scholarly journals DOES THE LOCAL ECONOMIC GOVERNANCE IN INDONESIAPERFORM AN IMPROVEMENT?

2012 ◽  
Vol 15 (1) ◽  
pp. 83-106
Author(s):  
Haryo Kuncoro
Keyword(s):  
Economic Growth ◽  
Fiscal Decentralization ◽  
Local Governance ◽  
Regional Economic Growth ◽  
Economic Governance ◽  
Regional Economic ◽  
Regional Autonomy ◽  
Low Degree ◽  
Development Goals ◽  
High Level

Governance has gone through radical changes over the last twenty five years. Seemingly, it became one of the important strategies, processes, methods and mechanisms in governing countries to achieve economic development goals. The objective of this paper is to observe the local economic governance dynamics in the case of districts/municipalities in Indonesia. First, the dynamics behavior of local governance over time is analyzed by visual inspection of their non-parametric density distribution. More deeply, we use Markov chains to predict a pattern of change in local economic governance toward its steady state. Based on comparison between 2007 and 2011 data delivered by Commission of Regional Autonomy Implementation Watch, we conclude that there is a high level of persistence in the relative position of local governance index, consistent with a low degree of mobility in the index distribution implying the implementation of governance in the districts/municipalities in Indonesia is weak enough. This finding implies that the local economic governance is a key to achieve sustainable regional economic growth in line with fiscal decentralization and regional autonomy. Keywords : Local Economic Governance, Decentralization, Regional Economic Growth, Kernel Densities, Markov ChainsJEL Classification: H70, O43, O56

scholarly journals APAKAH TATA KELOLA PEREKONOMIAN DAERAH DI INDONESIA TELAH MENINGKAT?

2012 ◽  
Vol 15 (1) ◽  
pp. 85-107
Author(s):  
Haryo Kuncoro
Keyword(s):  
Economic Growth ◽  
Fiscal Decentralization ◽  
Local Governance ◽  
Regional Economic Growth ◽  
Economic Governance ◽  
Regional Economic ◽  
Regional Autonomy ◽  
Low Degree ◽  
Development Goals ◽  
High Level

Governance has gone through radical changes over the last twenty five years.Seemingly, it became one of the important strategies, processes, methods and mechanisms in governing countries to achieve economic development goals. The objective of this paper is to observe the local economic governance dynamics in the case of districts/municipalities in Indonesia. First, the dynamics behavior of local governance over time is analyzed by visual inspection of their non-parametric density distribution. More deeply, we use Markov chains to predict a pattern of change in local economic governance toward its steady state. Based on comparison between 2007 and 2011 data delivered by Commission of Regional Autonomy Implementation Watch, we conclude that there is a high level of persistence in the relative position of local governance index, consistent with a low degree of mobility in the index distribution implying the implementation of governance in the districts/municipalities in Indonesia is weak enough. This finding implies that the local economic governance is a key to achieve sustainable regional economic growth in line with fiscal decentralization and regional autonomy.Keywords : Local Economic Governance, Decentralization, Regional Economic Growth, Kernel Densities, Markov ChainsJEL Classification: H70, O43, O56

scholarly journals DESENTRALISASI FISKAL DAN PERTUMBUHAN EKONOMI, SERTA KAITANNYA DENGAN OTONOMI DAERAH

1969 ◽  
Vol 9 (3) ◽  
Author(s):  
Rustan A.
Keyword(s):  
Economic Growth ◽  
Positive Relationship ◽  
Fiscal Decentralization ◽  
Panel Data Analysis ◽  
Regional Economic Growth ◽  
Regional Autonomy ◽  
Dummy Variable ◽  
Expenditure Share ◽  
Aggregate Effect ◽  
Hp Filter

This study attempts to examine the influence of fiscal decentralization and regional autonomy on regional economic growth in Indonesia by using panel data analysis and the Hodrick-Prescott (HP) filter. This study takes sample at provincial level (selected 19 provinces) in Indonesia in the period of 1994-2010. Furthermore, to represents the fiscal decentralization this thesis uses three indicators, namely expenditure share, revenue share, and local government's own revenue share. Further, regional autonomy is treated as dummy variable with base year of 2004. The result demonstrates that fiscal decentralization is positively associated with economic growth in Indonesia, especially from the revenue side and own revenue side. The findings further strengthens the decentralization theorem and previous studies that mentioned fiscal decentralization play a role in foster the economic growth. In addition, it is also found that the implementation of regional autonomy policy (aggregate decentralization effect) presents positive relationship to economic growth.Keywords : Fiscal Decentralization; Regional Autonomy; Economic GrowthStudi ini mencoba untuk menguji pengaruh desentralisasi fiskal dan otonomi daerah terhadap pertumbuhan ekonomi daerah di Indonesia dengan menggunakan metode analisis data panel dan analisis Hodrick-Prescott (HP) filter. Studi ini mengambil sampel pada level provinsi (19 provinsi terpilih) di Indonesia pada periode 1994-2010. Indikator yang digunakan untuk mewakili pengukuran desentralisasi fiskal ada tiga, yaitu indikator rasio pengeluaran, indikator rasio pendapatan, dan indikator rasio pendapatan asli pemerintah daerah. Sedangkan otonomi daerah diperlakukan sebagai dummy variable dengan acuan tahun 2004 sebagai tahun dasar. Hasil analisis menunjukkan bahwa desentralisasi fiskal secara positif turut mempengaruhi pertumbuhan ekonomi di Indonesia, terutama dari sisi pendapatan dan dari sisi peningkatan pendapatan asli daerah. Temuan ini semakin memperkuat decentralization theorem dan studistudi sebelumnya yang menyebutkan bahwa desentralisasi fiskal cukup berperan penting dalam mendorong pertumbuhan ekonomi. Selain itu, juga ditemukan bahwa implementasi kebijakan otonomi daerah (aggregate effect desentralisasi) menunjukkan adanya hubungan positif terhadap peningkatan pertumbuhan ekonomi daerah.Kata Kunci : Desentralisasi Fiskal; Otonomi Daerah; Pertumbuhan Ekonomi

scholarly journals Vertical Fiscal Imbalance and Regional Economic Growth

2020 ◽  
Vol 12 (6) ◽  
pp. 39-53
Author(s):  
B.I. Alekhin ◽  
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Fiscal Federalism ◽  
Fiscal Decentralization ◽  
Regional Economic Growth ◽  
Regional Economic ◽  
Fiscal Imbalance ◽  
Vertical Fiscal Imbalance ◽  
The Impact

This study examines the impact of fiscal decentralization on regional economic growth using panel data for 82 subjects of the Russian Federation for the period 2005-2018. General theoretical framework was drawn from the second-generation theory of fiscal federalism, and panel data econometrics suggested the appropriate empirical model and estimation method. The pooled mean group method was used to estimate an autoregressive distributed lags model based on Solow-Swan theory of economic growth. The results indicate that vertical fiscal gap has a negative and significant long-term impact on regional economic growth while vertical fiscal imbalance has a positive and significant long-term effect. The study is consistent with the modern theory of fiscal federalism, W.E. Oates’ matching hypothesis and previous empirical work using Russian data. The study also found evidence of conditional convergence of regional economies.

scholarly journals A Regional Landscape of Bolivian Economic Growth

2019 ◽  
pp. 77-98
Author(s):  
Pablo Mendieta Ossio
Keyword(s):  
Economic Growth ◽  
Economic Activity ◽  
Spatial Dimension ◽  
Regional Economic Growth ◽  
Panel Data Models ◽  
Medium Term ◽  
Regional Economic ◽  
The Past ◽  
Low Degree ◽  
Regional Landscape

Bolivia is a wide surface country, with more than one million of squared kilometers and diverse ecological ecosystems. Besides its landlockedness, Bolivian economic activity has been shaped by the diverse geographic characteristics mainly distance and the availability of communication channels. In this paper I use a novel regional database of regional economic activity to analyze in what extent the spatial dimension has influenced medium term economic growth of the nine regions during the past 45 years. Contrary to standard approach based on contiguity or geographical distance to introduce spatial issues in the analysis, I use an exponential decay approach built on “true distance” jointly a gravity model. Then, I found as significant the inclusion of spatial consideration in the estimation of static and dynamic balanced panel data models, where I found how the process of regional economic growth has been slightly influenced by this spatial feature implying the still low degree of integration among Bolivian regions.

scholarly journals Measuring the Impact of Fiscal Decentralization on Economic Growth and Income Inequality using the Heuristic Network

2019 ◽  
Vol 8 (5C) ◽  
pp. 1016-1024
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Fiscal Decentralization ◽  
Regional Economic Growth ◽  
Financial Resources ◽  
Regional Economic ◽  
East Kalimantan ◽  
Regional Budgets ◽  
The Impact

To achieve regional economic growth, the role of regional budgets is very important. In this regard, the utilization of regional economic and financial resources is an important factor in supporting the implementation of the fiscal decentralization system in the area. The implementation of fiscal decentralization in Indonesia is marked by the process of transferring financial resources to regions in significant amounts. In the last five years (2011-2015), the proportion of balancing funds to total regional income nationally reached an average of 73%. Despite the huge spike in decentralization policies, the implementation of fiscal decentralization in East Kalimantan Province, one of Indonesia's provinces, till now has not been able to bring about improving the welfare of local communities. In reality, there is still income inequality, although still relatively low in East Kalimantan Province. This study performs to measure the impact of fiscal decentralization on economic growth and income inequality in East Kalimantan – Indonesia. The hypothesis in this study is that fiscal decentralization negatively affects income inequality directly or indirectly through economic growth in East Kalimantan – Indonesia. The aim of this study is how to use the heuristic network to prove this hypothesis.

Fiscal decentralization and regional economic growth: Theory, empirical studies, and Russian experience

2016 ◽  
pp. 94-110 ◽  
Author(s):  
A. Yushkov
Keyword(s):  
Economic Growth ◽  
Fiscal Decentralization ◽  
Empirical Studies ◽  
Empirical Relationship ◽  
Regional Economic Growth ◽  
Growth Theory ◽  
Russian Regions ◽  
Regional Economic ◽  
Fiscal Transfers ◽  
Federal Center

The article deals with the theoretical and empirical relationship between fiscal decentralization and economic growth. Empirical analysis of Russian regions for 2005-2012 shows that excessive expenditure decentralization within the region, which is not accompanied by the respective level of revenue decentralization, is significantly and negatively related to regional economic growth. On the contrary, regional dependence on intergovernmental fiscal transfers from the federal center is positively associated with economic growth.

scholarly journals Fiscal Decentralization and Economic Growth in Thailand: A Cross-Region Analysis

2019 ◽  
Vol 11 (1) ◽  
pp. 147
Author(s):  
Phouthakannha Nantharath ◽  
Sirisak Laochankham ◽  
Peerasit Kamnuasilpa ◽  
Eungoo Kang
Keyword(s):  
Economic Growth ◽  
Least Squares ◽  
Local Governments ◽  
Fiscal Decentralization ◽  
Local Level ◽  
Regional Economic Growth ◽  
Regional Economic ◽  
Positive Effects ◽  
Fiscal Imbalance ◽  
Vertical Fiscal Imbalance

Prior to the 1997 decentralization, over 90% of national revenue in Thailand were held at the central government and less than 10% of public expenditure were allocated to local governments across country. Lack of adequate revenue and access to sufficient expenditure budget has caused disparity and ineffectiveness of public services and economic development at the local level. This study examines the effects of the fiscal decentralization on the economic growth in Thailand from 2004 to 2017. The research methodology uses a cross panel data analysis across five provincial regions and considers revenue decentralization, expenditure decentralization, transfer dependency, and vertical fiscal imbalance as influential factors of growth. By applying Panel Fully Modified Least Squares (FMOLS) and Panel Dynamic Least Squares (DOLS) regression approaches, the study finds empirical evidence of positive effects of revenue decentralization, transfer dependency, and vertical fiscal imbalance on regional economic growth across five regions. However, this study also finds that expenditure decentralization has a negative impact on regional economic growth, but level of significance is weak. These findings suggest that the rapid increase in metropolis government expenditure budget following the years of political transition in 2006 and 2014 has caused stagnation in public investment at local level across country, thereby resulted in a lagged behind industrial output and gross provincial product. Lack of budget expenditures also weakens demand and stagnates growth in manufacturing, construction, and real estate activities, thereby rendering fiscal imbalances and development gaps in Thai economy.

scholarly journals PENGARUH DESENTRALISASI FISKAL, INVESTASI, DAN INDEKS PEMBANGUNAN MANUSIA TERHADAP PERTUMBUHAN EKONOMI REGIONAL DI PROVINSI KALIMANTAN TIMUR

2020 ◽  
Vol 1 (2) ◽  
pp. 57-72
Author(s):  
Agung Dinarjito ◽  
Almizar Dharmazi
Keyword(s):  
Economic Growth ◽  
Human Development ◽  
Human Development Index ◽  
Local Governments ◽  
Fiscal Decentralization ◽  
Regional Economic Growth ◽  
Government Investment ◽  
Regional Economic ◽  
Development Index ◽  
East Kalimantan

Economic growth can be influenced by several factors, including fiscal decentralization, government investment, and also the level of human development. Therefore, this study aims to analyze the effect of fiscal decentralization, investment and human development index on regional economic growth in the province of East Kalimantan. East Kalimantan Province is one of the biggest mining producers in Indonesia, but the economic growth is negative. This research is a quantitative descriptive study using linear regression analysis method. The conclusion from this study is that only the human development index significantly influences regional economic growth in East Kalimantan Province. The author hopes that this research will be able to encourage Local Governments to evaluate existing policies by focusing on human development, increasing the effectiveness of Government investment and overseeing the implementation of fiscal decentralization.Pertumbuhan ekonomi dapat dipengaruhi oleh beberapa faktor, antara lain desentralisasi fiskal, investasi pemerintah, dan juga tingkat pembangunan manusianya. oleh karena itu, penelitian ini bertujuan untuk menganalisisi pengaruh desentralisasi fiskal, investasi dan indeks pembangunan manusia terhadap pertumbuhan ekonomi regional di Provinsi Kalimantan Timur. Provinsi Kalimantan Timur merupakan salah satu penghasil tambang terbesar di Indonesia, namun pertumbuhan ekonominya secara rata-rata negatif. Penelitian ini merupakan penelitian kuantitatif deskriptif dengan menggunakan metode analisis regresi linier. Simpulan dari penelitian ini adalah bahwa hanya indeks pembangunan manusia yang secara signfikan mempengaruhi pertumbuhan ekonomi regional di Provinsi Kalimantan Timur. Penulis berharap agar penelitian ini mampu mendorong Pemerintah Daerah mengevaluasi kebijakan yang ada dengan memfokuskan pada pembangunan manusia, meningkatkan efektivitas investasi Pemerintah dan pengawasan pelaksanaan desentralisasi fiskal.

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