Effect of budget efficiency on economic growth

Abstract

This study aimed to find and analyze a comparison of the region's ability to carry out budget efficiency, the relationship between regional expenditure and regional original revenue, and analyze the relationship of budget efficiency in creating Gross Regional Domestic Revenue (GRDP). Qualitative methodology is used to analyze the data by comparing and analyzing the ratio of efficiency relative from several regions. Through the Data Envelopment Analysis (DEA) approach and Linear Regression Testing, the results are seen as follows: first, there is a comparison of efficiency between districts/cities in budget management, where Pontianak City is a benchmark for districts/cities in West Kalimantan Province. Second, there is a significant positive relationship between the amounts of expenditure with the amount of Local Original Revenue. Third, there is a significant and positive relationship between budget efficiency and Gross Regional Domestic Revenue (GRDP) growth. The effort to maximize the budget in improving the Regional Original Income (ROI) can be done through giving motivation/awareness of society in paying tax and retribution, what can be achieved by optimizing the system of information and technology which are available and by the improvement of competency of apparatus resources. JEL Classification: E620, H720, H760