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Journal : Ecces: Economics, Social, and Development Studies

Regional Disparities in Public Expenditure Effectiveness; A Comparative Analysis of Western and Eastern Indonesia Sabir, Sabir; Rahman R, Abd; Fernandes, Adji Achmad Rinaldo; Bakar, Normizan bin
EcceS: Economics, Social, and Development Studies Vol 12 No 1 (2025): June
Publisher : Economics Department, Faculty of Economic and Islamic Business, Universitas Islam Negeri Alauddin Makassar, Indonesia

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Abstract

This study investigates the impact of government expenditure on employment across Indonesia’s regional economies, incorporating private investment as a mediating variable and region as a moderating variable. Using data from 2010 to 2022, the analysis focuses on five categories of government spending: general, housing and settlement, economic, education, and health. A multigroup path analysis model is employed to examine both direct and indirect effects of these expenditures on employment. The results reveal that government spending has a stronger impact on employment in the western region compared to the eastern region. Regional differences significantly moderate the relationship between government expenditure and private investment, particularly in general, economic, education, and health spending. In contrast, housing and settlement expenditure consistently affect both regions. Furthermore, private investment significantly enhances employment, especially in the western provinces. These findings underscore the importance of accounting for regional disparities in fiscal policy design and provide valuable insights for developing more effective and equitable regional economic strategies in Indonesia.
Co-Authors Abdullah, Serlih Agussalim, Agussalim Ahmad Fadly Rusdin ALMI ALMI, ALMI Ambosakka, Dhemanda H. Andi Aswan, Andi Aprilianti, Ni Luh Putri Arniawan, Arniawan Bakar, Normizan bin Basri Basri Elfiyunai, Ni Nyoman Faathir, A. Fathyan Al Fathiyyah, Nur Fatmawati Fatmawati Fattah, Sanusi Fernandes, Adji Achmad Rinaldo Fitrah Fitrah, Fitrah Hamrullah Hamrullah Hamrullah, Hamrullah Hamza, La Ode Firman Hasbullah Hasbullah* Hasbullah*, Hasbullah Haswiwin, Haswiwin Indriyani Indriyani Jannah, Miftahul Putri Juliansyah Roy Kadir, Abd. Rahman Katrina Feby Lestari Kawiri, Hendrik Kilo, Mohamad Fikriyanto H. Labatjo, Moh. Galang Lisda, Lisda Putri Madris Madris Madris Madris, Madris Magfira, Magfira Mardhatillah, Muti`ah Margani, Ni Wayan Masahengke, Romildah Oktovin Mayumi, Mayumi Megawati - Muhammad Arman Muhammad Munif Musran Munizu Naharuddin Naharuddin Nurdin Brasit Nurhasana, Dwi Nurhijrah, Nurhijrah Nurlina Nurlina Nursinah Amrullah Nursini Nursini, Nursini Nurwahida Alimuddin Pramesti Heriyanto, Diajeng Dita Nur Putri, Nirmala Sani Rahma Rahma Rahman R, Abd Ramadana, Tariza Ramadhani, Chaerunisac Ramdhani, Haulia Putri Razak, Abd Rahman Ridwan, Madinatul Munawwarah Rosa Dwi Wahyuni Ruauw, Andreas Saleh, Afni Safitri Sam, Jein Sandang, Mufrih Santika Santika Sari Jasi, Alyu Indah Sari, Waode Fitrah Setiahadi, Moh. Tirta Sihombing, Jovanca Estevania Lynch Siti Rahmi Soelo, Melisa Aprilia Songko, Stela Miracle Suaib, Suaib Sukarno, Zulfikry Syarif, Iif Ahmad Tahimu, Muhammad Reza Tangka’a, Enjelina Tarfin, Ruslan Topea, Monalisa Ubay, Ubay Uswatun Hasanah Wahyudi Wahyudi Wahyuni, Eka Sri Wardana, Helmalia Putri Wiwin Wiwin, Wiwin Wundu, Lovi Delordy Yusuf, Zuhrah Amalia