Can Increased Transfer Fund Efficiency Contribute to Poverty in South Sumatra, Indonesia?

Abstract

The central Transfer Fund to the region has experienced a sharp increase in the last 5 years but the poverty rate is experiencing slow decline. There is a possibility that funds are given to the area has not been efficient so poverty reduction is not optimal. The research focuses on the efficiency of specific allocation funds and village funds as an input factor and the level of poverty as an ouput. The data used is secondary data and processed with the DEA model. Research findings with the CRS and VRS methods indicate that the average district/city has not been efficient in using specific allocation funds and village funds. Therefore, contributions of special allocation funds and village funds to poverty rates are relatively low.