Human Development To Democracy: An Impact Analysis of Poverty and Income Inequality In Indonesia
Abstract
Research Originality: The research looks at the relationship and impact of welfare indicators on the implementation of democracy in Indonesia. Previous research concentrated on the impact of democracy implementation.
Research Objectives: This study aims to examine the role of public welfare variables in improving the implementation of democracy in Indonesia.
Research Methods: The study used panel data with a multiple regression approach from 34 provinces from 2009 to 2023 with the Fix Effect Model (FEM) category.
Empirical Results: The research findings show that the public welfare variable has a significant effect on the democracy index in Indonesia both partially and simultaneously, and only the human development index and the democracy index are linearly related. It was found that the human development index variable is an intermediary variable influencing the relationship between income inequality and the democracy index.
Implications: To increase people's understanding of democracy, the government can lower the poverty depth index because there is no intermediate variable between the two variables.
JEL Classification: C33, D72, Z13, Z18
Keywords
References
Acemoglu, D., Naidu, S., Restrepo, P., & Robinson, J. A. (2015). Democracy, Redistribution, and Inequality. In. Atkinson, A. B., & Bourguignon, F. (Eds). Handbook of Income Distribution, Vol. 2, 1885–1966. Netherland: Elsevier.
Ahmad, J., & Fadillah, N. (2021). An Analysis of the Failures and Successes of the Presidential Decree in the Parliament Dissolution: A Comparative of the Presidential Decree in Tunisia and Indonesia During Soekarno and Abdurrahman Wahid. Al-Risalah: Forum Kajian Hukum Dan Sosial Kemasyarakatan, 21(2), 163–181.
Ahmed, Z., Ahmad, M., Rjoub, H., Kalugina, O. A., & Hussain, N. (2022). Economic Growth, Renewable Energy Consumption, and Ecological Footprint: Exploring the Role of Environmental Regulations and Democracy in Sustainable Development. Sustainable Development, 30(4), 595–605. https://doi.org/10.1002/sd.2251.
Aiyar, S., & Ebeke, C. (2020). Inequality of Opportunity, Inequality of Income and Economic Growth. World Development, 136, 105115. https://doi.org/10.1016/j.worlddev.2020.105115.
Akacem, M. (2021). Algeria’s Elusive Quest Towards Economic Prosperity and Democracy. Journal of South Asian and Middle Eastern Studies, 44(4), 25–45. https://doi.org/10.1353/jsa.2021.0026.
Anyanwu, J. C., Erhijakpor, A. E. O., & Obi, E. (2016). Empirical Analysis of the Key Drivers of Income Inequality in West Africa: Key Drivers of Income Inequality in West Africa. African Development Review, 28(1), 18–38. https://doi.org/10.1111/1467-8268.12164.
Aspinall, E., & Mietzner, M. (2019). Indonesia’s Democratic Paradox: Competitive Elections amidst Rising Illiberalism. Bulletin of Indonesian Economic Studies, 55(3), 295–317. https://doi.org/10.1080/00074918.2019.1690412.
Baltagi, B. (2005). Econometric Analysis of Panel Data (3rd ed.). New Jersey: Jhon Wiley & Sons.
Brady, D., & Bostic, A. (2015). Paradoxes of Social Policy: Welfare Transfers, Relative Poverty, and Redistribution Preferences. American Sociological Review, 80(2), 268–298. https://doi.org/10.1177/0003122415573049.
Broome, A., & Quirk, J. (2015). Governing the World at a Distance: The Practice of Global Benchmarking. Review of International Studies, 41(5), 819–841. https://doi.org/10.1017/S0260210515000340.
Cantor, N., & Lewis, E. (2016). Our Compelling Interests: The Value of Diversity for Democracy and a Prosperous Society. New Jersey: Princeton University Press.
Celebi, K., & Hönig, M. (2019). The Impact of Macroeconomic Factors on the German Stock Market: Evidence for the Crisis, Pre- and Post-Crisis Periods. International Journal of Financial Studies, 7(2), 18. https://doi.org/10.3390/ijfs7020018
Dahl, R. A. (2023). A Preface to Economic Democracy. California: University of California Press.
Egharevba, M. E., Chiazor, A. I., Suleiman, B. M., & Iruonagbe, T. C. (2016). Poverty, Inequality and Human Development in Nigeria: Appraising the Non-Attainment of the MDGs. IFE PsychologIA: An International Journal, 24(2), 26–46.
Fadly, F., & Edward, Y. (2023). Government Spending Effect on HDI Indragiri Hilir: An ECM Approach. Economics Development Analysis Journal, 12(2), 257–269. https://doi.org/10.15294/edaj.v12i2.61053.
Fosu, A. K. (2017). Growth, Inequality, and Poverty Reduction in Developing Countries: Recent Global Evidence. Research in Economics, 71(2), 306–336. https://doi.org/10.1016/j.rie.2016.05.005.
Gerring, J., Knutsen, C. H., Maguire, M., Skaaning, S.-E., Teorell, J., & Coppedge, M. (2021). Democracy and Human Development: Issues of Conceptualization and Measurement. Democratization, 28(2), 308–332. https://doi.org/10.1080/13510347.2020.1818721.
Ghosh, S. (2016). Democracy and Human Development: Recent Legislation in India. Development Policy Review, 34(4), 539–561. https://doi.org/10.1111/dpr.12162.
Ghozali, I. (2018). Aplikasi Analisis Multivariate dengan Program IBM SPSS 25. Semarang: Badan Penerbit Universitas Diponegoro.
Gidron, N., & Hall, P. A. (2017). The Politics of Social Status: Economic and Cultural Roots of the Populist Right. The British Journal of Sociology, 68(S1), S57-S84. https://doi.org/10.1111/1468-4446.12319.
Graham, M. H., & Svolik, M. W. (2020). Democracy in America? Partisanship, Polarization, and the Robustness of Support for Democracy in the United States. American Political Science Review, 114(2), 392–409. https://doi.org/10.1017/S0003055420000052.
Gründler, K., & Krieger, T. (2016). Democracy and Growth: Evidence from a Machine Learning Indicator. European Journal of Political Economy, 45, 85–107. https://doi.org/10.1016/j.ejpoleco.2016.05.005.
Gujarati, N. D. (2012). Dasar-dasar Ekonometrika. Jakarta: Salemba Empat.
Gumede, V. (2021). Revisiting Poverty, Human Development and Inequality in Democratic South Africa. Indian Journal of Human Development, 15(2), 183–199. https://doi.org/10.1177/09737030211032961.
Hansen, J. D., & Reich, J. (2015). Democratizing Education? Examining Access and Usage Patterns in Massive Open Online Courses. Science, 350(6265), 1245–1248. https://doi.org/10.1126/science.aab3782.
Hara, Abubakar. E. (2001). The Difficult Journey of Democratization in Indonesia. ISEAS-Yusof-Ishak Institute, 23(2), 307–326.
Haseeb, M., Suryanto, T., Hartani, N. H., & Jermsittiparsert, K. (2022). Editorial Expression of Concern to: Nexus Between Globalization, Income Inequality and Human Development in Indonesian Economy: Evidence from Application of Partial and Multiple Wavelet Coherence. Social Indicators Research, 164(2), 1015–1015. https://doi.org/10.1007/s11205-022-02962-1.
Hickel, J. (2020). The Sustainable Development Index: Measuring the Ecological Efficiency of Human Development in the Anthropocene. Ecological Economics, 167, 106331. https://doi.org/10.1016/j.ecolecon.2019.05.011.
Horowitz, D. L. (2013). Constitutional Change and Democracy in Indonesia. Cambridge: Cambridge University Press.
Iversen, T., & Soskice, D. (2019). Democracy and Prosperity: Reinventing Capitalism through a Turbulent Century. New Jersey: Princeton University Press.
Jameaba, M. (2021). Improving the Quality of Economic Development to Reverse Rising Income Inequality: Why Financial Inclusion may not be the Magic Bullet for Indonesia. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3962144.
Jetter, M., Agudelo, A. M., & Hassan, A. R. (2015). The Effect of Democracy on Corruption: Income is Key. World Development, 74, 286–304. https://doi.org/10.1016/j.worlddev.2015.05.016.
Karlson, N. (2018). Statecraft and Liberal Reform in Advanced Democracies. Berlin: Springer International Publishing. https://doi.org/10.1007/978-3-319-64233-8.
Katadata. (2023). Cek Data: Anies Sebut Indeks Demokrasi Indonesia Menurun, Benarkah? Indeks Demokrasi Indonesia Versi EIU (2006-2022. Retrived from: https://databoks.katadata.co.id/datapublish/2023/12/12/cek-data-anies-sebut-indeks-demokrasi-indonesia-menurun-benarkah.
Katadata. (2024a). BPS: Ketimpangan Ekonomi Indonesia Turun pada Maret 2024 [Statistik]. Ketimpangan Pengeluaran/Rasio Gini Indonesia Berdasarkan Karakteristik Daerah (Maret 2017-Maret 2024). Retrieved from: https://databoks.katadata.co.id/datapublish/2024/07/01/bps-ketimpangan-ekonomi-indonesia-turun-pada-maret-2024
Katadata. (2024b). Indeks Pembangunan Manusia Menurut Provinsi. Tren Indeks Pembangunan Manusia Menurut Provinsi (2018-2023). https://databoks.katadata.co.id/datapublish/2024/07/12/indeks-pembangunan-manusia-menurut-provinsi
Katadata. (2024c). Tingkat Demokrasi Indonesia Turun pada 2023, Apa Penyebabnya? Skor Indeks Demokrasi Indonesia/IDI (2009-2023). https://databoks.katadata.co.id/datapublish/2024/06/13/tingkat-demokrasi-indonesia-turun-pada-2023-apa-penyebabnya
Kompas. (2012). Demokrasi, Kemiskinan, dan “Inequality.” Kompas.Id. https://nasional.kompas.com/read/2012/10/30/11200060/~Nasional?page=all
Kompas. (2024). Indeks Demokrasi Turun, Kebebasan Pers Turut Terancam. Kompas.id. https://www.kompas.id/baca/polhuk/2024/01/31/indeks-demokrasi-turun-kebebasan-pers-turut-terancam
Latif, Y. (2018). The Religiosity, Nationality, and Sociality of Pancasila: Toward Pancasila through Soekarno’s Way. Studia Islamika, 25(2), 207–245. https://doi.org/10.15408/sdi.v25i2.7502
LEMHANAS. (2022). Analisis Indeks Geo V. In Kekuatan dan Kelemahan Relatif Indonesia. Lemhanas Indonesia.
Lerner, R. M. (2018). Concepts and Theories of Human Development (4th ed.). Routledge. https://doi.org/10.4324/9780203581629
Liddle, R. W. (2002). Indonesia’s Democratic Transition: Playing by the Rules. The Architecture of Democracy, 373–399.
Liotti, G., Musella, M., & D’Isanto, F. (2018). Does democracy improve human development? Evidence from former socialist countries. 9.
Media Indonesia. (2024). Pakar Prediksi Indeks Demokrasi Indonesia Merosot Lagi Tahun Depan. Media Indonesia. https://mediaindonesia.com/politik-dan-hukum/652253/pakar-prediksi-indeks-demokrasi-indonesia-merosot-lagi-tahun-depan
Michener, J. (2018). Fragmented Democracy: Medicaid, Federalism, and Unequal Politics (1st ed.). Cambridge University Press. https://doi.org/10.1017/9781108224987
Moyo, C., Mishi, S., & Ncwadi, R. (2022). Human capital development, poverty and income inequality in the Eastern Cape province. Development Studies Research, 9(1), 36–47. https://doi.org/10.1080/21665095.2022.2032236
Nurdin, A. A. (2016). Revisiting discourse on Islam and state relation in Indonesia: The view of Soekarno, Natsir and Nurcholish Madjid. Indonesian Journal of Islam and Muslim Societies, 6(1), 63. https://doi.org/10.18326/ijims.v6i1.63-92
OECD & Asian Development Bank. (2015). Education in Indonesia: Rising to the Challenge. OECD. https://doi.org/10.1787/9789264230750-en
Osher, D., Cantor, P., Berg, J., Steyer, L., & Rose, T. (2020). Drivers of human development: How relationships and context shape learning and development 1. Applied Developmental Science, 24(1), 6–36. https://doi.org/10.1080/10888691.2017.1398650
Ramelli, S., & Wagner, A. F. (2020). Feverish Stock Price Reactions to COVID-19*. The Review of Corporate Finance Studies, 9(3), 622–655. https://doi.org/10.1093/rcfs/cfaa012
Rodionov, D. G., Kudryavtseva, T. J., & Skhvediani, A. E. (2018). Human Development and Income Inequality as Factors of Regional Economic Growth.
Saha, S., & Zhang, Z. (2017). Democracy-growth nexus and its interaction effect on human development: A cross-national analysis. Economic Modelling, 63, 304–310. https://doi.org/10.1016/j.econmod.2017.02.021
Sarkodie, S. A., & Adams, S. (2020). Electricity access, human development index, governance and income inequality in Sub-Saharan Africa. Energy Reports, 6, 455–466. https://doi.org/10.1016/j.egyr.2020.02.009
Silalahi, F., & Tampubolon, M. (2021). General election based on the principle of Luber-Jurdil and its development in Indonesia. Technium Soc. Sci. J, 20, 791.
Sugiono. (2019). Metodelogi Penelitian Kuantitatif dan Kualitatif dan R&D. Alfabeta. chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://eprints.uny.ac.id/68655/4/BAB%20III.pdf
Syafi’ie, M. (2022). Regresi Demokrasi [University]. https://law.uii.ac.id/blog/2023/12/22/regresi-demokrasi/
Tadjoeddin, M. Z., Yumna, A., & Gultom, S. E. (2017). Ketimpangan dan stabilitas di Indonesia yang demokratis dan terdesentralisasi. The SMERU Research Institute. file:///C:/Users/H%20P/Downloads/inequalitystability_ind.pdf
Trump, K.-S. (2018). Income Inequality Influences Perceptions of Legitimate Income Differences. British Journal of Political Science, 48(4), 929–952. https://doi.org/10.1017/S0007123416000326
Wilkinson, R. G. (2022). Poverty and Progress: An Ecological Model of Economic Development (1st ed.). Routledge. https://doi.org/10.4324/9781003306351
DOI: 10.15408/sjie.v13i2.42378
Refbacks
- There are currently no refbacks.