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This paper has examined good governance in promoting investment in the South Sumatra province. In the context of decentralization, it is evident that the local government (Kabupaten/Kota) seeks to enhance its fiscal capacity to provide sufficient public services to the community. In this regard, the policy of raising fiscal revenue (PAD) has been undertaken through broadening local tax and retribution. However, such policies have deteriorated business climate and thus hindered investment in the region. The one-stop service policy also fails to enhance investemnt due to the weakness in bureaucratic system of the local government, despite insufficient quality of infrastructure, such as electricity, transportation reduce the willingness of private sectors to invest in the region. |
