DECENTRALIZATION AND EFFICIENCY OF SPENDING AND ITS IMPLICATIONS ON WELFARE (CASE STUDY OF EDUCATION SPENDING OF REGENCY/CITY IN SOUTH SULAWESI PROVINCE)

INFO ARTHA ◽  
2021 ◽  
Vol 5 (1) ◽  
pp. 11-24
Author(s):  
Azwar Iskandar
Keyword(s):  
Good Governance ◽  
Fiscal Decentralization ◽  
Dynamic Panel Data ◽  
Method Of Moment ◽  
Education Spending ◽  
South Sulawesi ◽  
Decentralization Policy ◽  
Government Bureaucracy ◽  
The Impact ◽  
Variable Interaction

This study aims to analyze: (i) the level of efficiency of regional spending of educational functions; (ii) the impact of fiscal decentralization on the spending efficiency; and (iii) the implications of education spending efficiency on the level of welfare in the region. The research used quantitative approach with Data Envelopment Analysis (DEA) and Dinamic Generalized Method of Moment (DGMM) analysis techniques. The results showed that the realization and utilization of education function spending in the aggregate in South Sulawesi Province is quite good, although the spending is still more allocated to government bureaucracy spending. However, the results of efficiency testing by DEA method show that in most districts/cities in South Sulawesi Province, the realization and utilization of such spending is relatively less efficient. From the results of Dynamic Panel Data Testing (DGMM), the findings were obtained that fiscal decentralization in the form of  Local Own-Source Revenue had a positive and significant impact on the education spending efficiency, while the fiscal decentralization policy in the form of Balance Fund, negatively influential but insignificant. In terms of good governance, the variable interaction between fiscal decentralization in the form of  Local Own-Source Revenue and opinion from BPK on LKPD in districts/cities negatively and significantly affects the efficiency of education spending. While the variable interaction between fiscal decentralization both in the form of Balance Fund and opinion from BPK on LKPD in districts/cities has a positive and significant effect on the efficiency of education spending. The increase in the efficiency of education spending will be significantly followed by the improvement of the welfare of the community. Meanwhile, fiscal decentralization policy in the form of  Local Own-Source Revenue has a positive and significant effect.

scholarly journals PENGARUH TATA KELOLA TERHADAP PENCAPAIAN TUJUAN DESENTRALISASI FISKAL

2020 ◽  
Vol 1 (2) ◽  
pp. 114-123
Author(s):  
Rynalto Mukiwihando
Keyword(s):  
Good Governance ◽  
Fiscal Decentralization ◽  
Education Level ◽  
Governance Indicator ◽  
Study Results ◽  
West Papua ◽  
Decentralization Policy ◽  
Papua Barat ◽  
The Impact ◽  
The Relationship

Indonesia has embarked fiscal decentralization policy for more than 20 years. While the results are still varying across the regions, governance seems to be one of the causes of existing condition. The study analyze the impact of governance to the link between General Allocation Fund (DAU) and Gross Domestic Product (GDP). Employing governance indicator from kemitraan in 2012, this research compares the relationship within good governance province (east Java) and bad governance provinces (Papua and West Papua). This study results argue that governance matters in achieving fiscal decentralization objectives. Another result also confirm that education level has positive connection fiscal decentralization outcomes only in province with good governance indicator. Indonesia telah menerapkan kebijakan desentralisasi fiskal lebih dari 20 tahun yang lalu. Dengan hasil yang masih bervariasi belum sesuai di berbagai daerah. Beberapa studi mengindikasikan bahwa perbedaan ini disebabkan oleh faktor tata kelola dari masing-masing pemerintahan daerah. Studi ini menganalisis pengaruh dari tata kelola terhadap hubungan antara Dana Alokasi Umum (DAU) dan Produk Domestik Bruto(PDB). Menggunakan data indeks tata kelola dari kemitraan.or.id pada tahun 2012, penelitian ini menguji pengaruh variabel tata kelola pada daerah dengan indeks tata kelola baik (Jawa Timur) dan daerah dengan tata kelola buruk (Papua dan Papua Barat). Hasil studi menunjukkan bahwa tata kelola memiliki pengaruh dalam mencapai tujuan desentralisasi fiskal. Hasil yang yang lain juga mengkonfirmasi bahwa tingkat pendidikan memiliki pengaruh signifikan bagi PDB hanya pada daerah yang memiliki tata kelola yang baik.

scholarly journals Econometrics Model of Economic Growth in East Java Province with Dynamic Panel Data through Generalized Method of Moment (GMM) Approach

2020 ◽  
Vol 15 (1) ◽  
pp. 38
Author(s):  
Joko Hadi Susilo ◽  
Luthfi Ibnu Tsani ◽  
Herianto Herianto ◽  
M Kholilurrohman
Keyword(s):  
Economic Growth ◽  
Fiscal Decentralization ◽  
Dynamic Panel Data ◽  
Least Square ◽  
Method Of Moment ◽  
Short Term ◽  
Previous Period ◽  
Generalized Method Of Moment ◽  
The Impact

Increasing the rate of economic growth is one of the biggest goals for an area, because it affects macroeconomic conditions in the aggregate especially the level of public welfare. Law Number 32 of 2004 becomes empirical evidence that there is a transfer of responsibility from the central government to regional governments in carrying out economic development. This research is conducted to determine the condition of economic growth in East Java Province with a population of 29 districts and 9 cities in the 2014-2018 observation period, the number of samples was 190 samples. The data analysis technique is carried out through the econometrics model with two stages, namely conducting a simultaneous regression analysis of the ordinary least square method, then for the second stage, an Arellano-Bond Generalized Method of Moment (GMM) analysis is carried out on the grounds that many economic variables are dynamic, This means that the value of a variable can be influenced by the value of other variables and is influenced by the value of the variable concerned in the past or previous period,in addition to knowing the short-term and long-term effects of economic growth. The findings of the study reveal that simultaneous economic growth in East Java Province is influenced by agglomeration, fiscal decentralization, poverty rates and human development index. Based on the results of the generalized method of moment arellano-bond analysis, the researchers find that fiscal decentralization have a partial effect on economic growth in the province of East Java with the impact of the elasticity of short-term and long-term economic growth values. In addition, researchers find that economic growth in East Java Province is influenced by the value of the variable itself (economic growth) in the previous period.

scholarly journals PENGARUH PEMBANGUNAN INFRASTRUKTUR TELEKOMUNIKASI TERHADAP PERTUMBUHAN EKONOMI DI ASEAN

2019 ◽  
Vol 4 (1) ◽  
Author(s):  
Galih adi Prasetyo
Keyword(s):  
Economic Growth ◽  
Trade Openness ◽  
Dynamic Panel Data ◽  
Infrastructure Development ◽  
Method Of Moment ◽  
Telecommunications Infrastructure ◽  
Telecommunication Infrastructure ◽  
Asean Countries ◽  
Urbanization Rate ◽  
The Impact

Abstract This study aims to determine the effect of the development of telecommunications infrastructure to economic growth in ASEAN. Generalized Method of Moment (GMM) is used to test how telecommunication infrastructure development to economic growth in ASEAN. This study uses a dynamic panel data from 10 ASEAN countries in the period 2000-2013. Variables used in this research is the GDP growth, the development of telecommunication infrastructure index, foreign direct investment, trade openness, and urbanization rate. Tests were performed using STATA 13.0 software shows the use sys-GMM better than diff-GMM. The results of this study indicate the development of telecommunications infrastructure significantly affect economic growth but had negative relationships. Based on the theory of demand following hypothesis (DFH) economic growth leads to the development of telecommunications infrastructure. The impact of telecommunications infrastructure development is only emerge through the product or outcome of economic growth. Telecommunications infrastructure development is considered as the impact of economic growth continues to increase.

scholarly journals Bureaucratic Reform and The Challange of Good Governance Implementation in Indonesia

2019 ◽  
Vol 3 (2) ◽  
pp. 25-42
Author(s):  
Muhadam Labolo ◽  
Etin Indrayani
Keyword(s):  
Local Government ◽  
Central Government ◽  
Good Governance ◽  
The Public ◽  
Government Bureaucracy ◽  
Local Government Level ◽  
Important Note ◽  
Corrupt Behavior ◽  
Almost All ◽  
The Impact

Bureaucratic reformation is the fundamental structuring efforts are expected to havean impact on changing systems and structures. The system deals with the relationshipbetween the unsure or the element that influence each other and are associated to makea form totally. The change in one element can influence the other elements in the system.The structure relates with the order of who arrayed a regular basis and systematically.Structure changes is also included with the mechanism and procedure, human resources,facilities and infrastructure, organization and organization’s environment in terms of theachievement of the efficiency of government bureaucracy. These changes include allowingall of the aspects of the bureaucracy has sufficient capacity to carry out the duties and thebasic function. Bureaucratic failure in a term for service the public until now representpoor government both at central and local government level. The urgency of bureaucraticreform in Indonesia is driven by a number of important note. First, the increased apparatusexpenditure is caused by increased of apparatus recruitment without unmeasured control.Second, the ballooning cost of democracy (election) affected the floated of local governmentbudget have increased significantly. The magnitude of the election budget and the impact ongovernmental bureaucracy resulted not ready to close the budget deficit. More than thesebureaucracy has loyalty dilemma caused by dispersed of concentration in every election’sactivity. Third, increased of develop the bureaucratic organization without planning andanalysis of the measured trigger financing and recruitment of apparatus that not less. Asa result, the bureaucracy in most areas are overload, or even lack in outside of Java. Inother side, less of local incomes make dependence to central government, while the localgovernment expenditure is to far from efficiency, even tend to be less controlled due to thehigh cost of the organization. Fourth, extensive corrupt behavior in almost all public sectorbureaucracy encourages lose confidence as a public servant.Keywords: Bureaucratic Reformation, bureaucracy design, local government, GoodGovernance

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 Alleviation of Allocation Funding and Rural Poverty in Indonesia

2019 ◽  
Vol 2 (2) ◽  
pp. 123-136
Author(s):  
Ambya ◽  
Nairobi ◽  
Muhammad Rizqiandri
Keyword(s):  
Poverty Alleviation ◽  
Poverty Reduction ◽  
Fiscal Decentralization ◽  
Panel Data Analysis ◽  
Rural Poverty ◽  
Poverty Rate ◽  
Dynamic Panel Data ◽  
Method Of Moment ◽  
Development Goals ◽  
Investment Spending

Indonesian authority put the fiscal decentralization as one of the policies established to delegate the authority of the central authority to each region to explore sources of income, to benefit the merit in receiving allocations from the higher level of authority, and to organize routine and investment spending. Poverty alleviation is an important agenda for a country to realize the welfare of its people so that poverty alleviation becomes an abroad and massive issue in implementing Sustainable Development Goals (SDGs). This study aims to see how big the influence of fiscal decentralization is, in terms of authority spending, in the form the allocation funding consisting of the General Allocation Funding (DAU), the Special Allocation Funding (DAK) and the Village Funding (DD) on the Poverty Rate in 34 provinces in Indonesia. This paper used a dynamic panel data analysis through the approach Generalized Method of Moment (GMM). The results of this study concluded that the DAU, DAK, and Village Funding variables becoming significantly influencing the rural poverty reduction in Indonesia.

The Impact of Fiscal Decentralization Policy on the Sustainability of Regional Development

2021 ◽  
Vol 3 (2) ◽  
pp. 97-106
Author(s):  
Rahmat Salam
Keyword(s):  
Central Government ◽  
Fiscal Decentralization ◽  
Capital Expenditure ◽  
Regional Growth ◽  
Regional Government ◽  
Infrastructure Development ◽  
Regional Autonomy ◽  
Reform Period ◽  
Decentralization Policy ◽  
The Impact

Fiscal decentralization is a critical component of the concept of regional autonomy that has been embraced since the Reform period. With fiscal decentralization, it is envisioned that every regional government can impose development in its territory. However, the fiscal decentralization strategy in the field cannot be applied in all areas owing to political concerns. Then, each local authority has had solid financial potential since 2001 since it got very high transfer funds from the central government, but the allowance for growth was minimal. E.g., there are still many roads that are destroyed. This may be attributed to the fact that much of the transfer funds from the central government are reserved towards staff spending. The purpose of this analysis is to provide a general overview of the impact on the stabilization of regional growth of the fiscal decentralization policy in effect since 2001. For literature review, this study uses a qualitative approach. The study shows, however, that the fiscal decentralization policy has not affected all growth sectors because much of the Central Government allocation funds continue to be used for regular spending and salary payments such that capital expenditure funding, including infrastructure development funding, is modest and even budget-free.

scholarly journals A Study of Good Governance Index in Yogyakarta Special Region between 2012 and 2016

2017 ◽  
Vol 21 (1) ◽  
pp. 14
Author(s):  
Achmad Ubaidillah
Keyword(s):  
Good Governance ◽  
Legal Basis ◽  
Governance Reform ◽  
Policy Changes ◽  
Governance Index ◽  
Government Bureaucracy ◽  
The Impact ◽  
Actual Policy ◽  
Special Region ◽  
Made In

This study assesses the progress of good governance index in Yogyakarta between 2012 and 2016. Kemitraan (Partnership for Governance Reform) developed the Yogyakarta governance index of 2012 based on the IGI (Indonesia Governance Index)’s methodology. The author used the same methodology   to develop Yogyakarta governance index of 2016 based on newly collected data on government, bureaucracy, civil society and economic society in Yogyakarta. This paper compares Yogyakarta good governance index for 2012 and 2016. The index comprises scores on three levels, interalia:  the arena, principles and actual policy. The paper introduces and describes the three tier structure and index processing. Results of the comparison of the index for 2012 and 2016 shows that in general Yogyakarta governance index increased from the level of fairy good (6.80) in 2012 to good (7.93) in 2016. Subsequently, the scores that comprise the arena and principle levels were analyzed to determine the contribution of each to the total governance index, and afterwards determine the contribution of each principle to the score of each arena. The results of the analysis procedure indicates the possibility that the increase in governance index may be linked to new special status Law No.13 of 2012 for Yogyakarta. Prior to 2012, the special status of Yogyakarta special administration was shrouded in uncertainty. However, with the passage of Law No.13/2013, the special status of the province is now codified, and today forms the legal basis for   policy making in this province. This paper limits itself to indicators that point to the association between the governance and the enactment of the law, and does neither go as far as analyzing the impact that the enactment of the special status law has had on policies, nor evaluate the impact that policy changes made in the aftermath of the implementation of the special status law on the performance of the index.

scholarly journals THE IMPACT OF FISCAL DECENTRALIZATION ON INCOME AND EDUCATION INEQUALITY THROUGH ECONOMIC GROWTH IN EAST JAVA

2019 ◽  
Vol 4 (special) ◽  
pp. 90-98
Author(s):  
Muhammad Abdul Ghofur ◽  
Lucky Rachmawati
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Income Inequality ◽  
Economic Model ◽  
Fiscal Decentralization ◽  
Analysis Model ◽  
Education Inequality ◽  
Indirect Impact ◽  
Decentralization Policy ◽  
The Impact

There are still many districts in East Java Province that are categorized as underdeveloped regions, which means that the region has low economic growth with a high income and education inequality. An economic model analysis that illustrates how the impact of fiscal decentralization has been exercised on income inequality and inequality of education through economic growth is needed. The analysis model used is path analysis to determine the direct and indirect impact of fiscal decentralization on income and education inequality through economic growth. The data used in the study were panel data from 2008 to 2015 collected from 29 districts in the East Java Province. The results of the study indicate that the implementation of the fiscal decentralization policy has not been able to encourage economic growth and reduce the number of income inequality and inequality of education. Decentralization makes income inequality even more intense. Economic growth has not been able to reduce the income inequality, but it can reduce the rate of education inequality.

scholarly journals Does Fiscal Decentralization Increases Regional Income Inequality in Indonesia?

2020 ◽  
Vol 2 (2) ◽  
Author(s):  
Afief El Ashfahany ◽  
Rifi Fazrina Djuuna ◽  
Nur Fahmi Rofiq
Keyword(s):  
Income Inequality ◽  
Method Of Moments ◽  
Fiscal Decentralization ◽  
Panel Data Analysis ◽  
Generalized Method Of Moments ◽  
Dynamic Panel Data ◽  
Regional Income ◽  
High Dependency ◽  
Regional Income Inequality ◽  
The Impact

This paper examines the impact of fiscal decentralization on regional income inequality in Indonesia. This study employs dynamic panel data analysis–the two-step system generalized method of moments (GMM) on 2008-2017 regional level datasets. This study found that regional income inequality indeed increases during the implementation of fiscal decentralization and appears to be exceptionally high for rich provinces. Essentially, this study suggest that fiscal decentralization appears to increase regional income inequality in Indonesia. The results might be due to low regional fiscal capacity in Indonesia, which induces high dependency of local government that further restraints local competition in public goods provision. Keywords: fiscal decentralization, regional income inequality, generalized method of moments (GMM).

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