EMPIRICAL STUDY OF SOCIAL BUDGET AND REGIONAL WEALTH IN ACHIEVING SDG 1 (NO POVERTY) IN INDONESIA

Given the high rate of poverty and the inefficient use of regional budgets and wealth, this study
intends to examine how social budgets and regional wealth affect Indonesia’s attainment of
Sustainable Development Goal (SDG) 1, “No Poverty.” This study uses secondary data from
local governments in Indonesia for the period 2018-2022 with a total sample of 2,320
observations, which are examined through the use of a panel data regression model with a
Generalized Least Squares (GLS) method for random effects. Specifically, the panel regression
results indicate that social budgets and Regional Government Expenditures (APBD) are
significant at the 1% level with an Adjusted R2 of 0.147. Local governments can better implement
poverty alleviation initiatives, speed up the process, and aid the region’s achievement of the
Sustainable Development Goals (SDGs) by increasing the allocation of the social budget as well
as management and utilization of regional wealth. This study emphasizes the importance of
increasing targeted social budget allocations of regional assets and the formulation of policies
focused on sustainable poverty reduction to support the achievement of SDG 1 targets. Keywords: Social Budget; Regional Wealth; Fiscal Decentralization; Poverty Reduction: SDG 1