THE INFLUENCE OF REGIONAL TRANSFER FUNDS AND LOCAL OWN-SOURCE REVENUE ON POVERTY RATES IN CENTRAL JAVA PROVINCE 2021-2024

Abstract

Poverty remains a major challenge for development in Indonesia. One such region is Central Java Province, which continues to have a high poverty rate. This study aims to analyze the impact of regional transfer funds and local own-source revenue on poverty rates in Central Java Province for the 2021–2024 period. The independent variables used in this study are the General Allocation Fund, the Special Allocation Fund, and Local Original Revenue. Additionally, control variables include the Gross Regional Domestic Product (GRDP), with poverty rates serving as the dependent variable. The analysis method employed is panel data regression. The results of this study indicate that the General Allocation Fund, the Special Allocation Fund, and the Gross Domestic Regional Product (GDRP) have a negative and significant effect on the poverty rate. Meanwhile, Local Own-Source Revenue has a positive and significant effect on the poverty rate. These findings underscore the importance of optimizing the management of transfer funds and enhancing the effectiveness of Local Own-Source Revenue utilization to support inclusive and sustainable development in poverty alleviation efforts in Central Java Province. The results of this study are expected to assist the government in formulating strategic development plans that can eradicate poverty and improve community welfare.