Effect of Environmental Budget on Environmental and Human Development Qualities: Empirical Evidence from Local Governments of Indonesia

Governments are obliged to allocate sufficient budget to protect environmental and human development qualities. This study, conducted on Indonesian local governments, investigated the impact of the environmental budget on environmental and human development qualities. Using Geospatial Information System (GIS) in acquiring the number of degradation land degradation as a proxy for environmental quality, we documented positive relationships between the environmental budget and the quality of the environment. Local government that allocated more budget on the environment protection and management program tended to have better quality of the environment compared to other areas. Furthermore, there was a positive relationship between the environmental quality and human development quality. A healthy and good quality of environment could have an impact on the community's ability to access education, health, and better economic prosperity. Finally, we found that the environmental quality affected indirectly the relationship between the environmental budget and the quality of human development. The results of this study indicate the important roles of the environmental budget to improve environmental quality and the quality of human development in Indonesia.