<![CDATA[Government expenditure is one of the key drivers of economic growth through increased economic activity and development. During the 2013–2023 period, government expenditure in Indonesia continued to rise while economic growth tended to slow down, indicating a gap in fiscal policy effectiveness. This study employs a two-stage design: a 2016 Input-Output Table analysis to examine the role of government expenditure on economic sector output and Gross Value Added (GVA) at the national level, and a quantitative case study using Fixed Effect Model panel data regression on three selected provinces (Banten, Central Java, and DKI Jakarta) for 2013–2023 to identify the capital expenditure components most effective in driving economic growth. The Input-Output analysis shows that government expenditure contributed most dominantly to the government administration, manufacturing, and education services sectors, with a simulated contribution to growth of only 0.02–0.80 percent per year. The panel data regression results indicate that Capital Expenditure on Land, Equipment and Machinery, and Roads, Irrigation, and Networks has a positive and significant effect on economic growth. Meanwhile, Capital Expenditure on Other Fixed Assets has a significant negative effect, whereas Capital Expenditure on Buildings and Structures has no effect on economic growth.]]>
Copyrights © 2026
