Regional Dimension of Human Development Towards Sustainable Human Development in Decentralized Indonesia

Seldadyoy, Harry (2012). "Regional Dimension of Human Development Towards Sustainable Human Development in Decentralized Indonesia" Paper presented at the 9th annual conference of the HDCA, 5-7 September 2012, Jakarta, Indonesia.

Indonesia's decentralization policy eectively implemented since 2001 can be justied along various dimensions. Among others, regional diversity may rationalize this policy choice. Not only do the regions vary with their geo-spatial and insitutional characteristics, but they are also dierent in their human development achievement. This paper is intended to disclose the nexus between geo-spatial and institutional variables and human development index (HDI) in a decentralized environment. The results indicate that geo-spatial and institutional characteristics matter in determining the quality of human development. Using provincial-level dataset, this paper exploits spatial variables to capture location of jurisdictions. This includes longitude, latitude, altitude, distance to capital city of Jakarta. The paper also explores the patterns of physical characteristics of region that include the size of administrative area and natural resource endowment captured via the share of extractive sectors (forestry, mining, and quarrying) to Gross Regional Domestic Product (GRDP). Lastly, the paper scrutinizes institutional variables that aect human development. The institutional variables explain the quality of public sectors, ie., government (provincial governor and local council) as a policy making body and bureaucracy as a policy executing agent, and the quality of democracy captured via the behavior of civil liberties and political rights. The paper nds that longitude and distance to capital city of Jakarta statistically explain the variation in provincial human development index in a negative fashion. The more we go to the eastern part of the nation and the farther we go away from the capital city of Jakarta, the lower HDI is found. Location, therefore, needs to be taken into account in human development policy formation and execution. As also found in the size of administrative area, the share of extractive sectors, especially mining and quarrying, adversely aect the
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