Fiscal decentralization in Indonesia may perpetuate regional poverty, study finds.
Decentralization in Indonesia involves giving different responsibilities and money to the central and local governments. A study looked at how this affects economic growth in different regions of Indonesia. They used two ways to measure the economy in each region, one including oil and gas money and one without. They found that when all regions are treated equally, decentralization helps economic growth. But when regions are not treated equally, it can actually make poor regions stay poor. Giving money to local governments can either help or hurt growth, depending on how it's used. The study suggests ways to improve how money is given to local governments to help all regions grow.