Apakah Belanja Modal dan Belanja Sosial Meningkatkan Pertumbuhan Ekonomi? Bukti Data Panel di Indonesia

Abstract

This study analyzes the effect of capital and social spending on regional economic growth in Indonesia. Using panel data from 24 provinces during the period 2005-2018, the data were analyzed using a panel regression econometric tool with a fixed effect approach. The study pointed out that capital and social spending can significantly increase economic growth. The greater the realization of the local government budget for these two expenditures, the higher the economic growth.

The Effect of Mandatory Expenditures on Basic Services of the Local Government on Gross Per Capita Regional Domestic Products in East Java Province

“…An increase in per capita The incompatibility of the allocation of the realization of social protection expenditure can be seen from two perspectives; first, the allocation of social protection expenditure in cash. Public consumption will increase by giving a larger portion of direct cash assistance, increasing people's welfare (Asnawi, 2022). However, the cash given to the lowerincome people is used to buy non-primary and unproductive goods.…”

“…assistance to businesses failed to boost economic production in the regions, in contrast with the study conducted byAsnawi (2022). This phenomenon can happen if the type of business in the region diverts the source of grant funds and social assistance tooperational maintenance or repair of infrastructure facilities that cannot provide added value.…”