Human Resource and Infrastructure Investment Model on Cost Effectiveness and Economic Development Performance in Bojonegoro

Abstract

Introduction: Economic development is a process that aims to create a just, prosperous, and equitable society. The main goal of economic development is to improve people's quality of life, welfare, and access to various aspects of development, including politics, economics, social welfare, and security. A strong desire to carry out development, encourages community involvement in planning and formulating development policies, shows that the policy is inclusive and representative. Even in the face of global economic uncertainty, Indonesia's economic development has demonstrated a good trend, continuing to rise.  Both family spending and exports contributed to the rise seen in the first quarter of 2023.  Bojonegoro Regency is an area with abundant oil, gas, and agricultural potential that is located at the border between East and Central Java.  Nevertheless, it still has problems including unstable economies and low Human Development Index (HDI) ratings. The substantial influence of infrastructure and human resource quality on economic performance is supported by a number of research.  Employee performance has been found to be strongly correlated with the availability of infrastructure, and economic growth in ASEAN countries is positively impacted by excellent governance, notably the efficiency of the government and the fight against corruption.  Similarly, political stability and freedom of speech strengthen economic resilience even more.

Objectives: These goals seek to comprehend the ways in which investments in infrastructure and human capital, either directly or indirectly, impact regional economic outcomes, especially through resource allocation efficiency.

Methods: The study employed a quantitative approach with descriptive and verifiable strategies to investigate the relationships between human resource investment, infrastructure, cost effectiveness, and economic development performance in Bojonegoro Regency.

Results: 1) Road Infrastructure Condition - This finding reflects the success of the local government in investing and improving road infrastructure, 2) Human Resource Investment - Despite the increase, there are still similarities between expectations and reality, which are likely caused by economic factors, access to education, and the quality of educational facilities and infrastructure, 3) Economic Development Performance (GRDP) - Gross Regional Domestic Product (GRDP) data per capita shows an increasing trend from IDR 604 million in 2007 to IDR 10,323 million in 2022. A significant increase occurred in 2010, reaching IDR 8,087 million, indicating a change in improvement in the regional economy, 4) Cost Effectiveness - The effectiveness of the education budget is measured through budget allocation and realization from 2007 to 2022. The total education budget increased from IDR 77.16 billion in 2007 to IDR 395.89 billion in 2022. However, there is a difference between the budget and realization, which reflects the difficulty in optimal budget management and absorption.

Conclusions: These findings highlight the need for integrated infrastructure strategies that prioritize efficient resource management, targeted skill development, and quality-focused planning to improve regional economic performance.