Government spending on healthcare and poverty reduction policies play a far more significant role in improving human development than economic growth alone, according to a new study conducted by researchers from Universitas Negeri Makassar, Indonesia. The research found that health expenditure has a strong positive impact on the Human Development Index (HDI), while poverty remains one of the largest barriers to improving quality of life across provinces in Western Indonesia.
The study, titled “Determinants of Human Development in Western Indonesia from Economic, Poverty, and Fiscal Perspectives,” was conducted by Dirmansyah Darwin, La Ode Muhammad Iksan Yusuf, and Andi Nur Wahyuningsih from Universitas Negeri Makassar. Published in the International Journal of Applied Research and Sustainable Sciences (IJARSS) in 2026, the research examined how economic growth, education spending, health expenditure, and poverty levels affect human development outcomes across Western Indonesia between 2017 and 2024.
The findings arrive at a critical moment as Indonesia continues addressing regional inequality and disparities in public welfare. Although Western Indonesia includes some of the country’s most economically developed regions, significant differences in education, healthcare access, income distribution, and quality of life still exist across provinces and districts.
According to the researchers, human development should not be viewed only through economic indicators such as income or gross regional output. Instead, development must also reflect improvements in health, education, and living standards that allow individuals to live productive and meaningful lives.
The study used the Human Development Index as its primary measurement framework. HDI combines indicators related to life expectancy, education, and standard of living to evaluate the overall quality of human development in a region.
Researchers noted that despite ongoing economic growth in many parts of Western Indonesia, not all regions have experienced equal improvements in human development. Provinces such as DKI Jakarta and DI Yogyakarta consistently maintain higher HDI scores, while provinces such as Bengkulu and West Kalimantan continue facing lower human development outcomes despite gradual progress over time.
To investigate these disparities, the research team applied a quantitative multiple linear regression model using secondary data collected from Indonesia’s Central Statistics Agency (BPS), regional economic reports, and government budget allocation records. The dataset included provinces and regencies across Sumatra, Java, Bali, and West Kalimantan during the 2017–2024 period.
The analysis examined four major variables affecting human development: economic growth, education expenditure, health expenditure, and poverty levels. Statistical analysis included t-tests, F-tests, and coefficient of determination analysis to evaluate the significance and relative influence of each variable on HDI.
One of the study’s most surprising findings involved economic growth.
The results showed that economic growth had a negative coefficient of -0.111 and was statistically insignificant with a significance level of 0.595. In practical terms, this means that higher economic growth alone did not automatically improve human development outcomes in Western Indonesia.
According to the researchers, the finding reflects a broader economic reality in which growth benefits are not always distributed equally across society. In regions where income inequality remains high, economic expansion may primarily benefit higher-income groups without significantly improving access to education, healthcare, or basic services for lower-income populations.
The study also found that education expenditure did not significantly affect HDI outcomes. Education spending produced a negative coefficient of -59.790 with a significance level of 0.304, indicating that increased educational budgets alone were insufficient to improve human development directly.
Researchers explained that education quality depends not only on budget size but also on effective fund distribution, teacher quality, educational infrastructure, and equal access to learning opportunities. Without efficient management and quality improvement, large education budgets may fail to generate meaningful gains in educational outcomes and human development indicators.
Health expenditure, however, emerged as the strongest positive factor influencing human development.
The study found that health expenditure had a positive coefficient of 125.003 and was statistically significant at the 0.047 level. This indicates that higher government investment in healthcare directly contributes to improved human development outcomes across Western Indonesia.
According to the researchers, healthcare investment improves life expectancy, strengthens public access to medical services, enhances nutrition quality, and increases overall productivity among citizens. Regions allocating larger healthcare budgets generally achieved stronger HDI performance compared to areas with limited healthcare infrastructure and services.
Poverty also demonstrated a significant negative relationship with human development.
The study identified a negative poverty coefficient of -0.358 with a significance level of 0.014, confirming that higher poverty rates substantially reduce HDI outcomes in Western Indonesia.
Researchers explained that poverty limits access to basic services such as education, healthcare, and decent living conditions. Poor households often face structural barriers that prevent them from obtaining quality education, adequate nutrition, and medical treatment, ultimately weakening long-term human development.
The regression model as a whole was statistically significant. The F-test produced a value of 3.064 with a significance level of 0.018, indicating that the combined variables collectively influence HDI outcomes in Western Indonesia.
However, researchers also acknowledged that the model explained only 7.3 percent of total HDI variation. The remaining 92.7 percent is likely influenced by other factors not included in the study, such as infrastructure quality, governance effectiveness, cultural conditions, income distribution, and social inequality.
According to Darwin and his research team, the findings demonstrate that human development policies must go beyond economic growth targets. Investments in healthcare systems and poverty alleviation programs appear far more effective in improving people’s quality of life than relying solely on economic expansion.
The research also reinforces broader international development perspectives emphasizing that welfare-oriented policies are central to sustainable human development. In regions with significant inequality, targeted social spending may produce stronger improvements in quality of life than macroeconomic growth alone.
For policymakers, the study offers an important message: improving healthcare access and reducing poverty should remain strategic priorities if governments aim to strengthen human development outcomes more evenly across Indonesia’s western region.
Author Profile
Dirmansyah Darwin is an academic and researcher from Universitas Negeri Makassar, Indonesia, specializing in regional development, public economics, human development, and fiscal policy. The study was co-authored by La Ode Muhammad Iksan Yusuf and Andi Nur Wahyuningsih, also from Universitas Negeri Makassar. Their research frequently examines the relationship between economic policy, poverty, public expenditure, and social welfare in Indonesia.
Source
Dirmansyah Darwin, La Ode Muhammad Iksan Yusuf, & Andi Nur Wahyuningsih. “Determinants of Human Development in Western Indonesia from Economic, Poverty, and Fiscal Perspectives.” International Journal of Applied Research and Sustainable Sciences (IJARSS), Vol. 4 No. 4, 2026, pp. 347–356. DOI: https://doi.org/10.59890/ijarss.v4i4.246
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