Analysis of Regional Government Strategy and Policy in National Economic Development Planning in Indonesia

Abstract

National economic development represents a comprehensive transformational process aimed at enhancing the welfare of society through sustained income growth, structural improvements in the economy, and equitable distribution of resources. Within the Indonesian context, the role of local governments has become increasingly crucial for optimizing local potential, strengthening human resource capacities, and ensuring that policies are fully aligned with the broader national development agenda. This study seeks to examine and analyze the strategies and public policies implemented by local governments to support national economic development, particularly in the current era of decentralization and regional autonomy. The research employs a systematic literature review methodology, analyzing scholarly journal articles. Findings reveal that effective utilization of local potential, capacity-building of government officials, and innovative approaches to development planning constitute key strategic factors in enhancing regional self-reliance and competitiveness. Nevertheless, challenges persist, including fiscal constraints, dependency on central government transfers, and uneven quality of human resources across regions. The study underscores the critical importance of fostering strong central–regional synergy, promoting policy innovation, and reinforcing institutional capacities to achieve economic development that is inclusive, sustainable, and globally competitive. Addressing these challenges effectively can significantly contribute to long-term social welfare, regional resilience, and balanced national growth.