How can quality regional spending reduce poverty and improve human development index?

• Published in: Journal of Asian economics Vol. 82; p. 101515
• Main Authors: Masduki, Uki, Rindayati, Wiwiek, Mulatsih, Sri
• Format: Journal Article
• Language: English
• Published: Elsevier Inc 01.10.2022
• Subjects: Governance; Human development index; Poverty; Quality of government Spending; Poverty; Quality of government Spending; Governance; Human development index
• ISSN: 1049-0078; 1873-7927
• DOI: 10.1016/j.asieco.2022.101515

There is only a small amount of literature that discusses government spending and development performance, especially poverty and the human development index (HDI). Most of them discuss through income. Although some discuss government spending, few discuss their quality. This paper attempts to examine and discuss the quality of government spending and then to link its effects to poverty and HDI rates for underdeveloped areas in Indonesia in Java. The method used in this study is to use the Partial Least Squares Structural Equation Model (PLS-SEM) with the help of SmartPLS software. The results of this study indicate that the quality of government spending is supported by the constructs of PRIORITY, ALLOCATION, TIME, ACCOUNTABILITY, and EFFECTIVENESS. This means that government spending can be said to be of quality when viewed from the five constructs. The results of this study also concluded that quality government spending can reduce poverty levels and the human development index (HDI).