<![CDATA[Income inequality remains a development challenge in resource-rich regions because strong economic capacity does not automatically produce equitable welfare. This study examines fiscal decentralization and macroeconomic conditions across all ten provinces of Sumatra during 2021–2025 using panel-data regression. The explanatory variables are the Provincial Minimum Wage, General Allocation Fund, Special Allocation Fund, Revenue Sharing Fund, unemployment, and Gross Regional Domestic Product. Chow, Hausman, and Lagrange Multiplier tests select the Random Effects Model, while robust standard errors address serial correlation. The Special Allocation Fund is negatively associated with inequality. Unemployment also has a negative association, but this pattern is interpreted as income compression rather than welfare improvement; the other variables do not show convincing relationships. This article contributes to the fiscal-decentralization debate by showing that under heterogeneous subnational governance, transfer design and administrative control may matter more than fiscal magnitude: the targeted Special Allocation Fund is associated with lower inequality, whereas the General Allocation Fund and Revenue Sharing Fund show no measurable redistributive association.]]>
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