scholarly journals The Flypaper Effect Phenomenon: Evidence from Indonesia

2018 ◽  
Vol 2 (1) ◽  
pp. 21-26
Author(s):  
Ansharullah Tasri
Keyword(s):  
Panel Data ◽  
Local Government ◽  
Central Government ◽  
Fiscal Decentralization ◽  
Government Expenditure ◽  
Provincial Government ◽  
Least Square ◽  
Flypaper Effect ◽  
Decentralization Policy ◽  
Local Government Expenditure

Abstract One of the implementations of autonomy policy is fiscal decentralization. The State gives chance to every local government for improving its fiscal ability. Original Local Government Revenue (PAD) is fiscal potency owned local government to improve local government independence to promote welfare to society. To accelerate fiscal independence of local government equally, the central government sends transfer funds in the form of General Allocation Funds (DAU) which aims to comply local government expenditure that has not fulfilled. However, problems faced is local government expenditure management still much more affected by DAU rather than PAD. It indicates that local government still depends on central government to comply expenditure called flypaper effect. This research aims to analyze the effect of PAD and DAU on local government expenditure by identifying whether occurs flypaper on provincial government in Indonesia. The method used in this research is analysis regression of panel data with Generalized Least Square (GLS). Data used is panel data from 34 provinces in Indonesia between 2008-2017. Based on results estimation, PAD and DAU positively and significantly affect local government expenditure. However, the DAU more affects local government expenditure compared with PAD. This exhibits that flypaper effect phenomenon occurred on provincial government in Indonesia which local government expenditure response more affected by DAU than PAD. It is happening due to the provincial government still relies on central government to comply its expenditure illustrated with high DAU transfers. This research concludes that decentralization policy in Indonesia is not effective yet. Thus, the government needs to adjust decentralization policy in order to improve regional fiscal independence.

scholarly journals The Flypaper Effect Phenomenon: Evidence from Indonesia

2018 ◽  
Vol 2 (1) ◽  
pp. 21
Author(s):  
Ansharullah Tasri
Keyword(s):  
Panel Data ◽  
Local Government ◽  
Central Government ◽  
Fiscal Decentralization ◽  
Government Expenditure ◽  
Provincial Government ◽  
Least Square ◽  
Flypaper Effect ◽  
Decentralization Policy ◽  
Local Government Expenditure

One of the implementations of autonomy policy is fiscal decentralization. The State gives chance to every local government for improving its fiscal ability. Original Local Government Revenue (PAD) is fiscal potency owned local government to improve local government independence to promote welfare to society. To accelerate fiscal independence of local government equally, the central government sends transfer funds in the form of General Allocation Funds (DAU) which aims to comply local government expenditure that has not fulfilled. However, problems faced is local government expenditure management still much more affected by DAU rather than PAD. It indicates that local government still depends on central government to comply expenditure called flypaper effect. This research aims to analyze the effect of PAD and DAU on local government expenditure by identifying whether occurs flypaper on provincial government in Indonesia. The method used in this research is analysis regression of panel data with Generalized Least Square (GLS). Data used is panel data from 34 provinces in Indonesia between 2008-2017. Based on results estimation, PAD and DAU positively and significantly affect local government expenditure. However, the DAU more affects local government expenditure compared with PAD. This exhibits that flypaper effect phenomenon occurred on provincial government in Indonesia which local government expenditure response more affected by DAU than PAD. It is happening due to the provincial government still relies on central government to comply its expenditure illustrated with high DAU transfers. This research concludes that decentralization policy in Indonesia is not effective yet. Thus, the government needs to adjust decentralization policy in order to improve regional fiscal independence.

scholarly journals The Flypaper Effect Phenomenon: Evidence from Indonesia

2018 ◽  
Vol 2 (1) ◽  
pp. 20
Author(s):  
Ansharullah Tasri
Keyword(s):  
Panel Data ◽  
Local Government ◽  
Central Government ◽  
Fiscal Decentralization ◽  
Government Expenditure ◽  
Provincial Government ◽  
Least Square ◽  
Flypaper Effect ◽  
Decentralization Policy ◽  
Local Government Expenditure

One of the implementations of autonomy policy is fiscal decentralization. The State gives chance to every local government for improving its fiscal ability. Original Local Government Revenue (PAD) is fiscal potency owned local government to improve local government independence to promote welfare to society. To accelerate fiscal independence of local government equally, the central government sends transfer funds in the form of General Allocation Funds (DAU) which aims to comply local government expenditure that has not fulfilled. However, problems faced is local government expenditure management still much more affected by DAU rather than PAD. It indicates that local government still depends on central government to comply expenditure called flypaper effect. This research aims to analyze the effect of PAD and DAU on local government expenditure by identifying whether occurs flypaper on provincial government in Indonesia. The method used in this research is analysis regression of panel data with Generalized Least Square (GLS). Data used is panel data from 34 provinces in Indonesia between 2008-2017. Based on results estimation, PAD and DAU positively and significantly affect local government expenditure. However, the DAU more affects local government expenditure compared with PAD. This exhibits that flypaper effect phenomenon occurred on provincial government in Indonesia which local government expenditure response more affected by DAU than PAD. It is happening due to the provincial government still relies on central government to comply its expenditure illustrated with high DAU transfers. This research concludes that decentralization policy in Indonesia is not effective yet. Thus, the government needs to adjust decentralization policy in order to improve regional fiscal independence.

scholarly journals Pengaruh Kekayaan Sumberdaya Alam Batubara Terhadap Ketimpangan Pendapatan di Provinsi Kalimantan Timur

2018 ◽  
Vol 13 (2) ◽  
pp. 111-130
Author(s):  
Ahmad Zaini
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Local Government ◽  
Income Inequality ◽  
Natural Resources ◽  
Agricultural Sector ◽  
Government Expenditure ◽  
Least Square ◽  
East Kalimantan ◽  
Local Government Expenditure

East Kalimantan Province is the largest producer of natural resources in Indonesia. Due to the massive exploitation process and high value, the mining sector has the biggest contribution and thus dominates the economy sector in the region. Related to this conditions, this study aims to describe the effect the effect of coal as natural resource on income inequality in East Kalimantan Province. This study uses panel data from nine districts/municipalities in East Kalimantan during 2006 until 2014, which is then processed by a pooled least square model. The study concludes that the contribution of coal sub-sectors in the economy is positively related to income inequality. The higher the contribution of coal subsector in the economy, the higher the income inequality in East Kalimantan Province. In addition, this study also finds that local government expenditure is not significantly related to income inequality, which means that the local government has not succeeded in creating equal prosperity in that region. However, the economic growth and the contribution of agricultural sector have no significant effect on income inequality.  Keywords: income inequality, natural resources curse,government expenditure. Provinsi Kalimantan Timur merupakan provinsi penghasil sumber daya alam terbesar di Indonesia. Akibat proses eksploitasi yang massive dan nilai yang tinggi, sektor pertambangan sangat mendominasi perekonomian daerah tersebut. Dari sekian banyak sumber daya alam yang ada di Provinsi Kalimantan Timur, batubara adalah yang paling besar kontribusinya terhadap perekonomian. Terkait kondisi tersebut, penelitian ini bertujuan untuk menguji pengaruh kekayaan sumber daya alambatubara terhadap ketimpangan pendapatan di Provinsi Kalimantan Timur. Penelitian ini menggunakan data panel dari sembilan daerah kabupaten/kota di Provinsi Kalimantan Timur selama tahun 2006-2014, yang kemudian diolah menggunakan model pooled least square. Hasil penelitian menyimpulkan bahwa kontribusi subsektor batubara dalam perekonomian berhubungan positif dengan ketimpangan pendapatan. Semakin tinggi kontribusi subsektor batubara dalam perekonomian, semakin tinggi pula ketimpangan pendapatan di Provinsi Kalimantan Timur. Selain itu dalam penelitian ini ditemukan pula bahwa pengeluaran pemerintah berhubungan positifdengan ketimpangan pendapatan, yang berarti pemerintah daerah belum berhasil menciptakan pemerataan kesejahteraan di wilayahnya. Adapun pertumbuhan ekonomi dan kontribusi sektor pertanian dalam perekonomian Provinsi Kalimantan Timur terbukti tidak memiliki pengaruh yang signifikan terhadap ketimpangan pendapatan.  Kata kunci: ketimpangan pendapatan, kutukan sumber daya alam, pengeluaran pemerintah

scholarly journals Efficiency and Effectiveness of Government Expenditure on Education at Districts/Cities Level in East Java Indonesia

2017 ◽  
Vol 13 (8) ◽  
pp. 91
Author(s):  
Achmad Solihin ◽  
Djoko Mursinto ◽  
Lilik Sugiharti
Keyword(s):  
Panel Data ◽  
Local Government ◽  
Government Expenditure ◽  
Educational Outcome ◽  
Household Expenditure ◽  
Panel Data Regression ◽  
Data Regression ◽  
Efficiency And Effectiveness ◽  
Local Government Expenditure ◽  
Regional Product

The purpose of this study is to investigate and analyze the efficiency and effectiveness of local government expenditure on education sector in districts and cities level of East Java, during the periods 2007-2014. Furthermore, this study will evaluate the impacts of local government expenditure, household expenditure for education, and regional product domestic bruto or (PDRB) on the educational outcomes, namely education index.Data Envelopment Analysis (DEA) is selected as the methodology for analyzing the efficiency of local government expenditure on educational outcome. The model assumes constant return to scale (CRS) and variable return to scale (VRS). Measurement of the effectiveness of government spending is done by using panel data regression. Data for supporting the analyses is panel data from 38 districts and cities in East Java for the periods of 2007 – 2014. The results show that government expenditure in educational sector is relatively inefficient. Government Expenditure for Education (PPP) has no significant impact on educational index, while Household expenditure for education (PPRT) and GRDP per Capita positive has significant impact on the Education Index (IP). This imply that government expenditure for educational sector is not effective improving educational index.

scholarly journals DANA ALOKASI KHUSUS DAN PENDAPATAN ASLI DAERAH TERHADAP INDEKS PEMBANGUNAN MANUSIA (Studi Empiris pada Pemerintah Provinsi se-Indonesia Tahun 2012-2014)

2018 ◽  
Vol 1 (1) ◽  
pp. 54-63
Author(s):  
Hastu Sarkoro ◽  
Zulfikar Zulfikar
Keyword(s):  
Local Government ◽  
Human Development ◽  
Human Development Index ◽  
Hypothesis Test ◽  
Government Expenditure ◽  
Secondary Data ◽  
Provincial Government ◽  
Government Revenue ◽  
Development Index ◽  
Local Government Expenditure

The purpose of this research is to examine the significant impact of Local Government Expenditure, General Allocation Fund, Special Allocation Fund and Original Local Government Revenue in Human Development Index at Province Governance in Indonesia. The method of this research is purposive sampling with 33 province as a sample for every year from 34 province at Indonesia  for 2012-2014 period. This research utilizies secondary data. The data are taken from the website BPS Statistic Indonesia (www.bps.go.id). The data which is analyzed in this research are collected through the realitation revenue and expenditure of provincial government. The data which have already collected are processed with classic assumption test before hypothesis test. Hypothesis test in this research use multiple regression with t test, F test and coefficient determination test. The result of this research show that partially Local Government Expenditure and Original Local Government Revenue have a positive significant impact to the Human Development Index. Whereas, General Allocation Fund and Special Allocation Fund have a negative significant impact to the Human Development Index. Local Government Expenditure, General Allocation Fund, Special Allocation Fund and Original Local Government Revenue have a positive significant impact to the Human Development Index simultaneously.

scholarly journals The Determinants of Level of Society Welfare Within Fiscal Decentralization Framework In Regional Autonomy Era

2020 ◽  
Vol 21 (2) ◽  
pp. 60-70
Author(s):  
Nuwun Priyono ◽  
Siti Arifah ◽  
Eva Wulandari ◽  
Panji Kusuma Prasetyanto
Keyword(s):  
Local Government ◽  
Time Series Data ◽  
Fiscal Decentralization ◽  
Government Expenditure ◽  
Balance Sheet ◽  
Significance Test ◽  
Profit Sharing ◽  
Series Data ◽  
Central Java ◽  
Local Government Expenditure

The purpose of this study is to prove to what extent the influence that fiscal decentralization, local financial performance, local government expenditure, Locally Generated Recurring Revenues or Pendapatan Asli Daerah (PAD), Profit-Sharing Fund or Dana Bagi Hasil (DBH), General Allocation Fund or Dana Alokasi Umum (DAU), and Special Allocation Fund or Dana Alokasi Khusus (DAK) have on the level of society welfare. The objects of this research are Regencies and Municipalities in Java Island. The data used in this study are the secondary. The data on balance sheet and realization report of the regional revenues and expenditure budget (APBD) are from the Ministry of Finance of the Republic of Indonesia. The data on the level of society welfare that is proxyed by the value of HDI is obtained from Bappenas and BPS of Central Java. This research uses time series data from 2012-2014 periods. The research method used is the research of causality with linear regression model. The result of the significance test shows that only one DAK variable can partially affect the HDI variable. Meanwhile those variables other than DAK partially or individually do not influence the HDI variable. The result of regression analysis shows that simultaneously such variables as Fiscal Decentralization, Regional Finance Performance, Local Government Expenditure, PAD, DAU, DAK and DBH have an influence on HDI in Regencies / Municipalities in Java Island.

Determinan Penerimaan dan Belanja Daerah: Studi pada 10 Provinsi di Indonesia

2017 ◽  
Vol 2 (1) ◽  
pp. 57-77
Author(s):  
Eliza Noviriani ◽  
Anniza Dwi Febrianty
Keyword(s):  
Exchange Rate ◽  
Panel Data ◽  
Local Government ◽  
Significant Influence ◽  
Government Expenditure ◽  
Domestic Product ◽  
Government Revenue ◽  
Local Government Expenditure

The aim of this study is to determine local government revenue and expenditure determinants from 10 provinces in Indonesia. The factors which affect local government revenue are Gross Regional Domestic Product (GDPR), inflation, and exchange rate. The local government revenue will affect local government expenditure. By using panel data, the research showed that variable of GDPR did not have influence on local government revenue. In addition, variable of inflation had a negative and significant influence on the local government revenue. Exchange rate had a positive and significant effect on local government revenue. Finally, local government revenue had a positive and significant impact on local government expenditure.                         Abstrak Penelitian ini bertujuan untuk menguji determinan penerimaan dan belanja daerah di 10 Provinsi di Indonesia. Adapun faktor-faktor yang mempengaruhi penerimaan daerah adalah Produk Domestik Regional Bruto (PDRB), inflasi serta kurs. Penerimaan daerah akan berpengaruh terhadap belanja pemerintah daerah. Hasil pengujian dengan menggunakan data panel memperoleh hasil bahwa variabel PDRB tidak memiliki pengaruh terhadap penerimaan daerah. Selain itu, variabel inflasi memiliki pengaruh yang negatif dan signifikan terhadap penerimaan daerah. Variabel kurs berpengaruh positif dan signifikan terhadap penerimaan daerah. Akhirnya, variabel penerimaan daerah berpengaruh positif dan signifikan terhadap belanja pemerintah daerah.

Dampak Desentralisasi Fiskal terhadap Perekonomian Antar Daerah : Analisa Model IRIO

2003 ◽  
Vol 3 (2) ◽  
pp. 50-71
Author(s):  
Nurkholis Nurkholis ◽  
Bambang P.S. Brodjonegoro
Keyword(s):  
Natural Resources ◽  
Central Government ◽  
Fiscal Decentralization ◽  
Government Expenditure ◽  
Regional Government ◽  
Block Grants ◽  
Current Formulation ◽  
Decentralization Policy ◽  
Tax Sharing ◽  
The Impact

Regional autonomy program is the form of fiscal decentralization policy in Indonesia, legally started with the law of Regional Government No.22/1999 about de-concentration azas, which imply power or authority sharing and No.25/1999 about decentralization, which imply financial sharing between central and regional government. Financial sharing is tax and natural resources sharing revenue. This financial sharing type can widen fiscal gap between regions. As the solution, the central government gives block grants. Interregional Input-Output (IRIO) model can be used to analyze the impact of fiscal decentralization policy on sectoral and regional linkages, multipliers, growth, equalization, and efficiency of the regional economy. The analysis use shock variables of inter-governmental transfer including tax sharing revenue, natural resources revenue and block grants. They are treated as an exogenous variable package by regional government expenditure. The expenditures are in the form of investment and consumption based on IRIO model to analyze the optimality of policy variation. The analysis shows that the optimality of growth, equalization, and economic efficiency will be reached if the allocation of inter-governmental transfer is exactly the same as the potency and linkages between sectors and regions. We find the current formulation of intergovernmental transfer by central government, potent to increase regional disparity. Central government should reformulate division of inter-governmental transfer to avoid fiscal decentralization to be contra productive policy.

scholarly journals THE ROLE OF LOCAL GOVERNMENT EXPENDITURE ON ECONOMIC GROWTH: A REVIEW OF PANEL DATA IN INDONESIA

2019 ◽  
Vol 7 (5) ◽  
pp. 1293-1303
Author(s):  
Agus Tri Basuki ◽  
Yunastiti Purwaningsih ◽  
Mulyanto ◽  
A. M. Susilo
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Local Government ◽  
Cross Section ◽  
Foreign Investment ◽  
Raw Materials ◽  
Government Expenditure ◽  
Local Economy ◽  
Series Data ◽  
Local Government Expenditure

Purpose of the study: This research aims to empirically prove the composition of local government expenditure (education, health, marine and fisheries, agriculture, and general allocation fund) on economic growth in 18 provinces in Indonesia from 2010 to 2015. Methodology: The model used in this research is panel data regression. The use of panel data in regression can provide more information that cannot be provided by cross-section or time-series data, and provides the best solution for inferring dynamic changes than cross-section data. Main Findings: The findings in this study are foreign investment has no influence on economic growth. Fiscal policies that are carried out are not effective in encouraging economic growth, and the use of the General Allocation Fund is not on target. Applications of this study: Foreign investment must be a trigger for the local economy and the national economy by means of foreign investment in Indonesia which is prioritized using raw materials and local labour, so that dependence on imported raw materials can be minimized. To overcome leakage of development budget must implement a budgeting system that is oriented towards organizational output and is very closely related to the organization's vision, mission, and strategic plan. The use of general allocation funds needs to be monitored by certain institutions and prioritizing public interest.

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