Do gender empowerment and democracy reduce poverty rate? A cross-provinces evidence from western Indonesia

Abstract

DOI: 10.14254/2071789X.2021/14-3/3 ABSTRACT. Our study aims to explore the effect of gender empowerment and democracy on the poverty rate in western Indonesia. The data operationalized is a crosssectional data set of 8 provinces for the period of 20072018. The dynamic model of the econometric analysis was applied to analyze functional and causal relations between the three variables. Our findings discovered that there is a long-run equilibrium relationship between the poverty rate, gender empowerment, and democracy. In the long-run, both the poverty rate and democracy positively related to gender empowerment. In the short-run, the relations are negative and significant. At the 2-period horizon, gender empowerment has a negative and significant effect on poverty, but democracy has a non-significant effect on the poverty rate. The result of the Granger causality test indicates that there is a bidirectional causality between gender empowerment and democracy. Besides, unidirectional causality exists from gender empowerment and democracy to poverty rates. This finding implies that the effort of the Indonesian government to alleviate the poverty rate should consider policy intervention related to increasing gender empowerment and improving the quality of democracy. The government should encourage women’s role in the economic, social, and political field. Besides, the government has to increase the democracy index by improving civil rights in economics and politics.