Convergence and the Factors that Influence Regional of District Level in Indonesia.

Abstract

Areas development is a sub system of economic corridors and province development, also as part of national development that could not be separated. The implication of economic development at each district level has been gave different achievement. The Implication of fiscal decentralization policy on 2001, gave an important roles to the region government on areas growth. Aims of this research are to analyze dynamics of areas disparity and facilities development, to examine the income convergence by Gross Regional Domestic Product (GRDP) and household expenditures of district level areas and comparing between economic corridor in Indonesia, and to analyze the influence factors of areas disparity between economic corridor in Indonesia for five years period on 2006-2010. The conclusion of analysis result shows when used GRDP, there were no income convergence of district level in Indonesia, while when used household expenditures by FD-GMM estimation technique, there were a number of convergence process. Further, there were convergences in every economic corridor, both with GRDP or household expenditures. The fastest convergence exists at Java Economic Corridor by household expenditures.