Poverty in Remote Regions: Evidence from the Papua Highlands of Indonesia

Taosige Wau and Farawi Ghannili
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Taosige Wau: UIN Sunan Kalijaga Yogyakarta, Indonesia
Farawi Ghannili: UIN Sunan Kalijaga Yogyakarta, Indonesia

Journal of Economic Development, 2026, vol. 51, issue 2, 43-67

Abstract: This study examines the structural determinants of poverty in the Papua Highlands, Indonesia, where poverty persists despite substantial Special Autonomy fiscal transfers. Using a balanced panel of 16 highland districts from 2010 to 2023 and a dynamic panel model estimated with System GMM, the study examines the effects of human capital, economic conditions, and public spending on poverty rates. The results indicate strong poverty persistence. Mean years of schooling, life expectancy, and government spending on education and health are negatively associated with poverty, whereas per capita GRDP and capital spending show weak or ambiguous effects. These findings suggest that growth and infrastructure investment are not automatically pro-poor in this region. The study contributes context-specific evidence to development economics by showing how remoteness, human capital constraints, and public policy interact in disadvantaged regions, while emphasizing that the findings should be interpreted within the distinctive context of the Papua Highlands.

Keywords: Structural Poverty; Papua Highlands; Human Capital; Public Expenditure; Regional Poverty Traps (search for similar items in EconPapers)
JEL-codes: I32 J24 O18 P36 P46 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ris:jecdev:023037

DOI: 10.35866/caujed.2026.51.2.003

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