Targeted Fiscal Transfers and Regional Income Inequality: Evidence from Sumatra, Indonesia

Revienda Anita Fitrie; Vidya Imanuari Pertiwi

doi:10.30737/mediasosian.v10i2.7901

Authors

Revienda Anita Fitrie Universitas Negeri Surabaya
Vidya Imanuari Pertiwi Universitas Pembangunan Nasional Veteran Jawa Timur

DOI:

https://doi.org/10.30737/mediasosian.v10i2.7901

Keywords:

Desentralisasi Fiskal, Ketimpangan Pendapatan, Dana Alokasi Khusus, Pengangguran, Sumatra, Fiscal Decentralization, Income Inequality, Special Allocation Fund, Unemployment

Abstract

Income inequality remains a development challenge in resource-rich regions because strong economic capacity does not automatically produce equitable welfare. This study examines fiscal decentralization and macroeconomic conditions across all ten provinces of Sumatra during 2021–2025 using panel-data regression. The explanatory variables are the Provincial Minimum Wage, General Allocation Fund, Special Allocation Fund, Revenue Sharing Fund, unemployment, and Gross Regional Domestic Product. Chow, Hausman, and Lagrange Multiplier tests select the Random Effects Model, while robust standard errors address serial correlation. The Special Allocation Fund is negatively associated with inequality. Unemployment also has a negative association, but this pattern is interpreted as income compression rather than welfare improvement; the other variables do not show convincing relationships. This article contributes to the fiscal-decentralization debate by showing that under heterogeneous subnational governance, transfer design and administrative control may matter more than fiscal magnitude: the targeted Special Allocation Fund is associated with lower inequality, whereas the General Allocation Fund and Revenue Sharing Fund show no measurable redistributive association.

References

Abror, D., & Tyasotyaningrum, B. (2022). MSN-approach dalam implementasi kebijakan bantuan langsung tunai dana desa di Desa Lambangkuning Kecamatan Kertosono Kabupaten Nganjuk. Jurnal Mediasosian: Jurnal Ilmu Sosial dan Administrasi Negara, 6(2), 248–258. https://doi.org/10.30737/mediasosian.v6i2.3194

Aginta, H., Gunawan, A. B., & Mendez, C. (2023). Regional income disparities and convergence clubs in Indonesia: New district-level evidence. Journal of the Asia Pacific Economy, 28(1), 101–132. https://doi.org/10.1080/13547860.2020.1868107

Akita, T., Riadi, A. A., & Rizal, A. (2021). Fiscal disparities in Indonesia in the decentralization era: Does general allocation fund equalize fiscal revenues? Regional Science Policy & Practice, 13(6), 1842–1865. https://doi.org/10.1111/rsp3.12326

Amalia, F. (2017). Flypaper effect of regional expenditure and its impact to regional inequality in Indonesia. Signifikan: Jurnal Ilmu Ekonomi, 6(1), 125–138. https://doi.org/10.15408/sjie.v6i1.3293

Amalia, V. M., Warsito, L. ‘A. Q., & Wardiyanto, B. (2026). Jogja Smart Service (JSS): Desentralisasi kewenangan dan efisiensi pelayanan publik dalam kerangka New Public Management. Jurnal Mediasosian: Jurnal Ilmu Sosial dan Administrasi Negara, 10(1), 173–186. https://doi.org/10.30737/mediasosian.v10i1.7235

Arellano, M. (1987). Computing robust standard errors for within-groups estimators. Oxford Bulletin of Economics and Statistics, 49(4), 431–434.

Badan Pusat Statistik. (2019). Statistik Indonesia 2019.

Badan Pusat Statistik. (2026). Gini ratio menurut provinsi dan daerah [Tabel statistik]. https://www.bps.go.id/id/statistics-table/2/OTgjMg%3D%3D/gini-rasio

Chalil, T. M. (2018). The size of flypaper effect in decentralizing Indonesia. Jurnal Perencanaan Pembangunan: The Indonesian Journal of Development Planning, 2(2), 101–119. https://doi.org/10.36574/jpp.v2i2.37

Chun, N., & Khor, N. (2010). Minimum wages and changing wage inequality in Indonesia. ADB Economics Working Paper Series No. 196. Asian Development Bank.

Haryati, S., Hanum, F., & Yanuarita, H. A. (2020). Evaluasi pengelolaan dana desa dalam pembangunan fisik dan non fisik di Kecamatan Doko Kelurahan Blitar. Jurnal Mediasosian: Jurnal Ilmu Sosial dan Administrasi Negara, 4(2), 137–148. https://doi.org/10.30737/mediasosian.v4i2.1198

Hornok, C., & Raeskyesa, D. G. S. (2024). Economic zones and local income inequality: Evidence from Indonesia. The Journal of Economic Inequality, 22, 69–100. https://doi.org/10.1007/s10888-023-09581-x

Ismail, H., Wahyudi, E., Triningsih, R. S., & Puspitaningtyas, A. (2026). Analisis Location Quotient dan Shift Share dalam perumusan prioritas kebijakan pembangunan daerah di Kabupaten Sidoarjo. Jurnal Mediasosian: Jurnal Ilmu Sosial dan Administrasi Negara, 10(1), 1–14. https://doi.org/10.30737/mediasosian.v10i1.6896

Isman, M. H. S., Salomo, R. V., & Bakri, M. R. (2025). Integration of fiscal policy and accountability to improve public services in Indonesia: From transfers to outcomes. Jurnal Tata Kelola dan Akuntabilitas Keuangan Negara, 11(2), 243–257. https://doi.org/10.28986/jtaken.v11i2.2108

Kuznets, S. (1955). Economic growth and income inequality. The American Economic Review, 45(1), 1–28.

Lewis, B. D. (2017). Local government spending and service delivery in Indonesia: The perverse effects of substantial fiscal resources. Regional Studies, 51(11), 1695–1707. https://doi.org/10.1080/00343404.2016.1216957

Lewis, B. D. (2023). Indonesia’s new fiscal decentralisation law: A critical assessment. Bulletin of Indonesian Economic Studies, 59(1), 1–28. https://doi.org/10.1080/00074918.2023.2180838

Lewis, B. D., & Smoke, P. (2017). Intergovernmental fiscal transfers and local incentives and responses: The case of Indonesia. Fiscal Studies, 38(1), 111–139. https://doi.org/10.1111/1475-5890.12080

Mashuri, M., Suwarno, S., & Pramono, T. (2020). Pengelolaan dana kelurahan dalam perspektif Community Driven Development. Jurnal Mediasosian: Jurnal Ilmu Sosial dan Administrasi Negara, 4(1), 51–62. https://doi.org/10.30737/mediasosian.v4i1.819

Musgrave, R. A. (1959). The theory of public finance: A study in public economy. McGraw-Hill.

Oates, W. E. (1972). Fiscal federalism. Harcourt Brace Jovanovich.

Oates, W. E. (1999). An essay on fiscal federalism. Journal of Economic Literature, 37(3), 1120–1149. https://doi.org/10.1257/jel.37.3.1120

Oates, W. E. (2005). Toward a second-generation theory of fiscal federalism. International Tax and Public Finance, 12(4), 349–373. https://doi.org/10.1007/s10797-005-1619-9

Pemerintah Indonesia. (2022). Undang-Undang Nomor 1 Tahun 2022 tentang Hubungan Keuangan antara Pemerintah Pusat dan Pemerintahan Daerah.

Pratama, M. R., & Pramono, T. (2020). Pelayanan publik di daerah: Menguak kesenjangan pelayanan dasar di era otonomi daerah. Jurnal Mediasosian: Jurnal Ilmu Sosial dan Administrasi Negara, 3(2). https://doi.org/10.30737/mediasosian.v3i2.670

Rahayu, D. P., Nainggolan, T. A., Huda, M., & Rudtyanto, R. L. (2026). Praktik perlindungan sosial pekerja informal di perbatasan Republik Indonesia dan Republik Demokratik Timor Leste. Jurnal Mediasosian: Jurnal Ilmu Sosial dan Administrasi Negara, 10(1), 42–54. https://doi.org/10.30737/mediasosian.v10i1.7435

Rahmadi, S., Siregar, R. S. D., & Rosmeli, R. (2024). Determinan ketimpangan distribusi pendapatan di Pulau Sumatera. Jurnal Paradigma Ekonomika, 19(4), 941–952.

Rama, B., & Setiawan, F. (2021). Partisipasi masyarakat dalam pengelolaan dana desa pada Desa Citaman Jernih Kecamatan Perbaungan Kabupaten Serdang Bedagai. Jurnal Mediasosian: Jurnal Ilmu Sosial dan Administrasi Negara, 5(1), 14–28. https://doi.org/10.30737/mediasosian.v5i1.1662

Sacchi, A., & Salotti, S. (2014). The effects of fiscal decentralization on household income inequality: Some empirical evidence. Spatial Economic Analysis, 9(2), 202–222. https://doi.org/10.1080/17421772.2013.833343

Santoso, F. D. P., & Mukhlis, I. (2021). Ketimpangan pendapatan dan faktor-faktor yang mempengaruhi pada masa sebelum dan pada saat pandemi COVID-19 di Indonesia. Jurnal Ekonomi, Bisnis dan Pendidikan, 1(2), 146–162.

Sapitri, S., & Alexandro, R. (2021). Pengelolaan alokasi dana desa dalam pemberdayaan masyarakat. Jurnal Mediasosian: Jurnal Ilmu Sosial dan Administrasi Negara, 5(2), 239–249. https://doi.org/10.30737/mediasosian.v5i2.1786

Siburian, M. E. (2020). Fiscal decentralization and regional income inequality: Evidence from Indonesia. Applied Economics Letters, 27(17), 1383–1386. https://doi.org/10.1080/13504851.2019.1683139

Siburian, M. E. (2021). Fiscal decentralization, regional income inequality, and the provision of local public goods: Evidence from Indonesia. Journal of Economic Development, 46(4), 87–103.

Sidik, M., Hidayat, S., & Ridwansyah, M. (2020). Dampak alokasi dana perimbangan (DAU, DAK, DBH) terhadap tingkat ketimpangan antar daerah di Provinsi Jambi periode 2010–2019. Jurnal Paradigma Ekonomika, 15(2), 229–238.

Todaro, M. P., & Smith, S. C. (2015). Pembangunan ekonomi (12th ed.). Pearson.

Utomo, T. N. Y. P. (2022). Analisis pengaruh pertumbuhan ekonomi, pengeluaran pemerintah, tenaga kerja, pekerja berpendidikan SMA ke atas, dan investasi terhadap ketimpangan pendapatan di Provinsi Bali tahun 2016–2020. Jurnal PARETO, 5. https://doi.org/10.32663/pareto.v5i2.2765

Wardiansyah, M., Yulmardi, Y., & Bahri, Z. (2017). Analisis faktor-faktor yang mempengaruhi tingkat pengangguran (Studi kasus provinsi-provinsi se-Sumatera). E-Jurnal Ekonomi Sumberdaya dan Lingkungan, 5(1), 13–18. https://doi.org/10.22437/jels.v5i1.3924

World Bank. (2020). Indonesia public expenditure review: Spending for better results.