Regional Fiscal Resources Income Inequality and Poverty in Indonesia

Evaluating fiscal budget utilization is crucial for understanding fiscal conditions and poverty in Indonesia. This study examines the relationships among locally-generated revenue, central government transfers, income inequality, regional economic conditions, and poverty levels across Indonesian provinces. It utilizes a balanced panel dataset covering 34 provinces from 2018 to 2024, comprising 238 observations. The analysis employs the Pooled Ordinary Least Squares method with heteroskedasticity-robust standard errors, incorporating the unemployment rate, average years of schooling, and Gross Regional Domestic Product (GRDP) at current prices as additional explanatory variables. Locally-generated revenue and economic output exhibit a negative relationship with poverty, whereas central government transfers and income inequality show a positive relationship. Unemployment and education were found to be statistically insignificant. A 1% increase in locally-generated revenue is associated with a 0.039 decrease in the poverty rate, while a 1% increase in central transfers is linked to a 0.070 increase. These contrasting relationships highlight the importance of distinguishing between fiscal revenue sources when analyzing provincial-level poverty. The study’s findings indicate associations between variables rather than causal relationships. Diagnostic tests revealed the presence of serial correlation and heteroskedasticity, necessitating caution in statistical decision-making and suggesting a need for methodological refinement. Furthermore, further research is required regarding transfer allocation mechanisms and the consideration of regional characteristics in the context of poverty alleviation.

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Publication Details

Journal
MARGINAL JOURNAL OF MANAGEMENT ACCOUNTING GENERAL FINANCE AND INTERNATIONAL ECONOMIC ISSUES
Published
2026-11-03
DOI
https://doi.org/10.55047/marginal.v5i4.2398
Primary Topic
Economic Growth and Fiscal Policies
Type
article
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article

Regional Fiscal Resources Income Inequality and Poverty in Indonesia

Maulana Ghani Yusuf, Navi'ah Khusniati, Tangguh Pratysto
MARGINAL JOURNAL OF MANAGEMENT ACCOUNTING GENERAL FINANCE AND INTERNATIONAL ECONOMIC ISSUES
Economic Growth and Fiscal Policies
article

Regional Fiscal Resources Income Inequality and Poverty in Indonesia

Maulana Ghani Yusuf, Navi'ah Khusniati, Tangguh Pratysto
article en

Abstract

Evaluating fiscal budget utilization is crucial for understanding fiscal conditions and poverty in Indonesia. This study examines the relationships among locally-generated revenue, central government transfers, income inequality, regional economic conditions, and poverty levels across Indonesian provinces. It utilizes a balanced panel dataset covering 34 provinces from 2018 to 2024, comprising 238 observations. The analysis employs the Pooled Ordinary Least Squares method with heteroskedasticity-robust standard errors, incorporating the unemployment rate, average years of schooling, and Gross Regional Domestic Product (GRDP) at current prices as additional explanatory variables. Locally-generated revenue and economic output exhibit a negative relationship with poverty, whereas central government transfers and income inequality show a positive relationship. Unemployment and education were found to be statistically insignificant. A 1% increase in locally-generated revenue is associated with a 0.039 decrease in the poverty rate, while a 1% increase in central transfers is linked to a 0.070 increase. These contrasting relationships highlight the importance of distinguishing between fiscal revenue sources when analyzing provincial-level poverty. The study’s findings indicate associations between variables rather than causal relationships. Diagnostic tests revealed the presence of serial correlation and heteroskedasticity, necessitating caution in statistical decision-making and suggesting a need for methodological refinement. Furthermore, further research is required regarding transfer allocation mechanisms and the consideration of regional characteristics in the context of poverty alleviation.

MARGINAL JOURNAL OF MANAGEMENT ACCOUNTING GENERAL FINANCE AND INTERNATIONAL ECONOMIC ISSUESVol. 5(4)
Diponegoro University (ID)
Openalex Percentile: Top 11%
Economic Growth and Fiscal Policies
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Regional Fiscal Resources Income Inequality and Poverty in Indonesia — Maulana Ghani Yusuf, Navi'ah Khusniati, et al. · MARGINAL JOURNAL OF MANAGEMENT ACCOUNTING GENERAL FINANCE AND INTERNATIONAL ECONOMIC ISSUES (2026) | TGRS Research Map | TGRS