The Effect of Fiscal Decentralization and Economic Growth on Poverty Reduction: A Case Study of Grobogan Regency
DOI:
https://doi.org/10.58684/paradigma.v2i2.93Keywords:
Capital Expenditure, Economic Growth, Local Own-Source Revenue, Poverty Alleviation, Regional TransfersAbstract
Poverty is a complex and multidimensional issue that is a major focus of the development agenda. Amidst an era of fiscal decentralisation and regional autonomy, local governments play a crucial role in formulating effective policies to serve the community and resolve issues at the local level, including poverty alleviation. This study aims to analyse the influence of Local Own-Source Revenue (PAD), Regional Transfers (TKD), Capital Expenditure, and Economic Growth on efforts to reduce poverty rates in Grobogan Regency. This study uses a quantitative approach with multiple linear regression analysis, utilising secondary data from 2015 to 2024 processed using STATA version 19 software. The results show that simultaneously, the variables of PAD, TKD, Capital Expenditure, and Economic Growth have a significant effect on reducing poverty rates. However, partial testing found that only the TKD variable had a significant effect on reducing poverty rates. Meanwhile, the PAD, Capital Expenditure, and Economic Growth variables did not show a statistically significant effect. These findings imply that it is necessary to strengthen regional fiscal capacity through the optimisation of PAD to reduce dependence on transfers from the central government, as well as to design capital expenditure allocations and economic growth strategies that are more inclusive and favourable to the poor.
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