Local governments' expenditures efficiency on human development and poverty

This paper investigates the efficiency of local governments' expenditures in Indonesia, setting Human Development and Poverty level as the designated outputs. Annual data of 33 provinces in Indonesia during 2007-2011 are collected for conducting this research. Data Envelopment Analysis (DEA) is used to measure the efficiency levels. In addition, the efficiencies' performance also measured by using Malmquist index. This paper founds that, during the analysis period, the efficiency levels of local government expenditures of provinces outside of Java Island are still deficient. DKI Jakarta, West Java Province, DIYogyakarta, and Banten Province are always located in the efficient frontiers. However, Riau Province has been the most improved province among all.