THE ROLE OF GOVERNMENT EXPENDITURE ON PER CAPITA INCOME CONVERGENCE IN EAST JAVA
Hardianto, Erwin & Sholihin, Achmad

Department of Economics, Airlangga University

Abstract

This research aims to test and analyze the absolute and conditional convergence of per capita income from 38 districts/cities in East Java with the variables PAD, BOS and BOK during the period 2020 - 2022. According to the Chow, Hausmann test and Lagrange Multiplier, the panel data convergence model estimates using the fixed effect model method. Results show that in the districts/cities and observation period, divergent conditions occurred. Also, conditional variables did not have a significant influence on the growth of per capita income. This condition can occur because capital and technology are distributed unevenly between districts/cities. The implication of this research is to improve the allocation and distribution of the government budget, especially those related to School Operational Assistance (BOS) and Health Operational Assistance (BOK).

Keywords: Convergence, Government Spending, BOS, BOK

Topic: Public economics