The Effect of Regional Budget Proportions on Community Welfare, Infrastructure Conditions, and Human Resource Conditions: A Study of Regencies/Cities in West Kalimantan Province

Juanda Astarani

doi:10.55681/economina.v5i10.4504

Authors

Juanda Astarani Universitas Tanjungpura, Pontianak, Indonesia

DOI:

https://doi.org/10.55681/economina.v5i10.4504

Keywords:

Regional Budget Proportions, Capital Expenditure, Education Expenditure, Health Expenditure, Community Welfare, Panel Data.

Abstract

This study analyzes the effects of the proportions of capital expenditure, education expenditure, and health expenditure on infrastructure conditions, human resources (HR), and community welfare across 14 regencies/cities in West Kalimantan Province during the 2014–2023 period (140 observations). Using a two-way fixed-effects panel data regression with cluster-robust standard errors, the results show that the proportion of capital expenditure has a significant positive effect on access to adequate sanitation (β = 0.293; p = 0.034), while health expenditure has a significant positive effect on life expectancy (β = 0.084; p = 0.021). Both education and health expenditure also have significant positive effects on the Human Development Index (β = 0.027; p = 0.020 and β = 0.031; p = 0.036, respectively). Education expenditure does not yet have a significant effect on mean years of schooling, and none of the three expenditure proportions has a significant effect on the poverty rate. The effects of budget proportions differ significantly between regions with high and low fiscal capacity for sanitation, poverty, and mean years of schooling outcomes. These findings remain consistent after controlling for fiscal capacity, regional per capita income, and population density, highlighting that the size of budget allocations needs to be accompanied by spending quality and well-targeted programs.

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