RELATIONSHIP BETWEEN BUDGET POLICY, FISCAL CAPACITY AND STUNTING PREVALENCE IN INDONESIA

Abstract

The prevalence of stunting in Indonesia is still above the world stunting average, although it shows a downward trend (Central Statistics Agency, 2020). The deterioration in the quality of life of children with growth, development and metabolic disorders increases health care costs. In the long run, stunting can affect the quality of human resources and social development in Indonesia. Alderman et al. (2006) found that children with developmental delays tend to have lower cognitive abilities, lower incomes, and less than optimal productivity when they grow up so that it will affect the improvement of the quality of Human Resources and the nation's competitiveness in the future. Strengthening the quality of human resources is still a top priority in the 2020-2024 RPJMN, in connection with efforts to strengthen these human resources, the Government has established a National Strategy for the Acceleration of Stunting Prevention in 2020-2024. In the National Medium-Term Development Plan (RPJMN) 2020-2024, the Indonesian government sets a target of reducing the prevalence of stunting in children under 5 years old by only 14% by 2024. Stunting reduction is a national priority program, so budget policies and fiscal capacity adequacy are needed. The stunting reduction budget from the State Budget is channeled through the Provincial-District/City Governments according to the authority for these activities. The budget allocation is expected to be part of orchestration with own regional funds to reduce stunting prevalence in Indonesia. This study will analyze the relationship between budget policies, fiscal capacity conditions, and stunting prevalence in 34 (thirty-four) provinces in Indonesia from 2018 to 2022 using the fixed effect method.
 Keywords: Budget Policy, Fiscal Capacity, Stunting Prevalence.