The Effect of Local Own Revenue, General Allocation Funds, and Special Allocation Funds on Poverty Rate in the Special Region of Yogyakarta and Central Java Province

Abstract

Introduction/Main Objectives: Poverty is a condition in which an individual or group in society can’t fulfill their daily needs due to low-income levels. During the period 2014-2016, the poverty rate in Indonesia fluctuated both in relative and absolute terms. Background Problems: During the 2011-2015 periods, the java regions with the lowest PDRB came from Yogyakarta and Central Java Province. Therefore, the researchers made the two areas objects of research related to the effect of PAD, DAU, and DAK on poverty levels in the two regions. Research Methods: This type of research uses a quantitative approach. The data used is secondary data with the type of panel data. The method used in sampling is the purposive sampling method, and in data collection, researchers used documentation methods obtained from BPS and the Ministry of Finance. The data analysis technique used is to use multiple regression models and test the classic assumption with the E-Views analysis tool. Finding/Results: Based on the results of the analysis using multiple regression models, it can be explained that simultaneously there is an influence between PAD, DAU, and DAK on the poverty level in Yogyakarta and Central Java Province. Meanwhile, partially the test results show that PAD and DAU have a negative effect on the poverty level, while the DAK variable has a positive effect on the poverty level in Yogyakarta and Central Java Province.