Dynamic circular causation model in poverty alleviation: Empirical evidence from Indonesia

Abstract

Purpose

This paper aims to unveil the impact of government policy, socio-economic variable, Zakat Infaq Shadaqah (ZIS) and financing of Baitul Maal wat Tamwil (BMT) toward severe problem of poverty in Indonesia.

Design/methodology/approach

The paper considers dynamic circular causation model to produce proper solution on Indonesian style of poverty that hitherto remain unresolved.

Findings

All variables including ZIS, government policy, socio-economic variable and BMT financing have an impact toward poverty reduction.

Research limitations/implications

This paper confined to the scope of poverty that occurred in Indonesia only, and therefore all variables and literatures derived from Indonesian pedigree on poverty.

Practical implications

This paper implies that government policy will be shifted toward focusing on extending subsidy for rural society to uplift their income by involving in more real sector.

Originality/value

This paper considered to be scarce as focusing only for Indonesian style of poverty by using dynamic circular causation model as a solution.

Citation

Mariyanti, T. and Mahfudz, A.A. (2016), "Dynamic circular causation model in poverty alleviation: Empirical evidence from Indonesia", Humanomics, Vol. 32 No. 3, pp. 275-299. https://doi.org/10.1108/H-02-2016-0016