FISCAL POLICY AND ITS IMPACT ON ECONOMIC DEVELOPMENT IN BORDER AREAS
Keywords:
Fiscal Policy, Economic Development, Border Areas.Abstract
This study aims to identify and analyze the impact of fiscal policy on economic development in border areas. Fiscal policy, as defined by the economic literature, encompasses government initiatives to influence the economy through government revenues and expenditures. Based on a comprehensive literature review, this study explores three main dimensions of fiscal policy in border regions: tax incentives in special economic zones and free trade zones, investment in infrastructure, and fiscal support for the agricultural sector and MSMEs. The use of fiscal policy can play a crucial role in attracting foreign and local investment, boosting industrial growth, and creating jobs. In relation to infrastructure, significant government investment in transportation, health, and education is vital to facilitate market and resource access, promote poverty reduction, and enhance regional economic integration. Finally, subsidies and credit facilities aimed at the agricultural sector and MSMEs show potential in enhancing the region's economic sustainability and diversification. The results of this study demonstrate that fiscal policy has a strong positive influence on economic development in border regions. Fiscal incentives, including tax reductions and accelerated infrastructure investment, have successfully boosted economic growth by creating more jobs and increasing competitiveness. Support for the agricultural sector and MSMEs plays an important role in ensuring inclusive and sustainable economic development. These findings emphasize the importance of the government's role through fiscal policy in facilitating and accelerating economic development, particularly in border regions that often face greater development challenges compared to core regions.
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