How the Government Quality can Help Boosting Infrastructure Investment and Economic Growth? A Closer Look at Indonesia’s Practice

Extant literatures have suggested that the quality of infrastructure determines the successfulness of development occurred in a nation. It includes providing good transportation infrastructures e.g. roads, river, sea, air and railways that not only can facilitate people’ movement abut also improve outcomes of business cycles connected through various transportation system. infrastructure, especially transportation infrastructure, which includes roads, rivers, sea, air and railways. In the case of the Indonesian economy with the classic issue of poor government governance, the weak role of transportation infrastructure in the national development tends to be in line with the low service quality and limited scope of services on the transportation-related sectors symbolizing ineffectiveness of existing transportation infrastructure to boost the economic growth of the nation. This paper aims to analyze the relationship among government quality, investment in transportation infrastructure and economic growth in Indonesia over 2000 – 2017 period. The results of data analysis indicates that road length has a positive relationship with economic growth in the first 5 years and shows a negative relationship in the following year. The contribution of loading and unloading of domestic shipping goods on the economic growth only occurred in 2010. More interestingly, the quality of government reflected from unqualified opinion for the financial statements of Ministry of Transportation of Republic of Indonesia shows no impact to the infrastructure investment especially from foreign direct investment.