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The Effect of Government Expenditure on Economic Growth Through the Human Development Index in Indonesia 2016 to 2020 Period

Muhammad Yusuf, Y.S., Abd. Hamid Paddu, and Nur Dwiana Sari Saudi

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Yusuf, M.Y.S., Paddu, A.H. and Saudi, N.D.S., 2021. The Effect of Government Expenditure on Economic Growth Through the Human Development Index in Indonesia 2016 to 2020 Period. United International Journal for Research & Technology (UIJRT), 2(9), pp.27-33.

Abstract

This study aims to examine the effect of the realization of government spending on the education sector, health sector, infrastructure sector on the human development index and economic growth through the human development index in all provinces in Indonesia, as for the research period from 2016 to 2020. In this study using secondary data. in the form of panel data. Panel data is a combination of cross section data and time series data, which consists of data from all provinces in Indonesia from 2016 to 2020. The data sources are obtained from the Central Statistics Agency, the Directorate General of Fiscal Balance, the Ministry of Finance of the Republic of Indonesia, the Ministry of Public Works and Housing. People, Ministry of Health and other sources. The findings of this study indicate that education expenditures have no direct effect on the human development index. Health spending has no direct effect on the human development index. Infrastructure spending has no direct effect on the human development index.

The human development index has no direct effect on economic growth. Education expenditure has no direct effect on economic growth and indirectly through the development index. Health spending has no direct effect on economic growth and indirectly through the human development index. Infrastructure spending has no direct effect on economic growth and indirectly through the human development index. The findings of this study found that, although there was an increase in the amount of expenditure in each province, it was not yet able to increase the human development index due to the disparity in expenditure between provinces, or there were other variables that influenced but were not included in this study.

Keywords: Government Expenditure, Economic Growth and Human Development Index.

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