Does Public Policy Innovation Promote Inclusive Economic Growth?: The Case of Surabaya and Bandung City- Indonesia

Octa Soehartono (National Institute of Public Administration)
Tari Lestari (Ministry of National Development Planning)

The ultimate goal of national development is to achieve prosperity and welfare of the people in a nation with no exemption, while achieving the target to be equivalent with high-income countries as stated in the Indonesia’s President goals namely “Nawacita”. In relation to this, there is a wide consensus mentioned that public service reform is a crucial factor for economic outcomes at the national and regional levels. Public policy innovation could create inclusiveness through several ways such as: generating employment, improving public expenditure efficiency, providing good quality of health services and education, as well as controlling corruption. Open and responsible government can help reduce poverty and promote economic growth. This paper explores the impact of public policy innovation to achieve inclusive economic growth in Surabaya and Bandung City - Indonesia. By using path analysis, supported by qualitative analysis, within period of 2010-2016, innovation in public policy does make some huge impact in promoting inclusive economic growth through reducing poverty and unemployment rate in both cities. The inovations have been reached a much larger segment of the poor and excluded population. There are similar approaches using by Surabaya and Bandung in reaching their potential to achieve inclusive economic growth: (i) support local investment that creates new jobs; (ii) improve human capacity/labor productivity; (iii) strengthen entrepreneurial and academic collaboration that promotes innovation; (iv) support the improvement of cultural events and entertainment activities.

PowerPoint Presentation