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ANALYSIS OF THE ALLOCATION OF SPECIAL AUTONOMY FUNDS IN
INFRASTRUCTURE, EDUCATION AND HEALTH AS THE AREAS WITH

THE LARGEST ALLOCATION TO POVERTY LEVELS IN ACEH

Glena Shafira Sebayang
Faculty of Business and Economics, University of Indonesia, Indonesia

ABSTRACT
Aceh's poverty rate is still high enough to make Aceh the fifth poorest province in Indonesia. This is a
concern because Aceh received additional transfer funds in the form of Special Autonomy Funds which
are used for seven areas, namely, infrastructure maintenance and development, people's economic
empowerment, poverty alleviation, education, social, health, and Aceh. However, of these seven areas,
the areas that received the largest allocation were infrastructure, education, and health, while the other
fields tended to get relatively small allocations. Nevertheless, infrastructure, education, and health
continue to have an influence on poverty. For this reason, this study aims to determine how the influence
of infrastructure, education, and health as fields that have a large allocation of funds in the Special
Autonomy Fund on poverty levels. This study used panel data from 22 districts/cities in Aceh in the
2014-2021 research period. This study used regression panel fixed effect model data to see the estimated
results. The results of this study show that the allocation of Special Autonomy Fund in infrastructure,
education, and health has not significantly affected poverty rates in Aceh.

Keywords: Allocation of Special Autonomy Fund for infrastructure; allocation of the Special Autonomy
Fund for education; allocation of the Special Autonomy Fund for health; and poverty rates

INTRODUCTION

Aceh's poverty rate is still quite alarming. Aceh is the fifth poorest province in Indonesia.
The number of poor people in Aceh reached 15.9% or around 850.26 thousand people in 2021
(BPS, 2022). This is a concern because Aceh is one of the 5 regions that have special rights. The
rights obtained by Aceh are specifically in the form of special autonomy through Law Number
11 of 2006 concerning the Government of Aceh. In the implementation of special autonomy,
Aceh also received a special fiscal enactment, where Aceh received additional transfer funds in
the form of Special Autonomy Funds (Kemenkeu, 2019). The Special Autonomy Fund has a
considerable contribution in regional revenues, both at the provincial and district/city levels
(Handra et al., 2018). This should have had more impact on the welfare of people in Aceh.
However, during the period of implementation of this policy, the poverty rate in Aceh was still
quite high (Hasta Budiratna & Riatu M. Qibthiyyah, 2020; Setiawan et al., 2020).

In the implementation of the Special Autonomy Fund, this fund is intended for development
in seven areas. The field of development in question includes the field of infrastructure
maintenance and development, the field of people's economic empowerment, the field of poverty
alleviation, the field of education, the field of social, the field of health, and the field of privileges
of Aceh. However, it can be seen from figure 1 that the areas that receive the largest allocation
are infrastructure, education, and health. Other fields tend to receive relatively small allocations,
even including poverty alleviation allocations.

Analysis of The Allocation of Special Autonomy Funds in Infrastructure, Education And Health as The
Areas with The Largest Allocation to Poverty Levels in Aceh

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Graphs 1

Total Allocation of Special Autonomy Funds per Field
for the Period 2008-2021 (Billion Rupiah)

Source: Special Autonomy Fund Realization Report (Reworked)

Nevertheless, infrastructure, education, and health continue to have an influence on

poverty. The view of the relationship between infrastructure and poverty is illustrated by the
research of Tamam (2013), according to them the relationship between infrastructure investment
and poverty alleviation can be seen directly (direct) and indirect (indirect). Directly, the
relationship between infrastructure and poverty starts from infrastructure investment (intervention
areas) that affect productivity in areas affected by infrastructure development (areas of influence).
Then, with better infrastructure development, it will create jobs and better wages, so that with
more decent wages and jobs can reduce poverty (areas of concern). Furthermore, the relationship
between infrastructure and poverty indirectly starts from infrastructure investment which will
affect economic growth, then economic growth will affect real income or real consumption of the
poor, and the end result is real income or real consumption will reduce poverty.

Then, education became one of the sectors that was closely correlated with poverty.
Education plays an important role as a means to improve their abilities and develop their capacity
in a sustainable manner. By having a good education, the productivity of the poor will increase,
so they have the ability to compete and obtain opportunities for greater opportunities in economic
and social activities. People with a good education will have basic knowledge and skills will have
the option to have a better and decent job with a better salary/income as well. The better income
will help the poor in improving their quality of life which will improve their welfare. Therefore,
education is one of the productive investments because it involves human capital that can increase
productivity (Todaro & Smith, 2012) to have a better life in the future, so that poor people can get
out of poverty conditions.

The impact of health on poverty is as great as any other sector. Health is a prerequisite to
be able to carry out daily activities. The impact of health on poverty can be felt if the need for
proper health services can be met. A person or household that is not healthy enough to work
because it is difficult to get access to health care, will cause their productivity to be low.
According to (Todaro & Smith, 2012) that someone who is healthier will get a higher income. This
is because with good health, a person will be more productive so that the income obtained will be
better than people with low productivity. Higher incomes will help the poor to get out of poverty.
Therefore, it is important to provide adequate health services to help people to get out and avoid
poverty.

From this, we learn that the three largest areas of the special autonomy fund have an
influence on poverty, both directly and indirectly. For this reason, it is interesting to know how

Analysis of The Allocation of Special Autonomy Funds in Infrastructure, Education And Health as The
Areas with The Largest Allocation to Poverty Levels in Aceh

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the influence of infrastructure, education, and health as fields that have a large allocation of funds
in the Special Autonomy Fund on poverty levels.

Research related to the allocation per field in the Special Autonomy Fund has never been
conducted with the object of Aceh research. However, there is research that has been done in
other regions, namely Papua. Research by (Kharisma et al., 2020) looks at the impact of the
allocation of the Special Autonomy Fund for education and health on the Human Development
Index in Papua Province. They found that the allocation of the Special Autonomy Fund in
education had an insignificant negative influence on HDI in Papua Province in 2014-2017. This
is not in accordance with the theory that education will improve the quality of oneself. This is
because education development does not have a significant magnitude when compared to the
complexity of education problems in Papua. Furthermore, they also found that the allocation of
health areas had a significant positive influence on HDI. For these two results, they suggested
evaluating the distribution method and utilization of the Special Autonomy Fund as well as
increasing the human resource capacity of local government officials in order to be able to
distribute funds even better.

Then, another study by (Tamberan et al., 2020) which looked at the impact of the allocation
of Special Autonomy Funds in the fields of education, health, infrastructure, and community
economic empowerment on regional economic inequality, both directly and indirectly through
HDI in Papua in 2010-2018. The results showed that the Special Autonomy Fund variables in
education and health had a significant positive effect on HDI, while the Special Autonomy Fund
variables in infrastructure and community economic empowerment did not have a significant
effect on HDI. Furthermore, the Special Autonomy Fund for infrastructure directly has a
significant negative effect on regional economic inequality. Meanwhile, the Special Autonomy
Fund in the field of people's economic empowerment does not have a significant effect on regional
economic inequality. Indirectly through HDI, the variable of special autonomy funds in the fields
of education, health, infrastructure, and community economic empowerment does not have a
significant effect on regional economic inequality.

RESEARCH METHOD

This research analysis uses inferential analysis with a quantitative approach with the aim
of measuring the indicators of research variables so that an objective picture of these variables is
obtained. The type of data used is secondary data obtained indirectly or sourced from third parties,
where the data in this study is sourced from data publications from the Central Statistics Agency
(BPS), Aceh Audit Board (BPKA) (BPK RI, 2018), and the Indonesia Database for Policy and
Economic Research (INDODAPOER). The data obtained are 22 districts/cities in Aceh in the
2014-2017 and 2019-2021 research periods, in 2018 they were excluded from the research time
period because in 2018 Qanun No.10 of 2016 was enacted which allocations for the district/city
level were managed by the provincial level.

Allocation of Special
Autonomy Fund in

Infrastructure

Allocation of Special
Autonomy Fund in

Education

Allocation of Special
Autonomy Fund in

Health Sector

Poverty

Figure 1 Mindset Scheme

Analysis of The Allocation of Special Autonomy Funds in Infrastructure, Education And Health as The
Areas with The Largest Allocation to Poverty Levels in Aceh

798 Return: Study of Economic And Business Management, Vol 2 (8), August 2023

The following is an operational definition of the variables used for inferential analysis in
this study:

1. Independent Variable
a) Allocation in the infrastructure sector is funds allocated to finance infrastructure

development. The data used is the realization of the allocation of infrastructure. The
unit used is the natural logarithm (ln_infras).

b) Allocation in the field of education is funds allocated to finance funding for
educational activities. The data used is the realization of the allocation of the education
sector. The unit used is the natural logarithm (ln_didik).

c) Allocation in the health sector is funds allocated to finance the health sector. The data
used is the realization of the allocation of infrastructure. The unit used is the natural
logarithm (ln_sehat).

2. Dependent Variable
a) The poverty rate is the number of poor people who have incomes below the poverty

line. The unit used is the natural logarithm (ln_pov).

To see the effect of the allocation of the Special Autonomy Fund in the fields of
infrastructure, education, and health on poverty, the equation model used in this study is as
follows:

ln⁡(��)�� = ⁡��0 + ⁡��1⁡ln⁡(��)��−1 +⁡��2⁡ln⁡(��)��−1 + ⁡��3⁡ln⁡(��ℎ��)��−1 +⁡��⁡

Where:
ln_pov : Percentage of poor people (%)
ln_infras : Allocation of infrastructure (Rp)
ln_didik : Allocation of education (Rp)
ln_sehat : Health sector allocation (Rp)
α0 : Intersep
β0 : Variable constants
i : Districts/Municipalities
t : time period (Year)
εit : error term

Inferential analysis in this study uses panel data with a fixed effect model approach. Fixed

effect estimation models are used to control for unobserved variables and overcome variables
that do not change over time, which can cause bias in the estimation results due to differences in
regional characteristics (districts / cities) (Gujarati, 2016). The analysis in this study was carried
out by processing data using data processing software in the form of Stata 16.0.

Then, the variables of the allocation of the Special Autonomy Fund in the infrastructure
sector (infrastructure), the allocation of the Special Autonomy Fund in the field of education
(education), and the allocation of the Special Autonomy Fund in the health sector (health) use lag
time (inaction model). This is because a policy is difficult to see results at the same time as the
implementation of policy, especially in budget policy. This study only used the first lag time due
to data limitations.

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RESULT AND DISCUSSION
The estimation results in this study can be seen in table 2 as follows:

Table 1 Estimated Results

Variable Coefficient Std. Error t P>|t|
L1. ln_infras -0,0103677 0,0165194 -0,63 0,537
L1. ln_didik 0,0196665 0,0163593 1,20 0,243
L1. ln_sehat 0,0074166 0,0131072 0,57 0,577

_cons 10,00122 0,3880572 25,77 0,000
Source: Panel Data Regression Results in Stata Software, 2023

Table 1 aims to see the effect of the three allocation areas with the largest allocation from
the Special Autonomy Fund on poverty levels in Aceh. The estimation results show that the
allocation of Special Autonomy Funds in the fields of infrastructure, education, and health in the
first lag has not significantly affected the poverty rate in Aceh.

Discussion
Allocation of Special Autonomy Fund in Infrastructure to Poverty

The infrastructure sector is the area with the largest allocation from the Special Autonomy
Fund throughout the implementation of the 2008-2021 period. During this period, funds allocated
to infrastructure have an increasing budget trend. In 2008, the infrastructure budget fund was IDR
1.9 trillion with a realization of IDR 1.2 trillion, then in 2021, the infrastructure budget reached
IDR 3.09 trillion with a realization of IDR 2.4 trillion in 2021. The increase in allocation to
infrastructure is in line with the increase in the Special Autonomy Fund.

Although the budget and realization in the infrastructure sector have an increasing trend,
the portion of allocation in the infrastructure sector actually experienced a downward trend despite
increasing fluctuations in the period. The portion of fund allocation for infrastructure at the
beginning of the Special Autonomy Fund policy period reached 52.8%, then decreased to 38.06%
of the total realization of the Special Autonomy Fund.

2.785
2.405

-
500

1.000
1.500
2.000
2.500
3.000
3.500
4.000

Budget and Realization of DOK Infrastructure
(Billion Rupiah)

Anggaran Realisasi Linear (Anggaran) Linear (Realisasi)

Analysis of The Allocation of Special Autonomy Funds in Infrastructure, Education And Health as The
Areas with The Largest Allocation to Poverty Levels in Aceh

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Figure 2 Budget Development and Realization in the Infrastructure Sector along with the Portion

of Infrastructure Allocation to the Special Autonomy Fund
Source: (BPKA, 2021) (Reworked)

In the policy period, activity programs in the infrastructure sector were used for the

construction and maintenance of 16 types of infrastructure (Bappeda, 2020). The largest
allocation is used for road and bridge construction and rehabilitation activities with a value of Rp
28.74 trillion or around 80% of the total realization of the infrastructure sector. This indicates that
the construction and rehabilitation of roads and bridges in Aceh is predominantly sourced from
the receipt of the Aceh Special Autonomy Fund. The second largest allocation was distributed for
irrigation development with an amount of around 5.54% of the allocation of funds in the
infrastructure sector, followed by flood control construction by 5.12%, and the construction of
sea dikes/jetties by 2.92%.

Most of the funds in the infrastructure sector are used for the construction of public
infrastructure such as roads and bridges, transportation facilities, natural disaster management
infrastructure, and others. This public infrastructure development indirectly affects the poverty
rate, where infrastructure development will affect through economic growth. Adequate
infrastructure will create better economic growth, so that poverty alleviation programs will also
run better (Tamam & Rahma, 2013).This means that infrastructure has transmission to influence
poverty, but it takes longer to see the impact of infrastructure development on poverty.

44,30

Portion of Infrastructure to Special Autonomy Fund (Realization) (%)

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Allocation of Special Autonomy Fund in Education to Poverty
Education was the second largest allocation from the Special Autonomy Fund in the 2008-

2021 period. In terms of budget and realization as well as the portion in the education sector, it
seems to have an increasing trend, although it experienced a sharp decline in 2011, where the
education sector only had a portion of 0.74% of the total Special Autonomy Fund. Then after that,
the Aceh Government tried to maintain the ratio in the education sector to 20% since 2012 (Badan
Akuntabilitas Keuangan Negara, 2020).

Figure 3 Budget Development and Realization in the Education Sector along with the Allocation
Portion of the Education Sector to the Special Autonomy Fund

Source: (BPKA, 2021) (Reworked)

Regarding program activities in the field of education, based on the report of Bappeda Aceh
(2020) that the education sector has three groups of activity programs during the period 2008-
2020 used for three activity programs. The program of activities that have been realized includes:
first, scholarships for higher education (S1, S2, S3) and other scholarships with a total realization
of the allocation of IDR 0.93 trillion for 14,169 people; second, the procurement of educational
facilities with a total allocation of IDR 6.19 trillion; finally, the procurement of educational
infrastructure with a total realization of Rp. 8.18 trillion. From the activity program, it can be seen
that the funds allocated for the field of education are used to improve the quality of human
resources. Improving the quality of human resources will improve productivity, thus having a
positive impact on reducing poverty. However, it will take longer to see the impact of increased

1.211
1.036

500

1.000

1.500

2.000

2.500

Budget and Realization of DOK Education Sector
(Billion Rupiah)

Anggaran Realisasi Linear (Anggaran) Linear (Realisasi)

19,08

Share of Education Sector to Special Autonomy Fund (Realization) (%)

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802 Return: Study of Economic And Business Management, Vol 2 (8), August 2023

productivity that can help reduce poverty. However, improving the quality of human resources
through education will have a long-term impact because education is one of the productive
investments because it involves human capital that can increase productivity (Todaro & Smith,
2012), so that poor people can get out of poverty. poverty.

Allocation of Special Autonomy Fund in the Health Sector to Poverty

The Special Autonomy Fund has contributed to realizing health services in Aceh through
allocations in the health sector. During the period 2008-2021, the health sector had an average
realization allocation of 14.13% of the total realization of the Special Autonomy Fund per year.
In terms of budget and realization of health sector funds and the portion of the allocation of health
sector funds to the Special Autonomy Fund, there is an increasing trend of fluctuations. The
increase in allocation for the health sector is quite high, where there was a significant increase in
the first three years of the implementation of Special Autonomy. Then, the allocation of the health
sector continued to increase during the 2008-2021 period, except in 2015. Thus, the Special
Autonomy Fund for health sector contributed relatively significantly to health spending in Aceh
in that period (Handra et al., 2018).

Figure 4 Budget Development and Realization in the Health Sector along with the Portion of

Health Allocation to the Special Autonomy Fund
Source: (BPKA, 2021) (Reworked)

Related to the activity programs that have been implemented in the health sector in the
2008-2020 period, six groups of activity programs are used (Bappeda, 2020). The program of
activities that have been carried out include: first, JKA (Aceh Health Insurance) which has the

846
767

-
200
400
600
800

1.000
1.200
1.400
1.600
1.800

Budget and Realization of DOK in the Health Sector
(Billion Rupiah)

Anggaran Realisasi Linear (Anggaran) Linear (Realisasi)

14,13

Portion of Health Sector to Special Autonomy Fund (Realization) (%)

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largest allocation reaching Rp 4.63 trillion or reaching 45.32% of the total health sector funds in
the 2008-2020 period; second, rehabilitation and construction of hospitals with a total realization
of allocation of Rp 2.81 trillion; third, rehabilitation of puskesmas in 351 puskesmas units in
Aceh, with a total cost of Rp 1.29 trillion; fourth, rehabilitation and development with a total
realization of allocation of Rp 0.53 trillion which includes pustu/poskesdes in 2,337
pustu/poskesdes units in Aceh; fourth, funding for medical devices with a total of Rp 0.62 trillion;
Finally, the procurement of operational vehicles and ambulances with a total of Rp 0.33 trillion.

The work program in the health sector seems to be used to ensure the fulfillment of basic
health needs in Aceh. The improvement of quality in the provision of health services can increase
people's productivity because with healthier conditions, they can be more active in activities. With
an increase in productivity, you will get a better income compared to people with low productivity
(Todaro & Smith, 2012). Higher incomes will help the poor to get out of poverty. However, it goes
back again that it takes longer to see an increase in productivity that will affect poverty levels.

CONCLUSION

The estimation results in this study show that the allocation of Special Autonomy Funds in
the fields of infrastructure, education, and health has not significantly affected the poverty rate in
Aceh. This is because the influence of these three areas is not directly on poverty, so it takes a
longer time to see the effect on poverty levels. Therefore, this allows regression results that have
not yet affected the poverty level for the period 2014-2021.

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