Regional Fiscal Performance and Inclusive Economic Growth in Yogyakarta’s Digital Era

Wuku Astuti; Baldric Siregar; Rudy Badrudin; Miswanto

doi:10.61255/jeemba.v4i5.1134

Authors

Wuku Astuti Universitas Widya Mataram
Baldric Siregar Sekolah Tinggi Ilmu Ekonomi YKPN
Rudy Badrudin Sekolah Tinggi Ilmu Ekonomi YKPN
Miswanto Sekolah Tinggi Ilmu Ekonomi YKPN

DOI:

https://doi.org/10.61255/jeemba.v4i5.1134

Keywords:

Economic Growth, Fiscal Digitalization, Inclusive Economic Growth, Regional Fiscal Performance, Special Region of Yogyakarta Province.

Abstract

Purpose – This study examines the relationship between regional fiscal performance, economic growth, and inclusive economic growth in the Special Region of Yogyakarta, Indonesia, during the digital governance era.

Design/methodology/approach – Using panel data from five regencies/municipalities during 2008–2024, this study applies pooled OLS-based multiple regression. Regional fiscal performance is measured through fiscal independence, local own-source revenue effectiveness, expenditure efficiency, expenditure harmony, fiscal dependency, and regional revenue growth. Fiscal digitalization is examined as a moderating variable, while economic growth is assessed as a possible pathway variable through sequential regression evidence. The models were re-estimated using bootstrapped standard errors with 5,000 resamples and percentile confidence intervals.

Finding/Results – The results show that expenditure efficiency (coefficient = −1.645, p = 0.017), expenditure harmony (coefficient = −0.288, p = 0.023), and fiscal dependency (coefficient = −1.599, p < 0.001) are significantly associated with economic growth. Fiscal digitalization strengthens the relationships of fiscal independence and expenditure harmony with economic growth, with the significant moderation effect of expenditure harmony (coefficient = 0.215, p = 0.013), while the interaction between fiscal dependency and fiscal digitalization is only marginally significant at the 10% level. Economic growth is negatively associated with inclusive economic growth (coefficient = −2.342, p < 0.001), indicating that regional growth has not fully translated into inclusive welfare outcomes. Sequential regression further indicates that the expected pathway through economic growth is not supported in the hypothesized direction.

Originality/Value – This study integrates regional fiscal performance, fiscal digitalization, economic growth, and inclusive economic growth within a single empirical framework. The findings highlight the importance of fiscal digitalization while showing that economic growth does not automatically produce inclusive development.

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