Chapter 4 Analysis on Sources of Inefficiency in the Construction Sector: High Cost of Infrastructure Development in Indonesia

This study aims to identify the trend and sources of inefficiency of the construction sector in Indonesia causes expensive infrastructure development. The basic model was built on the basis of the intermediate input coefficients of Input–Output Table. The sources of inefficiency were metal goods industry, mining and other quarries, the non-metal goods and minerals industry, the cement industry, petroleum refining, building and business services companies, wood, land transportation, manufacture of rubber and plastic goods, financial institutions and machinery, electrical equipment and equipment industries. Indonesia needs a strong upstream industry on raw and supporting materials of iron-steel, wood and cement.