THE EFFECT OF NATURAL RESOURCE REVENUE-SHARING FUNDS, CAPITAL EXPENDITURE, AND LOCAL OWN-SOURCE REVENUE ON THE HUMAN DEVELOPMENT INDEX OF REGENCIES/MUNICIPALITIES IN NORTH SUMATRA PROVINCE, 2017–2024
DOI:
https://doi.org/10.5281/zenodo.21756046Keywords:
Human Development Index, Natural Resource Revenue-Sharing Funds, Capital Expenditure, Local Own-Source Revenue, Panel Data RegressionAbstract
This study aims to analyze the effects of Natural Resource Revenue-Sharing Funds (DBH-SDA), Capital Expenditure, and Local Own-Source Revenue (PAD) on the Human Development Index (HDI) across 33 regencies and municipalities in North Sumatra Province during the 2017–2024 period. Although the average HDI increased from 69.42 to 74.70, the interregional disparity remained substantial at 17.57 points. This study is grounded in Fiscal Decentralization Theory (Oates, 1972) and Human Development Theory (Sen, 1999). Secondary data were obtained from the Central Bureau of Statistics (BPS) and the Directorate General of Fiscal Balance (DJPK), resulting in a balanced panel dataset comprising 264 observations. The analysis employed panel data regression using EViews, with the Chow Test and Hausman Test indicating that the Fixed Effect Model (FEM) was the most appropriate model, yielding an Adjusted R² of 85.48%. The partial regression results reveal that Natural Resource Revenue-Sharing Funds have a negative and statistically significant effect on the HDI, Capital Expenditure has a positive and statistically positive effect, and Local Own-Source Revenue also has a negative and statistically significant effect on the HDI. Simultaneously, all three variables significantly influence the HDI (Prob. F = 0.000). The findings suggest that the effectiveness of regional fiscal allocation, rather than the magnitude of fiscal revenue alone, constitutes the primary determinant of human development quality.
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