Fiscal Decentralization and Regional Disparity in East and West Indonesia’s Provinces
Abstract: This
study aimed to examine the direct and indirect effects of fiscal decentralization
on regional disparity in eastern and western Indonesia througheconomic growth.
Analyzing variable between economic growths because growth based on several
theories and previous research says that the increase in local revenues and
fund balance can increase economic growth. Meanwhile, according to theory said
that increasing economic growth will increase regional disparity. The method of
analysis used in this study is a quantitative method, with the use of Path
Analysis. The variables used in this study are the General Allocation Fund (DAU),
Special Allocation Fund (DAK), Revenue Sharing Fund (DBH), local revenue (PAD),
Economic Growth (G), and regional disparity (IW). While to compare the results
of the analysis between Eastern Indonesia Region (Borneo, Celebes, Maluku,
Papua, and Nusa Tenggara) and Western Indonesia Region (Sumatera, Java, and
Bali). The results of the study is that there is no direct effect of fiscal
decentralization on regional disparity and economic growth through direct
fiscal decentralization on regional disparity both in eastern Indonesia western
Indonesia. Although the outcome in eastern Indonesia there is only DAU variable
that affects. Whereas in the west Indonesia DBH only have an influence. This is
consistent with the composition of the balance funds are disbursed by the central
government to local governments, where the composition of the greatest in eastern
Indonesia is the General Allocation Fund in which it reflects the dependence of
local governments to the center of the high, while for the West Region
Indonesia composition equalization funds is greatest DBH where this is a reflection
of the independence of local governments are not dependent on the central
government. So as to create fiscal decentralization well then required a greater
allocation of the fund balance.
Keywords:
Fiscal Decentralization, Economic Growth, Fund Balance, Regional disparity
Penulis: Faishal
Fadli
