Democracy and the Expenditure: Unraveling the Drivers of Poverty Reduction in Indonesia
Keywords:
Poverty, government expenditure, and quality of democracy.
Abstract
This study aims to identify and analyze the influence of government expenditure and the quality of democracy on poverty in Indonesia from 2013 to 2023. In this study, secondary data sourced from the Directorate General of Financial Balance (DJPK) and the Central Bureau of Statistics (BPS) in 28 provinces in Indonesia from 2013 to 2023 were processed using panel regression with the Fixed Effect Model (FEM). The independent variables used in this study consist of government expenditure in the education sector, government expenditure in the health sector, government expenditure in the social protection sector, civil liberties, political rights, and democratic institutions. The research results show that the variables of government expenditure in the education sector, government expenditure in the health sector, political rights, and democratic institutions have a negative impact, while the variables of government expenditure in the social protection sector and civil liberties do not have a significant impact on poverty in Indonesia from 2013 to 2023.
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Sánchez Dávila, E. (2023). The impact of economic growth and social expenditure on poverty reduction. Panel VAR analysis for some Latin American countries, 2000-2019. Investigación Económica, 82(324), 51–71.
Sano, H.-O. (2020). How Can a Human Rights-Based Approach Contribute to Poverty Reduction? The Relevance of Human Rights to Sustainable Development Goal One. 11–27.
Sen, A. (1982). Poverty and famines: an essay on entitlement and deprivation. Oxford university press.
Sirait, J. F., Ferayanti, F., & Qudraty, M. F. (2022). Analisis Pengaruh Pengeluaran Pemerintah Sektor Perlindungan Sosial dan Kesehatan terhadap Kemiskinan di Provinsi Aceh. Jurnal Ilmiah Mahasiswa Ekonomi Pembangunan, 7(4), 235–244.
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Susanti, E. N., & Sartiyah. (2019). Determinants of Poverty In The Riau Islands Province. Dimensi, 8(2), 249–265.
Widarjono, A. (2018). Ekonometrika Pengantar dan Aplikasinya Disertai. Panduan Eviews. Edisi Kelima. Yogyakarta: UPP STIM YKPN Yogyakarta
Wooldridge, J. M. (2016). Introductory Econometrics: A Modern Approach 6rd ed. Cengage learning.
Yani, T. (2024). Tingkat Kemiskinan di Indonesia dan Dunia: Tantangan dan Upaya Mengatasinya. Media Indonesia.
Ananta, P., Kamal, M. E. bin M., & Mohamed, N. (2023). Public Spending, Corruption, and Human Development: Empirical Evidence in Middle-Income Countries. Proceedings of the International Conference in Technology, Humanities and Management (ICTHM 2023), 12-13 June, 2023, Istanbul, Turkey, 131, 561–579.
Anggraeni, P. A., & Uzaimah, L. (2024). Tinjauan Terhadap Kasus Korupsi Bantuan Sosial Dan Dampak Bagi Kesejahteraan Masyarakat Priska Aulia Anggraeni 1 , Lutfi Uzaimah 2 Fakultas Hukum, Universitas Negeri Semarang. 10(24), 396–404.
Azzahra, Q. (2024). Realitas Kemiskinan Indonesia, Tersebab Kebijakan atau Populasi. The Prakarsa.
Bambang Irawan, B. (2007). 312-1184-1-Sm. Hukum Dan Dinamika Masyarakat, 5(0854), 54–64.
Bandiyono, A. (2018). Pengaruh Belanja Pemerintah Daerah Berdasarkan Fungsi Terhadap Peningkatan Ipm Dan Pengentasan Kemiskinan ( Studi Pada Kabupaten/Kota Di Provinsi Aceh). Info Artha, 2(1), 11–28.
Barrientos, A. (2011). Social protection and poverty. International Journal of Social Welfare, 20(3)
Craigwell, R., Bynoe, D., & Lowe, S. (2012). The effectiveness of government expenditure on education and health care in the Caribbean. International Journal of Development Issues, 11(1), 4–18.
Damai, A., & Aprianti, Y. (2024). The impact of fiscal policy on the underprivileged population in Indonesia. Jurnal Perspektif Pembiayaan Dan Pembangunan Daerah, 12(3), 321–342.
Fan, S., Hazell, P., & Thorat, S. (2000). Government spending, growth and poverty in rural India. American Journal of Agricultural Economics, 82(4), 1038–1051.
Fletcher, T., & Rosenberg, T. (2024). Is Governance Associated with Poverty Reduction Independent of Economic Growth? November.
Gao, Y., & Zang, L. (2022). Is democracy pro‐poor? An empirical test of the Sen Hypothesis based on global evidence. Governance, 35(3), 847–868.
Hidalgo-Hidalgo, M., & Iturbe-Ormaetxe, I. (2018). Long-run effects of public expenditure on poverty. The Journal of Economic Inequality, 16, 1–22.
Hong, H., & Ahmed, S. (2009). Government spending on public goods: Evidence on growth and poverty. Economic and Political Weekly, 102–108.
Huang, Y. (2024). The Poverty Reduction Effect of Economic Growth: How Does Chinas Economic Growth Impact the Population Size of the Urban Livings of Minimum Living Allowance? Advances in Economics, Management and Political Sciences, 72(1), 180–191.
Kar, B. B. (2022). Poverty and the role of institutions in Sub-Saharan African Countries. In Interdisciplinary approaches to the future of Africa and Policy Development (pp. 151–167). IGI Global Scientific Publishing.
Komarudin, M., & Oak, M. (2020). Public Health Spending, Governance Quality and Poverty Alleviation. Economics and Finance in Indonesia, 66(2), 157. https://doi.org/10.47291/efi.v66i2.751
Liu, W., Li, J., & Zhao, R. (2020). Rural public expenditure and poverty alleviation in China: A spatial econometric analysis. Journal of Agricultural Science, 12(6), 46.
Melati, A. M., Sudrajat, Burhany, D. I., Rasyid, M. R. H., & Triani, M. (2024). Pengaruh Pengeluaran Pemerintah di Sektor Kesehatan, Pendidikan dan Tingkat Partisipasi Angkatan Kerja terhadap Tingkat Kemiskinan di Kabupaten/Kota Provinsi Sumatera Barat. Indonesian Accounting Research Journal, 1(2), 163–171.
Mellyndawati, V., & Yuhertiana, I. (2023). Government Expenditure and Poverty in East Java Province. International Journal of Current Science Research and Review, 6(08).
Misdawita, & Sari, A. A. P. (2018). Analisis Dampak Pengeluaran Pemerintah Di Bidang Pendidikan, Kesehatan, Dan Pengeluaran Subsidi Terhadap Kemiskinan Di Indonesia. Jurnal Ekonomi & Kebijakan Publik, 4, 147–161.
Novanto. (2024). Pengaruh Perkembangan Demokrasi dan Indeks Pembangunan Manusia Terhadap Pertumbuhan Ekonomi di Indonesia. 4, 41–53.
Novrizaldi. (2024). Pemerintah Kejar Target Penurunan Angka Kemiskinan dan Kemiskinan Ekstrem di Indonesia. KemenkoPMK.
Nurias, N., Johari, S. M., Muljarijadi, B., & Wardhana, A. (2023). Reducing the provincial poverty rate in Indonesia: The impact of local government expenditure. Jurnal Ekonomi & Studi Pembangunan, 24(2), 297–315.
Popova, D. (2023). Impact of equity in social protection spending on income poverty and inequality. Social Indicators Research, 169(1), 697–721.
Purba, S. F., & Hariyadi, H. (2023). Relasi Bauran Aspek Demokrasi dan Pertumbuhan Ekonomi di Indonesia. Politika: Jurnal Ilmu Politik, 14(2), 165–188. https://doi.org/10.14710/politika.14.2.2023.165-188
Purmiyati, A., Hassan, A. A. G., Sari, D. W., Romadhoni, V., Anggela, N., & Rahmadani, L. (2023). The Effect of Political and Economic Dimensions on Poverty in Indonesia. Jurnal Ekonomi Dan Studi Pembangunan, 15(2), 18.
Puspita, A. R. (2024). Dampak Korupsi Pemerintah Dalam Pengelolaan Bantuan Sosial Terhadap Kondisi Sosial Ekonomi Masyarakat. 2(1), 206–213.
Rambeli, N., Marikan, D. A. A., Podivinsky, J. M., Amiruddin, R., & Ismail, I. (2021). The dynamic impact of government expenditure in education on economic growth. International Journal of Business and Society, 22(3), 1487–1507.
Sánchez Dávila, E. (2023). The impact of economic growth and social expenditure on poverty reduction. Panel VAR analysis for some Latin American countries, 2000-2019. Investigación Económica, 82(324), 51–71.
Sano, H.-O. (2020). How Can a Human Rights-Based Approach Contribute to Poverty Reduction? The Relevance of Human Rights to Sustainable Development Goal One. 11–27.
Sen, A. (1982). Poverty and famines: an essay on entitlement and deprivation. Oxford university press.
Sirait, J. F., Ferayanti, F., & Qudraty, M. F. (2022). Analisis Pengaruh Pengeluaran Pemerintah Sektor Perlindungan Sosial dan Kesehatan terhadap Kemiskinan di Provinsi Aceh. Jurnal Ilmiah Mahasiswa Ekonomi Pembangunan, 7(4), 235–244.
Suparno, H. (2015). Pengaruh Pengeluaran Pemerintah Sektor Pendidikan, Kesehatan Dan Infrastuktur Terhadap Pertumbuhan Ekonomi Dan Peningkatan Pembangunan Manusia Di Provinsi Kalimantan Timur. Journal of Innovation in Business and Economics, 5(1), 1.
Susanti, E. N., & Sartiyah. (2019). Determinants of Poverty In The Riau Islands Province. Dimensi, 8(2), 249–265.
Widarjono, A. (2018). Ekonometrika Pengantar dan Aplikasinya Disertai. Panduan Eviews. Edisi Kelima. Yogyakarta: UPP STIM YKPN Yogyakarta
Wooldridge, J. M. (2016). Introductory Econometrics: A Modern Approach 6rd ed. Cengage learning.
Yani, T. (2024). Tingkat Kemiskinan di Indonesia dan Dunia: Tantangan dan Upaya Mengatasinya. Media Indonesia.
Published
2025-06-26
How to Cite
Filza Listiana, Ambya, & Prayudha Ananta. (2025). Democracy and the Expenditure: Unraveling the Drivers of Poverty Reduction in Indonesia. International Journal of Economics, Business and Innovation Research, 4(04), 706-722. https://doi.org/10.63922/ijebir.v4i04.1997
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