The Influence of Regional Expenditure Realization on Human Development Index in Indonesia

Diana Christin, Dinar Prasasti, Supeni Anggraeni Mapuasari

Abstract


This study aims to determine the relationship between government spending on the human development index (HDI), human development index, that consists of health, education, and purchasing power. Government expenditure related to human quality development is the responsibility of each government in the area, which is regulated in law number 23 of 2004. This research was conducted in 34 provinces in Indonesia and used secondary data collected from the official website that is National Central Agency (BPS). The data used in this research relates to the allocation of spending funds based on their function using data obtained from 2017, then using HDI data from 2018-2020 and in this study using multiple linear regression and classical assumption techniques in SPSS. The result of this analysis is that government spending on the economic function has no impact on the human development index, government spending on the health and education function has a significant effect on the human development index.  Through the conclusions of this study, the government can determine where the budget should be spent to be more effective in improving the quality of the HDI, to avoid over budget expenditure but not having results in increasing the HDI and for HDI indicators whose growth is not affected by budget expenditure, the government needs to find a solution other than increasing budget expenditure because it is unlikely to affect the growth of the HDI.

Keywords: Human Development Index, Government Expenditure in Economic, Government Expenditure in Health, Government Expenditure in Education.


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