The Impact of Socioeconomic, Government Expenditure and Transportation Infrastructures on Economics Development: The Case of West Timor, Indonesia Thobias Arnoldus Messakh 1 , Ernan Rustiadi 2* , Eka Intan Kumala Putri 3 , Akhmad Fauzi 4 1 Study Program of Regional and Rural Development Planning, Faculty of Economics and Management, IPB University, Bogor 16680, Indonesia 2 Division of Regional Development Planning, Department of Soil Science and Land Resources Management, Faculty of Agricultural, IPB University, Bogor 16680, Indonesia 3 Department of Resources and Environmental Economics, IPB University, Bogor 16680, Indonesia 4 Regional and Rural Development Planning, IPB University, Bogor 16680, Indonesia Corresponding Author Email: ernanrustiadi@apps.ipb.ac.id https://doi.org/10.18280/ijsdp.170328 ABSTRACT Received: 15 October 2021 Accepted: 28 January 2022 Socioeconomic, government expenditures, and transportation infrastructures, such as roads and ports, play a critical role in the economic development of poor and deprived regions. These factors are as catalysts for increasing economic output and enhancing people’s living standards in these regions. This study of West Timor, Indonesia, aimed to examine the impact of Socioeconomic, government expenditure, road, and port infrastructure on economic growth. This study analyzed panel data from a cross-section of six regencies/municipality in the West Timor region from 2002 to 2020. The analytical method used in this research is the fixed effect model (FEM) and the random effect model (REM). We found that human development, government expenditure on personnel and capital expenditure, urbanization, and district roads positively impacted economic growth, while expenditure on goods and services has a negative impact on economic growth. In contrast to district roads, national roads adversely impact economic growth due to triggering backwash and leakage of the regional economy. Therefore, human development, government expenditure, and infrastructure development to encourage the local economy of underdeveloped areas in the country’s border areas must consider the needs of local communities in increasing their productivity. Keywords: backwash effect, economic growth, government expenditure, human development, infrastructure, West Timor 1. INTRODUCTION Economic growth is a major goal for the development of every country. The realization of prosperity is also observed from indicators of economic growth through improving the quality of infrastructure and human capital [1-8]. Research on the impact of transportation infrastructure development was conducted by Auscher in 1989 [9-13]. These studies also confirmed the growing controversy over whether transportation infrastructure development is becoming a more important option and has a more positive impact on development than options for development in other sectors. Improper infrastructure development will result in regional imbalances [6]. The results of other studies show that due to certain conditions, some forms of transportation infrastructure can have a negative impact on economic growth [1, 7, 14]. According to Barro and Martin [15], the Solow model of economic growth explains the income of aggregate capital and labor. Whereas capital reduces marginal returns, long-term growth is explained by population growth and technological advances. This general model has been including several variables, particularly government expenditure (infrastructure), human capital, protection of property rights, and market distortions, which increase the rate of output growth. Economists studying growth are increasingly turning to endogenous growth models. These models are characterized by the assumption of constant return to scale. According to this, the Solow model only predicts convergence after controlling for the determinants of the steady-state, a phenomenon which can be called conditional convergence. Barro and Martin [15] developed empirical applications in the presence of an endogenous growth theory model, arguing that the government contributes to production when it is driven by the flow of productive expenditure (infrastructure), that can prevent the completion of private sector capital returns, increasing the marginal product of private sector capital. In turn, this increases the rate of economic growth. The influence of infrastructure development on economic growth is a model for endogenous economic growth. Gunnar Myrdal proposed a regional growth theory in 1957 with a much higher explanatory power than the convergence hypothesis proposed by Barro and Martin [15]. Myrdal explained the backwash and spread effects to describe the challenges of developing the eastern region of Germany as an underdeveloped region relative to the wealthier regions of western Germany [16]. The backwash effect was also observed between urban and rural areas in China in the research of Chen and Partridge [17]. The term backwash is often referred to as “polarization” or “parasitic,” and the term spread is often used as an alternative to or in conjunction with the terms “trickle-down,” “filtering,” and “diffusion”. The backwash effect is defined as a result of International Journal of Sustainable Development and Planning Vol. 17, No. 3, June, 2022, pp. 971-979 Journal homepage: http://iieta.org/journals/ijsdp 971