Electronic Theses and Dissertation

The phenomenon of poverty is a major issue not only for developing countries, but also for developed countries. It is one of reasons why the nations made a promise to free people from extreme poverty and poverty deprivations, and known as MDGs. The number of poverty can not be reduced significantly while government budget and economic growth continues to rise over years. Some theories suggest that economic growth will help reduce poverty, as well as government budgets are essentially for the welfare of the community. This study attempt to show the link between economic growth and number of poverty in Indonesia, also the link between government expenditure and poverty reduction. This study found that economic growth has a negatif correlation with number of poverty. With appropriate allocation budget, government expenditure can be a good instrument to reduce poverty rate in Indonesia, either direct or indirect effect trough economic growth. Economic growth should reduced the number of poverty in Indonesia.




Keywords : poverty, government, expenditure, growth, direct effect, welfare

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