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The link between fiscal decentralization and poverty – Evidence from Indonesia

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  • Siburian, Matondang Elsa

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.

Suggested Citation

  • Siburian, Matondang Elsa, 2022. "The link between fiscal decentralization and poverty – Evidence from Indonesia," Journal of Asian Economics, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:asieco:v:81:y:2022:i:c:s1049007822000513
    DOI: 10.1016/j.asieco.2022.101493
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    Cited by:

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    2. Yan Miao & Zheng Li, 2023. "The poverty alleviation effect of transfer payments: evidence from China," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-9, December.

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    More about this item

    Keywords

    Fiscal decentralization; Poverty; Indonesia; Non-linearity;
    All these keywords.

    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development

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