Abstract

The implementation of fiscal decentralization policy has a good impact on the development of the potential and creativity of local governments. Effectiveness in managing the results of regional wealth will affect the original income of the region which can then be utilized for the welfare of the community. This study aims to determine the effect of fiscal decentralization and economic growth on poverty in Gorontalo Province. This research uses quantitative methods. The data used in this study were sourced from the Central Statistics Agency and the Directorate General of Fiscal Balance so that the data in this study were secondary data using the econometrics method through a panel data regression equation in the form of a combination of 10-year time series data (2008-2017) and cross section data 6 Regency / City areas in Gorontalo Province. Estimation is done using the Fixed Effect Model (FEM). The results of this study indicate that (1) Partially the degree of fiscal decentralization has a negative effect (unidirectional relationship) and significant on poverty means that the greater the fiscal decentralization variable will have an impact on reducing the level of poverty (2) Partially economic growth has a negative effect (unidirectional relationship) and significant to poverty means increasing economic growth can reduce poverty levels (3) Simultaneously the degree of fiscal decentralization and economic growth have a significant effect on poverty in Gorontalo Province.
 
 Keywords: fiscal decentralization, economic growth, poverty

Highlights

  • The implementation of fiscal decentralization policy has a good impact on the development of the potential and creativity of local governments

  • The regression coefficient, which is negative, indicates that the degree of fiscal decentralization has a unrelated relationship to poverty

  • In other words, when the variable degree of fiscal decentralization gets larger, there is a large allocation of local own-source revenue for development purposes so that it has an impact on reducing poverty levels in Gorontalo Province

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Summary

Introduction

The implementation of fiscal decentralization policy has a good impact on the development of the potential and creativity of local governments. This study aims to determine the effect of fiscal decentralization and economic growth on poverty in Gorontalo Province. The high poverty rate in Indonesia is one of the problems that is still difficult to overcome by the central government and regional governments. The poverty rate in Gorontalo is still relatively high when compared to other provinces in Indonesia. The Central Statistics Agency noted that the percentage of poverty in Gorontalo Province is still relatively high. High economic people was 24.88% and increased by growth will have an impact on employment. In 2011 to 2012 the rate of decreased to 17.72% and until 2017 the growth of Gorontalo economy continued to poverty rate became 17 , 56%. In the number of poor people in Gorontalo in 2013 to 2016 the economy of Gorontalo

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