DOES ZAKAT AND GOVERNMENT SOCIAL EXPENDITURE AFFECT POVERTY LEVEL? EVIDENCE FROM NORTH SUMATRA INDONESIA

Abstract

The purpose of this study is to investigate whether zakat and government social expenditures affect poverty level. This article also discusses the possibility of other variables that contributing the poverty level in North Sumatra, related to the possibility of misuse of funds received by beneficiaries. Research type is associative research with quantitative approach in resolving the causality relationship.  Research conduct in North Sumatra, Indonesia, with time series data originating from published records by BPS-Statistics and Baznas. The analytical method used is the multiple linear regression model (OLS) to analyze the influence of zakat distribution and Government Social Expenditure to Poverty level in North Sumatra, Indonesia. The result show that independent variables partially and simultaneously have a significant negative effect on the Poverty Level. The influence of independent variables is 44.9% while the remaining 56.1% is influenced by other variables not included in this study. This study explains that zakat can influence poverty alleviation as one of the Islamic fiscal policies.