Abstract
The purpose of this research was to analyze fiscal and proverty performance, (1) to analyze fiscal policy impact on poverty performance, and (2) to determine strategic policy on poverty in North Sumatra Province. Model of fiscal policy in North Sumatra Province was built with the dynamic simultaneous equation system and used 2SLS with SYSLIN and SIMNLIN procedures. In this study we also used pooled data in 1990-2007 period. The results of this study were (1) factors of fiscal performance in North Sumatra which were local tax and tax sharing were influenced by local GDP positively, on the other hand general alocation funds and local retribution were not influenced by local GDP, and (2) during fiscal policy, poverty performance decreased, which was interpreted with number of poor people in rural areas and number of poor in urban-poverty condition in urban area which was to decrease found and fluctuate, (3) in simulation section, decreased of illiteracy and health expenditure gave better impact on poverty and also increased local GDP in North Sumatra than other simulation. Finalally it was that Fiscal policy, especially in health and education sector, will stimulate quality social life in the future.
