THE EFFECTS OF FISCAL DECENTRALIZATION, ECONOMIC GROWTH AND INCOME INEQUALITY ON POVERTY RATE OF INDONESIA?S 33 PROVINCES.
- Doctoral Study Program, Faculty of Economics and Business, Airlangga University, Surabaya, Indonesia
- Economics Department, Faculty of Economics and Business, Airlangga University, Surabaya, Indonesia.
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This study aims to analyze the effect of fiscal decentralization, income inequality, and economic growth on poverty rate of 33 provinces in Indonesia. The population of this study consists of 33 provinces in Indonesia. This study utilizes secondary data released by Statistics Indonesia (Badan Pusat Statistik/BPS) from 2009 to 2012. The data were analyzed using panel data regression on Eviews 7 software. The analysis comes to several findings. First, in short term fiscal decentralization and economic growth do not have significant effect on poverty rate while income inequality has significantly negative effect on regional poverty rate. Second, fiscal decentralization and economic growth possess significant and negative effect on regional poverty rate. In long term, regional poverty rate is decreasing in several provinces with high economic growth and high regional income. Third, income inequality does not give significantly negative effect on regional poverty rate. Decreasing income inequality may improve regional poverty rate even though the effect is in minuscule scale. Nevertheless, equitable development will happen in most Indonesia provinces in long term.
[Khubbi Abdillah and Djoko Mursinto. (2016); THE EFFECTS OF FISCAL DECENTRALIZATION, ECONOMIC GROWTH AND INCOME INEQUALITY ON POVERTY RATE OF INDONESIA?S 33 PROVINCES. Int. J. of Adv. Res. 4 (Feb). 405-414] (ISSN 2320-5407). www.journalijar.com
