Title:
Comparison of Local Government Expenditure Efficiency: Eastern Indonesia vs Western Indonesia Before and After Covid-19

Authors:
Frenike Aldita*, Roosemarina Anggraini Rambe, Indonesia

Abstract:

This study aims to (1) measure the government spending efficiency of provinces in Indonesia before and after the COVID-19 pandemic and (2) compare the government spending efficiency between Western Indonesia and Eastern Indonesia at these two times. The data used consists of 34 provinces in 2019 (before the COVID-19 pandemic) and 2022 (after the COVID-19 pandemic). In this study, the inputs are education spending and health spending. The outputs used are average years of schooling and life expectancy rate. The method used is Data Envelopment Analysis (DEA) based on Variables Return to Scale (VRS) with an output-oriented model. The results show that in Western Indonesia, four provinces were efficient before the COVID-19 pandemic and increased to 6 provinces after the COVID-19 pandemic. In Eastern Indonesia, there were three efficient provinces before the COVID-19 pandemic, which increased to 4 provinces that were efficient after the COVID-19 pandemic.

Furthermore, in the Eastern region, two efficient provinces also become peers for inefficient provinces before and after the COVID-19 pandemic. These two peers are Maluku and Gorontalo. Meanwhile, four efficient provinces in Western Indonesia that became peers were Yogyakarta, Riau Islands, Jakarta, and North Kalimantan before the COVID-19 pandemic. East Kalimantan became a peer only when the COVID-19 pandemic was over. Inefficient provinces should refer to their peers so that they can be efficient.

DOI: https://doi.org/10.51505/IJEBMR.2024.81205