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All Journal Jurnal Ilmiah MEA (Manajemen, Ekonomi, dan Akuntansi)
Fitri Wahyuni
Universitas Tanjungpura, Pontianak
Decision Sciences, Operations Research & Management Economics, Econometrics & Finance

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GOVERNMENT EXPENDITURES AND REGIONAL DEVELOPMENT Fitri Wahyuni; Windhu Putra; Erni Panca Kurniasih
Jurnal Ilmiah Manajemen, Ekonomi, & Akuntansi (MEA) Vol 10 No 2 (2026): Edisi Mei - Agustus 2026
Publisher : LPPM STIE Muhammadiah Bandung

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.31955/mea.v10i2.7709

Abstract

The relationship between government expenditures and economic growth is an important topic to analyze. Disagreements among economists and the results of previous studies show inconsistent findings across regions. This study aims to examine whether there is a two-way causal relationship between government expenditures and economic growth (growth rate of GRDP at Constant Prices, Poverty Depth Index, Poverty Severity Index, Human Development Index, and Gini index). This study used annual panel data from 14 regencies/cities in West Kalimantan province with a Vector Error Correction Model (VECM) analysis, using E-views 10 as the analytical tool. The results of this study have not proven a two-way causal relationship for any variable. There was no two-way or one-way causal relationship (in the period before and after the pandemic) for the variables Growth Rate, P2, and GINI (neutrality relationship). In the period before the Covid-19 pandemic, there was a one-way causal relationship between P1 and LOGGE (government expenditure) under Wagner's Law, and between LOGGE (government expenditure) and HDI under Keynesian theory. Meanwhile, in the post-pandemic period, there is a causal relationship between HDI and LOGGE (Wagner's Law). The primary driver of regional economic growth cannot yet be attributed to government expenditure. Given the pooled time-series approach applied to a panel-structured dataset, these findings should be regarded as preliminary and exploratory, warranting confirmation through a dynamic panel (PVECM/PVAR) approach.
Co-Authors Erni Panca Kurniasih Windhu Putra