Regional Governments Spending, Private Investment and Employment Performance in Indonesia
DOI:
https://doi.org/10.31685/kek.v18i3.23Keywords:
employment privat investment, regional government spendingAbstract
The amount and composition of government spending in fiscal operations has a significant impact on aggregate demand and national output and affects resource allocationin an economy. Therefore, in order to achieve effective economic development, government spending has to be allocated appropriately according to the potentials of each area. Indonesia, which consists of areas with a variety of potential resources would require the determination of the amount and composition of different government spending in order to have an impact on the growth of private investment and employment opportunities are maximized. The purpose of this study is to examine the regional government expenditure performance, private investment and employment opportunities in the area where contribution of the agricultural sector to GRDP is high and low. The study utilizes an econometric model of the system of simultaneous equations using a panel of data of 20 provinces in Indonesia for the period of2003-2011. The 20 sampled provinces were classified into two groups, based on contribution of agriculture sector to the respective regional economy. The estimation results indicate that the determination of the amount of local government spending, both in the areas where the contribution of the agricultural sector to GRDP is either high or low, based on the activity or program of the previous year. Meanwhile, the greater the number of regional government spending for the agricultural sector, the private investment of agricultural sector and employment is increasing.References
Ahmed, H. dan S.M. Miller. (2000]. Crowding-out and Crowding-in Effects of The Components of Government Expenditure. Contemporary Economic Policy, 18(1]: 124-133
Barro, R.J. (1990). Government Spending in a Simple Model of Endogenous Growth. Journal of Political Economy, 98: 103-125
Hayami, Y and V.W. Ruttan. (1981). Agricultural Development: An International Perspective. Baltimore: The John Hopkins Press.
Kaldor, N. (1966). Causes of the Slow Rate of Economic Growth of the United Kingdom: an Inaugural Lecture. Cambridge: Cambridge University Press.
Koutsoyiannis, A. (1982). Modern Microeconomics. Second Edition. Univercity of Waterloo, Ontario. Hongkong: The Macmillan Press LTD.
Liu, L.C; C.E. Hsu and M.Z. Younis. (2008). The Association Between Government Expenditure and Economic Growth: Granger Causality Test of US Data, 1947-2002. Journal of Public Budgeting Accounting & Financial Management, 20(4): 537-553
Mellor, JW. (1995). Agriculture on the Road to Industrialization. Baltimore and London: The John Hopkins University Press.
Musgrave, R.A. and B.M. Peggy. (1989). Public Finance in Theory and Practice. New York: McGraw-Hill Book Company.
Priyarsono, D.S. (2011). Dari Pertanian ke Indunstri, Analisis Pembangunan dalam Perspektif Ekonomi Regional. Bogor: IPB Press.
Stiglitz. J.E. (2000). Economics of the Public Sector. New York: W.W. Norton and Company.
Todaro, M.P. (2000). Economic Development. Seventh Edition. New York: Addision Wesley Longman. Inc.
Tulsidharan, S. (2006). Government Expendinture and Economic Growth in India (1960 to 2000). Finance India, 20(1): 169-179
Wang, B. (2005). Effects of Government Expendinture on Private Investment: Canadian Empirical Evidence. Empirical Economics. 30: 493-504
World Bank. (2009). Indonesia Agriculture Public Expenditure Review - Indonesia Agriculture Public and Growth. Policy Notes. The World Bank Office Jakarta.
Downloads
Published
Issue
Section
License
STATEMENT OF AUTHENTICITY AND COPYRIGHT RELEASE
I hereby certify that:
- The article (Article title) is authentic and never being published previously or will be published in other publication as well as not a plagiarism in any form.
- The article does not have any issue with other parties, regarding of the publication copyright.
- All the authors have read this statement and agree with the name and sequence.
- Hereby, I transfer the copyright of my article (Article title) to the KEK Editorial Board . this copyright transfer includes a right to reproduce a photograph for the similar article and its translation. This is also including a right to upload the article into a computer system which disseminated widely on the internet.
- Hereby, I agree with my article (Article title) to be published by KEK Volume (xx) Edition (x), under Creative Common Attribution- NonCommercial-ShareAlike 4.0 licensing. This is also including a right to upload the article into a computer system which disseminated widely on the internet.
Name : (Full Name)
Date : (Signing date)