Human Development Dynamics across Districts of Indonesia: A Study of Regional Convergence and Spatial Approach

Abstract

Indonesia is an archipelago country which comprises of two main parts, western and eastern regions and spread into over 500 districts. Each district has their own characteristics, especially in development aspect. Some districts have been growing faster on economic and social development, yet others still fall behind. Using Human Development Index and its components on education, health and economic variables over 2010- 2018 period, this study aims to examine convergence on the regional human growth process and investigate the speed of convergence across districts. The result reveals convergence occurred on human development process and its determinants across districts during 2010-2018. Education variables are assumed as the main contributor for boosting the speed of convergence of human development. Spatial dependences are detected among districts, followed by the spatial clusters and spatial outliers through global and local spatial autocorrelation. Applying two spatial autoregressive models, spatial autoregressive lag model (SAR) and spatial autoregressive error model (SEM), confirmed that there is significant spatial spill-overs.The speed of convergence for all variables are much declining after the inclusion of spatial lag and error model. As the policy implication, since regional inequality in term of human development is still a major issue, it will be a call for better coordination and cooperation within and between regions.