The Effect of Economic Growth, Fiscal Decentralization, Fiscal Stress, and Economic Openness on Regional Inequality

Hanny Tri Putri; Didik Susetyo; Feny Marissa; Sukanto Sukanto

The Effect of Economic Growth, Fiscal Decentralization, Fiscal Stress, and Economic Openness on Regional Inequality

Hanny Tri Putri, Didik Susetyo, Feny Marissa, Sukanto Sukanto

Abstract

Regional inequality is a phenomenon that occurs universally in all countries, regardless of their size and level of development. Regional inequality is basically caused by differences in the content of natural resources and demographic conditions in each region This study aims to determine the effect of economic growth, the degree of fiscal decentralization, fiscal stress, and economic openness on regional inequality between provinces in Sumatra during the 2010-2020 period. The method used in this study is the panel data regression analysis method using the Random Effect Model. The results showed that simultaneously economic growth, degree of fiscal decentralization, fiscal stress and economic openness influenced regional inequality. Partially, economic growth and the degree of fiscal decentralization have a negative but not significant effect on regional inequality, while fiscal stress has a positive but not significant effect on regional inequality, and economic openness has a positive and significant effect on regional inequality. The implication of this research is that local governments need to adopt policies to impose restrictions on exports and imports, such as barriers in the form of quotas or tariffs.

Full Text:

PDF

References

Aditya. (2020). Analisis Pengaruh Desentralisasi Fiskal Terhadap Ketimpangan Distribusi Pendapatan di Indonesia. Jurnal Ilmiah Mahasiswa FEB, 8(2), 1-12.

Alamanda. (2020) The Effect of Economic Growth on Income Inequality: Panel Data Analysis From Fifty Countries. Jurnal Info Artha, 5(1), 1-10. https://doi.org/10.31092/jia.v5i1.1176

Andhiani, K. D., Erfit, & Bhakti, A. (2018). Analisis Pertumbuhan Ekonomi dan Ketimpangan Pembangunan di Wilayah Sumatera. E-Jurnal Perspektif Ekonomi Dan Pembangunan Daerah, 7(1), 26–34. https://doi.org/10.22437/pdpd.v7i1.4602

Andiny, P., & Mandasari, P. (2017). Analisis Pertumbuhan Ekonomi dan Kemiskinan Terhadap Ketimpangan Di Provinsi Aceh. Jurnal Penelitian Ekonomi Akuntansi (JENSI), 1(2), 196–210. https://doi.org/10.33059/jensi.v1i2.412

Apriyani, D. (2021). What are the Leading Sectors Expected to Reduce Inequality in South Sumatra Province?. Jurnal Ekonomi Pembangunan (JEP), 19(2), 151-164. https://doi.org/10.29259/jep.v19i2.15221

Baransano, M. A., Putri, E. I. K., Achzani, N. A., & Kolopaking, L. (2016). Peranan Sektor Unggulan sebagai Salah Satu Faktor dalam Mengurangi Ketimpangan Pembangunan Wilayah di Provinsi Papua Barat. Journal of Regional and City Planning, 27(2), 119–136. https://doi.org/10.5614/jrcp.2016.27.2.4

Barua, A., & Chakraborty, P. (2010). Does openness affect regional inequality? A case study for India. Review of Development Economics, 14(3), 447–465. https://doi.org.10.1111/j.1467-9361.2010.00564.x

Cahyadi, M., Sari, V. K., Juwita, A.H., (2021). New Evidence of Environmental Kuznets Curve Hypothesis in Developing Countries. Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi dan Pembangunan. 22(2), 251-262. https://doi.org/10.23917/jep.v22i2.15794

Chotia, V., & Rao, N.V. (2017). Investigating The Interlinkages Between Infrastructure Development, Poverty and Rural-Urban Income Inequality: Evidence From Brics Nations. Studies in Economics and Finance, 34(4), 466-468.

Danawati, S., Bendesa, I. K. G., & Utama, M. S. (2016). Pengaruh Pengeluaran Pemerintah Dan Investasi Terhadap Kesempatan Kerja, Pertumbuhan Ekonomi Serta Ketimpangan Pendapatan Kabupaten/Kota Di Provinsi Bali. E-Jurnal Ekonomi Dan Bisnis Universitas Udayana, 5(7), 2123–2160.

Daumal, M. (2013). The impact of trade openness on regional inequality: the cases of India and Brazil. International Trade Journal, 27(3), 243–280. https://doi.org/10.1080/08853908.2013.796839

Dorn, F., Fuest, C., & Potrafke, N. (2022). Trade openness and income inequality: New empirical evidence. Economic Inquiry, 60(1), 202–223. https://doi.org/10.1111/ecin.13018

Fajri, M., Delis, A., & Amzar, Y. V. (2016). Dampak Otonomi Fiskal, Pertumbuhan Ekonomi, Dan Keterbukaan Daerah Terhadap Ketimpangan Wilayah Di Sumatera. Jurnal Ekonomi Kuantitatif Terapan, 9(2), 99–107. https://doi.org/10.24843/JEKT.2017.v09.i02.p02

Farida, N., Suman, A., Sakti, R.K. (2021). Fiscal Decentralization, Economics Growth and Regional Development Inequality in Eastern Indonesia. Journal of Indonesian Apllied Economics. 9(2), 1-9. https://doi.org/10.21776/ub.JIAE.009.02.1

Izzati, A. N., Laut, L. T., & Hutajulu, D. M. (2021). Analisis Pengaruh Pertumbuhan Ekonomi, Derajat Desentralisasi Fiskal Dan Tingkat Pengangguran Terbuka Terhadap Ketimpangan Pendapatan Di Provinsi DIY Tahun 2010-2019. DINAMIC: Directory Journal of Economic, 3(1), 69–86. https://doi.org/10.31002/dinamic.v3i1.2697

Kurniawan, A. (2017). Determinant Factors of The Performance Indicator of Local Government (Study towards Performance Indicator of Economic Growth and Open Unemployment Rate in Sidoarjo Regency). Wacana, 20(1), 56–64. https://doi.org/10.21776/ub.wacana.2017.020.07.

Kyriacou, A. P., Muinelo-gallo, L., & Roca-sagalés, O. (2017). Regional inequalities , fiscal decentralization and government quality. Regional Studies, 51(6), 945–957. https://doi.org/10.1080/00343404.2016.1150992

Li, B., Li, T., Yu, M. & Chen, B. (2017). Can Equalization of Public Service Narrow The Regional Disparities in China? A Spatial Econometrics Approach. China Economic Review, 44, 66-78. https://doi.org/10.1016/j.chieco.2017.03.010

Lyubimov, I. (2017). Income inequality revisited 60 years later: Piketty vs Kuznets. Russian Journal of Economics, 3(1), 42–53. https://doi.org/10.1016/j.ruje.2017.02.003

Nuryanto, D. T. R. J. (2017). Pariwisata, Pertumbuhan Ekonomi dan Ketimpangan Distribusi Pendapatan di Bali (Hipotesis Kurva Kuznets). Indonesian Treasury Review: Jurnal Perbendaharaan, Keuangan Negara, Dan Kebijakan Publik, 2(3), 43–54. https://doi.org/10.33105/itrev.v2i3.61

Priatama, R. A., Rustiadi, E., Widiatmaka, W., & Pravitasari, A. E. (2022). Physical Geographical Factors Leading to the Disparity of Regional Development: The Case Study of Java Island. Indonesian Journal of Geography, 54(2), 195–205. https://doi.org/10.22146/ijg.66729

Roy, J., Wijaya, A., Darma, D.C., Kurniawan, E. (2022) Fiscal Decentralization and Income Inequality: A Prediction Using the SEM Model. Journal of economics, Business, & Accountancy Ventura. 24(3), 379-391. https://doi.org/10.14414/jebav.v24i3.2902

Song, Y. (2013). Rising Chinese Regional Income Inequality: The Role of Fiscal Decentralization. China Economic Review, 27, 294–309. https://doi.org/10.1016/j.chieco.2013.02.001

Sutriani, S & Damanik, D. (2022). Analisis Pengaruh Derajat Desentralisasi Fiskal Terhadap Pertumbuhan Ekonomi Di Kota Pematangsiantar. Jurnal Kajian Ekonomi Dan Kebijakan Publik, 7(1), 38–50.

Wei, Y. D. (2015). Spatiality of regional inequality. Applied Geography, 61, 1–10. https://doi.org/10.1016/j.apgeog.2015.03.013

Winter, L.A., McCulloch, N., McKay. A. (2004) Trade Liberalization and Poverty: The Evidence so Far. Journal of Economics Literature. 42(1), 72-115. https://www.jstor.org/stable/3217037

Zhang, Z., Gibson, B., & Schafer, J. G. (2017). Reexamining the Relationship Between Fiscal Stress and Outsourcing. Public Performance & Management Review, 41(1), 22–46. https://doi.org/10.1080/15309576.2017.1358645

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Jurnal Ekonomi Pembangunan
Jalan Raya Palembang-Prabumulih Km. 32
Jurusan Ekonomi Pembangunan, Fakultas Ekonomi Universitas Sriwijaya
Indralaya, Sumatera Selatan, Indonesia
Email: jep.unsri@gmail.com, Tel/Fax : (0711)580231

p-ISSN: 1829-5843, e-ISSN 2685-0788

Jurnal Ekonomi Pembangunan by http://ejournal.unsri.ac.id/index.php/jep

is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Jurnal Ekonomi Pembangunan is Indexed by: