are “urban fringe” and “peri-urban”, autonomy and decentralization, the emergence of which is frequently used in many articles for small cities will also creates new suburban areas. different contexts. The term “suburb” is also used In the same context, Joko Widodo’s by Sonmez (2009) in observing a suburban area of administration has introduced Nawa Cita the city of Izmir, Turkey. (Nine Agendas) which promotes the concept of Due to various terms that illustrates the “developing from the periphery”. Developing concept of suburbs, clear definition becomes from the periphery gives high priority on the very important. According to Ann (2013), clear outskirts as opposed to central areas (Priyarsono, definition will certainly be useful in (1) the issue of 2017). Moreover, Priyarsono (2017) argued that policy making; (2) the formulation of the research there is no formal definition for the concept of problem and theory; and (3) the field study, developing from the periphery, thus the concept although one may argues that clear definition is can be understood from a variety of perspectives. important only for theory. From the results of the Developing from the periphery can be seen as analysis, defining the suburban comprehensively an attempt to build rural areas, in which the turned out as a task that was not easy to be central areas are considered as the urban. In the done. However, Ann (2013)—referring to Harris context of this article, it may be declared the area (2010)—stated that in the search of the definition of the suburb is the periphery, and the urban of suburbs, approaches on location, density and areas is the center. On the basis of this simple novelty can be utilized. understanding, not to mention that the formal In this case, approach on location could be boundaries of the concept of “periphery” in Nawa more consistently applied because naturally, Cita is still undefined, any perspective on the suburbs’ development activity are done outside concept of “periphery” will still contribute to the the urban or metropolitan area. The question is, agenda of Nawa Cita. how far or wide is the suburban area? The answer The emergence of the suburban areas as depends on the number of existing metropolitan- area of interaction between rural and urban areas sized cities, the size of the town centre, and the is extremely complex in nature. It involves both forms of transportation. Therefore, Ann (2013) socio-economic and spatial issues. In a study of try to parse it into subdefinitions with a fixed literature on suburban, Hinchcliffe in Vaughan reference to Harris’ principles (2010), which are (2009) argued, “The literature of the suburbs is density and novelty. Harris stated, although extensive, yet the subject always seems elusive. not common, some urban areas have a denser For some the suburbs is a geographical space; for suburban area than the city centre. From the others, a cultural form; while for others still it is aspect of novelty, how old a suburb can be part a state of mind.” of a city’s suburban history? It comes down to the In theory, terms associated with suburban location and relative novelty that have landscape are used much differently by academics. Terrence functions, mode of transportation, social character Mcgee (1991) in Ortega (2012) introduced the and specific physical features. Jurnal Ekonomi Pembangunan, ISSN 1411-6081, E-ISSN 2460-9331 81  Avalaible online at http://journals.ums.ac.id, Permalink/DOI: 10.23917/jep.v19i1.5701 Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan, 19 (1), 2018, 80-93 Table 1. Approaches to Defining Suburbs Esensi Fitur dan Jenis Example: first, second, and third ring suburbs; suburbs as low Example: low density primarily density, with detached houses, What a suburb is/positive residential areas. middle class families, substantial open space, and scattered employment. Example: Suburbs are within metropolitan areas (not rural) Example: not cultured, not diverse, What a suburb lacks/negative and outside the central cities (not unequal, not dense. core) Source: Ann (2013) Table 2. Key Dimensions for Defining Suburbs with Examples of Definition Dimension Brief Description Examples Physical (where, what) Suburbs as on the outskirt of the town; definition unofficially derived from U.S Where the suburbs are located within a Location census metropolitan area -- suburbs as within metropolitan areas but outside of core cities Key physical features related Built environment Suburbs as having large areas of low density to development patterns or characteristics detached houses building types; local visual identity Fungtional (operations) How people access and around in Suburbs as locations within commuting Transportatation suburbs distance of a core city. Suburbs as mainly residential developments Activities Functions and uses of place with segregated uses. Social (who) U.S. definition of suburbs as municipalities Defined by municipal of similar Political space outside the core city, affecting policies such boundaries as education and zoning. The population character, level of Suburbs as middle class or exclusive; a Sociocultural exclusivity, and cultural heritage and suburban way of life. tastes Process (how, when) Who builds ; the level of Styles of building, design, and planning in terms of Suburbs as incremental and speculative planning amounts of control and developments scale of planning unit. Relates to relative newness, Suburbs as areas from the period since the Time or its period of development second world war Analytical Suburbs as sprawling, conformist, isolating, Critical Assessments Suburbs seen as problematic elite, locationally disadvantaged, and/or ugly places; often opposed to the core city. Defined using criteria Indices combined into some kind of Sprawl indices, fiscal capacity classifications indicator Source: Ann (2013) 82 Jurnal Ekonomi Pembangunan, ISSN 1411-6081, E-ISSN 2460-9331  Avalaible online at http://journals.ums.ac.id, Permalink/DOI: 10.23917/jep.v19i1.5701 Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan, 19 (1), 2018, 80-93 Government Livelihood Intergovernmental Expenditure Strategy Issues Environtment: Space, Water Governance Small Scale Green Open Farmers Less of Political Gated Space Participation Communities Food Security Land Dencification Transformation Spatial Real Estate Poverty Segregation Gentrification Boom Inequality Land Use Disparity Land Social Waste Transportation Subdivision Sprawal Segregation Over Population Spatial Physical Mismatch Fragmentation Community Social Deconstruction Retail Store Migration Infrastructure Polarization Price of Social Commuters Congestion Land Social Cohession Conflict Figure 1. The dynamics and complexity of problems in the Suburban Area Source: the analysis of the literature, proceed by Vensim, 2017 Next, Ann (2013) are trying to dissect the decentralized autonomous region. These changes concept of “suburban” from different perspectives. cause many areas to extract themselves and form a According to Ann, the two approaches that are new administrative area. As a result, many of those relatively good for defining the suburb can be seen propose to form the “downtown” area (municipal). from the positive and negative sides (Table 1). Ann Data from Ministry of Home Affairs Republic (2013) and other literature-based studies provide of Indonesia (2016) confirmed that since the key dimensions to define suburban with a few regulation of decentralization and autonomy was examples of such definitions. Those dimensions are first implemented, the number of municipal area physical, functional, social, process, and analytical increased from 61 to 94, or an increase of around scopes. In the end, that explanation is detailed 54%. In addition, Bappenas estimates that the enough to elaborate the concept of suburbs. The number of metropolitan cities and cities will Table 2 below describes the dimensions. increase sharply by 2025 (Bappenas, 2015). The In the context of developing countries, implication is that the increase of the number of particularly Indonesia, current trend shows that municipal were followed by the expansion of the the growth of suburban area is increasingly massif, functions of its territory, and thus the demand both its total areas as well as quantity. Further for various functions from the buffer area around inspection regarding the territory has showed that municipal also increased. The increase in demand the expansion of the functions of the metropolitan of functionality naturally implied that there was area continues to suppress the surrounding areas. also an increase in complexity of problems faced by This in turn alters the structure of economic, the suburban area. socio-cultural, ecological and spatial areas in the The complexity of the problems in the suburbs suburbs. Meanwhile, the increase of the number seems to be indeed a common phenomenon in of suburban areas seems to be tightly related to developing countries. Literature studies on the major change of governance in Indonesia, developing countries with high population density originally from a centralized framework to provide information that the problems are very Jurnal Ekonomi Pembangunan, ISSN 1411-6081, E-ISSN 2460-9331 83  Avalaible online at http://journals.ums.ac.id, Permalink/DOI: 10.23917/jep.v19i1.5701 Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan, 19 (1), 2018, 80-93 multidimensional. In Bangkok, Thailand for service facilities (Lambert et al., 2015). In addition, example, land transformation process studied by studies conducted by Surya (2006) stated that Hara et al., (2008), and it was concluded that land the growth of suburban areas would encourage planning (landscape) in the suburban area was the growth of transportation needs. It arose as a needed. In other contexts, for example in Brazil, result of people commuting from the suburbs to although marked by high quality transportation the centre to work (commuters) (Chan et al., 1992; infrastructure and its connectivity, the dynamics Myung, et al., 2013). of the social-ecological problems its suburban was Socially and ecologically, the growth of even more severe. High density of population, suburban areas thus increased poverty (Curley, weak law enforcement, high level of poverty and 2005), changed livelihood strategy of a community unemployment had been converted into high rates of who work in the agricultural sector (Eltayeb et al., criminality and middle-class residents’ dependency 2013, 2016, Liu Liu &), depressed social capital on alcohol (Silva et al., 2012). Illustration of the (Clark, 2007), put a pressure on the minority groups complexity and interconectedness of issues and (Ragusett, 2014), urged the rise of real estate and problems in suburban areas is illustrated in Figure housing cluster (Leisch, 2002; Goix, 2005, Huang 1. & Jiang, 2009; Serlin & Umilia, 2013; Güzey, A number of studies showed that the growth 2014), created economic and income inequalities of the suburban area in massive scale had an (Huang & Jiang, 2009; Kathryn, 2009; Yandri, impact on the whole dimension of life, whether 2014; Zhao, the 2016) as well as social segregation environmental, spatial, economic, ecological-socio- (Yandri, 2015), housing segregation (Hwang, 2015) cultural, and even political. The real impact on and in-group exclusivity (Gunawan (2011), all of the environment, studied by Garcia et al. (2013), which culminated the emergence of social tension attested to the suburban growth was the change (Widhyharto, 2009; Yandri, 2015). in water consumption patterns. These changes Politically, the growth of suburban areas, were caused by the increasing population growth one of which is marked by the emergence of the in suburban areas. residential real estate and/or housing clusters, Spatial impact of the growth of the suburban resulted in a low level of political participation area was indicated by the pressure on land (Day, by citizens because of a situation referred to 1996), the rise of sprawl (Giyarsih, 2002; Hiles as gentrification (Schram, 1991). A study of & Schipper, 2008; Astuti, et al., 2012, Lambert the situation was verified by studies conducted et al., 2015), and land conversion (Mugavin, Newman, et al. (2013) in the United States and 2002), including agricultural lands (Ortega, 2012; Yandri (2017) in the city of South Tangerang, Eltayeb, et al., 2013, 2016, Liu Liu &), as well as Indonesia. the spatial mismatch (Mikelbank, 2006). On a microeconomic level, the growth of 2. Methods suburban areas promoted growth of industrial area This brief article reports the results of a (Hudalah & Word, 2012), including the massive literature study on the condition of suburban areas growth of retail stores (Smadja & Torre, 2017), and in Indonesia. Article is presented by doing a review changes in consumption patterns as a result of the on the relevant literatures. The approach is done by emergence of a group of middle-class citizens with doing a critical review using institutional analysis high-middle income level (Ospala & Dufek, 2002; as the tool to elaborate classical and neoclassical Hirt, 2007). Meanwhile on the macroeconomic regional economic theories, as well as comparing level, the growth of suburban areas had an impact and synthesizing the literature. To sharpen the on the increase of government spending (and argument, the writers also present the relevant municipalities) in an effort to rehabilitate public descriptive data. 84 Jurnal Ekonomi Pembangunan, ISSN 1411-6081, E-ISSN 2460-9331  Avalaible online at http://journals.ums.ac.id, Permalink/DOI: 10.23917/jep.v19i1.5701 Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan, 19 (1), 2018, 80-93 3. Result and Discussion In classical economics, the explanation of the functionality over the location of the land was described by von Thunen (1783–1850). Therefore, discussing the suburbs seems to be related to the land use theory developed by von Thunen. Furthermore, this theory explains the interconnectedness of location production (agriculture) with the center in an effort to achieve maximum profit growth (land rent). The theory states that the farther a farmland with central growth area, the lower the rent obtained by farms. The theory elaborates the farm distribution patterns near the urban areas. Figure 2. von Thunen’s Distance-Rent Curve The real illustration of the theory is the curve reflecting the relation between distance and rent of However, many critics argue that this theory a land. The illustration for the theory above can be is no longer corresponds to the reality of the explained by the curve of the rent generated from present, especially if associated with the reality a production system (Figure 2). The von Thunen of the existence of the revolution industrialization theory then evolved and was adapted in a variety and economic development. The industrialization of phenomena, including rural-urban linkages. of the middle world is currently faced with On the basis of that theory of von Thunen, Walter particularly high technology use of transportation, Christaller (1933) introduced the central-place the revolution in the organization of human theory that explains the patterns of the locality of resources, and human behavior. The fact is that economic activities (Blair, 1991). there is currently significant modern suburban Problems wanting to be solved by von Thunen area that is different than what was experienced are: land use and cropping pattern as to what by von Thunen. Moreover, most urban areas are will happen to these conditions and how farming experiencing an expansion of territory, so that the systems in the different districts are affected nature of the urban expansion is determined by: (1) by distance from the city (with the assumption the difference in the price of land in the urban area that farming is regulated rationally). From the and rural; (2) motor vehicle transport flexibility hypothesis and the problem, the assumptions made offered land users; and (3) assessment and human are: (1) the city center as marketing, located in the desire (Sinclair, 1967). centre of a geographically homogenous area. The In further development, the land was central part is depicted as the centre of settlements then rated as production factors in encouraging as well as industrial center that is also the center economic growth, apart from the factor of labor of the market; (2) the cost of transportation (to and technology. Model from Robert Solow (1956) transport results from production sites to the city) later became the explanatory framework for the is proportionally linear with the distance. Every theory of economic growth. The reading of the farmer in the areas surrounding the city will sell literature of economics, especially its relation to the excess products to those cities while paying the the predictive models of economic growth, and the transportation costs; and (3) farmers rationally thought-provoking Solow model always is used, tend to choose plants that generate maximum and it is the point of departure for nearly the entire profit (Rustiadi et al., 2011). economic growth analysis, including an analysis of Jurnal Ekonomi Pembangunan, ISSN 1411-6081, E-ISSN 2460-9331 85  Avalaible online at http://journals.ums.ac.id, Permalink/DOI: 10.23917/jep.v19i1.5701 Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan, 19 (1), 2018, 80-93 the regional economic growth. The Solow model is In the span of one year thereafter, Gunar then in a variety of economic literature referred Myrdal (1957), as cited by Rustiadi et al., (2011), to as neoclassical economic model. If drawn on argues that the neoclassical model actually gives a regional level, the Solow model can provide an birth to what he termed the backwash effect explanation of the fundamental and the important. as a result of international and interregional It is caused by the understanding that regional demonstration effect. Myrdal’s argumentation is output certainly in the neo-classical view is based that the nature of the community in underdeveloped on or influenced by three components: the growth regions tend to emulate consumption patterns of the capital stock, the growth of employment and among the modern society in the region that is technological development. more advanced, so that those territories import Therefore, in neoclassical economic theory, goods from the more modern territory. Finally, it is known the function of production Q = f (K, the accumulated capital is not used to boost L, T,...), where K is capital, L is labor, and T is economic growth in its territory by purchasing technology. The main unifier in this model is local products, but instead it is leaked to outside actually the achievement of long-term economic the area. This theory was later called as regional growth that are experiencing convergence, i.e. leakages. The phenomenon, according to Myrdal, price mechanism, and capital accumulation widen the inter-region disparity. mechanisms, which is foreseen will take on a In the same decade, Francois Perroux (1955) situation that is convergent (ratio of capital in introduced the Growth Pole Theory. The core of relation to labor is uniform) (Priyarsono, 2017). this theory states that economic growth in each Nevertheless, the forecast form Solow model region does not occur at any place except in a is difficult to be attained because various factors, specific location called the pole of growth. To such as the model is not able to explain the achieve a high level of income, economic activity diversity of the inter-location, which is spatially center called polar growth (growth pole) should natural (Priyarsono, 2017). In addition, the Solow be built. Perroux’s view about the growth process model puts economic growth (output) as the best is a theory of spatial economy, where industries indicator in economic development. However, are the driving role early in building a centre economic development must be measured by other of growth. Geographically, growth pole can be indicators, such as the human development index described as a location that has the facilities and (HDI), and so on. Therefore, Rustiadi et al., (2011) advantages so as to cause an attraction for many argues that the pursuit of development priorities people to set up a wide range of businesses in the tend to pursue the goals of macro (economic area, and thus the public utilizes these facilities. growth), which in turn can lead to a variety of Functionally, the growth pole can be defined as a development imbalances in the form of the spike of place of concentration of economic groups (industry, spatial disparity, rural-urban disparity, structural business etc) resulting in economic influence into inequalities and so on. or out of the region (Blair, 1991). On the level of regional economic theory, Furthermore, in the respond for the weakness of this model’s prediction were later neoclassical macroeconomic model incompleteness, perfected by Walter Isard (1956) in Rustiadi et economic scientists then developed region-based al., (2011) by saying: “the existence of the fact that economic analysis. For example, Arthur Lewis human beings in performing its activities adapt (1967) in Blair (1991) argued that the development and interact with the physical environment, is a of a region would have experienced stagnation strong reason over the need for the formulation when only one sector are developed. Therefore, of comprehensive theory that consider aspects of according to Lewis, the development of the region human, physical and economic. can be achieved if other economic sectors are also growing. 86 Jurnal Ekonomi Pembangunan, ISSN 1411-6081, E-ISSN 2460-9331  Avalaible online at http://journals.ums.ac.id, Permalink/DOI: 10.23917/jep.v19i1.5701 Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan, 19 (1), 2018, 80-93 30.00 25.00 20.00 Poverty (%) 15.00 10.00 5.00 0.00 Urban Rural Figure 3. The percentage of poverty in urban and Rural in Indonesia Source: BPS, 2018 At the next stage, the economic base theory by a social crisis in the year 1997–1998 is a real put forward by Harry w. Richardson (1973) in confirmation that the neoclassical theories fail in Blair (1991) states that the primary determinants realizing economic development. The situation of economic growth in a region is directly related led to an understanding, both at policy makers to the demand for goods and services from or scientists that the nation-state will need to outside the region. In further explanation, it was reform themselves. elaborated that the growth of industries that use Therefore, the essential point fort the local resources, including manpower and raw change in Indonesian development patterns materials for export, will generate the wealth of began in 2001, marked by an era of autonomy the region and the creation of job opportunities. and decentralization with the passage of the Act This assumption gives the notion that an area No. 22/1999, then revised to Act 32/2004; and will have the leading sector (basic sector) if they revised back into the Act No. 23/2014 about local can win competition on the same sectors in other governance and Law No. 33/2004 (revision of the regions so as to produce exports. Act No. 25/1999) regarding Financial Equalization In Indonesia, especially at the level of policy, between the Central Government and Regions. neoclassical economic views were able to bring the The second act aims to address the disparity nation to wealth. The empirical facts shows that between the centre (vertical imbalance), and economic growth reached 7.1% at the end of 1996. interregional disparities (horizontal imbalance). From that indicator, the nation-state is judged to However, the implementation of fifteen years have reached a stadia which according to Rostow of autonomy and decentralization apparently has (1960) as a “take off” stadia. Nevertheless, the yet to show satisfactory results. It is indicated by choice of “economic growth” as an end thus the still unequal distribution of the development cause new problems, namely the wide disparity cake between rural and urban areas in Indonesia. between regions, with regional or interregional Publication of the data of the Central Bureau of centre in Indonesia. The economic crisis followed Statistics (BPS) in November 2011 shows that Jurnal Ekonomi Pembangunan, ISSN 1411-6081, E-ISSN 2460-9331 87  Avalaible online at http://journals.ums.ac.id, Permalink/DOI: 10.23917/jep.v19i1.5701 Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan, 19 (1), 2018, 80-93 the countryside was still suffered from severe management in real terms. This process is often poverty levels rather than urban areas. In 2009 valued as a contradictory process considering the for example, the number of poor population process is always accompanied by the conversion reached 20.62 million inhabitants in rural and of agricultural land. The phenomenon is referred 11.91 million in urban areas. In 2010, the number to as suburbanization, defined as the process of decreased to 19.93 million inhabitants in the the formation of new settlements and industrial rural and the urban in 11.10. While at 2011, area on the edge of urban areas mainly as a result the numbers were 18.97 million inhabitants in of the displacement of the population who need rural and 11.05 million in urban areas. Until a place to settle and establish industrial activity September 2017, although the total number of the (Rustiadi et al., 2011). poor population decreased, the situation was still Analysts are to argue that the phenomenon the same, that is, the number of poor population is unavoidable because the process is created as in rural areas (16.31 million) were higher than a result of the demand and supply in the market. urban (10.27 million). For them, in many aspects, it would have a High rates of poverty as a result of the low positive impact because it will create an economic employment opportunities and the level of wages agglomeration which produces additional is the cause for the poor population in rural resources in such as human capital that can serve areas to migrate to the cities. The phenomenon as the engine of economic growth (World Bank, of migration is a form of response from the 2009). This perspective, as read in the thought of society due to their expectations to increase their Robert Lucas (1967-1981) through its economic livelihood. In other words, rural-urban migration growth theory (Andrada, 2017). For him, in the will continue to progress along the on-going long run this process will be produce convergent rural-urban development gap (Rustiadi, 2011), economic growth. As for Lucas the mobility of labor in addition to the problem caused the perception and capital will help the economic concentration, that the city is the main source of wealth (urban and this flow will mitigate the differences in well- bias) (Fauzi, 2010). being that can accompany it. At the level of policy, In the empirical context, DKI Jakarta as this perspective would produce policies such as the centre of growth in trade and services in facilitating the migration and make clustered Indonesia, is a region that receives the spill-over immigrants who have skills and well educated of migration flows. Data from Population and (World Bank, 2009). In the present terminology, Civil Registration Agency of DKI Jakarta shows this is referred to as “demographic bonus” (Jati, that population in 2010 reached 9.6 million 2015). people and this number increased to 10.17 million Nevertheless, the convergence does not in 2015. The average rate of population growth in happen by itself, because it requires institution Jakarta from the year 2010 up to 2015 reached to manage the existing economic resources (land, 1.09% per year. With that population growth rate, and investment in infrastructure), on the right the population density reached 15.36 persons per track and well-managed intervention (World square kilometre. Bank, 2009). The prerequisite of good governance The decrease in availability of space and becomes the starting point for the realization of land, coupled with the high price of land in the convergence. Inaccuracy intervention such Jakarta (Figure 5 and 6) in turn will encourage as mis-allocative investment in many ways residents to move to the outskirts of the city thus worsening the situation changes in social, (suburb). This process is seen as an expansion economic and spatial in suburban areas (Lewyn, of the urban area (Jakarta) to suburban 2017) areas, impacting a wider scale of urban area 88 Jurnal Ekonomi Pembangunan, ISSN 1411-6081, E-ISSN 2460-9331  Avalaible online at http://journals.ums.ac.id, Permalink/DOI: 10.23917/jep.v19i1.5701 Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan, 19 (1), 2018, 80-93 Figure 4. The average price of land per M2 Figure 5. Lowest and highest price per M2 of land in Jakarta in in Jakarta in 2015 (in million Rupiah) 2017 (in million Rupiah) Source: Map: http://citiviu.com Source: Map: http://citiviu.com Land price: www.rumah.com Land price: Indonesia Property Watch Lewyn’s hypothesis (2017) has been proved which includes social capital, loyalty and learning in Indonesia. Parallel with the high demand of regions, power relations and control in the land, economic opportunities is taken by local organization, as well as organizational culture, governments by providing investment permit for norm and rules (Stimson et al., Priyarsono in developers of both industries and settlements. 2016, 2017). By that explanation, surely the Opening the investment valve is certainly question of land use planning and development intended to enlarge the income from tax through are beyond land and insfrastructure. expansion of the area of the region, particularly Therefore, in an attempt to understand the the Land and Building Tax (PBB). In the context region’s suburban and its spatial transformation, of the implementation of decentralization and it seems to be not enough to use the theories autonomy, it is justified because it has been set of the construction of the region as ‘menu’ in the regulation, either by law or other specific provided by von Thunen, Christaller, Perroux, regulations. On the basis of this reason, the local and Burgess. Also, the institutional perspective government issued a variety of policies in order to (institusionalism) can be an alternative identifier encourage increased investment. One set of the in an effort to understand the dynamics of the policies is streamlining investment permit and in suburban area. This is important given in certain certain cases makes it easier by providing online cases, the impact from government failure is often service for applying investment permit. more fatal due to lower economic efficiency overall, Therefore, in the context of economic inhibits growth and equalization (Rustiadi, et al., development, current construction practices 2011). and land planning was triggered by not only Urban development that stems from the company’s behavior and the behavior of coordinated planning and investment by households as assumptions in such theories, but coalitions of developers, bureaucrats, citizens, also the behavior of the government (Priyarsono, and politicians can lead to cities that are centers 2017). Referring to Sinclair (1967) and Priyarsono of growth, innovation, and productivity (World (2017), this indicates that the planning of land and Bank, 2017). In contrast, the weak urban area involves complex functions of institutions, planning such as mis-allocative investment and Jurnal Ekonomi Pembangunan, ISSN 1411-6081, E-ISSN 2460-9331 89  Avalaible online at http://journals.ums.ac.id, Permalink/DOI: 10.23917/jep.v19i1.5701 Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan, 19 (1), 2018, 80-93 limiting connectivity between neighborhoods the era of decentralization and autonomy to be and/or residential area, as well as the emergence implemented. Changing the status of the territory of practices of exploitation system to generate will also change the structure of social, economic profits for himself on its own, ultimately impeding and spatial locality. In that regard, it is evident an urban area/suburb in an attempt to reach the that the dynamics of land in suburban areas can economic growth the region. Such growth is not no longer rely on the old ways. Because the fact only leads to convergence, but also can provide remains that today’s planning and development the assurance of equitable distribution for the of land not only involves the role and behaviour of society. households and companies, but also institutions,. Moreover, the suburb, as a space, is filled both formal and informal. by socio-economic actors whose behaviour is undivided, but rather mutually interacting. In 5. Acknowledgment the context of institutional, every actor certainly This article is a ‘little piece’ of dissertation has its own interests. At the time the interest entitled “Developing Policy and the Governance was met, the clash of interest occurred (Yustika, of Sustainable Residential Area in Suburban 2006). At this point, Ostrom’s perspective (1990) Indonesia” in Regional and Rural Development can be used to become explanatory framework Planning Sciences Bogor Agricultural University. how the clash of the interests addressed. Upon the publication of this article, thank you In the end, this elaboration will lead us to delivered to all supervisors who has been doing further clarify it into a more factual empirical supervision and examination on this article. research. Although it is not easy because of the concerns the availability of the data, it is 6. References not impossible to do. Therefore, this article Andrada, A.F.S. (2017). Understanding Robert challenges the academics to review institutional Lucas (1967-1981): His Influences and roles, either formal or informal in relation to the Influences, EconomiA, May-Augustus 2017: transformation of suburb with all the dimensions 212-228. of the issue, either economic, social or spatial. Ann, F. (2013). Defining Suburbs, Journal of Concretely, a number of issues that can be Planning Literature, 27, No. 3: 270-281. examined include: government spending at the level of municipal urban infrastructure, in terms Astuti, W., et al. (2012). 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