Efficiency Evaluation of Local Government Expenditures Towards The Human Development Index
DOI:
https://doi.org/10.46851/85Abstrak
This study aimed to analyze the efficiency of government expenditure based on the Human Development Index (HDI)’s achievement in Indonesia using Data Envelopment Analysis (DEA) and Tobit Regression. The DEA method is used to measure the efficiency of a government entity by using multi-input and multi-output. DEA results can also be used to identify which input or output must be evaluated so that Decision Making Unit (DMU) can increase efficiency. While the Tobit model was conducted to investigate the connection of the efficiency result to some variables such as population, size, and differences between Java and non-java provinces. The result from this research showed that Yogyakarta, Jakarta, Central Java, and East Kalimantan were the most efficient provinces in 2015-2018, while East Java was the most inefficient. This research also indicates that the education sector was the main source of inefficiency both in input and output variables. Tobit's analysis showed that all independent variables used in this study had a significant effect on efficiency. Population and size variables had a negative significant effect on the efficiency. Otherwise, dummy variables of Java and non-Java had a positive significant effect on efficiency achievement.
Keywords: Public Expenditure Efficiency; HDI; DEA; Tobit
JEl Classification : D24, H72, H75
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Hak Cipta (c) 2023 Journal of Business and Political Economy : Biannual Review of The Indonesian Economy
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