INFLUENCE OF INVESTMENT, LOCAL EXPENDITURE AND FISCAL AUTONOMY TOWARDS ECONOMIC GROWTH IN SOUTHERN SUMATERA OF INDONESIA

Fiscal decentralisation has attracted great attention from governments, practitioners, and international institutions with the aims of enhancing economic growth in the last 5 decades. However, satisfactorily measuring the degree of fiscal decentralisation across countries has appeared to be problematic. In addition, the link between fiscal decentralisation and economic growth across provinces has largely been ignored, in particular for emerging markets such as Vietnam. As such, this study is conducted to determine the extent of fiscal decentralisation and to assess its impact on economic growth based on data from all 63 provinces of Vietnam in the period after the 2008 financial crisis. Instead of using traditional measures of fiscal decentralisation, the study uses the Fiscal Decentralisation Index (FDI) together with the two most important and inseparable components of the index, those being (i) the Fiscal Importance (FI) and (ii) the Fiscal Autonomy (FA). The Difference Generalised Method of Moments (DGMM) is utilised to correct for the potential problem of endogeneity between fiscal decentralisation and economic growth. Results show that the two indicators (FI and FDI) have a negative impact while FA has a positive impact on economic growth across provinces. On the ground of these empirical findings, implications for specific policies have emerged for Vietnam and other emerging markets on the extent of fiscal decentralisation, and its major determinants, which positively support economic growth in the future.

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Decentralization and Financial Local Governments Performance: How Does Fiscal Autonomy Affect Spending, Economic Growth, and Poverty in East Java Indonesia?

10.7176/jpid/51-04 ◽

2019 ◽

Keyword(s):

Economic Growth ◽

Local Governments ◽

Fiscal Autonomy

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Comparing local fiscal autonomy in the water and sanitation sectors of Johannesburg and Nairobi

Commonwealth Journal of Local Governance ◽

10.5130/cjlg.v0i13/14.3729 ◽

2013 ◽

pp. 141-156

Author(s):

Angelita Kithatu-Kiwekete

Keyword(s):

Local Government ◽

Municipal Services ◽

Recent Past ◽

African Cities ◽

Local Revenue ◽

Fiscal Autonomy ◽

Local Expenditure ◽

Close Proximity ◽

Fiscal Decentralisation ◽

Government Reforms

The rationale for local fiscal autonomy suggests that local expenditure and local revenue generation should remain in close proximity. This is achieved through fiscal decentralisation to local government, to ensure efficient provision of local services that align with local needs, and to improve accountability to residents. Fiscal decentralisation has found resonance in developing countries through local government reforms, but in Africa fiscal decentralisation has been focussed mainly on revenue sharing, except in a few cases where some local fiscal autonomy has been achieved. Urbanisation in Africa is likely to continue (UN-Habitat, 2008), necessitating an increase in municipal service delivery which African cities must finance − hence the need for local fiscal autonomy. Local fiscal autonomy is arguably contentious for African cities, partly because provision of municipal services must be tempered with considerations of equity and redistribution to the poorer urban populations, and because inadequate welfare nets from national government do not subsidise the gap in municipal revenue. In the recent past, Kenya and South Africa adopted local government reforms in different forms that has yielded different forms of local fiscal autonomy. The paper conducts a comparative of local fiscal autonomy in municipal services provision in Nairobi and Johannesburg.

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Analisis Pertumbuhan Ekonomi Dan Ketimpangan Pendapatan, Panel Data Enam Provinsi Di Pulau Jawa

JURNAL INOVASI PENDIDIKAN EKONOMI ◽

10.24036/011041740 ◽

2019 ◽

Vol 9 (1) ◽

pp. 27

Author(s):

Yosi Eka Putri ◽

Erita Erita

Keyword(s):

Economic Growth ◽

Panel Data ◽

Income Inequality ◽

Human Development ◽

Labor Productivity ◽

Human Development Index ◽

Equation Modeling ◽

Modeling Tools ◽

Development Index ◽

Fiscal Autonomy

This study aims to analyze (1) the effect of regional fiscal autonomy degrees, tax and investment ratios on economic growth in Indonesia, (2) the effect of economic growth, labor productivity, investment and the Human Development Index (HDI) on income inequality in Java.The type of research is descriptive and associative research. The type of data is documentary data, the data source is panel data during 2013 - 2017 in six provinces in Java. This study uses simultaneous equation modeling tools with the Indirect Least Squared method ( ILS) Common Effect. Endogenous variables in the study are economic growth and income inequality. While the exogenous variables are regional fiscal autonomy, tax ratios, labor productivity, investment and the Human Development Index (HDI).The results of the study concluded that (1) the variables of regional fiscal autonomy, tax and investment ratios had a significant effect on economic growth in Java.. (2) Variable economic growth, labor productivity, investment and HDI significantly affect income inequality in Java. The policies that can be suggested are that efforts are needed to increase economic growth with the efforts of the central government together with regional governments to increase Regional Original Revenue (PAD) by optimizing regional potentials. Increasing the potential of this area will encourage the increase of PAD in each region will have an impact on the increasing degree of regional fiscal autonomy (ratio between PAD and Total Regional Revenue). Focus more on equity-oriented development not only on economic growth. Keywords: economic growth, income inequality

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