Mining sector and local government revenue effects on interregional expenditure inequality in West Sulawesi Province
DOI:
https://doi.org/10.59890/ijma.v4i4.75Keywords:
Mining Sector, Local Government Revenue, Expenditure InequalityAbstract
This study examines the effect of the mining sector on local government revenue and its subsequent impact on interregional expenditure inequality across six districts in West Sulawesi Province during 2019–2024. Using a quantitative associative approach, panel data regression through the Common Effect, Fixed Effect, and Random Effect Models was applied to 36 district-year observations sourced from Statistics Indonesia (BPS), the Directorate General of Fiscal Balance (DJPK), and audited local government financial reports, complemented by a Baron and Kenny mediation test and a decomposition of the Williamson Index. The results show that the mining sector’s contribution to Gross Regional Domestic Product exerts a positive and significant effect on local government revenue (β = 0.631; p < 0.05), supporting the Economic Base Theory. However, local government revenue does not significantly affect interregional expenditure inequality at the within-effect level (p > 0.05) and does not function as a mediating variable between the mining sector and expenditure inequality, since the mining sector’s direct effect on per capita expenditure (β = −0.786; p < 0.05) far exceeds its negligible indirect effect through revenue (≈ 0.006). These findings indicate that intergovernmental fiscal transfers, particularly the General Allocation Fund, rather than locally generated revenue, remain the dominant channel shaping expenditure disparities between mining- and non-mining-producing districts. The study concludes that the fiscal benefits of mining have not been evenly transmitted into equitable public expenditure, reflecting an early symptom of subnational resource curse that calls for strengthened local tax instruments, a fairer revenue-sharing formula, and continued economic diversification in West Sulawesi Province.
References
Anggriani, N., & Widajanti, A. (2023). Ketimpangan antar wilayah dan hubungannya dengan belanja pemerintah: Studi di Indonesia. Jurnal Budget: Isu dan Masalah Keuangan Negara, 8(2), 89–100.
Asiamah, M., Addai, B., & Acheampong, T. (2022). Natural resource dependence and regional expenditure inequality in developing economies. Resources Policy, 78, 102834.
Badeeb, R. A., Lean, H. H., & Clark, J. (2017). The evolution of the natural resource curse thesis: A critical literature survey. Resources Policy, 51, 123–134.
Baltagi, B. H. (2013). Econometric analysis of panel data (5th ed.). John Wiley & Sons.
Bappenas. (2020). Rencana Pembangunan Jangka Menengah Nasional (RPJMN) 2020–2024. Kementerian PPN/Bappenas.
Bappenas. (2022). Evaluasi pelaksanaan desentralisasi fiskal dan implikasinya terhadap ketimpangan pembangunan daerah. Kementerian PPN/Bappenas.
Bird, R. M. (1999). Rethinking subnational taxes: A new look at tax assignment. IMF Working Paper No. WP/99/165, 1–54.
BPS. (2024). Berita resmi statistik: Profil kemiskinan di Indonesia Maret 2024. Badan Pusat Statistik.
BPS Kabupaten Majene. (2024). Kabupaten Majene dalam angka 2024. Badan Pusat Statistik Kabupaten Majene.
BPS Sulawesi Barat. (2025). Produk domestik regional bruto Provinsi Sulawesi Barat menurut lapangan usaha 2020–2024. Badan Pusat Statistik Provinsi Sulawesi Barat.
BPSIP. (2025). Laporan kinerja ekspor mineral Indonesia 2022–2024. Balai Penerapan Sistem dan Instrumentasi Pertanian.
Capello, R., & Cerisola, S. (2024). Backwash versus spread effects in regional fiscal dynamics. Journal of Regional Science, 64(2), 78–98.
Chenge, C. (2024). Fiscal decentralization and local revenue mobilization in resource-rich subnational governments. Public Finance Review, 52(1), 45–72.
Digdowiseiso, K. (2024). Mineral resource revenue and subnational fiscal capacity in Indonesia. Journal of Southeast Asian Economies, 41(1), 130–155.
DJPB Kemenkeu Sulbar. (2024). Kajian fiskal regional Sulawesi Barat tahun 2023. Direktorat Jenderal Perbendaharaan Kementerian Keuangan Perwakilan Sulawesi Barat.
Fitriah, A., & Suryaningrum, D. H. (2023). Pengaruh sektor pertambangan terhadap kapasitas fiskal dan belanja pembangunan daerah. Jurnal Ekonomi Pembangunan, 21(1), 68–84.
Floerkemeier, H., Lokshin, M., & Sajaia, Z. (2021). Measuring regional inequality: Williamson index and beyond. World Bank Economic Review, 35(1), 21–41.
Garrett, G., & Rodden, J. (2021). Globalization and fiscal decentralization. Comparative Political Studies, 54(2), 20–47.
Gazieva, G., Sultanova, D., & Yusupova, Z. (2025). Cumulative causation and regional divergence in transition economies. Post-Communist Economies, 37(1), 50–71.
Gujarati, D. N., & Porter, D. C. (2013). Dasar-dasar ekonometrika (5th ed., Vol. 2). Salemba Empat.
Hanif, I., Wallace, S., & Gago-de-Santos, P. (2020). Economic growth by means of fiscal decentralization: An empirical study for federal developing countries. SAGE Open, 10(4), 1–11.
Hsiao, C. (2022). Analysis of panel data (4th ed.). Cambridge University Press.
Iammarino, S., Rodriguez-Pose, A., & Storper, M. (2019). Regional inequality in Europe: Evidence, theory and policy implications. Journal of Economic Geography, 19(2), 273–298.
ICW. (2023). Laporan pemantauan tata kelola industri ekstraktif Indonesia. Indonesia Corruption Watch.
IPB. (2021). Kajian mekanisme redistribusi Dana Bagi Hasil sumber daya alam yang berkeadilan di Indonesia. Institut Pertanian Bogor.
Isserman, A. M. (2017). The economic base of rural regions. International Regional Science Review, 40(3), 89–115.
Kisiała, W., & Suszyńska, K. (2017). Economic growth and disparities: An empirical investigation for the CEE countries. Equilibrium: Quarterly Journal of Economics and Economic Policy, 12(4), 131–150.
Kouassi, E. (2018). Government expenditure and economic growth in developing countries: A Keynesian approach. International Journal of Economics and Finance, 10(3), 58–74.
Krysovatyy, A., Melnyk, V., & Plekan, M. (2022). Fiscal decentralization and regional divergence: Evidence from post-communist economies. Journal of Policy Modeling, 44(2), 165–185.
Lego, B., Gebremedhin, T., & Christiadi, C. (2018). The economic contribution of mineral extraction to regional economies. Natural Resources Research, 27(2), 58–74.
Madani, M. (2021). Paradoks pembangunan daerah penghasil tambang: Analisis kutukan sumber daya alam di Indonesia. Jurnal Ilmiah Administrasi Publik, 7(2), 47–62.
Manzano, O., & Gutiérrez, J. D. (2019). The political economy of the resource curse: A survey. Economía, 19(2), 18–47.
Milano, C., & Talandier, M. (2025). Economic base theory revisited: Uneven development in resource-dependent peripheral regions. Regional Studies, 59(1), 35–52.
Nanga, M., & Hudang, S. K. (2023). Desentralisasi fiskal dan pertumbuhan ekonomi daerah: Bukti dari kabupaten/kota di Indonesia Timur. Jurnal Ekonomi dan Pembangunan Indonesia, 23(2), 55–72.
Park, S. (2019). Mining-dependent regional economies and the fiscal base: A comparative study. Extractive Industries and Society, 6(2), 68–85.
Ramadhani, M. A., Sari, N. P., & Pratomo, D. S. (2024). Analisis ketimpangan regional antar provinsi di Indonesia: Peran pertumbuhan ekonomi, infrastruktur, dan kapasitas fiskal daerah. KNOWLEDGE: Jurnal Inovasi Hasil Penelitian dan Pengembangan, 5(2), 1–18.
Rahma, H., Fauzi, A., Juanda, B., & Widjojanto, B. (2021). Development of typologies of natural resource dependent regions and regional development disparities in Indonesia. Resources, 10(2), 86–103.
Rahman, M. M., Alam, K., & Velayutham, E. (2020). Mineral resource revenue, tax base, and regional economic growth. Resources Policy, 68, 101730.
Romaito, R., Sari, M., & Lubis, A. (2025). Dampak sektor pertambangan terhadap ketimpangan pendapatan antarwilayah di Sulawesi. Jurnal Ekonomi Regional, 20(1), 105–120.
Ross, M. L. (2020). What do we know about natural resources and civil war? Journal of Peace Research, 41(3), 337–356.
Santi, E., & Iskandar, A. (2021). Paradoks kekayaan alam dan kesejahteraan masyarakat daerah: Tinjauan empiris di Indonesia. Jurnal Ekonomi dan Bisnis Indonesia, 36(2), 80–95.
Savoia, A., & Sen, K. (2020). Institutional convergence and divergence: Resource curse and institutional quality. Journal of Institutional Economics, 16(3), 75–97.
Sedrakyan, G. S., & Varela-Candamio, L. (2019). Wagner's law testing in different groups of countries. Journal of Policy Modeling, 41(6), 10–29.
Septriani, S. (2023). Analisis pengaruh dana perimbangan dan pendapatan asli daerah terhadap belanja daerah kabupaten/kota di Provinsi Bengkulu. JEMSI (Jurnal Ekonomi, Manajemen, dan Akuntansi), 9(3), 884–894.
Sugiyono. (2022). Metode penelitian kuantitatif, kualitatif, dan R&D (2nd ed.). Alfabeta.
Wacana.info. (2024). Potensi bahan galian mineral di Provinsi Sulawesi Barat. https://wacana.info.
Wang, X., Zhang, C., & Wu, Y. (2024). Resource revenue dependence and fiscal expenditure inequality: Evidence from China. Energy Economics, 131, 107376.
Watson, P., Marcouiller, D., & Deller, S. (2019). Economic base analysis: Applications for rural community economic development. Journal of Regional Analysis and Policy, 49(1), 77–98.
