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.

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 ANALISIS PERKEMBANGAN KEMAMPUAN KEUANGAN DAERAH DALAM MENDUKUNG PELAKSANAAN OTONOMI DAERAH PADA DINAS PENDAPATAN DAERAH KOTA TIDORE

2018 ◽  
Vol 13 (04) ◽  
Author(s):  
Umilhair Alting ◽  
Winston Pontoh ◽  
I Gede Suwetja
Keyword(s):  
Local Government ◽  
Regional Development ◽  
Central Government ◽  
Fiscal Decentralization ◽  
Regional Government ◽  
Financial Capability ◽  
Growth Ratio ◽  
Regional Autonomy ◽  
New Beginning ◽  
The People

Fiscal decentralization is one the major component of the decentralization implementation of regional autonomy. As the new beginning in regional development and the people in managing the resources or all of the potential to the prosperity and the progress of region. Financial aspect is one of the basic criteria to find out the real capability regional government in managing their autonomy system (household system) the capability of regional government in managing their financial can be seen in APBD which describes the capability of local government in financing the activities of development task and equity in each region. The purpose of this research is to determine the financial capability of Tidore in regional autonomy especially in 2013-2017 judging by ratio of independency, decentralization fiscal degree, growth ratio. This research used observation, interview and documentation to collect the data. The data was analyzed using qualitative and quantitative data with described analysis. The result showed that the independence ratio of Tidore has been able to improve its financial capability. The degree of decentralization is still highly dependent on the central government, although it has been increasing year by year. Growth rate fluctuated this indicates the local government of Tidore is not too concerned with regional development and community welfare.Keywords: regional autonomy, ratio of independency, The degree of decentralization ratio, Growth ratio.

scholarly journals IMPLEMENTATION OF FISCAL DECENTRALIZATION IN INDONESIA: 2001-2009

2012 ◽  
Vol 13 (1) ◽  
pp. 1
Author(s):  
Nursini Nursini
Keyword(s):  
Government Spending ◽  
Central Government ◽  
Fiscal Decentralization ◽  
Descriptive Analysis ◽  
Government Expenditure ◽  
Secondary Data ◽  
Annual Growth Rate ◽  
Regional Government ◽  
Regional Autonomy ◽  
Fund Balance

In Indonesia, the implementation of fiscal decentralization has entered the 9th year, however, so far many problems and obstacles which is faced during the implementation to stimulate economic growth and reduce poverty. This study aims to analyze: trend of government expenditure in decentralization era and regional autonomy during 2001-2009 and fiscal decentralization degree in Indonesia. This objective is achieved through descriptive analysis using secondary data for 2001-2009. The result shows central government expenditure tends to decreased and transfer expenditure increased significantly every year in absolutely, but annual growth rate fluctuated considerably. This indicates the allocation portion of the transfers was unstable. The largest component of transfers is fund balance and tends to increase every year significantly, fiscal decentralization degree at districts/city and province increased in 2007-2008. It is recommended to regional government to allocate public interest bigger than for government administration such as personnel government spending.

scholarly journals The Impact of the Original Local Government Revenue and Balanced Budget toward Capital Expenditure of the Government of Palangka Raya City

2020 ◽  
Author(s):  
Irma Rianti ◽  
Suwadi . ◽  
Alexandra Hukom
Keyword(s):  
Local Government ◽  
Fiscal Decentralization ◽  
Capital Expenditure ◽  
Government Revenue ◽  
Regional Government ◽  
Descriptive Approach ◽  
Balanced Budget ◽  
The Government ◽  
Quantitative Descriptive ◽  
The Impact

The implementation of fiscal decentralization in improving services and necessity in various sectors including public sector has lead the Regional Government to allocate higher Capital Expenditure for the development of sectors that are considered beneficial in each region. The purpose of this study is that the researcher would like to investigate the impact of Original Local Government Revenue and Balanced Budget toward the Capital Expenditure of Palangka Raya City. The study was conducted in Palangka Raya City using a quantitative descriptive approach and multiple analysis for the data analysis. The results of the study indicates that part of Original Local Government Revenue does not have significant effect on Capital Expenditure. Meanwhile, part of the Balanced Budget has a significant effect on Capital Expenditure. Simultaneously, both of Original Local Government Revenue and Balanced Budget are able to influence local Capital Expenditure of the government of Palangka Raya City. Keywords: Original Local Government Revenue, Balanced Budget and Capital Expenditure

scholarly journals ANALISIS PENILAIAN KINERJA KEUANGAN PEMERINTAH DAERAH

2021 ◽  
Vol 1 (1) ◽  
pp. 75-94
Author(s):  
Ruddy Tri Santoso ◽  
Muhammad Syukri ◽  
Dyah Ayu Putri Ermawati ◽  
Ni’matul Hasanah
Keyword(s):  
Local Governments ◽  
Central Government ◽  
Capital Expenditure ◽  
Regional Government ◽  
Relationship Patterns ◽  
Growth Ratio ◽  
Regional Autonomy ◽  
Positive Growth ◽  
Positive Growth Rate ◽  
Financial Dependency

This research aims to measure the independence of local governments in implementing regional autonomy in Sleman Regency by assessing the financial performance of the Regional Financial and Asset Agency (BKAD) based on the Budget Realization Report (LRA) for 3 years from 2017 - 2019 by analyzing the effectiveness ratio of Regional Original Income, growth ratio, compatibility ratio, regional financial independence ratio, and regional financial dependency ratio. The results of the analysis showed that the growth ratio of Regional Native Income (PAD) was assessed to have a positive growth rate. PAD effectiveness level is already very effective with an average effectiveness of 110.5%. Ratio of Compatibility has decreased in 2019 to 81.47% which shows that still local governments still allocate a lot of operating spending rather than capital expenditure. The independence ratio in the Sleman Regency government increased from 51.50% to 54.36% which was categorized as having moderate financial capabilities and showing participatory relationship patterns. The level of local financial dependence on the central government is considered very high reaching 63.99%. This shows that the Sleman County Regional Government has not been able to maximize Local Original Income effectively and efficiently in obtaining Regional Revenue.

scholarly journals Bagaimana Pemerintah daerah merespon Fiscal Stress?

2019 ◽  
Vol 10 (2) ◽  
pp. 76
Author(s):  
Iqbal Lhutfi ◽  
Hamzah Ritchi ◽  
Ivan Yudianto
Keyword(s):  
Local Governments ◽  
Central Government ◽  
Capital Expenditure ◽  
Primary Data ◽  
Capital Expenditures ◽  
Fiscal Stress ◽  
Regional Government ◽  
Local Revenue ◽  
Current Period ◽  
The Impact

<div class="page" title="Page 1"><div class="layoutArea"><div class="column"><p><span>ABSTRACT</span></p><p><span>This study aims to find out and analyze how the response of the regency/municipality to the occurrence of fiscal stress, which is the inability of local governments to generate sufficient income in the current period to meet their expenditure. This study used descriptive qualitative approach to explore primary data information.. This study used Yogyakarta municipality and Surakarta municipality as research sample, the author conducted interviews with related parties for data collection. The results of this study found that the character of local government entities is an important factor in how the region responds to fiscal stress. Regional Original Income has significant influence on fiscal stress, high or low Regional Original Income will affect the confidence of the region in allocating the budget that will be used for public services. The higher the ability of a region in optimizing local revenue, the smaller the impact of fiscal stress on the area, and vice versa. Another response from local governments to fiscal stress is to allocate appropriate Capital Expenditures in accordance with priorities, so that regional potential will increase and attract investors, so that it will grow the economy of the region, and in the end it is expected to increase regional income in the future. In addition to avoiding fiscal stress, the regional government allocates capital expenditures from Special Allocation Funds (DAK), so that these funds if its increase or decrease have little effect on the fiscal stress, because the capital expenditure funding comes from central government transfer funds.</span></p><p><span>Keywords : </span><span>Fiscal Stress, Response, Yogyakarta, Surakarta</span><span>ABSTRAK</span></p><p><span>Penelitian ini bertujuan untuk mengetahui dan menganalisis bagaimana respon pemerintah kabupaten/kota terhadap terjadinya fiscal stress yang merupakan ketidakmampuan pemerintah daerah untuk menghasilkan pendapatan yang cukup dalam jangka waktu saat ini untuk memenuhi pengeluarannya. Penelitian ini menggunakan pendekatan kualitatif deskriptif dengan mencoba menggali informasi data primer ke narasumber. Penelitian ini menggunakan kota yogyakarta dan kota surakarta sebagai sampel penelitian, dan penulis melakukan wawancana ke pihak terkait untuk pengumpulan data. Hasil dari penelitian ini menemukan bahwa karakter entitas pemerintah daerah adalah faktor penting bagaimana daerah tersebut merespon terjadinya fiscal stress. Pendapatan Asli Daerah memiliki pengaruh yang signifikan terhadap fiscal stress, tinggi atau rendahnya Pendapatan Asli Daerah akan mempengaruhi kepercayaan diri daerah tersebut dalam mengalokasikan anggaran belanja yang akan digunakan untuk pelayanan publik. Semakin tinggi kemampuan suatu daerah dalam mengoptimalkan pendapatan asli daerah, semakin kecil pula dampak fiscal stress pada daerah tersebut, begitu sebaliknya. Respons lain dari pemerintah daerah terhadap fiskal stress adalah dengan mengalokasikan Belanja Modal yang sesuai sesuai dengan prioritas, sehingga potensi daerah akan meningkat dan menarik investor, sehingga pada akhirnya akan menumbuhkan perekonomian daerah tersebut, dan pada akhirnya diharapkan akan meningkatkan pendapatan daerah di masa yang akan datang. Selain itu untuk menghindari fiscal stress pemerintah daerah mengalokasikan belanja modal berasal dari Dana Alokasi Khusus (DAK), sehingga dana ini apabila mengalami kenaikan atau penurunan tidak terlalu berpengaruh terhadap tingkat fiscal stress daerah tersebut, karena pembiayaan belanja modal tersebut berasal dari dana transfer pemerintah pusat.</span></p><p><span>Kata kunci : </span><span>Fiscal Stress, Respon, Yogyakarta, Surakarta</span></p></div></div></div>

scholarly journals FLYPAPER EFFECT THEORY DALAM IMPLEMENTASI KEBIJAKAN DESENTRALISASI FISKAL

2015 ◽  
Vol 11 (1) ◽  
pp. 69
Author(s):  
Suyanto Suyanto
Keyword(s):  
Central Government ◽  
Fiscal Decentralization ◽  
Flypaper Effect ◽  
Effect Theory ◽  
Decentralization Policy ◽  
Fiscal Imbalance ◽  
Vertical Fiscal Imbalance ◽  
The Impact ◽  
Financial Transfer ◽  
Regional Governments

Fiscal decentralization can be considered as intergovernmental financial assistance within a state. This assistance is commonly called intergovernmental financial transfer that is transfer of fund from a level of government to another level. Generally, the transfer is usually occurred from a higher level of government the lower counterpart of a single state. The re- search is conducted to prove that Flypaper Effect has occurred in fiscal decentralization policy. The research finds that regional governments use the transfer for increasing their expenditures without raising the tax. The impact which is occurred from correlation of financial transfer by central government toward the income and expenditure of regional governments shows flypaper effect indication in the implementation of fiscal decentralization. In that case, the effect to the increase in regional expenditure is bigger than the effect toward its income. This is showing that transfer of the fund has caused the increase in vertical fiscal imbalance. Transfer of funds encourages the increase in the expenditure of autonomous regions.

scholarly journals Nonalam Disaster Management Policy for The Spread of Covid-19 in The Framework of Regional Autonomy (Central Java Provincial Government Case Study)

2021 ◽  
Vol 9 (2) ◽  
pp. 16-27
Author(s):  
Muhammad Nurul Huda ◽  
Titin Purwaningsih ◽  
Hammam
Keyword(s):  
Natural Disaster ◽  
Disaster Management ◽  
Central Government ◽  
Negative Impact ◽  
Provincial Government ◽  
Management Policy ◽  
Regional Government ◽  
Regional Autonomy ◽  
Central Java ◽  
The Impact

Coronavirus Disease 2019 (Covid-19) is an infectious disease caused by a type of coronavirus, this virus was first detected in Wuhan, China. Seeing the spread, the transmission of Covid-19 has increased very quickly across countries and continents. The Central Government has declared the non-natural disaster status of the spread of Covid-19 as a National disaster. Seeing the impact of the Covid-19 Pandemic not only causing a health emergency but also having an impact on the social, economic, political, cultural, educational and other fields so that its response requires synergy between the Central Government, Regional Government, the private sector, and the community. This study aims to analyze the effectiveness of non-natural disaster management policies for the spread of Covid-19 by the Central Government and Central Java Provincial Government within the framework of the division of authority through the regional autonomy law. This research method uses descriptive qualitative, using a statute approach and a case approach. The results show that the distribution of authority to the Regional Government to regulate their own household affairs has a positive impact on accelerating the management of non-natural disasters from the spread of Covid-19, on the other hand the negative impact is the potential for overlapping between central and regional policies. However, the potential for overlapping policies can be minimized as long as the Central Government is able to absorb the aspirations of the Regional Government and the Regional Government pays attention to the policies of the Central Government.

scholarly journals RENCANA AKSI NASIONAL BELA NEGARA

2019 ◽  
Vol 2 (01) ◽  
pp. 1-16
Author(s):  
Agus Subagyo
Keyword(s):  
Local Governments ◽  
Central Government ◽  
Action Plan ◽  
The State ◽  
Government Agencies ◽  
Regional Government ◽  
Regional Autonomy ◽  
Three Stages ◽  
State Defense ◽  
Government Level

This article aims to explain the 2018-2019 state defense action plan in Presidential Instruction No. 7 of 2018 which mandates all ministries, non-ministerial government agencies, and local governments to take action to defend the country through three stages, namely the stages of socialization, internalization, and movement action. The dilution of the state defense action plan at the central government level has been very active, however, at the level of the reverent regional government it has not yet been felt, especially with the existence of regional autonomy where the central government is not necessarily able to "control" the regional government, so that all this needs attention parties, to see the perspective of the regional government in implementing the state defense action plan.

THE IMPACT OF FISCAL DECENTRALIZATION AND STATE ALLOCATIVE EFFICIENCY ON REGIONAL GROWTH IN INDONESIA

2010 ◽  
Vol 01 (02) ◽  
pp. 287-307 ◽  
Author(s):  
DARIUS TIRTOSUHARTO
Keyword(s):  
Growth Model ◽  
Fiscal Decentralization ◽  
Regional Growth ◽  
Allocative Efficiency ◽  
Empirical Method ◽  
State Governments ◽  
Incentive Structure ◽  
Panel Data Regression ◽  
Using Data ◽  
The Impact

This paper provides a new empirical analysis on the effects of fiscal decentralization on economic growth with the inclusion of a state allocative efficiency factor in the growth model. Using Indonesia as a case study, this study aims to reveal whether the state allocative efficiency will impact growth through better allocation of public goods. Following a two-stage empirical method, the expenditure efficiency of Indonesia's 26 state governments over a 10-year period (1996–2005) is constructed by using Data Envelopment Analysis (DEA) and a panel data regression is utilized in the growth model. The results indicate that although fiscal decentralization provided a greater incentive structure for state governments to become more efficient in allocating fiscal resources, it did not always lead to robust growth due to rising regional disparities particularly in the level of development and resource capacities.

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