Indonesia Conference Directory

Basically the nature of development is the inclusive human development and the development of society as a whole. The government budget allocation policy has an important role to increase the human development index. In this study, the effect of government budget allocation on human development index of underdeveloped regions in Indonesia was analyzed. Using descriptive and verification methods, the documentation study was utilized to collect the data on realization report of Regional Revenue and Expenditure Budget (RREB) and publication report of Human Development Index (HDI) from Central Bureau of Statistics. The populations were 121 districts categorized as underdeveloped regions according to Presidential Regulation No. 131 of 2015 in 2015-2017, which obtained 363 observation data. Using regression analysis, it was found that the government budget allocation has a positive effect on human development index. This study supports the theory of economic development that the government success in managing the budget may have a positive impact on people welfare.