| Summary: | The increase of the revenue growth in the districts/cities of the Region I
and III in East Java is a sign of the economic growth happening in the area.
However, the various and heterogeneous characteristics of the district/city has
caused imbalance growth in each area. Some districts/cities have faster revenue
growth whilst the others have slower growth.
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This study aims to analyze the
disparity and convergence pattern of the regional GDP per capita across
district/city in Region I and III of East Java Province in the year of 1995-2009.
The tools of analysis are the Klassen typology, Williamson index, sigma
convergence and beta convergence, using the technique of panel data crosssection
regression.
Results of the disparity analysis showed that there were no evidences
sigma convergence, but there was a divergence or inequality in the income per
capita. Based on the dispersion range calculation using the Williamson index
value, the revenue imbalance of the districts/cities tended to be increasing in the
year of 1995 � 2009. It increased from 0.4361 to 0.4649 and the variation
coefficient increased from 0.4682 to 0.4985.
Results of the beta convergence analysis showed that there was no
absolute convergence or there were no evidences of value catching up with the
convergence rate of 5.0082 percent per year. Similarly, with the conditional
convergence analysis, the convergence process didn�t take place but there was a
divergence of the income per capita with the convergence rate of 4.9314 percent
per year for the models without a dummy and of 4.9390 percent per year for the
models which include the dummy General Allocation Fund. Factors that influence
the level of the regional GDP per capita is the regional GDP per capita of previous
year, the government expenditure and the percentage of working population.
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