The role of government mandatory spending on poverty rates in Indonesia

This study aims to estimate the impact of mandatory government spending on poverty levels in 34 provinces in Indonesia during 2016-2022. This study uses a panel data model with three main variables, namely education spending, health spending, and social spending. The three control variables used in this study are the Human Development Index, Unemployment Rate, and GRDP per capita. The results of the study indicate that Social Spending (GOVSOC) and Human Development Index (HDI) have a significant effect on poverty levels. This confirms that government social spending and human development levels are the main factors in poverty alleviation efforts. Meanwhile, health spending (GOVH), education spending (GOVEDU), Gross Regional Domestic Product per capita (GDPCAP), and unemployment rate (UR) did not show a significant effect on poverty levels in this study. Further research is needed to identify other factors that potentially influence poverty and to explain the deeper relationships between the independent variables that were not significant in this study.