Determinants of human development index in Indonesia

Abstract

The quality of society in a country can be measured by Human Development Index (HDI), an index of human development achievements based on a number of basic components of quality of life. Indonesian HDI components are life expectancy at birth for the health dimension, the expected years of schooling and the mean years of schooling for the educational dimension, and GNI per capita indicator for the decent life dimension. This study was aimed to analyze empirically the effect local own-source revenue (LOR), general allocation fund (GAF), special allocation fund (SAF), revenue sharing fund (RSF), excess fund balance budget calculation (EFBBC), the level of population (LP), gross regional domestic product (GRDP), and capital expenditure (CE) as the determinants of HDI. This research was conducted in South Sumatera, Indonesia. Data were analyzed by using multiple linear regression. The result showed that LOR, GAF, RSF and CE affected HDI. The government should prioritize the allocation of funds, especially those related to the HDI indicators. It is necessary for local governments to manage the management of central government transfer funds wisely according to government regulations as well as better supervision through equitable distribution of public welfare.