| Summary: | In Indonesia the cities have continously grown. However they varied in size. Some
cities have the population above two million citizens, while some have below than fIVe
hundred thousands. Some economic factors are hypothesized to influence such
distribution. This study aims to test the rank-size rule (Zipf's law) and to find the
determinants of size distribution of cities. The panel data method is employed to satisfy the
objectives of study. All district and provincial level data are usedfor year 1995, 2000 and
2005. The pareto exponent shows that the rank-size rule does not matter in Indonesia.
Level of agglomeration economies, local government expenditure and number of
administrative city increases the concentration of size of cities. The labor force
participation and region's openness affects the size of cities to be more equally distributed
Keywords: cities, rank-size rule, Zipf's law, pareto exponent, panel data
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