IDEAS home Printed from https://ideas.repec.org/p/unp/wpaper/201905.html
   My bibliography  Save this paper

The Impact of Fiscal Decentralization on Regional Economic Growth and Regional Income Disparity in Indonesia (Case Study: West Sumatra Province during the period 2011 - 2017)

Author

Listed:
  • Defri Kurniawan

    (Master of Applied Economics, Padjadjaran University)

  • Budiono

    (Department of Economics, Padjadjaran University)

Abstract

This study aims to analyze the impact of fiscal decentralization on regional economic growth and also investigate its influence on regional income disparity, particularly among regencies and municipalities in West Sumatra Province during the period from 2011 until 2017. The panel data model is applied on this study involving 19 (nineteen) regencies and municipalities in West Sumatra Province. As the results, fiscal decentralization which devolves the authority to collect local own revenue (PAD) prove not to promote distinguishable regional economic growth and also it contributes positively to regional income disparity. Conversely, the combination of local own revenue and intergovernmental transfer affect the positive contribution to regional economic growth and also narrowing the gap of regional income disparity. This research suggests that the intergovernmental transfer as an implication of the fiscal decentralization is still required by the regional government (cities and regencies) to support their financial resources, particularly in West Sumatra Province case. Moreover, allocating more budget on capital expenditure exhibits beneficial result to increase regional economic growth.

Suggested Citation

  • Defri Kurniawan & Budiono, 2019. "The Impact of Fiscal Decentralization on Regional Economic Growth and Regional Income Disparity in Indonesia (Case Study: West Sumatra Province during the period 2011 - 2017)," Working Papers in Economics and Development Studies (WoPEDS) 201905, Department of Economics, Padjadjaran University, revised Nov 2019.
    • Handle: RePEc:unp:wpaper:201905
    as

    Download full text from publisher

    File URL: http://ceds.feb.unpad.ac.id/wopeds/201905.pdf
    File Function: First version, 2019
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Fiscal decentralization; income disparity; regional; Indonesia;
    All these keywords.

    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:unp:wpaper:201905. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Arief Anshory Yusuf (email available below). General contact details of provider: https://edirc.repec.org/data/lppadid.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.