Government Expenditure, Poverty and Income Inequality in Indonesia: New Evidence From Village Funds

Abstract

This research measures the impact of the contribution of government policy to the paradigm of 'developing Indonesia from the periphery', namely village fund contributions, economic growth and the Human Development Index for poverty alleviation and village income inequality in Indonesia. In addition, it sought the effectiveness of government policies in channeling village funds to alleviate poverty and income inequality in the village. Third, look for a policy response to the contribution of village funds to reducing poverty and income inequality in the village. This study uses the estimated Least Square Panel (PLS) with quarterly panel data from 2015Q1 to 2017Q4. The results of the analysis found that the contribution of village fund policies had a significant impact on poverty and village income inequality. Economic growth has a significant impact on alleviating poverty and income inequality in the village. And the human development index alleviates poverty and income inequality in the village