The Influence of Government Spending on Increasing Regional Competitiveness through Infrastructure, Economic Growth, and the Quality of Human Resources after the Implementation Regional Autonomy in Indonesia

Syarifuddin, I Made Benyamin, Hamid Paddu, M. Yusri Zamhuri

Abstract: The implementation of regional autonomy in Indonesia has been regulated in Law No.32 of 2004 concerning regional government and Law No.33 of 2004 concerning financial balance between the central and regional governments. These two regulations indicate the support of human resources, equipment and financing that are synergized in an effort to increase regional added value, especially in facing global competition. This study aims to measure and analyze the effect of government spending on increasing regional competitiveness through infrastructure, economic growth, and the quality of human resources after regional autonomy has been implemented. The study used a recursive path analysis with a structural equation model (SEM) approach. The results showed that government expenditure did not directly influence the increase in regional competitiveness as indicated by the probability value (P-value 0.125> 0.05), but was influenced positively and significantly through the intervening variable of the quality of human resources with an estimated value of (P-value 0.004

Keywords: Government Expenditure, infrastructure, Human Development Index, Economic Growth, Regional Competitiveness