Central development spending in the regions post-decentralisation

The central government spends just under one-half of its development budget outside Jakarta. The centre provides more than one-third of total development spending carried out in the regions. Central development spending in the regions on primary and secondary sector activities and on education and culture is especially significant. The spatial distribution of consolidated public development expenditure is very unequal. However, central spending mitigates inequality in the geographic distribution of subnational development expenditure, at least to a certain extent. A good deal of central government spending in the regions appears to be on tasks that have been turned over to subnational governments and is therefore illegal under current decentralisation legislation. Central support of specific decentralised activities could be implemented more transparently and efficiently through the government's specific purpose grant.(Bull Indones Econ Stud/DÜI)