Budget Policy to Eradicate Education Inequality in Indonesia

Abstract

Education is one of the important factors of economic development. In recent implementation, the education cannot be obtained equally by the people of Indonesia. Based on Law no. 23/2014 on Local Government, education is the responsibility of the local governments, and there is a potency of inequality in the implantation of the education development, due to the different budget capabilities in each region. This study aims to determine the level of convergence of local government budgets in Indonesia. Using statistical estimation models, and data covering of 33 provinces in Indonesia, the study finds that the convergence on total revenue will occur on all Indonesian region for a long time but not in education spending. The policy implications on education in Indonesia are different across regions.