Influence of Government Expenses to Economic Growth and Manpower Absorption at Regencies/Cities in Central Kalimantan Province

Abstract

As the impact of the enactment of Regional Autonomy, the regional government administration has authority to determine priority of development  either for the principal regency or for the new-established one, through the government expenses, particularly allocation the capital expenses available at the APBD (Regional Revenue and Expenditure Budget). Capital expenditure allocated for infrastructure development is expected to be able to stimulate the economic growth and manpower absorption at regencies / cities in Central Kalimantan Province. During the period from 2003 till 2010, the government capital expenditures of the regencies/cities in Central Kalimantan Province certainly tend to increase, however they have not yet been optimum to overcome the basic problems, among others the relatively low economic growth, low job opportunities and low index of human development.

This research is intended to test and analyze the government expenses projected to the capital expenditures on economic growth, and manpower absorption at regencies/cities in Central Kalimantan Province, Indonesia. Population of this research are the whole regencies and one city. This research applies  the secondary pooled data from the combined time-series data (8 years) and cross section data (14 regencies/cities) and the total 112 objects of research are obtained from the Central Board of Statistics of Central Kalimantan Province and regencies / cities. Data are analyzed by using the Path Analysis applying the package of SPSS Program using Version 20.

The finding in this study is that the influence of government expenses or capital expenditure to the economic growth is significant. Then, the influence of government expenses or capital expenditures to the manpower absorption is not significant. Based on the finding in this study, it can be concluded that the economic growth constitutes an important variable very much needed to be taken into our attention in formulating the policies in the effort to improve the people welfare in regencies / cities in Central Kalimantan Province.

Keywords: Government Expenses, Economic Growth, Manpower Absorption.