Abstract
This paper is aimed to examine the hypothesis that regional disparities tend to persist because there are differences of implementing regional policy in economic development. This issues has become a crucial topic in economic regional analysis both before decentralization implementation and after. This study investigated the determinant factors of provincial convergence over 20 years (since 1985 to 2006). Using â-conditional convergence analysis based on panel data, we found that speed of income per capita convergence by 2,6 percent with half-time to reached steady state condition by 26 years. In this period, share of investment that represented by domestic fixed capital formation, share of agriculture sector and manufacture industry have important role to converging interprovincial income percapita in Indonesia. Comparing of convergence for before (1985-2000) and post decentralization (2001-2006) get the speed of convergence by 3,30 percent and 1,06 percent, respectively. There are different determinants of source of income percapita growth for those periods.
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