Abstract
One measurement of performance in local government is the regional government performance score (EKPPD). The purpose of this study was to analyze the influence of economic factors with performance scores in local government. This study conducted 119 cities and regencies in Java and Sumatra for 2 years, 2015-2016. The total sample is 238 cities and districts. The reason for this sample was chosen because Java and Sumatra are two large islands in Indonesia and have quite high economic development. The research method used is regression using panel data. The dependent variable used is the performance score from the Regional Government. The independent variable used is economic factors such as the Human Development Index (HDI). Control variables are Poverty Rate and GINI Coefficient. The results of this study explain that HDI and GINI have a positive effect on the performance of local governments. The contribution of this study provides an explanation that the higher the poverty rate inherent with the better quality of life of the community, prove that developments in the City / Regency in the Regional Government have been implemented by the Regional Government following the capacity of the Regional Government.
Highlights
The rules regarding regional autonomy have been regulated by the Government in the Law. Darumurti and Rauta (2000: 49) explain that the implementation of functions given by the Central Government to the Regional Government which is broader can create a burden regarding the readiness of the region in its implementation because the functions of the Regional Government are becoming wider to the City / Regency
The contribution of this study provides an explanation that the higher the poverty rate, the better quality of life of the community and prove that developments in the City / Regency in the Regional Government have been implemented by the Local Government following the capacity of the Regional Government
The results obtained include (1) the Human Development Index (HDI) having a positive effect on performance, this can be caused by HDI using benchmarks that are appropriate to the development of society, especially the components of life expectancy and education
Summary
The rules regarding regional autonomy have been regulated by the Government in the Law. Darumurti and Rauta (2000: 49) explain that the implementation of functions given by the Central Government to the Regional Government which is broader can create a burden regarding the readiness of the region in its implementation because the functions of the Regional Government are becoming wider to the City / Regency. The rules regarding regional autonomy have been regulated by the Government in the Law. Regional autonomy as an implementation that gives. The existence of regional autonomy must be accountable to the community because there must be a decentralized system that reflects transparency effectively and efficiently (appropriate and properly). In the implementation of good governance activities, it means that the implementation of regional financial management has been optimal, which can be reflected in the realization of the agency theory implementation. Jensen & Meckling (1979) explained that agency theory in companies could be in the form of principals and agents, in government the position can be seen as an agent (Regional Government) and principal (community) giving political power to parties who have been delegated and chosen by the people
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