SPENDING QUALITY OF LESS DEVELOPMENT REGION AND THE IMPACT ON DEVELOPMENT PERFORMANCE
Evidence from less development regions
DOI:
https://doi.org/10.14203/JEP.29.2.2021.167-182Keywords:
Development Performance, Less Development Regions, Spending QualityAbstract
Indonesia still has less developed districts. In Indonesia, districts are administrative areas after provinces. The number of underdeveloped regencies in Indonesia is 122 or 29% of the total 415 regencies established during 2015-2019 by the central government. Underdeveloped regencies are regencies whose regions and communities are less developed, as seen from five aspects: the community’s economy, human resources, facilities and infrastructure, regional financial capacity, accessibility, and regional characteristics. Lagging districts occur due to spending that has not supported the development, both physical and non-physical development. District spending that does not support development indicates poor quality of spending. This study aims to examine the indicators of the quality of spending in underdeveloped regions and relate them to development performance. Expenditure quality indicators include spending priorities, timeliness, spending allocations, accountability and transparency, and effectiveness. Structural Equation Modeling (SEM) is applied to measure the quality of spending and development performance of underdeveloped regions. This study found the quality of district spending not only can reduce poverty levels, but also increase the level of Human Development Index (HDI). This study also found a new model of the quality of regional spending, namely making indicators (poverty and HDI) into variables of development performance.Downloads
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