A computerized study of factors of economic growth disparity in Indonesia

Abstract

Disparity of economic development between regions is one of the problems and major challenges of economic development in Indonesia in the current situation and in the future. The success of development in the fiscal decentralization system cannot be measured only by the economic aspect with growth indicators or GRDP values of one region, however, it must be extended to indicators of economic progress, especially those concerning general basic services. Government put some efforts to reduce fiscal disparity, one of them is by providing the equalization funds, which are; SAF (Special Allocation Funds), GAF (General Allocation Funds) and RSF (Revenue Sharing Funds). However, in fact, the provision of equalization funds still causes fiscal imbalances. The purpose of this study is to describe variables that affect the condition of economic disparity in Indonesia, then examine the factors that cause economic growth disparity in Indonesia and the policies that should be carried out by the government to solve the problems. This study found that some researchers use different variables/indicators in determining economic growth in Indonesia.