scholarly journals Flypaper Effect in Indonesia: The Case of Kalimantan

2019 ◽  
Vol 4 (4) ◽  
pp. 116-121
Author(s):  
Yarlina Yacoub ◽  
Nindya Lestari
Keyword(s):  
Local Governments ◽  
Central Government ◽  
Least Square Method ◽  
Development Planning ◽  
Jel Classification ◽  
Least Square ◽  
Flypaper Effect ◽  
Intergovernmental Transfers ◽  
Local Revenue ◽  
Government Transfers

Objective – Changes in financial authority as a result of decentralization are expected to make provinces in Indonesia become more flexible in approving their finances. However, it goes beyond central government transfers which make local governments more consumptive, which impacts on the phenomenon of the effect of flypaper. This study aims to identify the influence of the government’s fiscal on regional expenditure and identify the effect of flypaper on the regional expenditure in Kalimantan. Methodology/Technique – The research uses panel data from 56 regencies and cities on Kalimantan Island. Pooled least square method is used. Findings – The results show that intergovernmental fiscal revenue has a significant relationship with expenditure. Further, the flypaper effect occurs in regional expenditure which means that districts and cities in Kalimantan are still dependent on the central government to finance regional expenditures. They are not able to maximize their respective regional income. Novelty – These results indicate that the existence of local revenue derived from taxes has not been able to be optimally absorbed. Thus, dependence on intergovernmental transfers is very high. In addition, the flypaper effect also indicated that the intervention of the central government came into regional development planning programs. Type of Paper: Empirical Keywords: Flypaper Effect; Intergovernmental Transfer; Fiscal; Grants. Reference to this paper should be made as follows: Yacoub, Y; Lestari, N. 2019. Flypaper Effect in Indonesia: The Case of Kalimantan, J. Fin. Bank. Review, 4 (4): 116 – 121 https://doi.org/10.35609/jfbr.2019.4.4(1) JEL Classification: B22, D02, H02, H21, H3.

scholarly journals Flypaper effect revisited: evidence for tax collection efficiency in Brazilian municipalities

2011 ◽  
Vol 41 (2) ◽  
pp. 239-267 ◽  
Author(s):  
Enlinson Mattos ◽  
Fabiana Rocha ◽  
Paulo Arvate
Keyword(s):  
Informal Economy ◽  
Local Governments ◽  
Central Government ◽  
Collection Efficiency ◽  
Tax Revenue ◽  
Flypaper Effect ◽  
Tax Collection ◽  
Tax Base ◽  
Two Stages ◽  
Government Transfers

The purpose of this article is to propose a reinterpretation of the traditional flypaper effect according to which central government transfers to local governments increase public spending by more than do increases in private income. Here, higher transfers from the federal government might induce less efficiency in local tax collection opposed to the income effect. Initially, we build a model in order to point out the possible existence of that flypaper effect in a context of standard maximization on the part of local governments. Next, we construct efficiency scores for Brazilian municipalities using Free Disposable Hull (FDH), taking into consideration two outputs: amount of per capita local tax collected -tax revenue- and the size of local informal economy - tax base. Last, using two stages least squares and Tobit regressions, which the instruments is built upon the rules established in the 1988 Brazilian Constitution and where we find that unconditional transfer funds to municipalities, we estimate that transfers have the opposite effect (negative) of consumer's income on efficiency of taxation, which leads us to a reinterpretation of the flypaper effect.

The Impact of Intergovernmental Transfers in the Japanese Local Government Fiscal System

2005 ◽  
Vol 4 (2) ◽  
pp. 26-58 ◽  
Author(s):  
Sayuri Shirai
Keyword(s):  
Low Income ◽  
Local Governments ◽  
Central Government ◽  
Accounting System ◽  
Fiscal Policies ◽  
Total Expenditure ◽  
Intergovernmental Transfers ◽  
Local Revenue ◽  
Fiscal System ◽  
The Impact

Since the 1990s, a decline in local revenue caused by sluggish economic growth and an increased tendency for local governments to implement expansionary fiscal policies on behalf of Japan's central government have given rise to a growing gap between autonomous revenue and total expenditure. This has caused a rapid increase in various intergovernmental transfers, particularly to lowincome local governments, leading to excessive and unproductive spending. Within a cash-based settlement accounting system, the fiscal positions of low-income prefectures have become superior to those of high-income ones, giving the impression that the former are fiscally sounder than the latter. Decentralization initiatives should take these problems of the existing system into account.

Public Choice and Financing Local Government Fiscal Reform in Albania

2018 ◽  
pp. 197-208
Author(s):  
Jane Beckett-Camarata
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Central Government ◽  
Fiscal Decentralization ◽  
Open Market ◽  
Policy Options ◽  
Intergovernmental Transfers ◽  
Local Revenue ◽  
Public Investments

The Albanian government has been decentralizing decision making. Central to decentralization is a system of intergovernmental revenue transfers, especially unconditional transfers. This study examines in what ways market conditions and policy options affect the central government and local government relationship. It analyzes unconditional intergovernmental revenue transfers between the central government and local governments to better understand Albanian fiscal decentralization. While the unconditional intergovernmental transfers during the time of this study were found to be stable, the fragmentation of local government units and the evolving role of the regions, could complicate decentralization. The lack of a clear path to local government debt and borrowing, coupled with the system of intergovernmental transfers, has resulted in few viable policy options for balancing local government budgets. A more diversified local revenue structure, coupled with the ability to borrow on the open market, could allow larger and better growth-enhancing public investments without additional budgetary pressures.

FLYPAPER EFFECT: FENOMENA SERIAL WAKTU DAN LINTAS KABUPATEN KOTA DI JAWA TIMUR 2003-2013

2015 ◽  
Vol 12 (2) ◽  
pp. 1
Author(s):  
Deni Oktavia
Keyword(s):  
Local Governments ◽  
Central Government ◽  
Funding Source ◽  
Block Grant ◽  
Flypaper Effect ◽  
Local Independence ◽  
Funding Sources ◽  
Asymmetric Behavior ◽  
Government Transfers ◽  
Positive Effect

The aims of local autonomy is to achieve local independence funding, so the interference of the central government decrease. Local governments have funding source from the own region revenues (PAD), which is used to finance expenditures and development. Regency or municipalities funding sources not only their PAD. Local governments also get help from central government transfers such block grant aid or transfer fund (DAU). In the course of the central government transfers actually become a disincentive for increased regional funding. Regions become more dependent on central government transfers rather than optimize their own revenues (PAD). There are has indications of asymmetric behavior in response to the transfer of central government. Region revenues (PAD) and the transfer fund (DAU) from central government is generally positive effect on the regional expenditure (BD). Results for the time series test indicates that occurred flypaper effect,  indicated by DAU more significant influence on regional expenditure of the influence of the PAD.  Regency or manucipalities in East Java generally done flypaper effect, BD response was greater from DAU components. Key words: region revenues, transfer fund, regional expenditure

scholarly journals FEATURES OF PLANNING AND IMPLEMENTATION OF LOCAL BUDGETS IN THE CONTEXT OFTHE BUDGET AND DECENTRALIZATION REFORMS

2017 ◽  
pp. 132-144
Author(s):  
Yuliia OSTRISHCHENKO
Keyword(s):  
Local Governments ◽  
Central Government ◽  
Poor Quality ◽  
Intergovernmental Transfers ◽  
Reform Implementation ◽  
Budget Reform ◽  
Subsidiarity Principle ◽  
Planning Methods ◽  
Local Budget ◽  
Budget Revenue

Introduction. Scarce local budget financial resources, lack of sufficient transparency of budget expenditures, and poor quality of public services provided by the central and local governments - all these factors require comprehensive governance reforms introduction primarily budget reform and powerdecentralization reform. Purpose. The aim of the article is to identify special traits and discover challenges of the local budgets planning and execution system, to analyze potential approaches to its improvement based on outcomes and effects of budget reform and local self-government reform implementation in Ukraine. Results. The article summarizes the tasks, measures and achievements of the local budgets reform and intergovernmental relation reform. The changes in the local budget revenue and expenditure structure were analyzed taking into account recent amendments to Budget and Tax Codes of Ukraine. The local budgets planning methods and approaches as well as procedures for fiscal equalization ofthe local government’s financial capacity were investigated; 2010-2017 reporting data on budget revenue and expenditures performance were analyzed. At the same time the article determines key budget parameters preliminarily included in draft 2018 Budget Law and medium-term Budget Declaration, in particular regarding local budgets and intergovernmental transfers and also represents review of progress achieved under the territorial communities’ amalgamation and establishment of direct interrelation between central government and newly formed amalgamated communities. Conclusion. According to the results ofthe research and analysis, the article substantiates the necessity of further local budget revenue amplification, the expediency of the budget decentralization considering budget subsidiarity principle, as well as the effectiveness of the new interbudgetary relation model.

scholarly journals THE IMPACT OF MIGRATION ON THE WAGE DISTRIBUTION IN INDONESIA

2019 ◽  
Vol 3 (02) ◽  
pp. 1
Author(s):  
Clalisca Pravitasari ◽  
Arie Damayanti
Keyword(s):  
Migrant Workers ◽  
Least Square Method ◽  
Jel Classification ◽  
Least Square ◽  
Wage Distribution ◽  
Average Wage ◽  
Ordinary Least Square ◽  
Wage Rates ◽  
Negative Impacts ◽  
The Impact

<p><em>Research on the impact of migration on workers' wages in destination areas has long been debated in the literature. However, studies that link migration to wage rates in different percentiles along the distribution have not been widely implemented, as migration does not have the same impact on wage levels in all groups of workers. By establishing a counterfactual using the semi-parametric DFL method of National Labor Force Survey data, this study found that migration promotes changes in the distribution of wages, especially in the upper and lower percentiles. After controlling the magnitude of in-migration in each percentile group by using the ordinary least square method, this study also proves that migration leads to wage decreasing in percentile groups where migrant workers are overrepresented, which is in the 75th and 90th percentile groups. Meanwhile, no negative impacts were found on wage levels in the lower middle percentile. In fact, migration has proven to encourage an increase in the average wage of workers in the lowest percentile of the distribution.</em></p><p><strong><em>JEL Classification: </em></strong><em>J01, J11, J61</em><strong></strong></p><strong><em>Keywords</em></strong>: <em>counterfactual, migration, wage distribution</em>

scholarly journals Analisis Hubungan Kemandirian Keuangan Daerah dan Ketergantungan Daerah Terhadap Pengangguran dan Kemiskinan

2018 ◽  
Vol 5 (2) ◽  
pp. 217-225
Author(s):  
Rosyafa Febiandani ◽  
Deky Aji Suseno
Keyword(s):  
Local Governments ◽  
Central Government ◽  
Fiscal Decentralization ◽  
Secondary Data ◽  
Direct Relation ◽  
Regional Autonomy ◽  
Local Revenue ◽  
Central Java ◽  
Relationship Of ◽  
The Relationship

Adanya desentralisasi fiskal diharapkan dapat menciptakan kemandirian daerah dan dapat mengurangi ketergantungan pemerintah daerah terhadap pemerintah pusat. Kemandirian keuangan daerah dicerminkan dengan perbandingan besarnya PAD terhadap total pendapatan daerah. Sejak 10 tahun dilaksanakannya otonomi daerah sesuai UU No 32 Tahun 2004, kemandirian keuangan daerah di Provinsi Jawa Tengah masih berada di level yang kurang baik dibandingkan dengan provinsi lainnya di Pulau Jawa. Jumlah pengangguran dan jumlah penduduk miskin di Provinsi Jawa Tengah juga masih terhitung tinggi. Penelitian ini bertujuan untuk mengetahui hubungan dari tingkat kemandirian keuangan daerah dan tingkat ketergantungan daerah terhadap tingkat pengangguran dan tingkat kemiskinan di kabupaten/kota Provinsi Jawa Tengah Tahun 2013. Data yang digunakan dalam penelitian ini adalah data sekunder. Metode analisis yang digunakan adalah Analisis Korelasi Kanonikal menggunakan bantuan program SPSS. Hasil penelitian menunjukkan kemandirian keuangan daerah mempunyi hubungan yang signifikan, kuat, dan tidak searah dengan pengangguran dan kemiskinan. Sedangkan hubungan antara ketergantungan daerah terhadap kemiskinan dan pengangguran mempunyai hubungan yang signifikan, tidak kuat, dan tidak searah. Peningkatan kemandirian keuangan daerah guna mengurangi tingkat ketergantungan terhadap pemerintah pusat dapat dilakukan dengan cara menggali dan mengelola sumber daya atau potensi daerah yang dimilikinya secara efektif dan efisien sebagai sumber utama pendapatan keuangan daerahnya. Fiscal decentralization is expected to create  independency regional financial  and to reduce the dependence of local governments to the central government. Independency regional financial can be result by the ratio of PAD to total local revenue. Since 10 years the implementation of regional autonomy based on UU No. 32 of 2004, independency regional financial in Central Java  is still unwell compared to the other provinces in Java. As well as unemployed, and the poverty in Central Java is still high. The purpose of this research is to determine the relationship of  independency regional financial and the dependency regional to unemployment and poverty in Central Java period 2013. The data used in this research is secondary data. The method of analysis used is the Canonical Correlation Analysis using SPSS application. The results of research showed that the relationship of independency regional financial are significant, strong, and no direct relation with unemployment and poverty The relationship between dependency regional with unemployment and poverty are significant, no strong, and no direct relation. Increased the independency local financial to reduce the dependence on the central government can be done by managing the resources or the potential of region effectively and efficiently as the source from their financial local revenue

scholarly journals Adakah Pengaruh Pertumbuhan Ekonomi terhadap Pendapatan Asli Daerah?

2017 ◽  
Vol 16 (2) ◽  
Author(s):  
Faishal Fadli
Keyword(s):  
Economic Growth ◽  
Gross Domestic Product ◽  
Regional Development ◽  
Local Governments ◽  
Central Government ◽  
Domestic Product ◽  
Local Revenue ◽  
Economic Progress ◽  
Regional Budget ◽  
The Government

<p><em>The implementation of regional autonomy resulted in each region to be able to manage their finances independently. This is one way the central government to remove the dependency of local governments to the central government. Thus requiring local governments to explore the sources of local revenue in order to finance regional development. In an effort to increase local revenues derived from the PAD is determined by economic factors or economic potential which has the prospect to be developed for each area. While the economic progress of a region heavily dependent on the development efforts undertaken by the government in providing public facilities to support economic activity. so it needs to be studied further economic growth in East Java, which increased from year to year, is also accompanied by an increase in revenue (PAD) as one source of income in financing regional development. The result indicates the role of the revenue (PAD) in the Regional Budget (APBD) of East Java Province indicates that there is still very small, with an average of 15.47% of the total revenue budget. This means that the level of dependence of local governments on the central government is still high. Although the results of regional revenue projections indicate that component has been great in their contribution of the reception area, which amounted to 69.52%. Using the ordinary least squre method, the result of regression correlation are insignificant. This means that the regional gross domestic product does not have an effect on revenue of East Java Province. If an increase or decrease in regional gross domestic product will not increase or decrease revenue amount. This means that there is no significant relationship between economic growths towards the reception of the revenue.</em></p><p align="left"><em> </em></p><p><strong>Keywords: </strong>economic growth, revenues (PAD), Regional Budget (APBD), Gross Domestic Product (GDP).</p>

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