After the severe fall of oil price in 1986, Indonesia has consistently maintained structural adjustment policy which has successfully shift it dependence from the oil sector to the non-oil sector. This alteration was absolutely necessary due to the fact that Indonesian economic performance could never rely anymore on oil revenue, which also meant reducing the goverment role in driving the economic growth. In order to achive that goal, several macroeconomic policies such as deregulations have been conducted to give private sector more space and a bigger role in the economy. The bigger role for the private sector, the more market mechanism will take place in controlling the equilbrium process. Yet another problem raised, particularly in the regional point of view, that private sector always seek profit opportunity in areas which have large marginal revenue of product. This condition is significantly taking place in Indonesia with the Western part of Indonesia playing as an ace for private investors. This regional imbalance between the Western and Eastern part of Indonesia has not also been creating resources accumulation in the Western part but also dragging resources out from the Eastern part. This condition will eventually restrain overall economic maximization since the Eastern part: production and consumption possibility are non-optimized. This study will analyze the impact of the incerase in development expenditure ,especially infrastructure, on Eastern part's economic dynamic : growth, private investment and strucutral transformation, using a regional macroeconometric model. Other objective is to compare those dynamics under several development scenarios : growth centre scenario and underdevelopment areas scenario. Regional economic consideration has been taken place since we finally realized the fact that national oriented macroeconomic policy often fails to create the desired performance. The nobility of top down approach is faced with the prevailing facts that different regional characteristics, which used to be taken for granted, caused each region acts differently or even oppositely from what is expected to be. According to this issue, this study also addresses its analysis in comparing results from top down to bottom up policy excercise in developing Eastern part of Indonesia's economy.