Iis Surgawati



The main purpose of this study was to analyze the relationship between government expenditure, especially on human resource development and economic growth, and paradoxically observed between Keynes hypotheses and Wagner theory of West Java economies. The data used are secondary unbalanced panel data from 27 districts / cities for the period of 2010 - 2017. The estimated model used on the entire data is Two Stage Least Square approach, Fixed Effect Model. The results showed that (i) government expenditure on human resource development and urban structure were significantly positive effect, region characteristic and the global financial crisis were significantly negative effect, labor and democratic development has a negative effect as well as the quality of the institution has a positive effect but not significant on economic growth, (ii) economic growth, population and total government expenditure were significantly positive effect, the financial crisis and the quality of institutions have a positive effect as well as the characteristics of the region and the development of democracy have negative effect but not significant on government expenditure on human resources development, (iii) the economy of West Java pattern tends to follow the Wagner theory.

Keywords: Government Expenditure, Economic Growth, Keynes Hypotheses, Wagner Theory, Two Stage Least Square.

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