Special Allocation Fund and Poverty Rate in Indonesia

Danesta Febianto Nugroho, Bayu Rhamadani Wicaksono and Muhammad R. Reynaldi
Additional contact information
Danesta Febianto Nugroho: Graduate School of International Relations, International University of Japan (IUJ), Japan
Bayu Rhamadani Wicaksono: Graduate School of Economics, Ritsumeikan University, Japan
Muhammad R. Reynaldi: Faculty of Economics and Business, Universitas Padjadjaran, Indonesia

Economics and Finance in Indonesia, 2021, vol. 67, 257-269

Abstract: The Special Allocation Fund is distributed to specific areas to aid them in funding special regional activities that follow national interests. Giving regional government’s broad autonomy is meant to hasten the realization of social welfare, as seen by reducing poverty. This study aims to examine the influence of the Special Allocation Fund for education, health, and infrastructure on the poverty rate in Indonesia, using the Poverty Gap Index (P1) as a proxy for the poverty rate. The study employed annual data from 33 Indonesian provinces from 2015 to 2018 and panel data regression analysis utilizing the Fixed Effects Model (FEM). The study discovered that the Special Allocation Fund for Education and Health has a negative and significant impact on poverty, but the Special Allocation Fund for Infrastructure has a positive but not significant impact on poverty. The central and regional governments must work together to guarantee that the Special Allocation Fund is distributed effectively to sectors directly relevant to poverty reduction efforts.

Keywords: special allocation fund; education; health; infrastructure; poverty rate; poverty gap index (search for similar items in EconPapers)
JEL-codes: C33 H51 H52 H54 I31 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://lpem.org/repec/lpe/efijnl/202117.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lpe:efijnl:202117

Access Statistics for this article

More articles in Economics and Finance in Indonesia from Faculty of Economics and Business, University of Indonesia Contact information at EDIRC.
Bibliographic data for series maintained by Muhammad Halley Yudhistira ( this e-mail address is bad, please contact ).