Abstract

Inclusive growth is economic growth that is able to reduce poverty, income inequality and unemployment. Inclusive growth in Indonesia was inconsistent, unequal between regions and varied. In addition, there are indications of spatial linkages due to socio-economic interactions between regions. The purpose of this study is to determine the effect of physical infrastructure, social, economic and spatial linkages on inclusive growth in Indonesia. With various measures of inclusive growth, this study uses a composite index of inclusive growth in 34 provinces in Indonesia during 2015-2020. The analytical method used is spatial Durbin model for panel data. The results showed that physical infrastructure (construction cost index, road length ratio, and the number of air transport passengers), social (population, school enrollment rates and internet control) and economic (regional original income ratio) had a significant effect on the inclusive growth that occurred. By calculating aspects of spatial linkages, the contribution of physical infrastructure (number of air passengers), social (gender empowerment, school participation rates and internet control), economy (inflation) and the achievement of inclusive growth in the surrounding area also have a significant effect on inclusive growth in a region. In general, there needs to be a synergy between the central government and local governments as well as local governments and other local governments. Spatial interactions that are proven to be able to achieve more inclusive growth need to be considered in formulating and implementing policies, especially from the dimensions of physical, social and economic infrastructure.