Decentralization to get efficiency

Efficiency

1. Economically: improving efficiency in the provision of local goods and services required of local communities That, reduce costs, increase of output and more effective to use of human resources.

2. Politically: decentralization is considered to strengthen accountability, political skills and the national integration. Decentralization of government closer to citizens, giving freedom, equality and welfare, to improve participatory democracy.

Politics

Before decentralization, the system is centralized, all decision / policy issued by the center, the area just waiting for instructions from the center to implement the policies outlined by the Act. The policies and decisions produced by people who are in the central government so that the time to decide a case becomes longer. In Addition, decisions and policies issued by the central government is also not on target. And then, various local regulation which was originally to be approved by the central government.

After Decentralization, it can be determined by the Regional Head That development independently so on target, then the area is free to exploit the existing natural resources as a source of revenue. With authority owned, regency / city can determine its own priorities in accordance with the regional development potential.

Economics
1. Investment licensing, which the area can be set and give permission without approval from the central government. Through the decentralization, the expected investment procedures will be more so easily so that potential areas can be utilized as much as possible for the prosperity of the people.

2. The Relationship Between central and local Finances need to get the settings so the expenditure will be the responsibility of the area can be funded from revenue sources that exist. In this case, the provision of public goods should be held by the local government

For example in Indonesia: fiscal decentralization

Through fiscal decentralization, is expected to increase of the efficiency of local financial administration and a clear arrangement of the sources of state and local income and share the profit of the revenue sources related to the natural wealth, taxes and levies. The impact of fiscal decentralization policy, based on economic calculations, Appears major changes in the budgets area counties and cities where there was an increase of to raise a remarkable, That have especially for areas of natural resources.

Therefore, people will choose to live in environments That meet the area budget of the highest preference Among the public service of a local authority with the taxes paid by the public. When people do not like the policies of local Governments in the imposition of taxes to finance public goods are local, then there are only two choices for the citizens, namely to leave the area or stay in the region by Trying to change the policies of local Governments through legislative

Goods/services of the public who have large economies of scale, Such as defense and security, would be more efficient if conducted by the central government. While the goods / services of the public without the large economies of scale would be more efficient if provided by local Governments.