Regional Economy, Resources, and Accountability of Local Government
Yuniarto Hadiwibowo (a*), Akhmad Priharjanto (b*), Fadlil Usman (c*), Ernest Rakinaung (d*)

a,b,c) Polytechnic of State Finance STAN
d) Ministry of Internal Affairs

Abstract

Purpose - This paper aims to analyze the relationships between regional economy, resources, and accountability of local government. Indonesia underwent substantial fiscal decentralization since 2001. Some regions performed better than other regions. This paper relates the performance of regions with their resources and accountability. The resources comprise physical resources, human resources, and financial resources. This paper also estimates the impacts of Covid-19 crisis to the economy. The focus is Papua region, because Papua regions relatively have less income than other regions in Indonesia.
Design/methodology/approach - We estimate the relationships between regional economy, resources, and accountability of local government. We includes 42 municipalities in Papua regions from 2013 to 2021. We use panel methods with Common Effects Model (CEM), Fixed Effects Model (FEM), Random Effects Model (REM), and Generalized Estimating Equation (GEE) to estimate the relationships.
Findings - Physical resources, human resources, and financial resources contribute to regional economy. Aaccountability are also important to support the growth. Covid-19 slowed down the economy.
Practical implications - The result implies that government should put more effort into resources accumulation. Physical resource may be developed by local government itself or provided by central government. Human resources development should be conducted more rapidly. Local governments should increased their capacity to collect local own-source revenue. Local government should maintain its accountability to gain public confidence.
Originality/value - This study provides proof on the importance of accountability on economic growth. The analysis includes the impact of Covid-19 Pandemic on the regional economy.

Keywords: regional economy- human development index- accountability- audit opinion- COVID-19

Topic: Development economics