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Will Creating New Regions Improve The Regional Welfare Equality?

Author

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  • Aloysius Gunadi Brata

    (University of Atma Jaya Yogyakarta)

Abstract

This paper presents a preliminary effort to analyze the relationship between the region creation (pemekaran) and the regional inequality. Using the variation in the Human Development Index (HDI) that has been widely accepted as a measure of human development, this paper confirmed that pemekaran or creation of new regions have caused regional inequality becoming more severe. A «damaging power» of pemekaran has also reduced the benefit of decentralization to improve regional equality. Since the analysis shows that pemekaran is not a solution for regional inequality, therefore the policy implication of this finding is that pemekaran should be controlled. A reverse process of pemekaran is amalgamation or consolidation of regions. However this policy is rather difficult to be implemented because it is mainly related to resistance of local elites and furthermore there is no guarantee that the amalgamation will improve quality of public services. Perhaps moratorium of pemekaran as a moderate choice could be an acceptable policy.

Suggested Citation

  • Aloysius Gunadi Brata, 2009. "Will Creating New Regions Improve The Regional Welfare Equality?," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 11(3), pages 1-12, January.
    • Handle: RePEc:idn:journl:v:11:y:2009:i:3:p:1-12
    DOI: https://doi.org/10.21098/bemp.v11i3.339
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    Cited by:

    1. M A B Siddique & Heru Wibowo & Yanrui Wu, 2014. "Fiscal Decentralisation and Inequality in Indonesia: 1999-2008," Economics Discussion / Working Papers 14-22, The University of Western Australia, Department of Economics.

    More about this item

    Keywords

    region creation; human development index; inequality;
    All these keywords.

    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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