Objective: In West Africa, poor macroeconomic policy coordination among the managers of the economy has negatively impacted the macroeconomic stability of the region as well as the economic growth. This study investigates macro policies coordination and its impact on economic growth in West Africa, using a panel data set of 15 countries from 1980 to 2021. Design/Methods/Approach: Vector Autoregression (VAR) is used for evaluation. The study used descriptive statistics and panel unit root tests. An optimal lag length was selected based on five criteria, and the impulse response and Variance Decomposition were used for analysis. Findings: The panel stationarity tests reveal that the variables are stationary in first differences at the 5% significance level. The impulse response functions of the log of GDP to inflation showed a negative shock in the short and medium runs, and a positive shock in the long run. The response to the log of broad money supply indicates a positive response in both the short, medium, and long-run. The response to capital expenditure indicated a positive short-run effect, followed by a negative shock in the medium and long runs. While the trade policy variable indicated a positive response in the short, medium, and long run. The variance decomposition of the log of GDP showed that apart from its own variation, it can only be explained by a variation in broad money supply. Originality/Value: This study contributes to the existing literature by evaluating the coordination of macroeconomic policies across the member states of ECOWAS in both the short and long run for macroeconomic stabilization in the region. The implication of considering key macroeconomic factors will help in generating results for more reliable economic analysis and forecasts. Practical/Policy implication: The study therefore recommends tight fiscal measures and monetary policy expansion, as these would enhance growth in the region
Objective: This paper examines the impact of three types of economic crises – banking, inflation, and foreign exchange reserves crises – on various indicators of economic inequality in Bolivia. Design/Methods/Approach: The study utilizes a GMM framework and quarterly data spanning from 1960 to 2023. GMM methodology is utilized for several reasons: (i) possible endogeneity of the regressors is overcome using instruments to produce consistent and unbiased estimates; (ii) it does not require the specification of the full distribution of the errors, making GMM estimates more robust; and (iii) it accounts for heteroskedasticity and autocorrelation, common issues in time-series analysis like the one conducted here. Findings: The findings highlight the nuanced effects of these crises: banking and inflation crises generally reduce income inequality, while foreign exchange reserves crises exacerbate it. Specifically, an increased likelihood of a banking crisis is associated with reductions in the Palma ratio, the poverty gap, the Gini coefficient, and the Atkinson and Theil indices, and with improved income shares for the bottom 40 percent. Similar patterns are observed during inflation crises. In contrast, foreign exchange reserve crises lead to higher Palma ratios and poverty gaps, indicating worsening income inequality and rising poverty levels. The study underscores the importance of maintaining robust safety nets to protect vulnerable populations during periods of economic distress. Originality/Value: A key contribution is to highlight the varying impacts of different types of economic crises on income inequality in a developing economy. Practical/Policy implication: From a policy perspective, since all types of crises – banking, inflation, and foreign exchange reserves – are likely to harm long-term growth and stability, the Bolivian government should maintain effective safety nets that support the poor during periods of economic distress.
Objective: This study evaluates the impact of health function spending and political affiliation on stunting reduction in Indonesia from 2015 to 2022. Design/Methods: Using the Grossman health production function model to examine how socioeconomic, demographic, environmental, and food adequacy factors influence stunting prevalence among children under five. A dynamic panel analysis via the Generalized Method of Moments (GMM) is employed to address potential endogeneity. Findings: The results show that quantifying health function spending as the ratio of spending realization to total regional budget (APBD) does not significantly impact the reduction of stunting prevalence across all provinces, but becomes impactful when measured per capita. In this case, health function spending significantly reduces the prevalence of stunting. Additionally, political affiliation plays a crucial role. Regions governed by leaders affiliated with the central government tend to demonstrate greater success in reducing stunting. Originality/Value: This study introduces a political dimension to examining the health production function by interpreting political affiliation as a factor mediating the relationship between health function spending and stunting prevalence. Practical/Policy implication: These findings suggest that to enhance the effectiveness of health spending, policymakers should prioritize per capita allocations and ensure that funds are directed toward regions and populations most in need. Additionally, efforts should be made to mitigate the influence of political competition on health budget allocation, ensuring that resources are distributed based on need rather than political affiliation
Objective: This study examines public-private partnership (PPP) investments in the infrastructure sectors of Brazil and China and their impact on economic growth. The study analyzes sector-specific investment behavior in water, energy, and transportation to determine its alignment with national development priorities and stages. The empirical analysis provides comparative insights into the influence of infrastructure investment strategies on macroeconomic outcomes. Design/Methods/Approach: This study uses a comparative empirical framework, drawing on panel data from the World Bank from 1994 to 2023. Jamovi software is used to statistically analyze the relationship between sectoral purchasing power parity (PPP) investments and gross domestic product (GDP) growth. The analysis focuses on the water, energy, and transportation sectors, examining the magnitude and consistency of investments to evaluate their economic impact. This methodological approach is ideal for identifying sector-specific effects and comparing different national investment strategies. Findings: The study finds that Brazil’s PPP investments are heavily concentrated in energy infrastructure. These investments are large but irregular, which introduces economic volatility and undermines long-term stability. In contrast, China implements a more balanced and consistent investment strategy across the water, energy, and transportation sectors. Transportation investments in China show the strongest positive correlation with GDP growth. However, energy investments exhibit a negative correlation, indicating inefficiencies and resource misallocation. These results underscore the importance of prioritizing infrastructure sectors with higher economic returns while addressing inefficiencies in others. Originality/Value: This research contributes to the existing literature by offering a cross-country, three-decade comparative analysis of sector-specific PPP investments, emphasizing the differential economic outcomes of investment strategies. Unlike previous studies, this research integrates sectoral investment patterns with macroeconomic performance, highlighting the nuanced relationship between investment consistency, sector selection, and economic stability. Practical/Policy implication: The findings inform policymakers and development planners about how to optimize PPP investment strategies. The findings suggest prioritizing transportation infrastructure for higher economic returns, balancing large-scale projects with steady, incremental investments, and strengthening governance and regulatory frameworks to mitigate inefficiencies. The study provides actionable guidance for sustainable infrastructure planning to ensure that PPP investments maximize short- and long-term economic growth.
Objective: The tourism sector is a significant component of Indonesia’s economic framework. This study aims to analyze the contribution of the tourism sector to the growth of Gross Regional Domestic Product (GRDP) and poverty reduction. Design/Methods/Approach: This study used secondary panel data from Statistics Indonesia (BPS) covering 34 provinces in Indonesia over the 2018-2022 period. A Simultaneous-equation model estimated using two-stage least squares (2SLS) is applied to examine the endogenous relationship among the tourism sector, Gross Regional Domestic Product (GRDP), and poverty. The selected exogenous variables consist of the hotel room occupancy rate, the number of tourist attractions, food and beverage providers, motorized vehicles, the realization of investment, the information and communication technology development index, unemployment rate, life expectancy, average years of schooling, and the consumer price index. Findings: The results show a simultaneous relationship between domestic tourist expenditure, GRDP, and poverty in Indonesia for 2018-2022. Increasing tourist expenditure raises GRDP, increasing GRDP reduces poverty, and lower poverty in turn boosts GRDP and domestic tourist expenditure. Originality/Value: Previous studies largely view the relationships between the tourism sector and GDP, and between GDP and poverty, as one-way. Different from these approaches, this study starts from the theoretical framework of Tourism-Led Economic Growth (TLG), Economic-Driven Tourism Growth (EDTG), and the concept of the vicious circle of poverty. Based on these theories, this study proposes that the two pairs of variables influence one another. Thus, tourism and GDP, as well as GDP and poverty, can influence each other reciprocally rather than in one direction. Practical/Policy implication: Tourism development, economic growth, and poverty alleviation need to be planned in an integrated manner. Implementing policies that encourage investment in the tourism sector and ensure a more equitable distribution of economic benefits can strengthen a sustainable, mutually beneficial cycle among these three sectors.
Objective: The economic reform programmes have failed to yield the anticipated improvements in health outcomes in Nigeria, due to deteriorating health outcomes. This study empirically examines the effect of economic reforms on health indicators in Nigeria. Design/Methods/Approach: The study employed descriptive analysis and Autoregressive Distributed Lag estimation technique (ARDL) with time series data extracted from the World development reports. Findings: The trend analysis reflects unimpressive impacts of economic reforms on the health indicators. The ARDL results show a mix of improvement and deterioration in the health indicators. A 10% increase in domestic health expenditure increases Immunization and life expectancy by 6.3%, and 0.1% in the long run, and 3.8%, and 0.1% in the short run. It decreases undernourishment by 3.2%, reduces stunting by 0.4% and infant mortality by 0.03% in the short run. A 10% increase in Out-of-pocket expenditure increased undernourishment by 5.9%, reduced prenatal care by 9.6%, stunting by 3.3%, and life expectancy by 0.4% in the long run. A 10% change due to social sector reform increased immunization by 1.9%, prenatal care by 0.9%, increased HIV/AIDS infections by 0.1%. A 10% change due to trade reform increased the immunization by 3.9%, HIV/AIDS infection by 0.5%, in the short run. A 10% change in domestic financial reform increased Immunization by 4.6%, HIV/AIDS infection by 1.9%, reduced prenatal care by 1.5%, and undernourishment by 2.3%. These results implied that economic reform alone cannot provide the expected improved outcomes in health indicators. Originality/Value: This study extends empirical investigation to cover social sector reform, domestic financial sector reform, trade reform and SAP, NEEDS, and transformation agenda. Practical/Policy implication: Actions on economic transformation and health indices must address distortions that inhibit the realization of the economic reform agenda. Government should be more intentional in curtailing the distortions that impede the growth process and carefully choose policy variables for economic reform and health outcomes.
Objective: The study examines the economic drivers and sustainability issues of Indonesia’s forestry sector, which are crucial for national economic growth, export revenues, and employment opportunities. The forest-based industry promotes monetary stability and poverty reduction, although it also produces considerable environmental externalities, particularly carbon emissions from deforestation and land-use changes. Design/Methods/Approach: This study uses a novel simultaneous-equations econometric model to analyze key factors influencing deforestation, including GDP growth, commodity prices, policy incentives, sustainable practices, and forest land availability, thereby capturing complex bidirectional relationships and feedback effects over the period 2000–2023. Findings: Results indicate that while economic growth and stable commodity prices reduce deforestation, high land management costs hinder sustainable practices. Given the limited influence of policy incentives, more complex financial and governance frameworks were required. Originality/Value: The study emphasizes the significance of Indonesia’s forest management strategies in the context of global environmental commitments and market demands for deforestation-free products, providing a nuanced econometric understanding of these interdependencies. Practical/Policy implications: Integrated forest management, financial support systems, legal reforms, and collaboration with international stakeholders are some of the recommendations that have been made to reconcile the goals of economic growth with environmentally sustainable development.
Objective: Remittances are now a key source of funds for local and national development in developing countries – alleviating liquidity constraints, boosting consumption, investments, and savings. Previous studies reveal mixed results on the association between remittances and education, probably because of their failure to explore the nature of the relationship. To contribute to this literature, the following research question is posed: is the remittances-education link non-linear? We investigate the nature of the association between remittances and education. Method: We use data spanning 2000-2020 from 75 developing economies sourced from the World Bank and the United Nations Development Programme. The Driscoll & Kraay error-correction fixed-effects method is used for the analysis and refined using the System Generalized Method of Moments (SGMM) estimator. Findings: We find that remittances have a U-shaped relationship with educational attainment. For example, baseline SGMM results show that, below the threshold of about 20% of GDP, any unit increase in remittances is associated with dwindling levels of educational attainment, and above this threshold, any unit increase in remittances is associated with improvements in educational attainment. These results are qualitatively consistent across alternative methods, genders, regions, levels of income, and transmission channels– an indication of robustness. Originality/value: Unlike previous studies that assume linearity, this study introduces a threshold analysis to identify the level of remittances (% of GDP) where the effect on education shifts from negative to positive. Practical/Policy implication: These findings are supportive of public policies such as foreign exchange interventions that promote competition and innovation to boost the inflow of remittances and protect remittance recipients and their investments in education.
Objective: This study explores whether financial development benefits all regions equally by analyzing how the financial system influences economic growth across Indonesian provinces and examining the heterogeneity of this relationship across low- and high-income regions. Design/Methods/Approach: The study extends the Mankiw–Romer–Weil (MRW) growth framework by incorporating dynamic indicators of financial intermediation. Using a provincial panel dataset spanning 2010–2022, the analysis employs a two-step system GMM estimator to address potential endogeneity and capture growth persistence. Findings: Both real credit and deposit growth significantly enhance provincial economic performance; however, the benefits are unevenly distributed. The impact is markedly stronger in high-income provinces, where more advanced financial infrastructure amplifies the growth-enhancing role of finance. The findings remain robust across a range of sensitivity tests. Originality/Value: The study contributes novel subnational evidence on the finance–growth nexus within an emerging economy context. By introducing dynamic proxies of financial development within an extended MRW framework and explicitly accounting for regional income disparities, this study deepens the understanding of how financial systems shape uneven growth trajectories across provinces. Practical/Policy implication: The results underscore the need for region-specific financial policies. While high-income provinces would benefit from further market deepening and financial innovation, low-income regions require targeted interventions to enhance financial inclusion, literacy, and infrastructure, thereby fostering more inclusive and balanced economic development.
Objective: This paper examines whether minimum wage policy affects firms’ energy efficiency, using evidence from Indonesia’s manufacturing sector. It studies how provincial minimum wage increases influence firm-level energy use and addresses a broader economic question of how labor regulation, a non-energy policy, shapes firms’ production behavior and resource allocation in an emerging economy. Design/Methods/Approach: The analysis uses firm-level panel data from large and medium manufacturing establishments in Indonesia for 2017–2019. Provincial economic indicators are matched to firms by location. The empirical strategy combines panel fixed-effects estimation with an instrumental variables approach to address potential endogeneity in minimum wage determination. Findings: Higher minimum wages are associated with lower firm-level energy intensity. The estimated magnitude indicates that a 1% increase in the provincial minimum wage corresponds to a measurable reduction in firms’ energy intensity. The effect is stronger among labor-intensive firms, consistent with firms adjusting production processes and adopting more efficient technologies in response to higher labor costs. Originality/Value: The study links labor market regulation to firm-level production efficiency and energy use. Unlike most research focusing on energy policy, it provides firm-level evidence that minimum wage policy can indirectly influence industrial energy efficiency in an emerging economy. Practical/Policy implications: Minimum wage adjustments may have implications beyond labor market outcomes. The findings suggest that wage-setting institutions can influence firms’ production choices and resource use, with potential efficiency gains arising from cost pressures. This indicates that labor regulation can complement policies aimed at improving industrial efficiency, while highlighting the importance of implementation and compliance mechanisms.
Objective: This study examines the interrelationships among three fundamental spheres in Lebanon: the economic sphere, measured by economic growth; the political sphere, reflected in political stability and control of corruption; and the social sphere, measured by human development. Methods: Using a World Bank annual dataset from 1996 – 2019, the study employs four autoregressive distributed lag (ARDL) models that include the following variables: economic growth, political stability, control of corruption, and the Human Development Index (HDI). Each variable is considered as a dependent variable in a model that is regressed on the other remaining variables. Findings: Empirical results reveal that the dynamic interaction between these three spheres exists in the long run and the short run. These findings demonstrate how the variables examined in this study contribute to understanding the underlying mechanisms and policy effects relevant to the research question. Originality/Value: By examining the interrelationships among the three spheres (economic, political, and social spheres) within the Lebanese context, this study addresses an important gap in the literature on the Lebanese economy. Its findings offer policy-relevant insights and contribute to the broader discussion on the design of effective economic policy in Lebanon. Policy Implication: These findings indicate that initiating a developing process at the economic, political, and social levels is a necessary step that the Lebanese authorities must take to overcome the crises that Lebanon has suffered from for decades.
Objective: The unemployment rate reported in official statistics does not fully capture labor market conditions as it overlooks hidden unemployment. These individuals, who appear to be employed, are not optimally engaged in economic activities. This study aims to nowcast hidden unemployment in Indonesia using high-frequency big data from Google Trends, thereby addressing the limitations of official statistics and providing more adaptive labor market indicators within the broader context of employment dynamics and policy evaluation. The research is empirical in nature. Design/Methods/Approach: The study employs time-series data, combining official statistics from the National Labor Force Survey (SAKERNAS) with search query data from Google Trends. Three econometric models — MIDAS, U-MIDAS, and BMF VAR — are applied to assess their performance in nowcasting hidden unemployment. The analysis is divided into pre-pandemic and combined periods to evaluate the model’s sensitivity to structural shocks, such as the COVID-19 pandemic. Findings: The results indicate that the MIDAS model outperforms the alternatives, with the lowest forecast errors (∆RMSE = 0.3538; ∆MAPE = 0.9028%) and the highest stability in capturing hidden dynamics of unemployment. Using the best-performing model, predictions for the first semester of 2025 indicate that hidden unemployment will reach 33.14 percent, reflecting persistent vulnerabilities in the labor market structure. Originality/Value: The study contributes to labor market research by integrating high-frequency big data with econometric nowcasting methods to estimate hidden unemployment, a phenomenon often overlooked in official statistics. This approach introduces a novel application of real-time indicators to enhance the timeliness and relevance of employment monitoring in emerging economies. Practical/Policy implication: The findings underscore the importance of adaptive employment policies that address hidden unemployment as a structural issue. By providing early indicators, this study offers policymakers timely insights to design responsive interventions, reduce labor market inefficiencies, and mitigate the risks of increasing employment disparities.
Objective: The role of financial and trade openness in output volatility has been widely debated, while the moderating role of economic freedom remains underexplored. This empirical study examines how economic freedom shapes the effects of financial and trade openness on output volatility in Sub-Saharan African countries. It focuses on overall economic freedom, financial freedom, and trade freedom, and provides empirical evidence relevant to volatility in developing economies. Design / Methods / Approach: Using panel data from 2012 to 2021, the study applies a two-step system Generalized Method of Moments estimation technique to control for endogeneity, unobserved heterogeneity, and dynamic effects. Measures of financial openness, trade openness, and economic freedom indices are included, along with interaction terms to capture the conditioning role of economic freedom. Findings: The result suggests that financial openness and trade openness have a significant positive effect on output volatility. But their role has changed to stabilizing when they interact with economic freedom indexes. Specifically, the impact of financial openness on output volatility is negative and statistically significant when both economic and financial freedom are high. Similarly, when there is more economic freedom and trade freedom, trade openness plays a minimizing role in output volatility. Originality/Value: This study is among the first to examine the mediating role of economic freedom in the relationship between openness and output volatility in SSA. By moving beyond direct effects of openness and disaggregating economic freedom into specific components, the research provides new institutional insights into the openness–volatility nexus in an underexplored regional context. Practical / Policy Implications: The results imply that trade and financial liberalization without institutional support can increase macroeconomic instability. Policies that strengthen economic and financial freedom should accompany openness reforms to improve shock absorption and promote macroeconomic stability.
Objective: Foreign Direct Investment acts as a significant factor in enhancing the macroeconomic performance of host countries, especially those that are less developed or in transition. Thus, understanding the causal association between foreign direct investment and economic growth in The Gambia is important for shaping policies that promote sustainable development. This study examines the causal relationship between foreign direct investment and economic growth in The Gambia. Method: This study utilised annual time series data from 1970 to 2022, using the Vector Error Correction Model (VECM) in examining the causal relationship between Foreign Direct Investment and Economic Growth in The Gambia. Findings: The results show a significant causal relationship between Foreign Direct Investment and economic growth. Originality/Value: Prior studies show mixed results on the relationship between Foreign Direct Investment and GDP across countries. This study focuses on The Gambia to clarify the direction of causality and fill this gap. It contributes to the literature by applying the VECM model, which effectively handles non-stationary time series data and captures long-run relationships among cointegrated variables, providing useful insights for policymakers to promote growth and attract FDI. Practical/policy implication: The study recommends policymakers prioritize creating a business-friendly environment to attract more foreign direct investment. This could include offering incentives such as tax breaks, reducing regulatory barriers, and ensuring political stability to instill investor confidence.
Objective: This study examines the relationship between regional economic development and private car ownership across 114 cities and regencies on Java Island, Indonesia, between 2015 and 2023, using data from Statistics Indonesia (BPS) and the Ministry of Transportation. Methods: The study applies a Correlated Random Effects (CRE) panel model with instrumental variable techniques to identify both within- and between-associations and to address potential endogeneity. The analysis is conducted using the full sample and subsamples by region and by city/regency size to capture heterogeneous effects across Java. Findings: The results indicate that per capita regional GDP and mean years of schooling are positively and significantly associated with private car ownership across all cities/regencies. In the Jakarta Metropolitan Area (JMA), population density is negatively and significantly associated with private car ownership, reflecting the region’s disadvantages of private car use. Conversely, in large cities/regencies, road infrastructure has a negative and significant association with car ownership, but population density maintains a positive and significant association, indicating insufficient public transportation services. Originality/Value: This study contributes to the literature by providing the first Java-wide panel analysis that jointly estimates within- and between-effects and addresses endogeneity in the economic development–car ownership nexus. Practical/Policy Implication: In the JMA region, first- and last-mile connectivity should be strengthened. In large cities/regencies, integrated multimodal transport systems should be developed to suppress the growth of private car ownership. In small cities/regencies, the Central Government should play a key role in supporting investment and planning for sustainable transportation.
This paper examines the influence of institutional quality on environmental quality in Bangladesh from 1960 to 2015. While institutional quality is the primary explanatory variable, GDP and natural gas electricity consumption are included as moderating variables to control for economic activity and energy-related influences on the environment. The study utilizes the autoregressive distributed lag (ARDL) bounds testing approach and the Toda-Yamamoto (T-Y) Granger causality test to analyze the association. Two measures of institutional quality are developed. One is a composite index constructed from the Worldwide Governance Indicators (WGIs) using principal component analysis (PCA). The other is the average of the six WGIs. Regardless of the index, the findings indicate that higher institutional quality helps reduce CO2 emissions. On the contrary, both GDP and ENG tend to increase CO2 emissions. The ARDL bounds test results confirm the existence of a long-run relationship among the variables in both models. Policymakers need to concentrate on improving institutions to improve environmental quality. Concurrently, they must ensure that economic progress and electricity generation production are sustainable in Bangladesh.
The United Arab Emirates (UAE) has become a significant global trade hub. Understanding the factors influencing trade flows is crucial for developing effective strategies to promote trade activities and sustain economic growth. This study examines the impact of Gross Domestic Product (GDP) per capita and population size on trade flows in UAE with major trading partners, including China, Germany, Iraq, India, Japan, and Saudi Arabia, by utilizing a fixed-effects gravity model and panel data from 2000 to 2020. A positive relationship was found between the GDP of UAE and trading partners and bilateral trade, and a negative relationship was found between GDP per capita, the population of UAE, and bilateral trade flows. The distance between the capital city of UAE and its trading partners also has a negative effect on bilateral trade flows. This study suggests that trading partners should improve their GDP per capita. The negative impact of the increasing population size of the UAE on bilateral trade flows indicates that the UAE should improve labor quality and skills that may enhance trade growth and economic development and that trade policies between UAE and its trading partners need to address trade barriers and initiate efforts for their eradication to improve bilateral trade. The policy implication is that trade opportunities should be expanded by exploring trade agreements and fostering diversification of export goods to mitigate domestic competition and open new markets.
Two of Indonesia’s top export commodities are coal and lignite. However, there is a decrease in the value of coal exports in 2023. The province in Indonesia with the biggest coal reserves is East Kalimantan. This study aims to examine the condition of the mining and coal industry and its relationship with other industries, determine the leading sectors, and assess the impact of the decline in coal exports on the economy of East Kalimantan. The input-output and gross regional domestic product tables for East Kalimantan in 2016 and 2023 are used in the analysis. This study found that even though it is not a leading industry, the mining and coal sector is still an important sector for the economy of East Kalimantan. All economic sectors experienced a decline in output due to the decline in the value of coal exports (mining products) in East Kalimantan, and this sector alone felt the greatest impact—around 73.67% of the total impact in all economic sectors. To process and purify coal produced during mining, the government must establish close communication with business owners in the coal mining industry. Apart from that, the development of the downstream coal industry must also be completed immediately.
Economic growth is an important phenomenon because it is closely related to the ultimate goal of development, namely community welfare. However, not all regions in Indonesia have experienced an increase in economic growth. Less-developed regions are among those with low economic growth. This study aims to analyze the determinant of economic growth in 40 less-developed regions of Indonesia during 2015-2022 using a quantile panel regression analysis tool. The results show that the fixed capital formation, population, and human development have a significant positive effect on economic growth at low, medium, and high levels of economic growth. The internet usage variable has a significant positive effect on low and medium economic growth levels but has no effect on high economic growth levels. The access to clean water variable has a significant positive effect on low economic growth levels but has a significant negative effect on medium economic growth levels. Meanwhile, at high economic growth levels, access to clean water has no effect. The government is more committed to accelerating development and the community must actively cooperate in regional development to increase regional economic growth.
This study evaluates the impact of Indonesian government programs in the housing and water, sanitation, and hygiene (WASH) sectors on social welfare, specifically targeting poverty reduction and health improvement. The primary hypothesis is that enhanced progress in housing and WASH programs correlates with lower poverty rates and improved health outcomes. Using data from SUSENAS and the Ministry of Development Planning, we employ a fixed effects model to mitigate endogeneity concerns and accurately assess program impact. Findings reveal that while advancements in WASH programs are significantly associated with improved public health, no strong evidence links these programs to poverty reduction. The study recommends prioritizing WASH program expansion and refining housing program strategies to address health outcomes more effectively and promote targeted poverty alleviation measures. These recommendations offer insights into optimizing development programs to enhance Indonesia’s socio-economic landscape.
