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Autonomy Policy Autonomy Policy and Social Welfare and Social Welfare in Tangerang City

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Autonomy Policy Autonomy Policy and Social Welfare and Social Welfare in Tangerang City ECONOMIC JOURNAL OF EMERGING MARKETS April 201 2 4(1) 52 -62 AUTONOMY POLICY AND SOCIAL WELFARE IN TANGERANG CITY Pitri Yandri Sekolah Tinggi Ilmu Ekonomi Maiji e-mail: [email protected] Abstract The paper analyze s the effect of public expenditure and the implementation of local autonomy pol- icy on Human Development Index (HDI). The paper uses Principal Component Regression Anal y- sis to conduct the analysis . The result shows that public expenditure has a positive effect on HDI . It also finds that the increase in HDI is bigger post the implementation of local autonomy policy. The elasticity of each coefficient of public expenditure are as follows: 1.58 for agriculture sector; 0.94 for education sector; 0.36 for health sector; 0.44 for housing sector; 0.61for infrastructure sector, and 0.70 for GRDP. Keywords : Pu blic expenditure, Human Development Index , principal component analysis JEL classification number s: H40, H52, I21, I32 Abstrak Penelitian ini mengkaji pengaruh belanja publik dan pelaksanaan otonomi daerah terhadap tingkat Indeks Pembangunan Manusia (IPM) di Kota Tangerang. Penelitian ini mengaplikasikan Analisis Regresi Komponen Utama untuk melakukan analisis . Hasil uji menunjukkan bahwa belanja publik memiliki pengaruh yang positif terhadap IPM . Lebih jauh, peningkatan IPM tersebut semakin besar setelah pelaksanaan kebijakan otonomi daerah. Penelitian ini juga menemukan tingkat e lastisitas per sektor terhadap belanja publik sebagai berikut: 1.58 pada sektor pertanian; 0.94 pada sektor pendidikan; 0.36 sektor kesehatan, 0.44 pada sektor perumahan; 0.61 pad a sektor infrastruktur, dan 0.77 untuk PDRB. Keywords : Belanja publik , Indeks Pembangunan Manusia , analisis regresi komponen utama JEL classification number s: H40, H52, I21, I32 INTRODUCTION urban areas . In addition to the positive i m- pact of incr easing job opportunities, indus- Tangerang City is geographically very str a- trial employment also had a negative i m- tegic because it is the main support ing area pact , particularly externalities (waste, air for the capital city of Jakarta and the next pollution, etc.) and the high rate of migr a- town to Banten region. In the past , this city tion. BPS data of Tangerang City show was part of Tangerang District, then up- from the years of 2000-2007 that Tange r- graded to an administrative city, and finally ang City continues to experience popula- established as a municipality on February tion growth . The population increa ses from 27, 1993 under Law No. 2/1993 on the e s- 1.311.746 people in 2000 to 1.575.140 tablishment of Tangerang Municipality . people in 2007. In 2010 , this number in- The term “municipality” then replaced with creased to 1.797.715 people . But, the ma g- “city ” in 2001. nitude of migration flows are not followed As a result of the hinterland, Ta n- by enough jobs creation which ma de the gerang City faced the typical problems of problem becomes even more complex . Autonomy Policy and Social Welfare … (Yandri ) 53 These conditions clearly require a HDI value compared with other regions in comprehensive treatment of local gover n- Banten Province . The Value reached 75.5 ment. When population growth is not su p- in 2006. These values are at medium level poerted by the increase in necessary facil i- of HDI . However, particularly in the educ a- ties , welfare decreases . tion, the enrollment rate (APM) is on the Therefore , the economi st s agree that increase. But at each level of education, a more comprehensive measure is needed there are differences in APM . Junior high to measure how far development efforts school and senior high school is lower than have been achieved by a region . The mea s- the prima ry school. Th e value is 85.25 for ures of the success of development as fo l- primary school; 55.33 for junior high lows : (a) the level of income inequal ity , ( b) school; and 23.87 for senior high school. poverty reduction, and ( c) a decrease in the Therefore, a new development par a- unemployment rate . The third measure s of digm should be directed to the distrib ution, the success of the above if it is listened to growth and sustainability in economic deve l- more deeply toward the ultimate goal of opment. This new paradigm can ref er to what improving the social welfare . Increasing is called the second fundamental theorem of social welfare means poverty reduction. welfare economics that in fact the gover n- In addition, the United Nation (UN) ment can actually choose the expected goal also has form ulated an indicator of ec o- of economic equality through the transfer, nomic development, especially human d e- ta xation and subsidies (Rustiadi 2007) . velopment and poverty . Formulation of de- In addition, they agreed that the ef- velopment indicators is referred to as the forts to improve human development d e- Millennium Development Goals (MDGs), manded a thorough comprehensive handled which consists of eight indicators of which involv e inter -sector -linkages , inter - achievement of development, namely : (a) actor, and inter -resources . One of the ap- the elimination of poverty and hunger ; (b) proach es that have taken is autonomy and education for all; (c) gender equality ; (d) decentralization policy . In Indonesia , auto n- resistance to infectious diseases ; (d) reduc- omy and decentralization policy framework tion in child mortality; (e) improving ma- has been set by law No. 32/2004 on R e- ternal health , ( f) the preservation of the e n- gional Governance and Law No. 33/2004 on vironment; (g) developing a global partner- Financial Balance between Central and L o- ship (Bappenas , 2007). cal Government . Of the eight indicators , there are With the implementation of this important sub-indicators of development, law , every region in Indonesia both provin- which is the Human Develo pment Index cial and dis trict government granted the (HDI ). HDI is composed of three comp o- authority to implement, including the allo- nents, namely the length of life measured cation of expenditure , especially capital by life expectancy at birth , ed ucational expenditure . Allocation of capital expendi- level was measured by a combination of ture is very important. Therefore, it co n- literacy rate in the adult population (with a tributes to the regional economy . This co n- two- thirds weight) and an average length of tribution takes place in two phases : the the school (with one third weight), and the short term through the expenditure of mat e- level of standard of living as measured by rial and labor absorption and in the long income per capita that has bee n adjusted term through the multiplier in the private (PPP dollars) . This index is simple average sector in the regional economy . of the three co mponents mentioned above. Study the impact of regional auto n- BPS data of Tangerang City showed omy has been widely performed and pro- that this region has achieved the highest duced varying conclusions. This conclusion 54 ECONOMIC JOURNAL OF EMERGING MARKETS April 201 2 4(1) 52-62 suggests that the regional autonomy has a of 1992 -2008 used as secondary data . Data is concrete impact on the social welfare ( Us- processed by Min itab 15 . Specification of the man, 2005; Arifin , 2006, Rozi , 2007; He r- model used refers to Intan (2009) who found nawan , 2007). However, there is also a that those expendit ure s: agricultural (EP- negative outlook stating that autonomy and ERT ), education (EPDDK ), health decentraliz ation do not yet have a positive (EKSHTN ), housing (EPRM ) and infrastru c- impact on the social welfare ( Lewis, 2001; ture (EINFRA ) have a significant effect on Siregar , 2001; Elmi , 2005; Nanga, 2006, poverty reduction (Mk ) in Banten Province . Wilopo and Budiono, 2007). The model is as fo llows: Nevertheless, the normative fram e- work of autonomy and decentralization Mk t = o + o(EPERT it -k) + 1(EPDDK it -k) based on the argument that the manag e- + 2(EK SHTN it -k) + 3(EPRM it -k) ment of the public service units will be + 4(EINFRA it -k) + 5D1 + 6D2 more effective if delivered to the unit in + t (1) direct contact with the community . The a s- sumption was that the closer of the rel a- In this study , the model is modified to : tionship between governments to the pub- HDI t= o + 1(ln EPERT t) + 2(ln EPDDK t) + (ln EKSHTN ) + (ln EPRM ) lic , the public can understand the need for a 3 t 4 t + (ln EINFRA ) + (ln PDRB ) service (Wilopo and Boediono 2007). In 5 t 6 t + 7Dotda + t (2) other words, administrative decentraliz a- tion is intended to create efficiency and ef- Where HDI t is Human Development I n- fectiveness of public services . dex at time t (1994-2008) (in percent) ; However, the result of studies r e- lnEPERT is Agriculture expenditure at lated to the implementation of public se r- t time t (in rupiah); lnEPDDK t is Education vices in the era of autonomy and dec en- expenditure at time t (in rupiah); tralization has not shown satisfactory pe r- lnEKSHTN t is Health expenditure at time t formance . Toyamah et al . (2002) found that (in rupiah); lnEPRM is Housing expendi- after the implementation of autonomy and t ture at time t (in rupiah); lnEINFRA t is I n- decentraliza tion in the education se ctor, frastructure expenditure at time t (in health , and infrastructure services has not rupiah); lnPDRB is Regional Gross Do- changed , but the condition of facilities a nd t mestic Product (in rupiah); Dotda is Auto n- infrastructure services tend to deteri orate . omy Dummy (before autonomy = 0; after Bappenas and UNDP (2008) also found auto nomy = 1) ; and t is error terms.
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