The Factors Affecting HDI Indonesia

Abstract

This research aims to determine the factors affecting human development index (HDI) in regency/city in Indonesia. Based on data from BPS (Statistics Indonesia), human development index (HDI) of each regency/city in Indonesia has a heterogeneous achievement value from the low, middle to high categories of HDI. This indicates that there are still underdeveloped areas and inequality in human development in Indonesia. Meanwhile, regional government expenditure on education, health, and economic functions tends to increase considerably each year. The methods used were panel data regressions with time series data from 2011-2017 and cross section data of 465 regencies/cities in Indonesia. Econometrics results show variables that have significant positive effect on HDI, which are regional government expenditure on education function, health function, economic function, GRDP (Gross Regional Domestic Product), education infrastructure (number of junior high schools), health infrastructure (number of community health center), and BPK (The Audit Board of Indonesia) opinion. While poverty has negative effect, infrastructure (road length) has no effect. To avoid inequality from affecting human development in Indonesia, the government role to prioritize human development in regency/city with HDI achievement values that are still low or underdeveloped is necessary. These contributions can be made by prioritizing expenditure on health, education, and economic functions in the regional budget.