The Role of Local Governments In Improving The Quality of Human Development

Dany Syarifudin, Achmad Solihin

Abstract


Local governments, through their own spending budgets, must intervene in improving the quality of human capital. Government spending on education and health is part of government spending that can encourage improvements in the quality of human capital. This study aims to determine the interaction relationship between government spending and human development. This research was conducted in 491 districts / cities in the 2010-2019 time period. The use of the Fully Modified OLS (FMOLS) analysis method with panel data. The results of this study indicate that the interaction of government spending on education and health has a long-term impact on improving the quality of human development. Government spending on education and health is known to have a positive effect on improving human capital. The importance of public investment for improving the quality of human capital through education and health so as to increase the standard of living and welfare of the community.


Keywords


poverty, health, human development, government, education

Full Text:

PDF

References


Anand, S., & Ravallion, M. (1993). Human development in poor countries: on the role of private incomes and public services. Journal of economic perspectives, 7(1), 133-150.

Andreosso, Bernadette and O’Callaghan. (2002). Human Capital Accumulation and Economic Growth in Asia. National Europe Centre Paper, (30).

Angirst, J., & Lavy, V. (1999). Using Mai-monides’ rule to estimate the effect of class size on scholastic achievement. Quarterly journal of economics, 114(2), 533-575.

Asaleye, A. J., Adama, J. I., & Ogunjobi, J. O. (2018). Financial sector and manufacturing sector performance: evidence from Nigeria. Investment Management and Financial Innovations, (15, Iss. 3), 35-48.

Astri, M., Nikensari, S. I., & Kuncara, H. (2013). Pengaruh pengeluaran pemerintah daerah pada sektor pendidikan dan kesehata terhadap indeks pembangunan manusia di Indonesia. Jurnal Pendidikan Ekonomi dan Bisnis (JPEB), 1(1), 77-102.

Attanasio, O., Meghir, C., Nix, E., & Salvati, F. (2017). Human capital growth and poverty: Evidence from Ethiopia and Peru. Review of economic dynamics, 25, 234-259.

Aziz, M. A. (2020). THE IMPACT OF GOVERNMENT EXPENDITURE, HUMAN DEVELOPMENT INDEX (HDI), WORKER AND INVESTMENT ON INDONESIA’S PROVINCIAL GROSS REGIONAL DOMESTIC PRODUCT (GRDP) (Doctoral dissertation, Universitas Islam Indonesia).

Badan Pusat Statistik. (2019). Indeks Pembangunan Manusia Tahun 2018. Jakarta: Badan Pusat Statistik.

Badrudin, R., & Khasanah, M. (2011). Pengaruh Pendapatan dan BelanjaDaerah terhadap Pembangunan Manusia di Provinsi Daerah Istimewa Yogyakarta. Buletin Ekonomi, Jurnal Manajemen Akuntansi dan Ekonomi Pembangunan, 9, 23–30.

Bardhan, P., & Mookherjee, D. (2005). Decentralizing antipoverty program delivery in developing countries. Journal of Public Economics, 89(4), 675–704. https://doi.org/10.1016/j.jpubeco.2003.01.001

Becker, G. S. (1962). Investment in Human Capital: A Theoretical Analysis. Journal of Political Economy, 5, 9–49. https://doi.org/10.1086/258724

______. (1975). Investment in human capital: effects on earnings. In Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education, Second Edition (pp. 13-44). NBER.

______. (2002). Human Capital, Theoretical and Empirical Analysis with Special Reference to Education, Third Edition. Chicago: The University of Chicago Press.

Bhukuth, A., Roumane, A., & Terrany, B. (2018). Cooperative, human capital and poverty: a theoretical framework. Economics & Sociology, 11(2), 11-18.

Bloom, D.E. & Canning, D. (2003). The health and poverty of nations: from theory to Practice. Journal of Human Development, Vol. 4, No. 1, pp. 47-71.

Brambor, T., Clark, W. R., & Golder, M. (2006). Understanding interaction models: Improving empirical analyses. Political analysis, 63-82.

Burrill, D.F.. (2003). Modeling and Interpreting Interactions in Multiple Regression. Toronto: The Ontario Institute for Studies in Education.

Cholili, Fatkhul M. 2014. Analisis Pengaruh Pengangguran, Produk Domestik Regional Bruto (PDRB), dan Indeks Pembangunan Manusia (IPM) Terhadap Jumlah Penduduk Miskin (Studi Kasus 33 Provinsi di Indonesia). Fakultas Ekonomi dan Bisnis Universitas Brawijaya.

Davoodi, H., & Zou, H.f. (1998). Fiscal decentralization and economic growth: a cross-country study. Journal of Urban Economics, 43, 244-257.

De Silva, I., & Sumarto, S. (2014). Dynamics of Growth, Poverty and Human Capital: Evidence from Indonesian Sub-National Data. Munich Personal RePEc Archive (MPRA) Paper No. 65328. http://mpra.ub.uni-muenchen.de/65328/.

Edeme, R. K., & Nkalu, C. N. (2019). Public expenditure and human development in Nigeria in the last decade, composition and distributional impacts. Economics and Business Letters, 8(2), 62–73. https://doi.org/10.17811/ebl.8.2.2019.62-73

Fadilah, A., Ananda, C. F., & Kaluge, D. (2018). A Panel Approach: How Does Government Expenditure Influence Human Development Index?. Jurnal Ekonomi dan Studi Pembangunan, 10(2), 130-139.

Faguet, J. (2001). Does Decentralization Increase Responsiveness to Local Needs? Evidence from Bolivia. Washington DC: World Bank.

Fattah, S., & Muji, A. (2012). Local Government Expenditure Allocation toward Human Development Index at Jeneponto Regency, South Sulawesi,Indonesia. IOSR Journal of Humanities and Social Science, 5(6), 40–50.

Fisher, A.G.B. (1946). Education and Economic Change. South Australia: W.E.A. Press.

Honohan, P. (2004). Financial Development, Growth and Poverty: How Close Are The Links? World Bank Policy Research Working Paper (Vol. 3203). Retrieved from http://econ.worldbank.org.

Hayek, F.A. (1948). Individualism and Economic Order. Chicago: University of Chicago Press.

Hsiao, C. (1986). Analysis of Panel Data. Cambridge: Cambridge University Press.

Jhingan, M. L. (2008). Ekonomi Pembangunan dan Perencanaan. Jakarta: PT Raja Grafindo Persada.

Kaasschieter, J., 2014. Remittances, economic growth, and the role of institutions and government policies. https://www.semanticscholar.org/paper/Remittances%2C-Eco nomic-Growth%2C-and-the-Role-of-and-Kaasschieter/7a29a9adcafee53266c823ee 9cd9db7c49e06576.

Kahang, M., & budi Suharto, R. (2017, January). Pengaruh pengeluaran pemerintah sektor pendidikan dan kesehatan terhadap indkes pembangunan manusia di kabupaten kutai timur. In Forum Ekonomi (Vol. 18, No. 2, pp. 130-140).

Kakwani, N. (1993). Poverty and economic growth with application to Côte d'Ivoire. Review of income and wealth, 39(2), 121-139.

Kao, C., & Chiang, M. H. (2001). On the estimation and inference of a cointegrated regression in panel data. In Nonstationary panels, panel cointegration, and dynamic panels. Emerald Group Publishing Limited.

Lockwood, B. (2006). The political economy of decentralization. In E. Ahmad, & G. Brosio, Handbook of Fiscal Federalism (pp. 33-60). Northampton, MA: Edward Elgar Publishing.

Lokhsin, M., & Yemtsov, R. (2005). Has Rural Infrastructure Rehabilitation in Georgia Helped the Poor? The Wold Bank Economic Reviw, 19(2), 311-333.

Lubis, E. N. M. (2017). The Influence of Educational Sector and Government Spending on Healthcare, Household Consumption for Food and Poverty Levels on Human Development Index in Indonesia. Proceedings of AICS-Social Sciences, 7, 20-25.

Lucas, R. E. (1988). On the mechanics of economic development. Journal of Monetary Economics, 22(1), 3–42. https://doi.org/10.1016/0304-3932(88)90168-7

Maharda, J. B., & Aulia, B. Z. (2020). Government Expenditure and Human Development in Indonesia. Jambura Equilibrium Journal, 2(2).

Maitra, B., & Mukhopadhyay. (2013). Public Spending on Education, Health Care and Economic Growth in Selected Countries of Asia and the Pacific. Asia-Pacific De- velopment Journal, 19(2), 19-48.

Makrifah, S. A. (2010). Analisis Pengelolaan Keuangan Daerah dan Dampaknya terhadap Pembangunan Ekonomi Provinsi Jawa Timur. Sekolah Pasca Sarjana: Institut Pertanian Bogor.

Mankiw, N. G. (2003). Macroeconomics, Eigth Edition. New York: Worth Publishers.

Mincer, J. (1974). Progress in Human Capital Analysis of the distribution of earnings (No. w0053. Schooling, Experience, and Earnings.). New York: Columbia University Press for National Bureau of Economic Research.

¬¬______. (1996). Economic Development, Growth of Human Capital, and the Dynamics of the Wage Structure. Journal of Economic Growth, 1(1), 29–48. https://doi.org/10.1007/BF00163341

Mirza, D. S. (2012). Pengaruh Kemiskinan, Pertumbuhan Ekonomi, dan Belanja Modal Terhadap Indeks Pembangunan Manusia di Jawa Tengah Tahun 2006-2009. Economics Development Analysis Journal, 1(1).

Musgrave, R.A. (1959). The Theory of Public Finance. New York: McGraw-Hill.

Nickell, S. (1981). Biases in dynamic models with fixed effects. Econometrica: Journal of the econometric society, 1417-1426.

Nurdyana S., H., Budiono, & Fahmi, M. (2012). Pendidikan dan Kemiskinan (Studi Kasus di Maluku Utara). Bandung: Departemen Ilmu Ekonomi Universitas Padjadjaran.

Nurmainah, S. (2013). Analisis Pengaruh Belanja Modal Pemerintah Daerah, Tenaga Kerja Terserap Dan Indeks Pembangunan Manusia Terhadap Pertumbuhan Ekonomi Dan Kemiskinan (Studi Kasus 35 Kabupaten/Kota Di Provinsi Jawa Tengah). Jurnal Bisnis dan Ekonomi, 20(2).

Oates, W. (1972). Fiscal Federalism. New York: Harcourt Brace Jovanovich.

¬______. (2008). On the evolution of fiscal federalism: theory and institutions. National Tax Journal, LXI(2), 313-334.

Olopade, B. C., Okodua, H., Oladosun, M., & Asaleye, A. J. (2019). Human capital and poverty reduction in OPEC member-countries. Heliyon, 5(8), e02279.

Omodero, C. O. (2019). Government General Spending and Human Development: A Case Study of Nigeria. Academic Journal of Interdisciplinary Studies, 8(1), 51–59. https://doi.org/10.2478/ajis-2019-0005

Osabuobien, Efobi, 2013. Africa's money in Africa. SAJE. South Afr. J. Econ. 81, 2.

Osoba, A., Tella, S., 2017. Human capital variables and economic growth in Nigeria: an interactive effect. EuroEconomica 36 (1).

Pahlevi, M. (2017). Impact of Governance and Government Expenditure on Human Development in Indonesia. Research Paper of Master of Arts in Development Studies International Institute of Social Studies.

Palayukan, M. (2019). PENGARUH BELANJA PEMERINTAH TERHADAP INDEKS PEMBANGUNAN MANUSIA: STUDI KASUS PROVINSI SULAWESI TENGGARA. Jurnal BPPK: Badan Pendidikan dan Pelatihan Keuangan, 12(2), 74-91.

Phillips, P. C., & Hansen, B. E. (1990). Statistical inference in instrumental variables regression with I (1) processes. The Review of Economic Studies, 57(1), 99-125.

Prasetyo, W. E. (2015). Hubungan Kinerja Pengelolaan Keuangan Daerah Terhadap Tingkat Kesejahteraan Masyarakat Kabupaten Banyuwangi. Universitas Jember.

Prasetyo, A. D., & Zuhdi, U. (2013). The Government Expenditure Efficiency towards the Human Development. Procedia Economics and Finance, 5(2012), 615–622. https://doi.org/10.1016/S2212-5671(13)00072-5.

Priambodo, A., & Noor, I. (2016). Analisis Pengaruh Belanja Pemerintah Daerah Terhadap Indeks Pembangunan Manusia (Studi pada Kabupaten/Kota di Pulau Jawa Tahun 2007-2013). Jurnal Ilmiah Mahasiswa FEB, 3(2).

Priyanto, A. (2011). Analisis Faktor-Faktor Yang Mempengaruhi Pembangunan Sumber DayaManusia di Provinsi Banten. Bogor: IPB.

Putra, W. (2017). Dampak Pengeluaran Pemerintah Terhadap Pertumbuhan Ekonomi dan Indeks Pembangunan Manusia di Perbatasan Indonesia. Jurnal Ekonomi Bisnis dan Kewirausahaan (JEBIK), 6(2), 120-138.

Rahmawati, F., & Intan, M. N. (2020). Government Spending, Gross Domestic Product, Human Development Index (Evidence from East Java Province). KnE Social Sciences, 774-786.

Ramirez, M. D. (2007). A panel unit root and panel cointegration test of the complementarity hypothesis in the Mexican case: 1960–2001. Atlantic Economic Journal, 35(3), 343-356.

Ranis, G., Stewart, F., & Ramirez, A. (2000). Economic growth and human development. World Development, 28(2), 197–219. https://doi.org/10.1016/S0305-750X(99)00131-X

Ravallion, M., & Chen, S. (2003). Measuring pro-poor growth. Economics Letters, 78, 93–99. https://doi.org/10.1016/S0165-1765(02)00205-7

Razmi, M., Abbasian, E., & Mohammadi, S. (2012). Investigating the Effect of Gov- ernment Health Expenditure on HDI in Iran. Journal of Knowledge Management, Economics, and Information Tech- nology, 2(5), 1-8.

Reeves, P., Szewczyk, Z., Proudfoot, J., Gale, N., Nicholas, J., & Anderson, J. (2019). Economic evaluations of stepped models of care for depressionand anxiety and associated implementation strategies: A review of empiricstudies. International Journal of Integrated Care, 19(2). https://doi.org/10.5334/ijic.4157.

Riphat, S., Setiawan, H., & Damayanty, S. A. (2016). Causality Analysis Between Financial Performance And Human Development Index: A Case Study Of Provinces In Eastern Indonesia. Kajian Ekonomi dan Keuangan, 20(3), 231-240.

Sanggelorang, S. M., Rumate, V. A., & Siwu, H. F. D. (2015). Pengaruh Pengeluaran Pemerintah Di Sektor Pendidikan Dan Kesehatan Terhadap Indeks Pembangunan Manusia Di Sulawesi Utara. Jurnal Berkala Ilmiah Efesiensi, 15(2), 1–11.

Santos, M. E. (2011). Human capital and the quality of education in a poverty trap model. Oxford Development Studies, 39(01), 25-47.

Schultz, T. W. (1961). Investment in Human Capital: Reply. The American Economic Review, 51(5), 1035–1039. https://doi.org/10.2307/1813848

Sijabat, R. (2017). Do Productive Government Expenditures Affect Economic Growth? Evidence from Provincial Governments across Indonesia. Jurnal Studi Pemerintahan, 8(1), 1-47.

Sitepu, R. K. K. (2007). Dampak investasi sumberdaya manusia dan transfer pendapatan terhadap distribusi pendapatan dan kemiskinan di Indonesia. The impact of human resource investment and income transfer on income distribution and poverty in Indonesia.

Sofilda, E., & Hamzah, M. Z. (2015). Government Spending Contributions on per Capita Income and its Effect toward the Human Development Index (Comparative Study between Western Indonesia and Central & East Indonesia). Journal of Social and Development Sciences, 6(3), 43-49.

Solihin, A., Mursinto, D., & Sugiharti, L. (2017). Efficiency and Effectiveness of Government Expenditure on Education at Districts/Cities Level in East Java Indonesia. Asian Social Science, 13(8), 91.

Sumas, S. (2012). Dampak Kebijakan Fiskal Sektor Pendidikan Dan Sektor Kesehatan Terhadap indeks Pembangunan Manusia di Indonesia [disertasi]. Bogor (ID): Institut Pertanian Bogor.

Sulistyowati, N., Sinaga, B. M., & Novindra, N. (2017). Impacts of government and household expenditure on human development index. JEJAK: Jurnal Ekonomi dan Kebijakan, 10(2), 412-428.

Teixeira, P. N. (2014). Gary Becker’s early work on human capital–collaborations and distinctiveness. IZA Journal of Labor Economics, 3(1), 1-20.

Tiebout, C. (1956). A pure theory of local expenditures. Journal of Political Economy, 64(1), 416-424.

Todaro, Michael P. & Stephen C. Smith. (2012). Economic Develompent 11th Edition. United States of America: Pearson.

UNDP, BPS & Bappenas. (2001). Indonesia Human Development Report 2001. Towards a New Consensus: Democracy and Human Development in Indonesia. Jakarta: UNDP, BPS & Bappenas.

¬¬¬______. (2004). Laporan Pembangunan Manusia Indonesia 2004 (Ekonomi dari Demokrasi: Membiayai Pembangunan Manusia Indonesia). Jakarta: UNDP, BPS & Bappenas.

Utami, D.R., 2007. Analisis Pengaruh Pengeluaran Pemerintah Daerah Kabupaten/ Kota di Bidang Pendidikan dan Kesehata terhadap Indeks Pembangunan Manusia (Tesis Magister). Jakarta: Universitas Indonesia.

Von Braun, J., & Grote, U. (2002). Does decentralization serve the poor?. Managing fiscal decentralization, 92-119.

Wibowo, M. E. (2014). Analisis Pengaruh Pengeluaran Pemerintah Di Sektor Pertanian, Pendidikan, Kesehatan Dan Infrastruktur Terhadap Tingkat Kemiskinan (Studi Kasus Di Kabupaten/Kota Provinsi Jawa Tengah). Semarang: Fakultas Ekonomika Dan Bisnis Universitas Diponegoro.

Wijayanto, A., Khusaini, M., & Syafitri, W. (2015). Analisis Pengaruh Pengeluaran Kesehatan dan Pendidikan serta PDRB terhadap IPM (Studi Terhadap Kabupaten/Kota di Jawa Timur). International Journal of Social and Local Economic Governance (IJLEG), 1(2), 85–95.

World Bank. (2005). Introduction to Poverty Analysis. New York: World Bank Institute.

______. (2006). Era Baru dalam Pengentasan Kemiskinan di Indonesia (Ikhtisar). Jakarta: The World Bank Office.

Yudhoyono, S.B. (2004). Pembangunan Pertanian dan Perdesaan Sebagai Upaya Mengatasi Kemiskinan dan Pengangguran: Analisis Ekonomi Politik Kebijakan Fiskal (Disertasi Doktor). Bogor: Institut Pertanian Bogor.




DOI: https://doi.org/10.21107/mediatrend.v17i1.10542



Copyright (c) 2022 Media Trend

Creative Commons License

Mediatrend © 2015 - Journal of Economic & Development Studies | Development Economics Program - Faculty of Economics and Bussiness, Trunojoyo University
DESKRIPSI GAMBAR DESKRIPSI GAMBAR