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This study examines the impact of government spending across various sectors on poverty in Indonesia, motivated by the need to understand how fiscal policies affect the well-being of people experiencing poverty. Using Ordinary Least Square (OLS) and Least Square Dummy Variable (LSDV) models, the findings reveal that government spending on public services, health, education, and social protection significantly affects the number of poor people. However, spending on public services and education shows a positive coefficient, which may result from mandatory spending regulations not directly aimed at improving welfare. In contrast, government spending in the economic sector has an insignificant impact on poverty, indicating that the effects may require more than one period to manifest. Further analysis is necessary to explore this relationship. The consistency of the results was enhanced by incorporating district/city status as a predictor. These findings highlight the need for a more targeted approach to government spending to reduce poverty in Indonesia effectively.

The Human Development Index (HDI) in Indonesia continues to improve. However, the rate of development varies by region, most notably in eastern Indonesia. Based on our findings, it is clear that during the COVID-19 pandemic, particularly in 2020, HDI growth in Indonesia slowed, with Eastern Indonesia even experiencing negative growth. During this time, Eastern Indonesia dropped from 65.78 to 65.74, or 0.04 points, while other regions continued to increase by 0.05 to 0.06 points. Gross Regional Domestic Product (GRDP) per capita, the number of poor people, the expected length of schooling, and life expectancy are among the variables that affect HDI. Between 2012 and 2022, data about variables affecting HDI were gathered as panel data from 159 regencies/cities in 5 provinces in Eastern Indonesia. The provinces are East Nusa Tenggara, Maluku, North Maluku, Papua, and West Papua. According to the data, GRDP per capita, expected length of schooling, and life expectancy all positively affected the HDI. In contrast, the number of poor people had the opposite effect. Differences in these four elements in each of Indonesia’s regions will cause HDI disparities. The study’s policy implications are that the Indonesian government can emphasize equitable distribution and improve the quality of human development in eastern Indonesia.

This study investigates whether village funds, village-owned enterprises (henceforth, BUMDes), and village original income in Indonesia (PADes) enhance rural development. We employ three empirical methodologies to analyze data collected from 361 districts across Indonesia. These methods encompass cross-section regression, Difference-in-Difference (DID) technique, and Structural Equation Model (SEM)-based mediation analysis. The findings show that village funds positively and significantly impact rural development (measured using the village development index). However, the impact of BUMDes on rural development shows weak evidence. The quasi-experiment also reveals that districts with higher funding for their villages do not experience greater improvements in the village development index between 2016 and 2020. Furthermore, our study indicates that PADes play a crucial role in determining rural development, either directly or as a mediator for village funds and BUMDes. Policymakers should monitor the allocation of village funds to evaluate future allocation policies. Additionally, PADes performance is important for determining village fund transfers and development progress.

This study investigates a scarce case of the effect of innovation by local government on development performance using district level data in Indonesia. We use the accumulation number of innovations (the quantity side) produced by each district during 2015–2022 period according to the top 99 nominations listed by the Ministry of Administrative and Bureacratic Reform, the Republic of Indonesia. We, alternatively, also use measure of innovation based on “the quality side” by applying regional innovation index. The descriptive results, not surprisingly, show that districts situated in Java and Sumatra Islands have had greater productivity in either collected innovations nomination number or index of regional innovation compared to those situated in Kalimantan and East Region in Indonesia. In this paper, we employ cross-sectional ordinary least squares (OLS) and two-stage least squares (2 S LS) approaches and find positive and significant impact of innovation on each development proxy used (growth in real per capita local GDP and the average of Inclusive Development Economic Index (IDEI)). Implementing the proportion of locals attaining higher education and geographical distance as instruments, our 2SLS estimator also confirms that public-sector innovations play as a positive driving factor on development outcomes. This study offers its novelty by providing empirical evidence of the effect of innovation within government organization on development for Indonesia's case where none has been found before.

The new capital city of Indonesia, Nusantara, having moved from Jakarta on Java Island to Kalimantan, is now officially located in the interregional area of the Makassar Strait. This area is expected to develop as the engine of the Indonesian economy, while various economic infrastructures are still very limited. The Makassar Strait area covers East Kalimantan, South Kalimantan, South Sulawesi, West Sulawesi and Central Sulawesi. These provinces have significant marine resource commodities and make a relatively significant economic contribution to the Indonesian economy as a whole. Using the data of the 2016 Inter-Regional Input-Output (IRIO) table which was updated in January 2021, this study aims to analyze the main sectors and inter-provincial linkages between each sector in the region. The results show that each province has a different main sector of economic development, which leads to differenct strategies based on their quadrants. Furthermore, the goal of provincial development as the new engine of the Indonesian economy is based on the assumption that the marine sector is on an industrial scale.

The study aimed to measure the impact of monetery policy issued by Bank of Indonesia (BI), that has the authority, on the inflation happening in Indonesia. Empirical variables included minimum mandatory reservesin minimum mandatory giro (X1) and interest rate of BI (X2) towards the inflation development (Y) in Indonesia. The research used quarterly data in 1993-2009. Monetery policyis intended to increase the amount of Statutory and BI rate and to lower the inflation. This means tha tthe inflation and monetary policy had negative relationship. Simple Regression with double log was employed to analyze the data. The research confirmed that there was apositive effect between inflation and monetary policy. The statutory reserves and interest rates had a positive and significant impact on inflation in Indonesia in the short term. It means that the increase of compulsory reserves and BI rate will be accompanied bythe increase of inflation.Penelitian ini bertujuan untuk mengukur pengaruh kebijakan bank sentral sebagai otoritas moneter (Bank Indonesia) atas penekanan inflasi di Indonesia. Variabel empiris uang digunakan dalam penelitian ini adalah cadangan wajib minimum yaitu giro wajib minimum (X1) dan tingkat suku bunga yaitu BI rate (X2) terhadap perkembangan inflasi (Y) di Indonesia. Penelitian ini menggunakan data semesteran pada periode 1993-2009. Kebijakan moneter dilakukan dengan menaikan besaran Giro Wajib Minimum dan BI rate, dengan harapan akan menurunkan tingkat inflasi, artinya inflasi & kebijakan moneter memiliki hubungan negatif. Metode analisis yang digunakan dalam penelitian ini adalah analisis regresi seder­hana secara double log.Hasil penelitian menunjukan adanya pengaruh positif antara inflasi dan kebijak­an moneter. GWM dan tingkat suku bunga berpengaruh positif dan signifikan terhadap inflasi di Indonesia dalam jangka pendek. Artinya kenaikan cadangan wajib dan BI rate akan diiringi dengan kenaikan inflasi.