Pro-Poor Public Spending Efficiency in Java: Dea and Discriminant Approach
It is challenging for the government to realize budget policies through spending allocations to achieve successful public programs, including reducing poverty levels. A good government financial system is essential to the economy and promotes poverty alleviation. However, the role of this budgeting policy becomes hampered by spending inefficiencies. In 2020, COVID-19 contributed to increased poverty, raising questions about pro-poor spending efficiency before and during the pandemic. This study aimed to examine the pro-poor spending efficiency in 114 regency/city governments in Java, Indonesia. The examination focused on the data collected in 2019 and 2020 before and during the COVID-19 pandemic. Pro-poor spending was assessed using the data envelopment analysis (DEA) method. Furthermore, the study aimed to identify differences in the characteristics of efficient local governments in 2019 using the discriminant analysis method. The results showed that local government spending efficiency level in reducing poverty in Java was more efficient in 2020 (during the pandemic) than in 2019 (before the pandemic). Furthermore, government size and political parties are the most and least discriminating variables that distinguish pro-poor spending efficiency on Java Island, respectively.
Keywords - Dea, Discriminant Analysis, Efficiency, Government Size, Pro-Poor Public Spending.