The phenomena of local government proliferation at provincial and district levels in Indonesia have also taken place in Kalimantan and Sulawesi since1999. Even though perceived as people’s aspiration, the proliferation results in welfare are questionable. This could happen when proliferation is due to a degradation of regional capacity in managing development. This research is focused on basic service rate in health and education. It is aimed at analyzing the impact of local government proliferation on basic service capacity and comparing the conditions in Kalimantan and Sulawesi Regions. To achieve that purpose, the author used descriptive analysis through assessing proxy variables for basic health and education service capacity indicators by utilizing Village Potency Data of 2000 – 2008, BPS, Indonesia. All indicators are measured in Ratio Value. After disclosing the performances in each district group of Kalimantan and Sulawesi then the author performed comparative analysis to the group using statistical t-test of two means comparison. The result shows that in general there is no significant divergence in service capacity performance from one to another district in Kalimantan and Sulawesi, except in some certain services. Education service capacity in newly-established districts, origin districts, and other districts are all in the suitable range of quantity standard. However, health service capacity of those three district groups is still below “the 2010 Indonesian Healthy Standard”. Newly-established districts of proliferation in Kalimantan and Sulawesi are all similar in performance. There is a slight difference in health and eduation performance between Newly-established districts in Kalimantan and Sulawesi,nevertheless, the divergence is rejected statistically. Eventually, proliferation taking place in different regions, i.e. Kalimantan and Sulawesi, is not due to performance differentiation. Keywords: government proliferation, basic service, performance differentiation