The poverty rate is an important indicator in assessing the welfare of society and the performance of regional development. This study aims to determine the effect of government expenditure on the poverty level in Banten Province during the period from 2009 to 2023. The data used is secondary data in the form of time series, and it is analyzed using the Vector Autoregression (VAR) method with stationarity tests, Johansen cointegration, Granger causality, Impulse Response Function (IRF), and Forecast Error Variance Decomposition (FEVD). The results show a short-term causal relationship between government expenditure and the poverty rate; however, no long-term relationship was found between the two. The contribution of government expenditure to changes in the poverty rate is also considered low. Conversely, the poverty rate has a greater influence on government expenditure. This reflects that expenditure policies have not been sufficiently effective in sustainably reducing poverty levels and remain responsive to prevailing socio-economic conditions.
Hafsari et al. (Tue,) studied this question.
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