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The link between fiscal decentralization and poverty – Evidence from Indonesia

Matondang Elsa Siburian

Journal of Asian Economics, 2022, vol. 81, issue C

Abstract: This paper aims to clarify the relationship between fiscal decentralization and poverty using Indonesian provincial-level data from 2001 to 2018 by way of panel data estimation. This paper circumvents the potential endogeneity problem between the interest variable to provide an unbiased estimated impact of the critical variables. The results provide robust evidence that the implementation of Indonesian fiscal decentralization contributes to poverty reduction outcomes. This paper also proposes a policy set based on the estimation result to the central government in handling the non-linear relationship between fiscal decentralization and poverty.

Keywords: Fiscal decentralization; Poverty; Indonesia; Non-linearity (search for similar items in EconPapers)
JEL-codes: H75 H77 I25 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1016/j.asieco.2022.101493

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