WILL CREATING NEW REGIONS IMPROVE THE REGIONAL WELFARE EQUALITY?

Abstract

This paper presents a preliminary effort to analyze the relationship between the region creation (pemekaran) and the regional inequality. Using the variation in the Human Development Index (HDI) that has been widely accepted as a measure of human development, this paper confirmed that pemekaran or creation of new regions have caused regional inequality becoming more severe.A ‘damaging power’ of pemekaran has also reduced the benefit of decentralization to improve regional equality. Since the analysis shows that pemekaran is not a solution for regional inequality, therefore the policy implication of this finding is that pemekaran should be controlled. A reverse process of pemekaran is amalgamation or consolidation of regions. However this policy is rather difficult to be implemented because it is mainly related to resistance of local elites and furthermore there is no guarantee that the amalgamation will improve quality of public services. Perhaps moratorium of pemekaran as a moderate choice could be an acceptable policy.JEL Classification: H75, R11, R58Keywords: region creation, human development index, inequality.