ANALYSIS OF GOVERNMENT EXPENDITURE AND ENVIRONMENTAL QUALITY: EMPIRICAL STUDY USING PROVINCIAL DATA LEVELS IN INDONESIA Shanty Oktavilia, Andryan Setyadharma, Indah Fadjarini Sri Wahyuningrum, Nadia Damayanti
Faculty of Economics, Universitas Negeri Semarang, Sekaran Gunungpati, Semarang, Indonesia
Abstract
The improvement of environmental quality is expected to increase along with the delegation of financial management authority to regional governments by the decentralization policy. The policy is expected to have an effect on the handling of environmental problems in the regions. This study analyzes the influence of regional government expenditure variables and aggregate economic output variables at the regional level, on environmental quality. This study uses cross section data of 33 provinces in Indonesia, in the period 2013-2018. Empirical studies were analyzed using panel data regression models. The results show that government expenditure has a positive and significant effect on the environmental quality index. The economic aggregate output variable has a positive and significant effect on the environmental quality index in Indonesia. This may imply that a rise in the quality of the environment in Indonesia is indicated by economic growth through a surge in aggregate economic output.
Keywords: Government expenditure, GRDB, environmental quality index, panel data
