Journal of Developing Economies

Demystifying Literacy Disparities: The Interplay of Economic Conditions and Educational Spending

Tryson Yangailo — Sat, 28 Jun 2025 00:00:00 +0700

This study provides a comprehensive analysis of the interplay between literacy rates, GDP per capita, and government spending on education in different regions of the world. Using secondary data from the World Bank and Jamovi software for statistical analysis, the study reveals significant disparities in literacy rates. Europe and Central Asia (excluding high-income countries) have the highest literacy rates, while Sub-Saharan Africa and Central Europe and the Baltics have comparatively lower rates. The results of the correlation analysis show a weak linear relationship between GDP per capita and literacy rates, while a non-linear relationship indicates a stronger relationship. Government spending on education shows a moderate positive correlation with literacy rates, but the results of regression analysis reveal inefficiencies, suggesting that increased spending does not always translate into improved literacy outcomes. The study addresses gaps in the existing literature by challenging the simplistic view that higher economic growth and spending automatically improve literacy, and by highlighting the need for more targeted education policies.

The Linkage Between Foreign Capital Inflows and Domestic Saving in Tanzania

Cornel Joseph — Sat, 28 Jun 2025 00:00:00 +0700

This study examines whether money from outside the country (such as remittances, foreign direct investment, and foreign aid) adds to or replaces domestic savings in Tanzania. The research uses a 33-year time series dataset (1991-2023) and employs the Autoregressive Distributed Lag (ARDL) estimation approach. Findings show that, in the long run, remittances, foreign direct investment, and foreign aid have a negative and statistically significant effect on savings in Tanzania. This means that when Tanzania gets foreign aid, remittances, and investments from outside people will save less. However, the results depict that, in the short run, foreign direct investment and remittance inflows have a positive and statistically significant effect on savings in Tanzania. Therefore, the government of Tanzania needs to develop policies that ensure that, in the long run, foreign aid, foreign direct investment and remittance inflows contribute to savings rather than replace them. Specifically, the government needs to strengthen domestic capital formation rather than relying on foreign capital. This could strengthen domestic savings and lead to economic growth in Tanzania.

Effect of Macroeconomic Factors on Economic Growth in Indonesia

Hafidz Zainul Mustofa, Moh. Faizin — Sat, 28 Jun 2025 00:00:00 +0700

Indonesia’s GDP growth from 2007 to 2022 shows a significant trend, reflecting the positive dynamics of a growing economy. This growth is influenced by macroeconomic factors such as inflation, interest rates, unemployment, fiscal and monetary policies, and international trade conditions. This study investigates the factors affecting Indonesia’s economic growth, mainly focusing on foreign direct investment (FDI), exchange rate, inflation rate, interest rate, and exports. This study uses quantitative methods with quarterly data from 2007 to 2022. The data used are time series data obtained from the Central Statistics Agency (BPS), the Investment Coordinating Board (BKPM), and Bank Indonesia (BI). The analysis used the Vector Error Correction Model (VECM) approach to understand the long-run and short-run relationships. The findings show that FDI is insignificant for Indonesia’s economic growth, while exchange rates and exports negatively impact growth in the short and long run. Inflation has a negative effect in the long run, and interest rates have a positive impact in the long run. Policy implications include improving FDI efficiency, maintaining currency stability, controlling inflation, setting appropriate interest rate policies, and diversifying exports to support economic growth.

The Role of Internet Usage on Gender Wage Gap: Evidence From Indonesia

Martina Nurma Dewi, Arie Damayanti — Sat, 28 Jun 2025 00:00:00 +0700

This study analyzes the effect of internet usage on the gender wage gap within Indonesia’s labor market. Using data from the 2022 National Labor Force Survey (Sakernas), the research employs robust least square regression, quantile regression, and the Oaxaca-Blinder Decomposition Method to assess the differential effects of internet use on wages across genders. The findings indicate that internet usage in main job significantly increases wages for both men and women while also narrowing the gender wage gap which varies by income level and job type. This effect is more pronounced in white-collar jobs and among higher-income groups compared to blue-collar jobs and middle-income groups. Additionally, the study underscores that unexplained factors, including discrimination, play a significant role in perpetuating the gender wage gap.

Analysis of the Effect of Socioeconomic Factors on Poverty in Central Java Province

Moh. Nur Khaqiqi, Lilik Sugiharti — Sat, 28 Jun 2025 00:00:00 +0700

Central Java, despite experiencing robust economic growth, continues to grapple with significant poverty, reflecting a broader national challenge of uneven wealth distribution. The poverty rate as of 2023 stands at 10.77%, highlighting persistent economic disparities. The study aims to analyze how socioeconomic factors like economic growth, HDI, and wage levels contribute to poverty alleviation within the region. The research uses a quantitative approach, employing regression random effect models to understand the dynamics between these variables and poverty rates over the years 2014-2023. Data were processed using Stata 17. The analysis indicates that economic growth in Central Java has an insignificant direct impact on reducing poverty. The research highlights a significant negative correlation between HDI and poverty levels. This study found that wage increases have not significantly impacted poverty reduction. Simultaneously, GDRP growth, HDI, and wages affect poverty in Central Java province. The findings suggest that merely focusing on economic growth and wage increases is not enough to reduce poverty. Comprehensive strategies that also improve human development indices and address income distribution are crucial for effective poverty alleviation.

Economic Growth and Its Determinants in Less-Developed Regions: A Panel Quantile Approach

Fania Malik, Jihad Lukis Panjawa, Fitrah Sari Islami, Rr. Retno Sugiharti — Sat, 28 Jun 2025 00:00:00 +0700

Economic growth is an important phenomenon because it is closely related to the ultimate goal of development, namely community welfare. However, not all regions in Indonesia have experienced an increase in economic growth. Less-developed regions are among those with low economic growth. This study aims to analyze the determinant of economic growth in 40 less-developed regions of Indonesia during 2015-2022 using a quantile panel regression analysis tool. The results show that the fixed capital formation, population, and human development have a significant positive effect on economic growth at low, medium, and high levels of economic growth. The internet usage variable has a significant positive effect on low and medium economic growth levels but has no effect on high economic growth levels. The access to clean water variable has a significant positive effect on low economic growth levels but has a significant negative effect on medium economic growth levels. Meanwhile, at high economic growth levels, access to clean water has no effect. The government is more committed to accelerating development and the community must actively cooperate in regional development to increase regional economic growth.

Urgent Choices: Evaluating The Impact of Housing and Wash Programs in Indonesia

Muhammad Hanri, Calista Endrina Dewi, Sheny Diah Puspita — Sat, 28 Jun 2025 00:00:00 +0700

This study evaluates the impact of Indonesian government programs in the housing and water, sanitation, and hygiene (WASH) sectors on social welfare, specifically targeting poverty reduction and health improvement. The primary hypothesis is that enhanced progress in housing and WASH programs correlates with lower poverty rates and improved health outcomes. Using data from SUSENAS and the Ministry of Development Planning, we employ a fixed effects model to mitigate endogeneity concerns and accurately assess program impact. Findings reveal that while advancements in WASH programs are significantly associated with improved public health, no strong evidence links these programs to poverty reduction. The study recommends prioritizing WASH program expansion and refining housing program strategies to address health outcomes more effectively and promote targeted poverty alleviation measures. These recommendations offer insights into optimizing development programs to enhance Indonesia’s socio-economic landscape.

Impact of Coal Export Decline on East Kalimantan's Mining and Coal Industry

Sat, 28 Jun 2025 00:00:00 +0700

Two of Indonesia’s top export commodities are coal and lignite. However, there is a decrease in the value of coal exports in 2023. The province in Indonesia with the biggest coal reserves is East Kalimantan. This study aims to examine the condition of the mining and coal industry and its relationship with other industries, determine the leading sectors, and assess the impact of the decline in coal exports on the economy of East Kalimantan. The input-output and gross regional domestic product tables for East Kalimantan in 2016 and 2023 are used in the analysis. This study found that even though it is not a leading industry, the mining and coal sector is still an important sector for the economy of East Kalimantan. All economic sectors experienced a decline in output due to the decline in the value of coal exports (mining products) in East Kalimantan, and this sector alone felt the greatest impact—around 73.67% of the total impact in all economic sectors. To process and purify coal produced during mining, the government must establish close communication with business owners in the coal mining industry. Apart from that, the development of the downstream coal industry must also be completed immediately.

Impact of Gross Domestic Product Per Capita and Population on United Arab Emirates Trade Volume

Ethar Hassan, John Atsu Agbolosoo, Rita Nurmalina, Amzul Rifin — Sat, 28 Jun 2025 00:00:00 +0700

The United Arab Emirates (UAE) has become a significant global trade hub. Understanding the factors influencing trade flows is crucial for developing effective strategies to promote trade activities and sustain economic growth. This study examines the impact of Gross Domestic Product (GDP) per capita and population size on trade flows in UAE with major trading partners, including China, Germany, Iraq, India, Japan, and Saudi Arabia, by utilizing a fixed-effects gravity model and panel data from 2000 to 2020. A positive relationship was found between the GDP of UAE and trading partners and bilateral trade, and a negative relationship was found between GDP per capita, the population of UAE, and bilateral trade flows. The distance between the capital city of UAE and its trading partners also has a negative effect on bilateral trade flows. This study suggests that trading partners should improve their GDP per capita. The negative impact of the increasing population size of the UAE on bilateral trade flows indicates that the UAE should improve labor quality and skills that may enhance trade growth and economic development and that trade policies between UAE and its trading partners need to address trade barriers and initiate efforts for their eradication to improve bilateral trade. The policy implication is that trade opportunities should be expanded by exploring trade agreements and fostering diversification of export goods to mitigate domestic competition and open new markets.

The Impact of Institutional Quality on Environmental Quality: A Time-Series Analysis of Bangladesh (1996-2015)

Mohammad Mokammel Karim Toufique — Sat, 28 Jun 2025 00:00:00 +0700

This paper examines the influence of institutional quality on environmental quality in Bangladesh from 1960 to 2015. While institutional quality is the primary explanatory variable, GDP and natural gas electricity consumption are included as moderating variables to control for economic activity and energy-related influences on the environment. The study utilizes the autoregressive distributed lag (ARDL) bounds testing approach and the Toda-Yamamoto (T-Y) Granger causality test to analyze the association. Two measures of institutional quality are developed. One is a composite index constructed from the Worldwide Governance Indicators (WGIs) using principal component analysis (PCA). The other is the average of the six WGIs. Regardless of the index, the findings indicate that higher institutional quality helps reduce CO2 emissions. On the contrary, both GDP and ENG tend to increase CO2 emissions. The ARDL bounds test results confirm the existence of a long-run relationship among the variables in both models. Policymakers need to concentrate on improving institutions to improve environmental quality. Concurrently, they must ensure that economic progress and electricity generation production are sustainable in Bangladesh.