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| Illustration by Ai |
A 2026 study by Pooja Zinta Stevany, Wiralestari, and Fredy Olimsar from Universitas Jambi compares the financial performance of three provincial governments in southern Sumatra—Jambi, South Sumatra, and Lampung—over the 2020–2024 period. Published in Jurnal Multidisiplin Madani (MUDIMA), the research finds that South Sumatra demonstrates the most consistent and balanced financial management, while Jambi excels in revenue effectiveness and Lampung faces ongoing structural challenges. The findings matter as Indonesia continues to strengthen regional autonomy and public accountability in managing local budgets.
Background: Why Regional Financial Performance Matters
Indonesia’s decentralization policy gives provincial governments significant authority to manage public finances through regional budgets (APBD). This autonomy comes with growing expectations for transparency, efficiency, and accountability in public spending.
However, disparities in fiscal capacity, governance quality, and economic conditions often lead to uneven performance across regions. In southern Sumatra—comprising Jambi, South Sumatra, and Lampung—these differences are particularly visible despite shared geographic proximity.
Public dissatisfaction with service quality has also increased pressure on local governments to demonstrate that public funds are used wisely. The Value for Money (VfM) framework—focusing on economy, efficiency, and effectiveness—has become a key benchmark for evaluating whether governments deliver results at optimal cost.
Methodology: Measuring Economy, Efficiency, and Effectiveness
The study uses a quantitative comparative design based on secondary data from official Budget Realization Reports (APBD) for each province between 2020 and 2024.
The researchers assessed financial performance using three key ratios:
- Economic ratio: Measures how well governments control spending relative to budget
- Efficiency ratio: Evaluates how effectively operational costs are managed
- Effectiveness ratio: Assesses the ability to meet revenue targets
Data were analyzed using financial ratio calculations and cross-provincial comparisons to identify strengths, weaknesses, and performance patterns.
Key Findings: Clear Differences Across Provinces
The study reveals distinct financial management profiles for each province.
1. South Sumatra Shows the Most Balanced Performance
South Sumatra ranks highest overall due to its consistency across all three indicators:
- Economic ratio: 84.77% (strong spending control)
- Efficiency ratio: 92.48% (best operational efficiency)
- Effectiveness ratio: 92.32% (steady improvement, exceeding targets in 2024)
The province consistently kept spending below budget while gradually improving revenue performance. This balance indicates strong fiscal discipline and effective financial planning.
2. Jambi Excels in Revenue Effectiveness but Faces Efficiency Pressure
Jambi stands out for its ability to exceed revenue targets:
- Effectiveness ratio: 104.68% (highest among all provinces)
- Achieved over 100% realization in most years (2020–2023)
However, challenges remain:
- Economic ratio: 95.62% (close to budget limit, reducing flexibility)
- Efficiency ratio: 94.55% (less room for cost savings)
In 2024, Jambi experienced a sharp drop in effectiveness to 83.33%, signaling potential issues in revenue planning or economic conditions.
3. Lampung Struggles with Stability and Revenue Performance
Lampung records the lowest overall performance:
- Economic ratio: 83.70% (adequate but declining sharply in 2024)
- Efficiency ratio: 93.92% (moderate but fluctuating)
- Effectiveness ratio: 89.45% (never reached revenue targets)
The province experienced a significant drop in effectiveness in 2023–2024, with revenue realization falling to around 78%. This suggests structural challenges in revenue collection and fiscal planning.
Comparative Highlights
- Best in economy and efficiency: South Sumatra
- Best in effectiveness: Jambi
- Most stable performance: South Sumatra
- Most significant decline: Lampung (especially after 2022)
Overall ranking based on combined indicators:
- South Sumatra
- Jambi
- Lampung
Implications: Lessons for Regional Governance
The findings offer practical insights for policymakers and regional governments across Indonesia.
For policymakers:
- The Value for Money framework provides a reliable tool for evaluating public financial performance.
- Consistency and balance across indicators are more sustainable than isolated strengths.
For provincial governments:
- South Sumatra’s model highlights the importance of disciplined spending and gradual improvement in revenue systems.
- Jambi needs to strengthen efficiency and maintain revenue stability.
- Lampung requires structural reforms in revenue management and budget execution.
For public accountability:
- Transparent and efficient financial management directly affects public trust and service delivery.
- Better budget planning and monitoring can reduce waste and improve outcomes.
Author Insight
Pooja Zinta Stevany of Universitas Jambi explains that strong financial performance is not only about exceeding targets but also about maintaining balance. The study shows that consistent control over spending and gradual improvement in revenue systems are key to achieving sustainable fiscal governance.
Author Profiles
- Pooja Zinta Stevany, S.E. – Researcher at Universitas Jambi specializing in public sector accounting and regional finance.
- Wiralestari, S.E., M.Si. – Lecturer at Universitas Jambi with expertise in financial management and government accounting.
- Fredy Olimsar, S.E., M.Si. – Academic at Universitas Jambi focusing on public finance and performance measurement.
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