GOVERNMENT SPENDING AND ECONOMIC GROWTH DYNAMICS IN SULAWESI ISLAND 2015-2024

Abstract

This study analyzes the extent to which government spending sourced from the State Budget (APBN) on functional classifications related to the tourism sector, public facilities, public order and security, and the environment affects the economic growth of Sulawesi Island during 2015–2024. This study employs a quantitative approach using secondary data on APBN realization and Gross Regional Domestic Product (GRDP) published by Ministry of Finance and BPS-Statistics Indonesia. The data were analyzed using panel data regression with a Fixed Effects Model (FEM). The findings indicate that government spending on public facilities, public order and security, and the environment has a positive and statistically significant association with economic growth. Meanwhile, government spending on tourism also shows a positive relationship with economic growth, but the effect is not statistically significant. These findings imply that public expenditures supporting basic services, security, and environmental quality play a more direct role in promoting regional economic growth in Sulawesi.