The Effect of Central Government Transfer ‎Funds onPoverty Levels in Maluku Province

  • Authors

    • Mohammad Faisal Sangadji Doctoral Program, Faculty of Economics and Business, Universitas Brawijaya, Jl. MT. Haryono 165, Malang, East Java, ‎Indonesia
    • Munawar Ismail Doctoral Program, Faculty of Economics and Business, Universitas Brawijaya, Jl. MT. Haryono 165, Malang, East Java, ‎Indonesia
    • Mohamad Khusaini Doctoral Program, Faculty of Economics and Business, Universitas Brawijaya, Jl. MT. Haryono 165, Malang, East Java, ‎Indonesia
    • Ferry Prasetyia Doctoral Program, Faculty of Economics and Business, Universitas Brawijaya, Jl. MT. Haryono 165, Malang, East Java, ‎Indonesia
    https://doi.org/10.14419/5pz05d14

    Received date: February 2, 2026

    Accepted date: February 12, 2026

    Published date: February 22, 2026

  • Fiscal Decentralization; Archipelagic Economy; Poverty Alleviation; Village Funds; 3SLS

  • Abstract

    The primary objective of this research is to analyze the effectiveness of central government fiscal transfers in alleviating poverty within Ma-‎luku Province, specifically positioning economic growth as a mediating factor. While fiscal transfers have consistently increased, poverty ‎remains a persistent issue in this archipelagic region. By applying the Three-Stage Least Squares (3SLS) method to panel data spanning 11 ‎regencies and cities from 2015 to 2024, this study reveals a critical insight: although transfer funds significantly boost regional economic ‎growth, they fail to directly reduce poverty rates. Economic growth functions as the main transmission channel; however, its impact is not ‎sufficiently inclusive to benefit low-income households. A notable anomaly is observed where Village Funds (DD) exhibit a negative corre-‎lation with growth, signaling potential institutional bottlenecks. The study concludes that the success of fiscal decentralization depends more ‎on allocation mechanisms and spending quality rather than transfer volume alone. We recommend a strategic reorientation of funds toward ‎productive sectors and strengthening local institutional capacity to achieve meaningful poverty reduction in island-based economies‎.

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  • How to Cite

    Faisal Sangadji, M., Ismail, M. ., Khusaini, M. ., & Prasetyia, F. . (2026). The Effect of Central Government Transfer ‎Funds onPoverty Levels in Maluku Province. International Journal of Accounting and Economics Studies, 13(2), 290-296. https://doi.org/10.14419/5pz05d14