The Effects of Physical and Non-physical Investments of Government Expenditure in Education and Health Sectors on Human Development Index in Pekanbaru City

Abstract

In this current globalization era, human resources investment is necessary for each country to improve the index of human development and economic growth, many countries have succeeded in economic growth by relying on human resources despite not having abundant natural resources. However, the success of resource investment is also strongly influenced by the availability of supporting facilities and infrastructure. Based on data of physical and non-physical investments of government expenditure in education and health sectors from 2007-2017, shows a positive trend with relatively increasing value. Meanwhile, based on data of human development index progress in Pekanbaru city in recent years showed a relatively declining value. This contradicts the theory of endogenous romer which explained that when the government or private sectors invest in human resources, it will encourage the improvement of human resources quality that reflects the progress of human development index. This study uses secondary data, namely government physical and non-physical expenditure data in the field of education and health in Pekanbaru City on Regional Budget in 2010-2017. The independent variable is government physical and non-physical expenditure in education and health sectors. While the dependent variable is the Human Development Index. The analysis method used is OLS (Ordinary Least Square) method where the data used are analyzed quantitatively using statistical analysis, namely multiple linear regression equations. Based on the results of research, government physical expenditure in education and government non-physical expenditure in the health sector does not significantly influence the human development index in Pekanbaru City. While government non-physical expenditure in education and government physical expenditure in health significantly affect the human development index in Pekanbaru City. Furthermore, for physical investment where in this research is the government physical expenditure in education and health sectors simultaneously has a significant effect on the human development index in Pekanbaru City. Whereas for non-physical investment where in this study is government non-physical expenditure in education and health sectors simultaneously has a significant effect on the human development index in Pekanbaru City.

The Impact of Fiscal Balance Funds Toward Human Development in Riau Province

“…It was determined that DAK non-physical contributed to human development from an education sector (HLS) in Riau. The results of this study were consistent with previous research by Fatria et al (2020), which demonstrated that DAK Non-Physical in the education field will impact the HDI, particularly education. Letelier S and Ormeño C (2018) added that fiscal decentralization will influence improving the quality of education.…”

“…Research by Arifin and Setiawati (2023) and Sandjaja et al (2020), which indicated that special allocation funds (DAK) affect the HDI, supports the conclusions of this study. Human development from a health aspect can be influenced by DAK Physical (Fatria et al, 2020;Nawawi et al, 2021).…”

“…Particularly, the fiscal balance funds influence human development in the health aspect (Arifin & Setiawati, 2023;Fitriya & Witono, 2023;Rocheleau & Warren, 1980;Sandjaja et al, 2020). Likewise, Fatria et al (2020), Fitriya and Witono (2023), Letelier S & Ormeño C (2018), Nawawi et al (2021), Pambudi et al (2021), Whitman (1977), and Wulansari et al (2021) state that the fiscal balance funds significantly affect human development in the education aspect. Additionally, the fiscal balance funds influence increasing human development in the aspect of a decent standard of living (Arifin & Setiawati, 2023;Azhari et al, 2021;Fitriya & Witono, 2023;Yusuf & Afendi, 2020).…”

A Framework of Contingencies Factors, Government Support and Management Accounting Practices in Malaysian Small and Medium-Sized Enterprises

“…According to Nguyen et al (2018), government support takes the form of tax exemptions, tax reductions, and loans with preferential interest rates, as well as trade activities, personnel training, and technology. Thus, government support is crucial not only for the business sector but also for other sectors such as education and health (Fatria et al, 2020).…”