Does Government Spending Improve Human Development? Evidence from Papua’s Districts

What is it about?

Government spending plays an important role in improving people’s quality of life, especially in regions facing development challenges. This study examines how local government spending affects human development in Papua, one of Indonesia’s least developed regions, over the period 2018–2022. Using data from districts across Papua, the research looks at how public spending on key sectors—such as education, health, and social services—is linked to changes in human development outcomes. Instead of focusing only on national trends, the study highlights differences between districts, showing how local government choices can lead to different results for communities. The findings show that strategic and well-managed government spending is associated with improvements in human development, particularly when funds are directed toward essential public services. However, the study also finds that increased spending alone is not enough. Limited administrative capacity, geographic challenges, and unequal access to services can reduce the impact of public budgets, especially in remote areas. Overall, the study suggests that improving human development in Papua requires not only sufficient funding, but also better planning, stronger local institutions, and more effective implementation at the district level. These insights are valuable for policymakers, local governments, and development practitioners seeking to reduce inequality and improve health, education, and living standards in disadvantaged regions.

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Photo by Aris Nurjaman on Unsplash

Photo by Aris Nurjaman on Unsplash

Why is it important?

Government spending plays a key role in improving people’s quality of life, especially in regions facing persistent development challenges. This study examines how local government spending affects human development in Papua, Indonesia, using district-level data from 2018–2022. What makes this article unique is its focus on district-level evidence in one of Indonesia’s most disadvantaged and geographically complex regions. While many studies rely on national averages, this research shows how development outcomes differ across districts and how local budget decisions directly affect health, education, and living standards. By focusing on Papua, the study brings attention to a region that is often underrepresented in development research. The article is also timely. Papua continues to face large development gaps compared to other regions of Indonesia, while governments are under increasing pressure to ensure that public spending is effective, transparent, and equitable. The post-pandemic period has further heightened concerns about whether public budgets are translating into real improvements in people’s lives. The findings suggest that strategic, well-targeted government spending can improve human development, but money alone is not enough. Strong local institutions, better planning, and effective implementation are essential, particularly in remote areas. By offering practical insights into how public funds can be used more effectively at the local level, this article can inform policymakers, development practitioners, and researchers working on public finance, decentralization, and regional inequality—making it highly relevant for today’s development and governance debates.

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