DO PLASTIC BAG POLICIES AFFECT REGIONAL ECONOMIC PERFORMANCE EVIDENCE FROM SEVERAL INDONESIAN CITIES, 2015-2024

Abstrak

Indonesian transition toward sustainable development has placed plastic use control at the center of environmental and economic policy debates, in line with national commitment to the Sustainable Development Goals (SDGs) and Net Zero Emission. While reducing plastic consumption is expected to lower pollution and emissions, concerns remain about potential economic consequences for regional economies and reliant on plastic packaging. Empirical evidence at regional level developing countries is limited. This study examines the impact of plastic reducing or control policies on regional economic performance in
Indonesia by exploiting variations in policy adoption across city using an annual city-level panel dataset (2015-2024) from Indonesian Statistic Bureau (BPS)
and local regulations. This study adds originality by providing city-level causal evidence on how these policies affect regional economies. Using a staggered Difference-in Difference approach, the analysis focuses on two sectors of GRDP, which are Accommodation and Food Service Activities, also Water Management, and Recycling. Results show short-term economic effects that dissipate over time, with robustness check confirming insignificant long-term impacts. Policy effectiveness depends on strong institutions, implementation fiscal quality, incentives, while and sustainable packaging adaptation can stimulate creative economic innovation. Despite data limitations, this study highlights the need for improvedimplementation design and future micro-level, also
integrated waste management data.