• The Journal of Asian Finance, Economics and Business
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• v.7 no.10
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• pp.433-442
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• 2020

This study investigates the impact of fiscal transfer, specifically the Village Fund Transfer, on rural income inequality and rural poverty. Studies on fiscal transfer offers contrasting outcomes, some argues that fiscal transfer suppresses wealth disparity, while others argue that it tends to widen disparity. This study employs descriptive analysis in estimating the elasticity of income inequality and poverty rate before and after the Village Fund Transfer. It develops multiple regressions model on panel datasets of 33 provinces in Indonesia before and after the implementation of Village Fund Transfer. This study suggests that the elasticity of income inequality is higher after the implementation of village fund transfer. Rural poverty tends to decline annually, however, the elasticity changes is lower after the implementation of village fund transfer. Furthermore, this study suggests that village fund transfer is insignificant in coping with the issue of income inequality, while education and the level of labor productivity of agricultural sector appears to be the determinant factor in tackling the issue of income inequality in the rural areas. This study further reveals the significance of village fund transfer in suppressing the rural poverty rate. This study also highlights the significance of human resources quality and agricultural sector in reducing poverty rate in rural areas.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.12
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• pp.593-604
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• 2020

This study analyzes human development convergence and the impact of funds transfer to the regions using σ and β-convergence analysis method. Observations were made in all Indonesia's provinces in the period 2010-2019. The coefficient of variation calculation shows a dispersion in the inequality of human development, which means that convergence occurred. This is also documented by the clustering analysis results developed in the study. The results are in line with the hypothesis of neoclassical theory, which shows the tendency for provinces with lower human development levels to grow relatively faster. The dynamic panel data approach with the GMM model shows that a model built with explanatory variables for transfer of funds to regions may lead to the process of convergence of human development - 2.21% per year or 31 years to cover the half-life of convergence. This is a consequence of the Special Allocation Fund and the Village Fund, which positively impact the convergence process, and the General Allocation Fund and the Revenue Sharing Fund with negative signs slowing the convergence process. This evidence opens opportunities to review the justification of the weighting component in determining the amount of funds transferred to the region to accelerate the convergence process of human development.

• Journal of Korean Society of Rural Planning
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• v.22 no.3
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• pp.71-80
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• 2016

Korea is becoming a model country for the developing countries' agricultural and rural development. Drawing implications for Vietnam from Korea's experiences can help make development strategies and policies for other developing countries including North Korea as well as for Vietnam itself. Vietnam is facing an inefficiency in agricultural production and the gap between urban and rural growth has been widening. Farm sizes per household are small and farmlands are scattered. Diversification in rural industry is very restricted. To attack these problems, investment is urgently needed for rural infrastructure building as well as agricultural structure adjustment. In the process of rural development, there have been also encountered such problems as financial procurement, community's spontaneous participation, manpower development for adjusting to industrial structural change. Korea's experiences may be helpful for establishing rural development strategies and policies in Vietnam. Benchmark scopes can go beyond Saemaul Undong in 1970s. Korea's pre- and post-Saemaul Undong era as well as the Saemaul Undong era can be referred. In the wake of globalization, Vietnam has not only experienced compressed rapid economic growth but also encountered policy tasks to eradicate poverty, to realize self-reliance and income increase, and to lessen urban-rural development gap, at the same time. Korea's experiences show that priority needs to be put on the establishment of national and rural development strategies based on Vietnam-specific conditions, utilization of village's resources including community tradition and social capital, fund raising for rural development, farmland development and mobilization, production and living infrastructure building, technology transfer for farmers and vocational training for new job seekers.