Continued monitoring and analysis

Oct 13, 2025 by wbrum.org 32 views

Analysis of Regional Development Inequality in North Sumatra Province in 1990 - 2013

Introduction

Development inequality is a complex and persistent problem that affects many regions around the world, particularly in developing countries. North Sumatra Province, located in Indonesia, is one such region that has experienced significant economic growth over the past few decades. However, despite this growth, the province still grapples with issues of regional development inequality. This study aims to analyze the level of development inequality in North Sumatra Province during the period of 1990 to 2013, test the Kuznets hypothesis, and examine the influence of independent variables such as GRDP (Gross Regional Domestic Revenue) per capita, investment, agglomeration, and fiscal decentralization on development inequality.

Background

Regional development inequality is a significant challenge facing many regions around the world. It is characterized by disparities in economic growth, income distribution, and access to basic services such as healthcare and education. In developing countries, regional development inequality can be particularly pronounced, as regions may have limited access to resources, infrastructure, and institutions that can support economic growth and development. In North Sumatra Province, the issue of regional development inequality is particularly pressing, as the province has experienced significant economic growth over the past few decades, but the benefits of this growth have not been evenly distributed.

Methodology

This study used secondary data obtained from the Central Statistics Agency (BPS) of North Sumatra Province and the Investment Coordinating Board (BKPM) for the period of 1990 to 2013. The analysis method applied was descriptive statistical analysis and regression analysis. Descriptive statistical analysis was used to calculate the level of development inequality in North Sumatra Province, while regression analysis was used to examine the influence of independent variables on development inequality.

Research Results and Findings

The results of this study showed that the level of development inequality in North Sumatra Province during the period of 1990 to 2013 was relatively low when viewed from the GRDP approach per capita. This suggests that despite economic development, the distribution of the results was not too uneven. In addition, the Kuznets hypothesis, which is expected to emerge in the form of the "U" curve, was not proven in this region. This means that an increase in GRDP per capita was not always accompanied by an increase in inequality.

Regression analysis revealed that the GRDP variable per capita, investment, and agglomeration had a negative but not significant effect on the level of inequality with the level of confidence α = 5%. Conversely, the variable dummy fiscal decentralization showed a significant positive effect. This indicates that fiscal decentralization can contribute to reducing inequality, which may be caused by increasing budget allocation for regions that require more attention.

Furthermore, the value of F count reached 18,07066 with a probability of 0.00004, which is lower than α = 5%. This shows that simultaneously, the four independent variables, namely GRDP per capita, investment, agglomeration, and fiscal decentralization, significantly affected the level of development inequality in North Sumatra Province. The R² value of 0.800626 indicates that 80.06% variations in development inequality can be explained by the four variables.

Conclusion

From the analysis conducted, it can be concluded that although the Province of North Sumatra shows a low level of inequality during the study period, it is essential to continue to monitor and analyze the factors that contribute to inequality. In addition, the support of fiscal decentralization has been proven to have a significant positive impact, and therefore, it is necessary to consider it in the regional development policy going forward. Further research is also needed to understand more complex dynamics related to inequality, including the long-term social and economic impacts of the policies taken.

Recommendations

Based on the findings of this study, the following recommendations are made:

Continued monitoring and analysis: It is essential to continue to monitor and analyze the factors that contribute to inequality in North Sumatra Province.
Fiscal decentralization: Fiscal decentralization has been proven to have a significant positive impact on reducing inequality. Therefore, it is necessary to consider it in the regional development policy going forward.
Further research: Further research is needed to understand more complex dynamics related to inequality, including the long-term social and economic impacts of the policies taken.

Limitations

This study has several limitations that should be noted. Firstly, the study used secondary data, which may not be comprehensive or up-to-date. Secondly, the study focused on a specific region, North Sumatra Province, which may not be representative of other regions in Indonesia. Finally, the study used a specific methodology, which may not be applicable to other regions or contexts.

Future Research Directions

This study has several implications for future research directions. Firstly, further research is needed to understand more complex dynamics related to inequality, including the long-term social and economic impacts of the policies taken. Secondly, research is needed to examine the effectiveness of fiscal decentralization in reducing inequality in other regions. Finally, research is needed to explore the role of other factors, such as education and healthcare, in reducing inequality.

References

Central Statistics Agency (BPS) of North Sumatra Province. (1990-2013). Statistical Yearbook of North Sumatra Province.
Investment Coordinating Board (BKPM). (1990-2013). Investment Statistics of North Sumatra Province.
Kuznets, S. (1955). Economic Growth and Income Inequality. American Economic Review, 45(1), 1-28.
World Bank. (2013). World Development Indicators. World Bank Publications.
Frequently Asked Questions (FAQs) about Regional Development Inequality in North Sumatra Province

Q: What is regional development inequality?

A: Regional development inequality refers to the disparities in economic growth, income distribution, and access to basic services such as healthcare and education between different regions.

Q: What is the significance of this study?

A: This study aims to analyze the level of development inequality in North Sumatra Province during the period of 1990 to 2013, test the Kuznets hypothesis, and examine the influence of independent variables such as GRDP (Gross Regional Domestic Revenue) per capita, investment, agglomeration, and fiscal decentralization on development inequality.

Q: What are the main findings of this study?

A: The study found that the level of development inequality in North Sumatra Province during the period of 1990 to 2013 was relatively low when viewed from the GRDP approach per capita. The Kuznets hypothesis was not proven in this region, and the variables GRDP per capita, investment, and agglomeration had a negative but not significant effect on the level of inequality. However, the variable dummy fiscal decentralization showed a significant positive effect.

Q: What is the implication of this study?

A: The study implies that fiscal decentralization can contribute to reducing inequality, which may be caused by increasing budget allocation for regions that require more attention. It also suggests that continued monitoring and analysis of the factors that contribute to inequality are essential.

Q: What are the limitations of this study?

A: The study has several limitations, including the use of secondary data, which may not be comprehensive or up-to-date, and the focus on a specific region, North Sumatra Province, which may not be representative of other regions in Indonesia.

Q: What are the future research directions?

A: Future research directions include further research to understand more complex dynamics related to inequality, including the long-term social and economic impacts of the policies taken, and the effectiveness of fiscal decentralization in reducing inequality in other regions.

Q: What are the policy implications of this study?

A: The study suggests that fiscal decentralization should be considered in the regional development policy going forward, and that continued monitoring and analysis of the factors that contribute to inequality are essential.

Q: How can this study be applied in practice?

A: This study can be applied in practice by policymakers and planners who are responsible for regional development in North Sumatra Province and other regions in Indonesia. It can also be used by researchers and academics who are interested in understanding the dynamics of regional development inequality.

Q: What are the potential benefits of this study?

A: The potential benefits of this study include a better understanding of the dynamics of regional development inequality, the identification of effective policies to reduce inequality, and the development of more effective regional development strategies.

Q: What are the potential challenges of this study?

A: The potential challenges of this study include the complexity of the data and the need for further research to understand more complex dynamics related to inequality.

Q: How can this study be replicated in other regions?

A: This study can be replicated in other regions by using similar data and methodologies, and by adapting the study to the specific context and needs of the region.

Q: What are the potential applications of this study?

A: The potential applications of this study include the development of more effective regional development strategies, the identification of effective policies to reduce inequality, and the improvement of the quality of life of people in North Sumatra Province and other regions in Indonesia.