THE EFFECT OF FISCAL POLICY ON ECONOMIC GROWTH CASE STUDY IN INDONESIA.

THE EFFECT OF FISCAL POLICY ON ECONOMIC GROWTH
CASE STUDY IN INDONESIA

THESIS
This is submitted in partial fulfillment of the requirements for the bachelor degree

By :
FANNY OKTIVIA DENOVIS
0910514021

Bachelor Degree of Economics Department
Faculty of Economy
Andalas University
Padang
2014

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FANNY OKTIVIA DENOVIS
PERSONAL OF IDENTITY

a).‫ا‬Place/‫ا‬Date‫ا‬of‫ا‬Birth:‫ا‬Padang‫ا‬Panjang‫ا‬/‫ا‬29‫ا‬oktober‫ا‬1991‫اا‬b).Parent’s‫ا‬name‫ا‬:‫ا‬Sastramed
& ‫ ا‬Evi ‫ ا‬Noveri ‫ ا‬c).Faculty:Economics ‫ ا‬d).Development:Economics ‫ ا‬e) ‫ ا‬Student ‫ ا‬Id ‫ ا‬No ‫ ا‬:
0910514021 ‫ ا‬f). ‫ ا‬Date ‫ ا‬of ‫ ا‬Examination: ‫ ا‬January, ‫ ا‬27th ‫ ا‬2014 ‫ ا‬g).Graduate ‫ ا‬Standard:
Satisfaction ‫ ا‬h). ‫ ا‬GPA: ‫ ا‬2,94 ‫ ا‬i). ‫ ا‬Length ‫ ا‬of ‫ ا‬Study‫ ا‬Period ‫ ا‬: ‫ ا‬4 ‫ ا‬year ‫ ا‬5 ‫ ا‬month ‫ ا‬j). ‫ ا‬parent’s
address:‫ا‬Nagari‫ا‬Panyalaian‫ا‬Kec.‫ا‬X‫ا‬Koto‫ا‬kab.‫ا‬Tanah‫ا‬Datar
THE EFFECT OF FISCAL POLICY ON ECONOMIC GROWTH
CASE STUDY : IN INDONESIA
Thesis by : Fanny Oktivia Denovis Thesis Advisor : Dr, H.Hefrizal Handra M.Soc.Sc
ABSTRACT
The‫ ا‬objectives‫ ا‬of‫ ا‬the‫ ا‬research ‫ا‬are‫ ا‬to‫ا‬analyze ‫ا‬the ‫ا‬effect ‫ا‬of‫ ا‬fiscal ‫ ا‬policy‫ا‬on‫ ا‬economic ‫ا‬growth‫ ا‬in
Indonesia.‫ا‬This‫ا‬research‫ا‬applies‫ا‬OLS‫(ا‬Ordinary‫ا‬Least‫ا‬Squares)‫ا‬method.‫اا‬Independent‫ا‬variables‫ا‬used
in‫ا‬this‫ا‬research‫ا‬are‫ا‬recurrent‫ا‬expenditure,‫ا‬development‫ا‬expenditure‫ا‬and‫ا‬income‫ا‬tax‫ا‬in‫ا‬the‫ا‬period‫ا‬of
2002-2012. ‫ا‬This‫ا‬research‫ا‬indicates‫ ا‬that‫ا‬fiscal‫ا‬policy‫ا‬infuences‫ ا‬the‫ ا‬economic‫ا‬growth‫ا‬in‫ا‬Indonesia.
The ‫ا‬coefficient ‫ا‬of ‫ا‬determination‫( ا‬R2) ‫ا‬shows ‫ ا‬that ‫ ا‬the ‫ ا‬variation ‫ ا‬of ‫ ا‬independent ‫ ا‬variables‫ ا‬explains
variation‫ا‬of‫ا‬dependent‫ا‬variable‫ا‬by‫ا‬99.2‫ا‬percents.‫ا‬Futhermore,‫ا‬government‫ا‬expenditure‫(ا‬recurrent‫ا‬or
development)‫ ا‬and‫ ا‬income ‫ا‬tax ‫ ا‬have ‫ا‬significantly‫ ا‬influenced‫ ا‬to ‫ا‬the ‫ا‬growth ‫ا‬in‫ ا‬Indonesia. ‫ا‬In ‫ ا‬other

words, ‫ا‬economic ‫ ا‬growth ‫ ا‬of ‫ ا‬Indonesia ‫ ا‬will ‫ا‬be ‫ ا‬more ‫ا‬progressive ‫ا‬with ‫ ا‬the ‫ ا‬raise ‫ ا‬of ‫ا‬government
expenditures‫ا‬and‫ا‬income‫ا‬tax.‫ا‬
Key words: economic growth, government expenditure, and income tax.

This thesis has been presented in front of the examiners in the Thesis Examination and
successfully passed the Thesis Examination on January 27, 2014.
The Abstract has been approved by the advisor and examiners
1.

2.

3.

Signature
FullName

Dr.H.Hefrizal‫ا‬Handra,M.Soc.Sc

Prof.H.‫ا‬Sjafrizal,‫ا‬SE.MA

Approved‫ا‬by,
Head‫ا‬of‫ا‬Department‫ا‬:‫اااا‬Dr,‫ا‬H.Hefrizal‫ا‬Handra,‫ا‬M.Soc.Sc
NIP.‫ا‬196510201993021001

Drs.‫ا‬H.Masrizal,‫ا‬M.Soc.Sc

Signature

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Appendix‫اا‬1.4‫ا‬Multicollinearity‫ا‬Test................................................................‫ااا‬71
Appendix‫اا‬1.5‫ا‬Normality‫ا‬Test...........................................................................‫ااا‬73

CHAPTER 1
INTRODUCTION
1.1.1

Background
Economic‫ا‬development‫ا‬is‫ا‬an‫ا‬absolute‫ا‬phase‫ا‬that‫ا‬should‫ا‬be‫ا‬done‫ا‬by‫ا‬every‫ا‬nation‫ا‬to

improve‫ا‬prosperity.‫ا‬The‫ا‬implementation‫ا‬of‫ا‬economic‫ا‬development‫ا‬is‫ا‬never‫ا‬apart‫ا‬from‫ا‬the

increase ‫ ا‬in ‫ ا‬income ‫ ا‬or ‫ ا‬we ‫ ا‬called ‫ ا‬economic ‫ ا‬growth. ‫ ا‬Economic ‫ ا‬growth ‫ ا‬and ‫ ا‬economic
development ‫ا‬are‫ ا‬almost‫ ا‬same ‫ ا‬but ‫ ا‬they‫ ا‬are ‫ ا‬fundamentally ‫ ا‬different. ‫ ا‬Economic ‫ ا‬growth ‫ ا‬is
increase‫ا‬in‫ا‬average‫ا‬income‫ا‬of‫ا‬an‫ا‬economy,‫ا‬while‫ا‬economic‫ا‬development‫ا‬is‫ا‬the‫ا‬increase‫ا‬in
welfare‫ا‬of‫ا‬people‫ا‬of‫ا‬that‫ا‬economy.
Economic‫ا‬Growth‫اا‬is‫ا‬an‫ا‬increase‫ا‬in‫ا‬a‫ا‬country's‫ا‬real‫ا‬level‫ا‬of‫ا‬national‫ا‬output‫ا‬which‫ا‬can
be ‫ ا‬caused ‫ ا‬by ‫ ا‬an ‫ ا‬increase ‫ ا‬in ‫ ا‬the ‫ ا‬quality ‫ا‬and ‫ا‬quantity ‫ ا‬of ‫ ا‬resources, ‫ا‬an‫ ا‬improvement ‫ا‬in
technology‫ ا‬or‫ا‬in‫ا‬another‫ا‬way‫ا‬an‫ا‬increase‫ا‬in‫ا‬the‫ا‬value‫ا‬of‫ا‬goods‫ا‬and‫ا‬services‫ا‬produced‫ا‬by
every‫ا‬sector‫ا‬of‫ا‬the‫ا‬economy.‫ا‬

Economic‫ا‬Growth‫ا‬can‫ا‬be‫ا‬measured‫ا‬by‫ا‬an‫ا‬increase‫ا‬in‫ا‬a‫ا‬country's‫ا‬GDP‫(ا‬gross‫ا‬domestic
product).‫“ا‬Economic‫ا‬growth‫ا‬is‫ا‬a‫ا‬process,‫ا‬not‫ا‬an‫ا‬economic‫ا‬picture‫ا‬in‫ا‬a‫ا‬given‫ا‬period,‫ا‬there‫ا‬are
development‫ا‬or‫ا‬changes‫ا‬and‫ا‬use‫ا‬of‫ا‬time”‫(ا‬Boediono,‫ا‬1992).
Indonesia’s ‫ ا‬economic ‫ ا‬growth ‫ ا‬has ‫ ا‬been‫ ا‬up ‫ ا‬and ‫ ا‬down ‫ ا‬in ‫ ا‬over ‫ ا‬recent ‫ ا‬decades, ‫ ا‬in
accordance ‫ ا‬with ‫ ا‬the ‫ ا‬conditions ‫ ا‬of‫ ا‬the ‫ ا‬world ‫ ا‬economy. ‫ ا‬National ‫ ا‬income ‫ا‬is ‫ ا‬a ‫ ا‬measure ‫ ا‬of
economic ‫ ا‬growth, ‫ ا‬which ‫ ا‬is‫ ا‬showed ‫ا‬by‫ ا‬fluctuating ‫ ا‬growth. ‫ ا‬The ‫ ا‬economic ‫ ا‬condition ‫ ا‬of
Indonesia ‫ ا‬as ‫ ا‬a ‫ ا‬developing ‫ ا‬country ‫ ا‬has ‫ ا‬not ‫ ا‬reached ‫ ا‬steady ‫ ا‬state ‫ ا‬conditions ‫ ا‬in ‫ ا‬which ‫ ا‬an
economy‫ا‬is‫ا‬already‫ا‬in‫ا‬a‫ا‬stable‫ا‬and‫ا‬less‫ا‬susceptible‫ا‬to‫ا‬shocks.
Indonesia’s‫ا‬economic‫ا‬growth‫ا‬is‫ا‬influenced‫ا‬by‫ا‬the‫ا‬various‫ا‬shocks.‫ا‬Shocks‫ا‬that‫ا‬make
Indonesian’s‫ا‬economy‫ا‬is‫ا‬disrupted‫ا‬economic‫ا‬crisis‫ا‬of‫ا‬1998,‫ا‬namely‫ا‬inflation‫ا‬78‫ا‬%‫ا‬and‫ا‬GDP
decreased‫ا‬by‫ا‬approximately‫ا‬11‫ا‬percent.‫ا‬In‫ا‬2008‫ا‬the‫ا‬world‫ا‬economy‫ا‬was‫ا‬in‫ا‬recession‫ا‬or
global‫ا‬economic‫ا‬recession,‫ا‬triggered‫ا‬by‫ا‬financial‫ا‬turmoil‫ا‬in‫ا‬the‫ا‬united‫ا‬states.‫ا‬This‫ا‬financial
crisis‫ا‬hit‫ا‬countries‫ا‬around‫ا‬the‫ا‬world‫ا‬includes‫ا‬Indonesia.‫ا‬The‫ا‬impact‫ا‬of‫ا‬this‫ا‬crisis‫ا‬in‫ا‬Indonesia
was‫ا‬marked‫ا‬by‫ا‬the‫ا‬side‫ا‬of‫ا‬state‫ا‬pending,‫ا‬state‫ا‬spending‫ا‬on‫ا‬state‫ا‬budget‫ا‬allocation‫ا‬in‫ا‬2009
was‫ا‬estimated‫ا‬to‫ا‬increase‫ا‬by‫ا‬Rp‫ا‬51,8‫ا‬trillion,‫ا‬compare‫ا‬to‫ا‬the‫ا‬realization‫ا‬of‫ا‬the‫ا‬state‫ا‬budget‫ا‬of
2008‫ا‬with‫ا‬total‫ا‬expenditures‫ا‬set‫ا‬at‫ا‬Rp‫ا‬1,037.1‫ا‬trillion‫(ا‬19.5‫ا‬percent‫ا‬of‫ا‬GDP),‫ا‬driven‫ا‬by‫ا‬an
increase ‫ ا‬in ‫ ا‬central ‫ ا‬government ‫ ا‬spending ‫ ا‬for ‫ ا‬Rp ‫ ا‬23.74 ‫ ا‬trillion ‫ ا‬and ‫ ا‬the ‫ ا‬allocation ‫ ا‬of
expenditure‫ا‬to‫ا‬the‫ا‬region‫ا‬of‫ا‬28.06‫ا‬trillion‫ا‬when‫ا‬compared‫ا‬with‫ا‬the‫ا‬realization‫ا‬of‫ا‬the‫ا‬2008

budget‫ا‬the‫ا‬government‫ا‬has‫ا‬been‫ا‬able‫ا‬to‫ا‬anticipate‫ا‬the‫ا‬situation,‫ا‬so‫ا‬that‫ا‬economic‫ا‬growth‫ا‬in

Indonesia‫ا‬is‫ا‬relatively‫ا‬safe,‫ا‬around‫ا‬6,38%‫(ا‬Data‫ا‬BPS,‫ا‬2008).
‫ا‬Indonesia‫ا‬is‫ا‬better‫ا‬equipped‫ا‬to‫ا‬survive‫ا‬in‫ا‬this‫ا‬time‫ا‬of‫ا‬crisis‫ا‬because‫ا‬of‫ا‬the‫ا‬experience
learned‫ا‬from‫ا‬previous‫ا‬crisis.‫ا‬A‫ا‬country‫ا‬must‫ا‬has‫ ا‬a‫ا‬government‫ا‬that‫ا‬serves‫ا‬as‫ا‬a‫ا‬economic
dampening ‫ ا‬and ‫ ا‬political ‫ ا‬turmoil ‫ ا‬both ‫ ا‬from ‫ ا‬domestic ‫ ا‬and ‫ ا‬abroad. ‫ ا‬Dampers ‫ ا‬are ‫ ا‬able ‫ ا‬to
stabilize‫ا‬the‫ا‬turmoil‫ا‬in‫ا‬the‫ا‬sense‫ا‬of‫ا‬a‫ا‬more‫ا‬conducive‫ا‬situation‫ا‬through‫ا‬various‫ا‬policies.
Government‫ا‬is‫ا‬a‫ا‬very‫ا‬important‫ا‬actor‫ا‬in‫ا‬the‫ا‬economy‫ا‬of‫ا‬a‫ا‬country.‫ا‬An‫ا‬economic‫ا‬activity‫ا‬will
be‫ا‬optimal‫ا‬if‫ا‬there‫ا‬is‫ا‬a‫ا‬government‫ا‬activity‫ا‬there‫ا‬in.
Economic‫ا‬growth‫ا‬in‫ا‬Indonesia‫ا‬is‫ا‬still‫ا‬at‫ا‬the‫ا‬development‫ا‬stage.‫ا‬Government‫ا‬spending
on‫ا‬Government‫ا‬activities‫ا‬that‫ا‬include‫ا‬spending‫ا‬in‫ا‬the‫ا‬political‫ا‬sphere‫ا‬as‫ا‬well‫ا‬as‫ا‬in‫ا‬the‫ا‬field‫ا‬of
economy‫ا‬where‫ا‬everything‫ا‬has‫ا‬planned‫ا‬in‫ا‬the‫ا‬budget‫ا‬revenue‫ا‬and‫ا‬expenditure‫ا‬of‫ا‬the‫ا‬state
budget.‫ا‬Managing‫ا‬sources‫ا‬of‫ا‬revenue‫ا‬and‫ا‬government‫ا‬spending,‫ا‬government‫ا‬can‫ا‬make‫ا‬a
policy‫ا‬to‫ا‬increase‫ا‬economic‫ا‬growth‫ا‬such‫ا‬as‫ا‬Fiscal‫ا‬Policy.
Fiscal‫ا‬Policy‫ا‬is‫ا‬the‫ا‬government‫ا‬policy‫ا‬which‫ا‬included‫ ا‬government‫ا‬expenditure‫ا‬and
taxes‫ا‬in‫ا‬collaboration‫ا‬with‫ا‬the‫ا‬monetary‫ا‬policy‫ا‬whose‫ا‬objective‫ا‬was‫ا‬to‫ا‬accelerate‫ا‬economic
growth. ‫ ا ا‬Government ‫ ا‬expenditure ‫ ا‬consists ‫ ا‬of ‫ ا‬recurrent ‫ ا‬expenditure ‫ ا‬and ‫ ا‬development
expenditure.
Recurrent‫ا‬expenditure‫ا‬is‫ا‬expenditure‫ا‬that‫ا‬used‫ا‬for‫ا‬maintenance‫ا‬and‫ا‬operation‫ا‬of‫ا‬a
government ‫ ا‬that ‫ ا‬includes ‫ ا‬spending ‫ ا‬on ‫ا‬personnel, ‫ ا‬goods ‫ ا‬expenditures, ‫ا‬interest ‫ ا‬payments,
subsidies‫ا‬and‫ا‬other‫ا‬routine‫ا‬expenses.‫ا‬Through‫ا‬routine ‫ا‬expenses,‫ا‬the‫ا‬government‫ا‬can‫ا‬carry
out ‫ ا‬its ‫ ا‬mission ‫ ا‬in ‫ ا‬order ‫ ا‬to ‫ ا‬maintain ‫ ا‬the ‫ ا‬smooth ‫ ا‬implementation ‫ ا‬of ‫ ا‬the ‫ ا‬government, ‫ ا‬the

operations ‫ ا‬and ‫ ا‬maintenance‫ ا‬of ‫ ا‬state ‫ ا‬assets, ‫ ا‬Government's ‫ ا‬responsibility ‫ ا‬to ‫ا‬third ‫ ا‬parties,
protection ‫ ا‬of ‫ ا‬the ‫ ا‬poor ‫ ا‬and ‫ ا‬underprivileged ‫ ا‬and ‫ ا‬maintain ‫ ا‬economic ‫ ا‬stability
(Mangkoesoebroto,‫ا‬1994).
Development ‫ ا‬expenditure ‫ ا‬is ‫ ا‬expenditure ‫ ا‬incurred ‫ ا‬to ‫ ا‬finance ‫ ا‬development ‫ ا‬in ‫ ا‬the
economic, ‫ ا‬social, ‫ ا‬and ‫ ا‬public ‫ ا‬and ‫ ا‬that ‫ ا‬is ‫ ا‬to ‫ ا‬raise ‫ ا‬capital ‫ ا‬in ‫ ا‬the ‫ ا‬form ‫ ا‬of ‫ ا‬community
development‫ا‬both‫ا‬physical‫ا‬and‫ا‬non-physical‫ا‬infrastructure‫ا‬is‫ا‬implemented‫ا‬in‫ا‬a‫ا‬given‫ا‬period.
Budget‫ا‬physical‫ا‬and‫ا‬non-physical‫ا‬development‫ا‬is‫ا‬always‫ا‬adjusted‫ا‬to‫ا‬the‫ا‬funds‫ا‬mobilized.

The‫ا‬funds‫ا‬are‫ا‬allocated‫ا‬to‫ا‬the‫ا‬various‫ا‬fields‫ا‬in‫ا‬accordance‫ا‬with‫ا‬the‫ا‬priorities‫ا‬that‫ا‬have‫ا‬been
planned.‫ا‬The‫ا‬role‫ا‬of‫ا‬the‫ا‬development‫ا‬budget‫ا‬is‫ا‬more‫ا‬emphasis‫ا‬on‫ا‬efforts‫ا‬to‫ا‬create‫ا‬a‫ا‬stable
and‫ا‬conducive‫ا‬conditions‫ا‬for‫ا‬the‫ا‬continuity‫ا‬of‫ا‬the‫ا‬process‫ا‬of‫ا‬economic‫ا‬recovery‫ا‬by‫ا‬providing
a‫ا‬stimulus‫ا‬to‫ا‬the‫ا‬growth‫ا‬of‫ا‬the‫ا‬national‫ا‬economy.‫ا‬In‫ا‬connection‫ا‬with‫ا‬the‫ا‬management‫ا‬of‫ا‬the
overall ‫ ا‬state ‫ ا‬budget ‫ ا‬with ‫ ا‬limited ‫ ا‬financial ‫ ا‬resources ‫ ا‬available, ‫ ا‬the ‫ ا‬achievement ‫ ا‬of
development‫ا‬goals‫ا‬should‫ا‬be‫ا‬as‫ا‬optimal‫ا‬as‫ا‬possible‫(ا‬Nota‫ا‬Keuangan‫ا‬dan‫ا‬APBN,‫ا‬2004).
Taxes‫ ا‬have‫ ا‬a ‫ ا‬very ‫ ا‬important ‫ ا‬role‫ ا‬in ‫ ا‬the‫ ا‬life ‫ ا‬of ‫ ا‬the ‫ ا‬state. ‫ ا‬Particularly‫ ا‬in ‫ ا‬the
implementation ‫ ا‬of ‫ ا‬development ‫ ا‬because ‫ ا‬the ‫ ا‬taxes ‫ ا‬a ‫ ا‬source ‫ ا‬of ‫ ا‬state‫ ا‬revenue‫ ا‬to ‫ ا‬fund‫ ا‬all
expenses‫ا‬including‫ا‬the‫ا‬expenses‫ا‬of‫ا‬government.‫ا‬Whether‫ا‬it's‫ا‬for‫ا‬recurrent‫ا‬expenditures‫ا‬and
development‫ا‬expenditures.
According‫ا‬to‫ا‬Waluyo‫(ا‬2006),‫ا‬high‫ا‬economic‫ا‬growth‫ا‬will‫ا‬increase‫ا‬the‫ا‬revenue‫ا‬of‫ا‬the
government‫ا‬of‫ا‬taxes‫(ا‬VAT‫ا‬and‫ا‬income‫ا‬tax)‫ا‬as‫ا‬well‫ا‬as‫ا‬providing‫ا‬employment‫ا‬and‫ا‬earnings‫ا‬or

saving‫ا‬foreign‫ا‬exchange.
Since ‫ ا‬the ‫ ا‬purpose ‫ ا‬of‫ ا‬taxation‫ ا‬and‫ ا‬government ‫ ا‬expenditure,‫ ا‬both ‫ ا‬recurrent ‫ ا‬and
development‫ا‬are‫ا‬to‫ا‬support‫ا‬national‫ا‬economic‫ا‬activity‫ا‬in‫ا‬maintaining‫ا‬the‫ا‬momentum‫ا‬of‫ا‬high
economic‫ا‬growth,‫ا‬and‫ا‬improve‫ا‬the‫ا‬welfare‫ا‬of‫ا‬the‫ا‬whole‫ا‬people‫ا‬of‫ا‬Indonesia.‫ا‬There‫ا‬fore‫ا‬the
role‫ ا‬of‫ا‬government‫ ا‬in‫ ا‬the‫ا‬field‫ا‬offiscal‫ ا‬policy‫ ا‬to‫ ا‬accelerate‫ ا‬economic‫ ا‬growth,‫ا‬the‫ا‬authors
tried‫ا‬to‫ا‬examine‫اا‬how‫ا‬the‫ا‬effect‫ا‬of‫ا‬fiscal‫ا‬policy‫ا‬on‫ا‬economic‫ا‬growth,‫ا‬in‫ا‬Indonesia.In‫ا‬this‫ا‬case
the‫ا‬government‫ا‬fiscal‫ا‬policy‫ا‬are‫ا‬government‫ا‬expenditure‫ا‬and‫ا‬taxes.
Based‫ا‬on‫ا‬the‫ا‬above‫ا‬assumptions,‫ا‬Fiscal‫ا‬policy‫ا‬is‫ا‬a‫ا‬government‫ا‬policy‫ا‬can‫ا‬impact‫ا‬of
activities‫ا‬against‫ا‬the‫ا‬government‫ا‬in‫ا‬running‫ا‬in‫ا‬the‫ا‬field‫ا‬of‫ا‬the‫ا‬economy‫ا‬in‫ا‬indonesia.‫اا‬to‫ا‬the
authors‫ا‬are‫ا‬interested‫ا‬in‫ا‬doing‫ا‬research‫ا‬to‫ا‬take‫ا‬the‫ا‬title‫ا‬of‫ا‬
“The Effect Of Fiscal Policy On Economic Growth : Case Study In Indonesia”.

1.2 Research Question

Based‫ا‬on‫ا‬the‫ا‬above‫ا‬explanation,‫ا‬the‫ا‬issues‫ا‬to‫ا‬be‫ا‬analyzed‫ا‬in‫ا‬this‫ا‬study‫ا‬are:

1. How ‫ ا‬does ‫ ا‬government ‫ا‬recurrent ‫ ا‬expenditure ‫ ا‬influence ‫ ا‬economic ‫ ا‬growth ‫ ا‬in

Indonesia?
2. How ‫ ا‬does ‫ ا‬government ‫ ا‬development ‫ ا‬expenditure ‫ ا‬influence ‫ ا‬economic ‫ ا‬growth ‫ ا‬in

Indonesia?
3. How‫ا‬does‫ا‬taxes‫ا‬influence‫ا‬economic‫ا‬growth‫ا‬in‫ا‬Indonesia?

1.3 Research objectives

In‫ا‬accordance‫ا‬with‫ا‬the‫ا‬above‫ا‬problems‫ا‬the‫ا‬purpose‫ا‬of‫ا‬this‫ا‬study‫ا‬were‫ا‬to:
1. To‫ا‬examine‫ا‬the‫ا‬effect‫ا‬of‫ا‬government ‫ا‬recurrent‫ا‬expenditure‫ا‬on‫ا‬economic‫ا‬growth‫ا‬in

Indonesia;
2. To‫ا‬examine‫ا‬the‫ا‬effect‫ا‬of‫ا‬government‫ا‬development‫ا‬expenditure‫ا‬on‫ا‬economic‫ا‬growth

in‫ا‬Indonesia;
3. To‫ا‬examine‫ا‬the‫ا‬effect‫ا‬of‫ا‬taxes‫ا‬on‫ا‬economic‫ا‬growth‫ا‬in‫ا‬Indonesia.
1.4 Research Advantage

The‫ا‬advantages of‫ا‬this‫ا‬research‫ا‬are:
1. For ‫ ا‬I ‫ ا‬and ‫ ا‬myself, ‫ ا‬to ‫ ا‬improve ‫ ا‬my ‫ ا‬ability ‫ ا‬in ‫ ا‬writing ‫ ا‬report ‫ ا‬and ‫ ا‬doing ‫ ا‬research,

especially‫ا‬in‫ا‬monetary‫ا‬economics,‫ا‬particularly‫ا‬fiscal‫ا‬policy.
2. For‫ا‬government‫ا‬as‫ا‬input‫ا‬for‫ا‬fiscal‫ا‬policy.

3. As‫ا‬a‫ا‬reference‫ا‬for‫ا‬other‫ا‬researcher‫ا‬who‫ا‬are‫ا‬interested‫ا‬to‫ا‬study‫ا‬in‫ا‬the‫ا‬same‫ا‬field‫ا‬with

the‫ا‬approach‫ا‬ad‫ا‬scope‫ا‬are‫ا‬different.