Empirical Model of Poverty Alleviation in Islamic Economic Perspective: Evidence from Indonesia

This study aims to examine the model of poverty alleviation by analyzing several aspects that in Islamic economics are considered to have an effect on poverty alleviation. Using a sample of provinces in Indonesia, this study applies to panel data analysis. The novelty of this research is using more variables, including some aspects rarely discussed in previous empirical models. The results of this study indicate a significant negative effect of mandatory and charity transfer variables on the poverty level. Although using different proxies, the results of this study are in line with and confirm previous theories and empirical research regarding the effect of zakat on poverty alleviation. In addition, the variable of increasing income was also found to have a significant effect on poverty alleviation. This provides an overview for the government to be able to optimize the role of zakat and increase income to reduce poverty, for example, by integrating the distribution of ziswaf through the provision of working capital more broadly and integrated towards economic improvement and growth so that it will bring a greater multiplier effect. In addition, the results of this study also provide recommendations for researchers to complement the limitations of this study. The limitation of this study is the lack of proxies in describing aspects that become variables of poverty alleviation in Islam as a whole. Whereas in Islam, poverty and its alleviation are multidimensional things and are not limited to material aspects but also spiritual.


INTRODUCTION
Poverty is a crucial problem in the economy. Various programs have been implemented to relieve the community from the shackles of poverty. The issue of poverty alleviation is also a concern for academics and researchers. Many studies discuss poverty from various perspectives and methods.
In Islamic economics perspective, there are some aspects considered influential in poverty alleviation (Sadeq, 1997). The first aspect is the mandatory transfer instrument in the form of an obligation to pay zakat. As the third pillar of Islam, zakat has the potential to be an effective tool for alleviating poverty (Ayuniyyah et al., 2022). In line with that, various empirical studies have been conducted on the importance of zakat distribution in poverty alleviation both qualitatively and quantitatively (Abdullah et al., 2015;Ayuniyyah et al., 2022;Hafandi & Helmy, 2021;Mariyanti & Mahfudz, 2016;Purbasari et al., 2020;Shaikh, 2016).
The second aspect is the existence of work orders to generate income. An increase in income allows a person to increase his purchasing power and standard of living. In other words, income escalation can increase a person's level of welfare so that he can escape from poverty. Thus, macroeconomic growth will occur with an increase in the gross domestic product (GDP), which can reduce the aggregate poverty level in the region. Several studies showed a significant negative effect on the proverty level (Affandi & Astuti, 2014;Erlando et al., 2020; Michalek & Jan Vybostok, 2019; Mohammed et al., 2021).
The next aspect is the role of the state. The state is obliged to create programs and facilities that can overcome the problem of poverty, guarantee a decent life for the poor, and provide the economic facilities needed to become a source of livelihood for the poor (Rahman & Siradjuddin, 2020). In Islam, the state must have resources that are managed as public wealth and used for the benefit of the state (Rahman & Siradjuddin, 2020). Then, the fourth aspect is the fair functional distribution of income. The priority of poverty alleviation, according to the Islamic economic concept, is to overcome the causes of poverty itself through the escalation of wealth distribution (Rahman & Siradjuddin, 2020).
The unequal distribution of income is the main cause of the existence of poverty  (Wu et al., 2015). According to (Yao et al., 2004), the effect of income inequality on poverty is higher than the effect of increasing the average income per capita.
In addition, inequality occurs not only in income distribution but also in access opportunities. In fact, lack of access to opportunities can affect a person's economic condition. One way to increase income or wealth equality is to focus on equality of opportunity (Hipsher, 2019). Therefore, the fifth aspect in this research is the aspect of equal opportunity. Providing equal opportunities also means providing access to education for everyone. A good quality formal education will broaden horizons and increase job opportunities with better and safer pay and general welfare.
Then, in an effort to reduce poverty, Islam has provisions that regulate the issue of ownership of certain resources that affect the lives of many people.
So, the next aspect that becomes the focus of this study is control of ownership over certain resources. One of these resources is water. Water has been identified as an essential resource for all life, production and development. The lack of access into water is associated with poverty (Biltonen & Dalton, 2003). In line with that, according to Pandey et al. (2022), the availability of access to water has a significant impact on various dimensions of human life (Pandey et al., 2022) The last aspect is the prevention of harmful malpractice. Islam stipulates ethics that prohibits its people from taking actions that can harm themselves and others, including in the economy. This can be seen from the prohibition of gambling, theft, hoarding, bribery, usury, acquisition of property that is not right, and so on (Sadeq, 1997). In line with that, according to (Palokoto et al., 2020), crime can also cause a poverty trap which results in the economy being in high crime and low production. Thus, poverty alleviation in Islam also views the obligation to prevent harmful economic practices.
In empirical studies, several models of poverty alleviation in Islam have However, there are still some limitations in these studies, for example in the study of Affandi & Astuti (2014), the study did not accommodate the role of zakat as one of the variables in the poverty alleviation model. Whereas in Islam zakat plays an important role as an income redistribution instrument that can affect poverty alleviation (Abdullah et al., 2015;Ahmed, 2004;Badan Amil Zakat Nasional, 2020;Hafandi & Helmy, 2021;Mariyanti & Mahfudz, 2016;Rahman & Siradjuddin, 2020;Sadeq, 1997;Shaikh, 2016).
In the empirical model of Mariyanti & Mahfudz (2016), the model does not accommodate the functional distribution of income variables, even though the distribution of income is important, because it could macroeconomically a country shows growth, but on the other hand the poverty rate does not decrease and even increases due to economic inequality (Ahmed, 2004;Mariyanti & Mahfudz, 2016;Mohseni-cheraghlou, 2015).

RESEARCH METHOD
This study uses a quantitative approach by using panel data analysis.
Based on data sources, this study uses secondary data in the form of annual reports from the Central Statistics Agency (BPS), the National Amil Zakat between the sections studied as intercepts (Widarjono, 2013). Meanwhile, in the Random Effect Model (REM) estimation model, parameters that differ between sections and between times are included in the error. This model helps us to estimate panel data where disturbance variables may be interrelated between sections and over time (Widarjono, 2013). In this case, to be able to find out which model is the most appropriate estimation, it is necessary to select a panel data model based on statistical considerations. In this case, the model selection is done by using the Chow test, Hausman test, and the Lagrange-Multiplier test. After finding the best model, the next step is to conduct a series of hypothesis testing using t test for partial analysis, F test for simultaneous analysis, and coefficient of determination test to see the Goodness of Model in this study.

Descriptive Analysis
The following is a descriptive analysis of these variables which are presented in tabular form as follows:

T-test Results
Partial analysis is used to see the individual effect of each variable. Based on as well as an increase in income will have an effect on reducing the poverty rate.
So that, these things can be a solution to poverty alleviation in Indonesia.

F-test Result
Based on the estimation results of the equation with the REM model in

Coefficient Determination Test Result
The R-Squared value is 0.248842 or 24.9%. This means that the independent variables in the equation are only able to explain the dependent variable by 24.9% and the remaining 75.1% is influenced by other variables that are not included in the model. This indicates that the poverty alleviation model is still limited in this study, thus allowing further research to combine other variables or proxies to improve this poverty alleviation model.

Discussion
The results of this study found that the mandatory transfer and Charity This is in accordance with the theory which states that giving in the form of zakat, infaq and alms will essentially grow. Empirically this is because when someone gives zakat or other social funds to people in need, the funds will be used immediately for both consumptive and productive purposes. Then the use of these funds will drive other economic activities and bring added value, so that it can affect the level of poverty. More than that, the results of this study can also be a recommendation for the government as a policy maker to be able to further optimize the role of zakat more broadly.
This study also found that the variable of increasing income which is proxied by the growth of GRDP per capita has a significant negative effect on the poverty level. Theoretically this is in accordance with the opinion of Rahman & Siradjuddin (2020) and Sadeq (1997). While empirically the results of this study In this case, economic growth will automatically be followed by a vertical flow from the rich to the poor. Thus, the effect of economic growth on poverty reduction is the effect of the flow, which means that the poverty rate will decrease on a small scale from the total benefits arising from economic growth (Soleh, 2015). Therefore, this study recommends the need for a reassessment of the direction of economic growth, so that the impact can really be felt by every element of society, especially the poor who need it.
The variable of state responsibility which is proxied by the total social assistance budget has no effect on the poverty level. This is theoretically different from the opinion of Rahman & Siradjuddin (2020) and Sadeq (1997)  However, this study is supported by several previous studies (Anderson et al., 2018;Melati & Burhany, 2021;Ridha et al., 2021) In this case, according to Anderson et al. (2018) differences in research results on the influence of the role of the state on poverty are due to a number of reasons, such as differences in the types of expenditures considered and how they are managed. Furthermore, government spending on transfers and subsidies can have a negative effect on poverty by increasing the real income of poor households, but it also depends on how well targeted and how they are financed (Anderson et al., 2018) Furthermore, this study shows that the functional distribution of income as measured by the provincial minimum wage (UMP) has no significant effect on poverty alleviation. This is generally different from the theory, where Islam views the importance of a fair functional distribution of income (Affandi & Astuti, 2014;Sadeq, 1997). However, according to Neumark (2015)  Next, this study shows that equal opportunity has no significant effect on increasing income. This is different from the theory which states that one way to increase income or wealth equality is to focus on equality of opportunity (Hipsher, 2019). Meanwhile, according to Harper et al. (2003) in an effort to eradicate poverty, it is necessary to provide and maintain equal opportunities for the entire population, including through the provision of education. Empirically this is also different from the results of research by Awan et al. (2011) which states that access to education has a negative effect on poverty levels, and research by Tilak (2010) which states that education levels play an important role in development.
However, the results of this study are supported by research by Amaliah (2015) and Situmorang & Susanti (2020). In this case, the rationalization that can be raised regarding the results of this study is as Daly & Fane (2002) argued that the weakness in the use of education as an effort to alleviate poverty is the fact that at every level of education other than elementary school, the proportion of students from rich families who enrolled is higher than the proportion of students from poor families. Thus, the net benefits of subsidies for education will be channeled more to the rich, not to the poor (Daly & Fane, 2002).
Meanwhile, the ownership control variable, which is proxied by the percentage of the population with access to water, has no effect on the poverty level. This is different from the theory presented by Biltonen & Dalton (2003) and Pandey et al. (2022) which states that there is a strong relationship between water availability and poverty. However, empirically the results of this study are in line with research Sumardjoko & Akhmadi (2019) which found that access to decent water had no effect on poverty alleviation. The interpretation that can be raised from this result is due to the fact that water management in Indonesia is carried out not only by the government but also by the private sector or corporations.
This is in accordance with the research of Al-Hmoud & Edwards (2005) which found that an increase in the number of private investment in the water sector will increase the accessibility and use of water, but does not have a significant effect on socio-economic conditions (Al-Hmoud & Edwards, 2005).
Therefore, increasing access to decent water does not have any implications for poverty alleviation. Because to get this access, people have to sacrifice part of their income.
The variable of preventing harmful economic malpractice in this study has no significant effect on the level of poverty. This is different from the theory which states that in Islam, all economic practices that produce something that is socially harmful must be prevented because it will produce wealth at the expense of others (Sadeq, 1997). This empirically also differs from research of Burdett et al. (2004) which found a correlation between high crime and poverty levels.  Palokoto et al. (2020). In this case, the 2017-2020 Criminal Statistics used in this study only displays data on all crime incidents reported by the public or actions whose perpetrators were caught redhanded by the police (Palokoto et al., 2020). Thus, if the public is reluctant to report the crime incident and is not handled by the police, then the crime is not included in the incident data, and the resulting data tends to be under-estimated.
Nevertheless, the combination of variables used in this study simultaneously has an influence on the percentage of the poor in Indonesia. This means that the poverty alleviation model in the Islamic perspective used in this study can simultaneously be a strategy in poverty alleviation. As for the partial results of several variables that have no effect, it indicates certain conditions that cause these variables do not play a maximum role as explained in the discussion or because of limited proxies in describing the variables in question in their entirety.

CONCLUSION
In this study, the aspects that have a significant effect on the poverty level are the mandatory and charity transfer variables which are measured by the National Zakat Index (IZN) and the income increase variable which is measured by the growth of GRDP per capita. This is certainly very interesting, considering the mandatory and charity transfer instruments in the form of zakat obligations and other alms suggestions which incidentally are one of the uniqueness of the

Islamic economic system. Meanwhile, the variable of increasing income which in
Islam is manifested in the form of work orders, prohibitions on being extravagant and excessive (tabdzir), until the recommendation not to beg is an effective means to increase productivity so that it can generate more added value and increase income. This provides an overview for the government as policy makers to be able to optimize the role of zakat and increase income in reducing poverty, for example by integrating the distribution of ziswaf through the provision of working capital more broadly and in an integrated manner towards economic improvement and growth so that it will bring a greater multiplier effect. Another example is the creation of a creative industry cluster or center that is tailored to the potential of the poor community in an area. This is also a challenge for amil zakat institutions and other social funds. This recommendation is a big challenge for institutions in the management and distribution of ziswaf funds to create a more optimal impact through the integration of ziswaf distribution and economic growth to alleviate poverty. The integration is expected to create an optimal and sustainable impact.
The limitations in this study are the inability of proxies to describe aspects that become variables of poverty alleviation in Islam as a whole. In this case, Islam views poverty as multidimensional and not limited to economic conditions. Moreover, poverty and wealth in Islam are not only related to material aspects, but also include spiritual aspects. However, this is certainly very difficult to measure with empirical models. It is hoped that further research will complement these limitations by analyzing both material aspects and spiritual aspects.

ACKNOWLEDGEMENT
The authors are grateful for feedback and insight from the FITRAH: Jurnal Kajian