Journal of Economics Research and Policy Studies
Vol. 5 No. 2 (2025): Journal of Economics Research and Policy Studies

Interrelationship of economic growth, poverty dynamics, and revenue generation in indonesia’s regional fiscal autonomy

Priambodo, Aji (Unknown)



Article Info

Publish Date
20 Aug 2025

Abstract

This study examines the dynamic relationship between regional own-source revenue, economic growth, and poverty within the framework of Indonesia’s decentralized governance. Using the Generalized Method of Moments (GMM) to address potential endogeneity, the analysis draws on panel data covering all provinces over a recent multi-year period. The findings indicate that stronger economic growth tends to be followed by improvements in the ability of local governments to raise revenue, while higher poverty levels are associated with weaker fiscal performance. The results also point to a degree of persistence in revenue patterns from one period to the next. Model diagnostics support the reliability of the estimates. These insights underline the importance of policies that encourage sustainable economic expansion and targeted poverty alleviation as key measures to strengthen regional fiscal autonomy. The study contributes to the literature on fiscal decentralization and offers practical recommendations to enhance subnational revenue performance in developing economies.

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Journal Info

Abbrev

jerps

Publisher

Subject

Economics, Econometrics & Finance

Description

Journal of Economics Research and Policy Studies [2797-8141] is a scientific journal that contains the results of theoretical research and studies on economics issues. The focus of this journal article is Economics, Economic Entrepreneurship, and start-up, development economics, monetary and fiscal ...