The Role of Papua Special Autonomy on Growth

Theoretically, government has a positive role on growth; however, many studies showed different results in different countries. Although there were different role as many studies have proven, this policy remain applies in many countries or region. Even in Papua, this policy called Special Autonomy which gives more authority than before to manage more fund for rapid development. The aim of this study was to determine the role of Special Autonomy on growth by panel data analysis of 29 regencies and municipality during 2010–2012. This study adopted Akai and Sakata Model which uses cross section analysis for United States. The result showed that special autonomy has negative role on growth. However, other variables suggested that the autonomy degree to collect their own revenue is positive to growth but they are not significant at 5 percent. On the contrary, the autonomy to expend has negative effect on the growth but not significant at 5 percent. Based on the results, the negative role of special autonomy on growth may caused by many factors one of which is the management of the fund. Therefore, more studies about the determinant of growth in Papua and how the government manages fund to boost economic development are needed.