HOW DOES LOCAL GOVERNMENT AFFECT RURAL DEVELOPMENT? (CASE IN INDONESIA)

• Main Author: MUHAMMAD (NIM 19014167), AFIQ
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/20787
• Institution: Institut Teknologi Bandung

In Indonesia, developing rural index is one measurement that can be used to strengthen the rural development by reducing the number of underdeveloped village status and increasing the number of independent village status. The factors that affect the rural development are not merely from the internal factors that formed by three-dimensional of the developing rural index include social, economy, and ecology, but there are also the local government factors in the process of developing rural area. The local government can give the enormous benefits to the rural development if the factors of local government is managed and allocated appropriately. In 2014, the government targeted to reduce the number of underdeveloped village until 5000 since there were still many underdeveloped villages that could hamper the achievement of national development in Indonesia. Therefore, the improvement and appropriate allocation of local government factors in Indonesia is needed in the regions to be evenly spread into the rural area. This research is aimed to find out the local government factors that affect the rural development in Indonesia and the effect of each factor towards the rural development so the improvement of each factor can be known to increase the rural development in Indonesia. <br /> <br /> The author employs the multiple linear regression with the number of sample of 305 municipalities in Indonesia in 2014. The variables in this research include the developing rural index as the dependent variable and human development index, gross regional domestic product, local own-source income, grant expenditure, capital expenditure, area size, and population size as the independent variables.Based on the findings in this research, the author found that human development index, local ownsource income,capital expenditure, area size, and population size are the local government factors that affect the rural development significantly. Moreover, the factors that have positive significant <br /> <br /> relationship toward the developing rural index are human development index, local own-source income, and population size, which the effect is the higher or larger these factors, the higher the rural development. Meanwhile, capital expenditure and area size are the factors that have negative significant relationship toward the development rural index, which the effect is the lower or smaller these factors, the higher the rural development. Furthermore, if the factors of local government can be managed and optimized appropriately, it leads the increase of rural development as well as the developing rural index which can reduce the number of underdeveloped village status and increase the number of independent village status. <br /> <br />