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Does Government Quality Spending can reduce Poverty? A Case in East Java Province

Author

Listed:
  • Candra Fajri Ananda

    (Faculty of Economics and Business, Brawijaya University, Indonesia Author-2-Name: Moh. Khusaini Author-2-Workplace-Name: Faculty of Economics and Business, Brawijaya University, Indonesia Author-3-Name: Atu Bagus Wiguna Author-3-Workplace-Name: Faculty of Economics and Business, Brawijaya University, Indonesia)

Abstract

"Objective � The poverty issue in East Java Province is an interesting research object. This phenomenon has retrieved in every fiscal year, although the intergovernmental transfer funds increase significantly annually. In the decentralization era, a region has been authorized to identify its problem and provide solutions based on their initiatives and preferences. The local government through their budget should focus on their problem solving, i.e. poverty alleviation. Utilizing panel regression, we found that government spending on education and health can reduce poverty rate. Methodology/Technique � OLS (Ordinary Least Squared) model was utilized to answer the objective of the study, that is, to see how the effect of government spending in various sectors on poverty alleviation. Findings � Using the panel regression model, this study found that government spending on education has a negative impact on poverty rate in the East Java Province. The impact on this variable appears to be statistically significant. Novelty � This study showed that central and local government should synchronize their proposed programs, reducing overlapped programs, to pursue a higher efficiency of budget management."

Suggested Citation

  • Candra Fajri Ananda, 2017. "Does Government Quality Spending can reduce Poverty? A Case in East Java Province," GATR Journals gjbssr458, Global Academy of Training and Research (GATR) Enterprise.
    • Handle: RePEc:gtr:gatrjs:gjbssr458
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    References listed on IDEAS

    as
    1. Wendy Edelberg & Martin Eichenbaum & Jonas D.M. Fisher, 1999. "Understanding the Effects of a Shock to Government Purchases," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 2(1), pages 166-206, January.
    2. Kruse, Ioana & Pradhan, Menno & Sparrow, Robert, 2012. "Marginal benefit incidence of public health spending: Evidence from Indonesian sub-national data," Journal of Health Economics, Elsevier, vol. 31(1), pages 147-157.
    3. Leigh, Andrew & Neill, Christine, 2011. "Can national infrastructure spending reduce local unemployment? Evidence from an Australian roads program," Economics Letters, Elsevier, vol. 113(2), pages 150-153.
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    More about this item

    Keywords

    Quality Spending; Budget Deficit/Surplus; Poverty Alleviation.;
    All these keywords.

    JEL classification:

    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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