What drives inclusive growth in Eastern Indonesia? A spatial heterogeneity analysis

Relevance. Inclusive growth remains a critical priority in dealing with persistent challenges such as inequality and poverty. This study contributes to the debate by offering policy insights to foster inclusive growth, examining how socio-economic and institutional factors shape outcomes at the district level. Research objective. The study pursues two main objectives: (1) to analyze the spatiotemporal patterns of inclusive growth across districts in Eastern Indonesia, and (2) to identify the key determinants driving these patterns. Data and methods. The analysis draws on district-level data from Eastern Indonesia for 2018–2022, sourced from Statistics Indonesia (BPS), the Ministry of Finance, and the Audit Board of the Republic of Indonesia. It employs Geographically Weighted Panel Regression (GWPR), a spatial econometric technique that captures localized variations in the effects of socio-economic and institutional variables on inclusive growth. Results. The findings reveal marked spatial disparities: central and coastal districts generally outperform more remote inland areas, as growth disruptions during the COVID-19 pandemic were followed by signs of recovery in 2022. The GWPR results show that capital expenditure, democratic governance, labor force participation, and education significantly promote inclusive growth. Conversely, weak financial governance, as reflected in poor audit outcomes, constrains progress in several districts. Conclusions. The study meets its objectives by mapping spatiotemporal variations in inclusive growth and identifying key socio-economic and institutional drivers across Eastern Indonesia’s districts. The findings underscore the need for spatially adaptive, context-specific policies to foster inclusive and sustainable regional development.