Creating New Regions, Improving Regional Welfare Equality?
Source: Munich Personal Repec Archive
In concurrent with reformation and decentralization, number of sub-national administrative in Indonesia increase significantly. Existing regions has been splitting to create new regions. As the result, number of municipalities and districts in Indonesia in recent years are more than 450. The creation of new regions has been expected will increase citizens' welfare in the regions and reduce regional inequality. However, indicative evidences shows negative impacts of this reform such as increase of inefficient administration cost of government, decrease capacity to deliver public services and increase potential for inter-group conflict.