Abstract
This study aims to estimate the association between government expenditure and human development index (HDI) in Indonesia. Due to inequal HDI attainment, this study focuses on 12 provinces which categorized as provinces with low level of HDI in Indonesia. This study employs fixed effect model (FEM) panel data analysis on provincial level datasets from 2010 to 2018. This study found that the increase of government expenditure on education significantly increases HDI, while government expenditure on health has no significant association with HDI. Major finding of the study highlights the role of gross regional domestic product (GRDP) per capita in increasing HDI on 12 provinces in Indonesia. 
 
 Keywords: Government expenditure on education, government expenditure on health, HDI, FEM.
Highlights
Human development has strong association with economic development as it has significant impact in increasing economic growth, standard of living, and social welfare
As discussed in the previous section, this study focuses on Lampung, South Sumatera, West Kalimantan, West Nusa Tenggara, East Nusa Tenggara, Gorontalo, Central Sulawesi, West Sulawesi, Maluku, North Maluku, Papua, and West Papua as main case study to further understand the association between government expenditure and human development index (HDI) in Indonesia
This study aims to estimate the role of government expenditure on human development on 12 provinces in Indonesia from 2010 to 2018
Summary
Human development has strong association with economic development as it has significant impact in increasing economic growth, standard of living, and social welfare. HDI portrays standard of living, educational attainment, and health attainment. Such association may further highlight the important role of government in human development investment in health, education, and other social services. Theoretical and empirical studies highlighted the significant role of government expenditure due to market failure in human development investment (Agarwal, 2015; Ali et al, 2012; Anand & Ravallion, 1993; Gupta et al, 2002). Investment in government expenditure appears to be significant to further boost human development and economic development
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