Analysis of Differences in Local Government Financial Performance Before and After Expansion on Papua Island

Abstract

Regional financial performance is an important indicator in assessing the effectiveness of
financial management at the regional level. This study focuses on the comparison of the
financial performance of Papua and West Papua Provinces before and after the division. This
study aims to determine the differences in regional financial performance using various
financial ratios after regional expansion in 2022. This research uses a descriptive qualitative
approach with documentation as a data collection technique. The analysis was carried out
through a comparison of the ratios of the degree of decentralization, dependence,
independence, effectiveness of regional own-source revenue (PAD), and expenditure
efficiency. The results showed that there were significant differences in the ratios of the
degree of decentralization, dependency, independence, revenue effectiveness, and
expenditure efficiency between Papua and West Papua Provinces before and after the
division in 2022. The study concludes that pemekaran has affected regional financial
performance, with changes in ratios reflecting higher dependence on central funds and
decreased financial independence. This suggests the need for efforts to improve regional
financial management capacity post-division.