The Role of Fiscal Policy in Economic Growth in Indonesia
Abstract
This research aims to analyze the influence of economic variables on Indonesia's economic growth in the short and long term. In this analysis, four main economic variables are evaluated: Goods Expenditures, Taxes, Subsidies, and Human Capital. The research results show that goods spending has a positive but not significant influence on economic growth, both in the short and long term. Meanwhile, taxes show a positive and significant influence on economic growth in both periods. However, subsidies are proven to have a negative and significant effect, indicating that providing subsidies may affect economic growth negatively in the short and long term. Apart from that, Human Capital also shows a negative and significant influence, highlighting the importance of investment in human resources to support sustainable economic growth in Indonesia. These findings provide valuable insights for economic policy that can be used to design more effective strategies for increasing Indonesia's economic growth.
Downloads
References
Abimanyu, A., & Imansyah, M. H. (2023). The Impact of Fuel Subsidy to The Income Distribution: The Case of Indonesia. Journal of Treasury, State Finance, and Public Policies. Vol 8 No 3. Hal 189-203.
Abimanyu, A., & Imansyah, M. H. (2023). Will Indonesia enter the 2023 financial crisis? Application of early warning model system. Economic Journal of Emerging Markets, 15(1), 28–41. https://doi.org/10.20885/ejem.vol15.iss1.art
Abu-Bader, S. & A. S. Abu-Qarn (2003). Government Expenditures, Military Spending and Economic Growth: Causality Evidence from Egypt, Israel, and Syria. Journal of Policy Modeling, 25, 567-583.
Adawo, M. A. (2011). Has education (human capital) contributed to the economic growth of Nigeria? In Journal of economics and international finance. Citeseer. https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.1029.1357&rep=rep1&type=pdf
Adkisson, R. V., & Mohammed, M. (2014). Tax structure and state economic growth during the Great Recession. Social Science Journal, 51(1). https://doi.org/10.1016/j.soscij.2013.10.009
Afifah, E. N. (2008). Kajian Kerangka Subsidi di Indonesia. Institute for Development of Economics and Finance (INDEF), 9(3), 1–111.
Akhadi, Imam. (2022). Pengaruh Penerimaan Pajak Terhadap Variabel Pendapatan Perkapita Dan Angka Kemiskinan Sebagai Indikator Kemakmuran Rakyat. JPI: Jurnal Pajak Indonesia. Vol.6, No.1. Hal.60-72.
Akpan, N.I., 2005. Government expenditure and economic growth in Nigeria: A disaggregate approach. CBN Economic and Financial Review, 43(1): 61–67
Amir, H., Hisyam, M. R. J., Kurnaini, Z. D., Handayani, H., Pasaribu, F. V., Irfan, M., & Paellorisky, M. O. (2019). Indonesia’s effort to phase out and rationalize its fossil-fuel subsidies. In Ministry of Energy and Mineral Resources and Ministry of Finance (Vol. 33, Issue April). https://www.oecd.org/fossilfuels/publication/G20 peer review Indonesia_Final-v2.pdf
Amri, L. H., & Ainul, W. A. (2021). Ekplorasi Penyaluran Bantuan Subsidi Upah (BSU) Tenaga Kependidikan Non PNS Selama Pandemi COVID-19. Jurnal Manajemen Strategi Dan Aplikasi Bisnis, 1 - 8.
Anugra, Ranifial., Marwa, Taufik., & Imelda. (2016). Analisis Hubungan Antara Pengeluaran Pemerintah Dengan Ketimpangan Distribusi Pendapatan di Provinsi Sumatera Selatan. Jurnal Ekonomi Pembangunan. Vol 14 (1): 31-40.
Cahyadi, Rahmad. (2023). Efektifitas Kebijakan Fiskal dan Kebijakan Moneter Terhadap Pertumbuhan Ekonomi Di Indonesia. Tesis. USU.
Dreßler, D. (2012). The Impact of Corporate Taxes on Investment - An Explanatory Empirical Analysis for Interested Practitioners. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2105624.
Edame, G. E., & Okoi, W. W. (2014). The Impact of Taxation on Investment and Economic Development in Nigeria. Academic Journal of Interdisciplinary Studies, 3(4), 209-218. http://dx.doi.org/10.5901/ajis.2014.v3n4p209
Fleisher, B., Li, H., & Zhao, M. Q. (2010). Human capital, economic growth, and regional inequality in China. Journal of Development Economics. https://www.sciencedirect.com/science/article/pii/S0304387809000121
Friday Ebong; Fidelis Ogwumike; Udeme Udongwo; Olumide Ayodele (2016). Impact of Government Expenditure on Economic Growth in Nigeria: A Disaggregated Analysis. Asian Journal of Economics and Empirical Research, 3(1): 113-121.
Ghazali, Imam. “Aplikasi Analisis Multivariate Dengan Program IBM SPSS 21” (Semarang: Badan Penerbit Universitas Diponegoro, 2013).
Han, J. S., & Lee, J. W. (2020). Demographic change, human capital, and economic growth in Korea. Japan and the World Economy, 53. https://doi.org/10.1016/j.japwor.2019.100984
Hanifah., & Yulhendri. (2022). Human Capital, Kebijakan Pendidikan dan Pertumbuhan Ekonomi Analisis Evidence di Indonesia. Jurnal Salingka Nagari. Vol 1 No 1. Page 78-92. UNP. https://jsn.ppj.unp.ac.id/index.php/jsn/index
Hasibuan, R., Ridwan, M., & Yusrizal, Y. (2023). Analysis of Macroeconomic Indicators (Case Study in North Sumatra Province). Indonesian Interdisciplinary Journal of Sharia Economics (IIJSE), 6(3), 2448-2474. https://doi.org/10.31538/iijse.v6i3.3965
Hermanto dan Endah Saptuningsih, Electronic Data Processing SPSS 10 dan Eviews 3.0. (UPFe. UMY, 2002).
Hutahaean, Parluhutan. (2019). Belanja Negara dan Pertumbuhan Ekonomi Indonesia: Analisis Kointegrasi dan Kausalitas. Kajian Ekonomi Keuangan. Vol 3 Nomor 2. http://dx.doi.org/10.31685/kek.V3i1.411
Indonesia, K. K. (2015). APBN 2015. Diambil kembali dari Kemenkeu: https://www.kemenkeu.go.id/apbn2015
Indonesia, K. K. (2016). APBN 2016. Diambil kembali dari Kemenkeu: https://www.kemenkeu.go.id/apbn2016
Indonesia, K. K. (2017). APBN 2017. Diambil kembali dari Kemenkeu: https://www.kemenkeu.go.id/apbn2017
Indonesia, K. K. (2018). APBN 2018. Diambil kembali dari Kemenkeu: https://www.kemenkeu.go.id/apbn2018
Indonesia, K. K. (2019). APBN 2019. Diambil kembali dari Kemenkeu: https://www.kemenkeu.go.id/apbn2019
Indonesia, K. K. (2020). APBN 2020. Diambil kembali dari Kemenkeu: https://www.kemenkeu.go.id/apbn2020
Indonesia, K. K. (2021). Informasi APBN 2021. Kemenkeu, 1-48. Diambil kembali dari Kemenkeu : https://www.kemenkeu.go.id/media/16835/informasi-apbn-2021.pdf
Indonesia, K. K. (2022). Data APBN. Diambil kembali dari Kemenkeu: https://www.kemenkeu.go.id/dataapbn
Isnan, E. (2023). Indonesia’s Economic Diplomacy in Facing Red (Renewable Energy Directive) and European Union Palm Oil Policy. Majapahit Journal of Islamic Finance and Management, 2(2), 110-128. https://doi.org/10.31538/mjifm.v2i2.29
Jiranyakul, K., (2013). The Relation between Government Expenditures and Economic Growth in Thailand. Journal of Economics and Economic Education Research, 8(1): 93-102.
Kakaulina, M. O. (2017). Visual Representation of Laffer Curve Factoring in Implications of Capital Outflow. Journal of Tax Reform, 3(2), 103–114. https://doi.org/10.15826/jtr.2017.3.2.034.
Kemenkeu. (2015). Budget In Brief APBN 2015. Kementrian Keuangan RI.
Kementerian Keuangan Republik Indonesia. (2019). Informasi APBN 2019. Retrieved from www.anggaran.kemenkeu.go.id
Kementerian Keuangan RI, 020. (2020). Pokok-pokok APBN 2020. In Anggaran Pendapatan dan Belanja Negara (APBN).
Keumala, C. M., Farida, R., Triana., N& Andirfa., M.(2023). Human Capital dan Pertumbuhan Ekonomi di Negara Berpenduduk Muslim, Asia-pacific Journal of Public Policy, 9(1), 24-40.
Khairunisa, Nur Afni., dkk. (2022). Analisis Pertumbuhan Ekonomi Negara-Negara ASEAN. Fair: Financial & Accounting Indonesian Research. Vol 2 Issue 2. Page 97-113.
Lisna, V., Sinaga, B. M., Firdaus, M., & Sutomo, S. (2013). Dampak Kapasitas Fiskal terhadap Penurunan Kemiskinan: Suatu Analisis Simulasi Kebijakan. Jurnal Ekonomi Dan Pembangunan Indonesia, 14(1). https://doi.org/10.21002/jepi.v14i1.433
Macek, R. (2015). The Impact of Taxation on Economic Growth: Case Study of OECD Countries. Review of Economic Perspectives, 14(4), 309–328. https://doi.org/10.1515/revecp-2015-0002
Maulid, Lelly Cesarina., Bawono, Icuk Rangga., & Sudibyo, Yudha Aryo. (2021). The Effect of Government Expenditure on Economic Growth in Indonesia. Ekuilibrium: Jurnal Ilmiah Bidang Ilmu Ekonomi. Vol 16 No 1. Hal 24-38. https://journal.umpo.ac.id/index.php/ekuilibrium
Mincer, J. (1984). Human capital and economic growth. Economics of Education Review, 3 (3), 195–205. https://doi.org/10.1016/0272-7757(84)90032-3
Mincer, J. (1996). Economic Development, Growth of Human Capital, and the Dynamics of the Wage Structure. Journal of Economic Growth, 1 (1), 29–48. https://doi.org/10.1007/BF00163341
Nguyen, H.T., & Darsono, S.N.A.C. (2022). The Impacts of Tax Revenue and Investment on the Economic Growth in Southeast Asian Countries. Journal of Accounting and Investment, 23(1), 128-146.
Okoro, A.S., 2013. Government spending and economic growth in Nigeria, 1980 – 2011. Global Journal of Management, Business Research, Economics and Commerce, 13(5): 20-29.
Olufemi, A. T., Jayeola, O., Oladele, A. S., & Naimot, A. O. (2018). Tax Revenue and Economic Growth in Nigeria. Scholedge International Journal of Management & Development, 5(7), 72-85. https://doi.org/10.19085/journal.sijmd050701
Permadi, Andrean., dkk. (2022). Causality of Consumption, Government Expenditure, and Distribution of ZIS Funds (Zakat, Infaq, and Shodaqoh) on Indonesia's Economic Growth. Open Access Indonesia Journal of Social Sciences. Vol 5 Issue 5. https://journalsocialsciences.com/index.php/OAIJSS
Purba, Nova Shenni dan Ari Darmawan,” Pengaruh Pertumbuhan Produk Domestik Bruto Dan Inflasi Terhadap Non Performing Finance Bank Syariah (Studi Pada Bank Umum Syariah Di Indonesia Periode 20142016)”, Jurnal Administrasi Bisnis (JAB) Vol. 61 (Agustus 2018).
Pusporini, Irma Dwi. (2020). Analisis Pengaruh Anggaran Pendapatan dan Belanja Daerah Terhadap Pertumbuhan Ekonomi di Provinsi Jawa Tengah. E-Jurnal Ekonomi dan Bisnis Universitas Udayana. Page 485-508.
Romer, C. D., & Romer, D. H. (2010). The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks. American Economic Review, 100(3), 763–801. https://doi.org/10.1257/aer.100.3.763
Saragih, A. H. (2018). Pengaruh Penerimaan Pajak Terhadap Pertumbuhan Ekonomi Di Indonesia. Jurnal SIKAP (Sistem Informasi, Keuangan, Auditing Dan Perpajakan), 3(1). https://doi.org/10.32897/jsikap.v3i1.103
Schuerenberg-Frosch, H. (2015). How to model a child in school? A dynamic macrosimulation study for tanzania. South African Journal of Economics, 83(1), 117–139. https://doi.org/10.1111/saje.12042
Sinulingga, Wesly Febriyanta. (2015). Goverment Expenditure and Economic Growth an Empirical Study In Indonesia. Jurnal BPPK. Vol 8 NO 1. Hal 41-52.
Solow, R. M. (1956). A Contribution to the Theory of Economic Growth. The Quarterly Journal of Economics, 70(1), 65-94. https://doi.org/10.2307/1884513
Sriyana, J. (2011): The Effect of Budget Deficit Shock on Government Spending: An Empirical Case in Indonesia. International Journal of Business and Development Studies 3: 41-58.
Stoilova, D. (2017). Tax structure and economic growth: Evidence from the European Union. Contaduría y Administración, 62(3), 1041–1057.
Suindyah S. 2011. The effect of investment, labor and government expenditure on economic growth in East Java Province. Jurnal Ekuitas. 15(4).
Sukmawati, A., & Siregar, H. (2014). Implementasi Penyusunan Rencana Kerja dan Anggaran Belanja Kementerian Pertanian Sektor Pertanian Tahun 2005-2012. Jurnal Manajemen & Agribisnis, 10(3), 182–191. https://doi.org/10.17358/jma.10.3.182-191
Terminanto, Ade Anantio., & Rama, Ali. (2017). Pengaruh Belanja Pemerintah dan Pembiayaan Bank Syariah Terhadap Pertumbuhan Ekonomi: Studi Kasuss Data Panel Provinsi di Indonesia. Iqtishadia: Jurna Kajian Ekonomi dan Bisnis Islam. Vol 10 No 1. http://dx.doi.org/10.21043/iqtishadia.v10i1.2320
Todaro, M. P., & Smith, S. C. (2015). Economic Development (12th Edition). New Jersey: Pearson Addison Wesley.
Tosun, M. S., & Abizadeh, S. (2005). Economic growth and tax components: an analysis of tax changes in OECD. Applied Economics, 37(19), 2251–2263.
Vatavu, S., Lobont, O. R., Stefea, P., & Brindescu-Olariu, D. (2019). How taxes relate to potential welfare gain and appreciable economic growth. Sustainability (Switzerland), 11(15). https://doi.org/10.3390/su11154094
Volchik, V., Oganesyan, A., & Olejarz, T. (2018). Higher education as a factor of socio-economic performance and development. Journal of International Studies, 11 (4), 326–340. https://doi.org/10.14254/2071-8330.2018/11-4/23
Wajdi, M. F., & Isa, M. (2014). Membangun Konsep Modal Manusia Yang Berperanan Dalam Kinerja Pemasaran Industri Kecil. Seminar Nasional Dan Call for Paper (Sancall 2014), Sancall, 452–464.
Whalley, J., & Zhao, X. (2013). The contribution of human capital to China’s economic growth. China Economic Policy Review. https://www.worldscientific.com/doi/abs/10.1142/S1793969013500015
Yulhendri. (2013). Pembangunan Human and Social Capital.pdf.
Copyright (c) 2024 Wike Ardinawati Saragih, Ahmad Albar Tanjung, M. Syafii
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work.
