Infrastructure and Poverty: State Budget Effect Analysis with Panel Model

The problem of poverty has an impact on various socio-economic problems such as high levels of illiteracy and unemployment, low levels of health and a bad environment. One strategy to reduce poverty can be done by building adequate infrastructure. The quality of advanced infrastructure is the main prerequisite needed by a country to accelerate its economic growth and development. This study focuses on the effect of infrastructure development that uses economic growth as a "bridge" in reducing the poverty rate that exists in Indonesia today. The contribution of this research is to find out how infrastructure budgeting affects poverty alleviation. The data used is panel data consisting of 32 provinces in Indonesia. The Fixed Effect model is the method used in this study, where the results show that the accelerated provision of priority infrastructure has a significant effect on poverty reduction. The availability of infrastructure services can encourage economic movement that reduces poverty. Partially, economic infrastructure, namely roads and clean water, has a significant effect on poverty alleviation, while social infrastructure DAU Education and DAU Health also have a significant negative effect . The results of this study have implications for the government where with the availability of adequate infrastructure it will be able to overcome poverty.


Introduction
One of the important capital factors in improving and developing the economy is the condition of adequate infrastructure. The quality of advanced infrastructure is the main prerequisite needed by a country to accelerate its economic growth and development.
Infrastructure development aims to reduce logistics costs so that the management of the allocation of resources owned by a region can be driven more quickly and have an impact on efficiency in economic activity.
Based on data from The Global Competitiveness Report 2020, infrastructure is one of the variables used to measure the level of efficiency of a country in utilizing production factors so as to encourage more efficient economic conditions. Resilient infrastructure development is also one of SDG's goals, which is the ninth goal (BPS, 2020).
In addition to economic growth and competitiveness, the main goal of infrastructure development in developing countries is to support poverty alleviation programs. Poverty is a global phenomenon that arises not only from a lack of resources but also from limited access to resources, information, opportunities, empowerment and mobility. The problem of poverty if left unchecked will have an impact on various socio-economic problems such as high levels of illiteracy and unemployment, low levels of health and a bad environment. One strategy to reduce poverty can be done by building adequate infrastructure. Infrastructure development is a public investment that produces a positive correlation between growth and income inequality (Charlery, Qaim, & Smith-Hall, 2016;Chatterjee & Turnovsky, 2012). However, unbalanced development of unbalanced infrastructure development can result in failure to reduce inequality in economic growth (Chotia & Rao, 2017), because inequality between regions occurs as a consequence of development inequality between regions that occurs as a result of development being concentrated in certain areas (Sukwika, 2018). Agency (BPS) records that poverty in Indonesia will still be concentrated in Java until March 2021 (BPS, 2021). A total of 14.8 million poor people live in Java, which is equivalent to 53.6% of the national total. Sumatra is followed by 6.1 million poor people. In Bali and Nusa Tenggara, The problem of poverty is a multidimensional problem. Therefore, solving the problem of poverty can no longer be carried out by the central government alone, but must be carried out together with local governments as well as the participation of the community and the private sector. Infrastructure development has become an integral part of the poverty alleviation program.
The Government of Indonesia has carried out a massive infrastructure development program since 2015. In addition, in the 2020-2024 Indonesian RPJMN, infrastructure development is the main vision where the goal is to connect large infrastructure with people's production areas, small industrial areas, special economic zones (KEK), tourism area as well as agricultural area. However, Schwab (2019) in his research shows that Indonesia's infrastructure is still ranked 71 out of 140 countries.
Source: Schwab (2019) Figure 2. 2019 Southeast Asian Countries Infrastructure Score Figure 2 shows the infrastructure scores among Southeast Asian Countries. Singapore Singapore has the highest score while Laos has the lowest score. Indonesia's infrastructure score is in fifth position which shows the condition of Indonesia's infrastructure is still inferior to several other countries in Southeast Asia. According to Breuer (2018), the poor condition of Indonesia's infrastructure is one of the factors that hampers Indonesia's economic growth because existing capital and infrastructure do not encourage job creation or reduce poverty in the medium term. infrastructure which is defined as infrastructure that has a significant impact on the economy at the central and regional levels which includes the availability of transportation, roads and agricultural irrigation, clean drinking water, waste management, telecommunications and electricity.
In the posture of the 2015-2020 State Budget, the infrastructure expenditure budget continues to experience a significant increase. Figure  accessibility. Road access makes it easier for people to reach remote areas so that the economy can develop. The development of productive areas supported by infrastructure can create jobs.
That way, poverty alleviation efforts can be carried out.
This study focuses on the effect of infrastructure development that uses economic growth as a "bridge" in reducing the poverty rate that exists in Indonesia today. This research is expected to contribute to evaluating the results of infrastructure development program policies so that the government can determine which policies have an impact on the final goals of the targets that have been set. The novelty of this research is to aggregate infrastructure development variables a. In addition, this study also uses the variable transfers to regions with special allocation funds as a form of fiscal decentralization in the infrastructure sector, according to type and using recent years' analysis.

Infrastructure
According to the Big Indonesian Dictionary, infrastructure can be interpreted as public facilities and infrastructure. Facilities are generally known as public facilities such as hospitals, roads, bridges, sanitation, telephones, etc. According to the MacMillan Modern Economics Dictionary (1996) infrastructure is a structural element that facilitates the flow of goods and services between buyers and sellers.
In relation to the relationship between infrastructure and economic development, several economists also provide their opinions. Hircvman (1958) defines infrastructure as something that is needed for production activities in various sectors of economic activity. Infrastructure development plays a very important role in spurring economic growth, both at the national and regional levels, as well as reducing unemployment, alleviating poverty and of course increasing people's welfare. Therefore, the government is committed to continuing to increase infrastructure development, because the availability of reliable infrastructure is very important to support economic activity and business growth. Infrastructure development plays a very important role in spurring economic growth, both at the national and regional levels, as well as reducing unemployment, alleviating poverty and of course increasing people's welfare.  Khaira (2021) which analyzed the impact of infrastructure development on poverty by using the variables of sanitation, electricity and roads where the results of these three variables have a significant effect on reducing the poverty rate.

APBN, Infrastructure Policy, and Public Policy
One of the important tasks of the government in developing countries is to be responsible for the provision of infrastructure because one of the challenges faced is the limited participation of the private sector in the provision of public goods which are high risk and have a low rate of return. One manifestation of sovereignty in the political, economic and cultural fields is the Merdeka Infrastructure. According to Gregory Mankiw (2003) in Economic Theory, infrastructure means a form of public capital consisting of public roads, bridges, sewer systems, etc., as investments made by the government. Looking at history, the government has consistently made efforts to achieve infrastructure self-reliance where one of the ways taken is by allocating a budget for infrastructure provision. During the New Order era, the infrastructure sector was the second largest item in the APBN with a focus on road construction which increased from 1979 by 74% to 1980 and irrigation networks continued to increase by 14.9% until 1985. In the current era, infrastructure development is directed at supporting a number of strengthening basic services as well as supporting increased productivity through connectivity and mobility infrastructure. In addition, the budget will be used to provide energy and food infrastructure that is affordable, reliable and environmentally sound, as well as equal distribution of infrastructure and access to information technology in Indonesia.

Panel Data Regression Analysis
The first stage of panel data regression analysis is to test the best model. All variables in this analysis are converted to natural logarithms to facilitate model estimation. Table 1 shows the results of each model    Table 3 shows that all variables except Health in the model are not significant because the coefficient value is above 0.05.

Best Model Test
After the three types of models have been analyzed, the next step is testing to select one of the three models using the Chow Test and Hausman Test. 3 what are the results of the Chow and Hausman tests to choose the best model.    (2014) that clean water and road infrastructure significantly reduce the poverty rate in North Sumatra. The availability of access to clean water can also reduce the number of poor people who fall into the relatively poor category. Access to clean water is one of the conditions for freedom from relative poverty, namely the determination of poverty using the ability to access public goods and services approach introduced by Sen (World Bank Institute , 2005). This result is in line with Putra and Rianto's research (2017).
The Port variable has a coefficient value of -0.335346 which means that an increase in infrastructure availability by 1 percent will reduce the poverty rate by 33 percent. However, these results are not significant which can be concluded that there is no influence between port infrastructure development and poverty reduction.
The variables DAU for Education and DAU for Health respectively have coefficient values of -0.094537 and -0.029732, which means that an increase in the development of clean water infrastructure and road infrastructure by 1 percent will reduce the poverty rate by 9.4 percent and 2.9 percent. This result is in line with Sembiring (2020). The DAU for Education and Health is used to fund physical/non-physical activities in order to improve the quality of basic services in the education and health sectors in accordance with priority activities and sub-activities.
Education and health infrastructure is the main support for reducing poverty. Both are the main conditions for increasing productivity in a country. Education has an important role in the ability of developing countries to deal with technological developments while health is a support for increasing productivity. Thus it can be interpreted that education and health have an important role in economic development according to (Todaro & Smith, 2015).
The results of the regression model equation and the t test show that the dummy variable, namely the accelerated infrastructure development program, has a negative and significant relationship with the Poverty Level. The coefficient value is -0.057343, which means that an increase in the acceleration of infrastructure development by 1 percent will reduce the poverty rate by 5.7 percent. Infrastructure is one of the important factors in reducing poverty in Indonesia. Increasing the quality and quantity of infrastructure provides the basic services needed to increase national productivity and support the smooth running of business activities so that employment can increase. It is this increase in employment that reduces the poverty rate.

Conclusion
Simultaneously, the accelerated provision of priority infrastructure has a significant effect on reducing poverty. The availability of infrastructure services can encourage economic movement that reduces poverty. Partially, economic infrastructure, namely roads and clean water, has a significant effect on poverty alleviation, while social infrastructure DAU Education and DAU Health also have a significant negative effect. The dummy variable that describes the policies before and after the accelerated program shows a significant negative value, meaning that the accelerated infrastructure development policy has an effect on reducing poverty. The contribution of this research is to find out how infrastructure budgeting affects poverty alleviation. Suggestions for further research are that researchers can analyze the impact of infrastructure development in the long term. This can be done by considering the availability of data and the multiplier effect that might be seen in the next few years.