Efficiency Analysis Of Direct And Indirect Expenditure Local Government In An Effort To Overcome Poverty In Central Java

The Central Java Provincial Government has made efforts to alleviate poverty as stated in theRegional Poverty Alleviation Strategy (SPKD). Many programs are carried out in an effort toovercome poverty, such as social assistance guarantees, regional health insurance, improvement ofhealth and education infrastructure, and other activities. The number of programs that are run requiresa large budget. However, the reality is that the program has not been able to overcome poverty inCentral Java optimally. This study aims to analyze the efficiency of direct and indirect spending onpoverty alleviation in Regencies/Cities of Central Java Province in 2018-2022. There is a novelty inresearch, namely the number of objects that are researched and include existing policy implicationswith facts that occur in the field that are connected to the research topic. The analysis method used isdata envelope analysis (DEA), assuming variable return to scale (VRS), which produces relativeefficiency values. The input variables used in this study are capital expenditure, goods and servicesexpenditure, grant expenditure, and social assistance expenditure. Meanwhile, the output variable isthe poverty level. The data used are 35 districts and cities in Central Java Province with the 2018-2022 period, which comes from the Directorate General of Financial Balance of the Ministry ofFinance of the Republic of Indonesia and the Central Statistics Agency. The results of this study showthat most districts/cities in Central Java Province in 2018-2022 have not achieved efficiency in the useof direct and indirect spending budgets to overcome poverty. There is only one region that hasreached a level of efficiency in both direct and indirect spending, namely Brebes Regency. Seeing thatmost regions have not reached the level of efficiency, the government must pay attention to theimprovement target so that in the coming year the use of the budget can reach an efficient level so thatthe poverty rate can decrease.