The Influence of General Allocation Fund, Special Allocation Fund, and Local Own-Source Revenue on Education and Health Expenditures in Increasing the Human Development Index in the Horseshoe Region

Human development is a key indicator of regional development success, as reflected in the Human Development Index (HDI). Despite increasing fiscal transfers from the central government, HDI disparities across regions persist, particularly in the Tapal Kuda region of East Java. This study examines the effect of the allocation of General Allocation Funds (DAU), Special Allocation Funds (DAK), and Local Own-Source Revenue (PAD) on education and health expenditures in improving HDI. Using a quantitative causal associative approach, panel data from nine districts in the Tapal Kuda region covering 2014–2023 were analyzed through multiple linear regression. The results show that simultaneously, all independent variables significantly affect HDI, with an F-value of 22.255 and a significance level of 0.000. Partially, the DAU allocated to education expenditure has a positive and significant effect on HDI, DAU allocated to health expenditure has a negative and significant effect, and PAD allocated to education expenditure has a positive and significant effect. Meanwhile, DAK allocated to education and health expenditures, as well as PAD allocated to health expenditure, do not significantly affect HDI. The R² value of 0.617 indicates that 61.7% of HDI variation is explained by the model. These findings suggest that the effectiveness of regional fiscal policy in promoting human development in the Tapal Kuda region is largely determined by the management of DAU and PAD, particularly in the education sector.