Accountability, Transparency, Regional Financial Performance, and Poverty in North Sumatra: The Moderating Role of Economic Growth

Abstract

This study examines the effects of accountability, transparency, and regional financial performance on poverty levels in North Sumatra Province, with economic growth incorporated as a moderating variable. The study employs panel data from regencies and municipalities in North Sumatra and relies on secondary data obtained from official statistical publications, regional government financial reports, public information disclosure reports, and audit-related documents. Poverty and economic growth data were derived from Statistics Indonesia, while accountability, transparency, and regional financial performance were constructed from relevant regional government records. Panel data regression was applied, and model selection through the Chow and Hausman tests indicated that the Random Effect Model was the most appropriate specification. The findings reveal that accountability and transparency have significant negative effects on poverty, implying that better governance is associated with lower poverty levels. Regional financial performance also shows a negative coefficient, although the effect is not statistically significant. Economic growth has a significant direct negative effect on poverty. However, the interaction results indicate that economic growth moderates the relationships between accountability, transparency, financial performance, and poverty, suggesting that growth does not automatically strengthen the poverty-reducing role of public financial governance. These findings imply that economic expansion must be accompanied by inclusive governance and equitable fiscal management in order to produce more effective poverty reduction. The study contributes to the literature on regional governance and poverty by demonstrating that the effectiveness of public financial governance depends not only on institutional quality, but also on how economic growth is distributed across society.