Scale Effect on The Size of Local Government in Indonesia

DOI

10.2991/aebmr.k.200606.028How to use a DOI?

Keywords

Scale Effect, Local Government, Public Services, Budget Spending

Abstract

Proliferation of local government increased substantially after the Law of Local Government No. 22 Year of 1999 and the Law Fiscal Balance No. 25 Year of 1999. The objective of proliferation is to provide public service closely to the community. Therefore, public welfare can be obtained faster. The number of local governments grew significantly due to the New Law allowed and relaxed to form new local government. Based on the recent data in 2016, the number of Regency are 416 and the number of City are 98. The objective of this paper is to identify the scale effect on the size of local government in Indonesia. The measurement of scale effect is based on the spending of budget on specific sector such as, health, education and infrastructure on the number of populations, area and population density. Econometric analysis will be used to identify whether there is an optimal size of local government among local governments in Indonesia. The result of this study shows that there is no optimal size local government to provide public services such as health, education and infrastructure. The result also shows that inefficiency exists in budget spending on specific sector. Therefore, quality spending should be improved by reorganized local government in providing public services.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Dewi Rahayu
AU  - Muhammad Handry Imansyah
PY  - 2020
DA  - 2020/06/09
TI  - Scale Effect on The Size of Local Government in Indonesia
BT  - Proceedings of the 23rd Asian Forum of Business Education(AFBE 2019)
PB  - Atlantis Press
SP  - 174
EP  - 177
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.200606.028
DO  - 10.2991/aebmr.k.200606.028
ID  - Rahayu2020
ER  -