This budget allocation is aimed at improving public services, especially in the education and health sectors. This study aims to: (1) measure the level of efficiency of DAK use during the period 2014–2023; and (2) analyze the implications of the use of DAK and the Human Development Index (HDI) on the quality of human resources in 2014–2023. The research method used was Data Envelopment Analysis (DEA) and simultaneous regression with secondary data sourced from the fund transfer report of the Ministry of Finance and the Central Statistics Agency. The results of the study show that there are still many inefficiencies in the use of DAK by local governments in these provinces. Furthermore, the regression results in the first equation model revealed that the number of accredited libraries had an effect on increasing the DAK budget. In the second equation model, it was found that DAK and literacy level had a significant influence on increasing HDI. Thus, the effectiveness of DAK is not only determined by the amount of allocation, but also by the quality of management of the education sector, literacy, and other supporting facilities in encouraging human development in the eastern region of Indonesia. 

DOI: http://dx.doi.org/10.51505/ijaemr.2025.1405