DETERMINAN PEMBANGUNAN MANUSIA DI INDONESIA

Abstract

This study examines the effects of education expenditure, inflation, and economic growth on the Human Development Index (HDI) in Indonesia using panel data from 31 provinces. Employing a Fixed Effect Model (FEM), the results show that the logarithm of education expenditure (LNBPEND) has a negative and significant effect on HDI at the 1% level (p = 0.009), indicating that higher education spending has not yet been optimally translated into better human development outcomes, potentially due to inefficiencies in budget management and allocation. Inflation (INF) exerts a positive but insignificant effect, suggesting minimal influence of price fluctuations on welfare, while economic growth (PE) has a positive and significant impact at the 10% level, highlighting its role in improving development outcomes. The joint effect of all variables is significant (F = 46.34, Prob > F = 0.0000; R² = 0.5045), confirming that education expenditure, inflation, and economic growth collectively influence HDI. These findings deviate from the classical predictions of Human Capital Theory, suggesting the presence of structural inefficiencies in educational policy implementation, while remaining consistent with Government Role Theory, which emphasizes the importance of effective public budget allocation for equitable and sustainable development.