The Regional Political Party Concentration Impact On Economic Growth

Abstract

In the dynamics of Indonesian democracy, the multiparty mechanism is one way to regulate aspirations. This mechanism is supported by Law no. 25 of 1999 concerning decentralization of scale and the dynamics of its changes. Direct Regional Head Elections (Pilkada) also support the mechanism of democracy in the regions. The political party that wins the election will influence the pattern of regional budget allocations which can ultimately have an impact on the effectiveness of government spending. This study estimates how much effect of the concentration of parties in the regions has on economic growth in the regions. The analysis uses data from 70 districts/cities in 2014 and 2019. The concentration of political parties in parliament in the regions is measured by the proportion of council members from each political party using the Herndahl Hirschman Index (HHI). Data from 2014 and 2019 confirm that the more concentrated members of the council are in one particular political party, the lower the economic growth of the region.