The Influence of Fiscal Decentralization on The Local Original Renevue and Public Expenditure in Indonesia

• Main Author: Eni Jufriyah Sulistyorini
• Format: Article
• Language: English
• Published: Universitas Sebelas Maret 2017-02-01
• Series: Jurnal Akuntansi dan Bisnis
• Online Access: https://jab.fe.uns.ac.id/index.php/jab/article/view/113

The implementation of fiscal decentralization in Indonesia has been done in order to give wider responsibility and autonomy to local government. The application of decentralization in the form of financial balance is expected to copes the realization of local autonomy, particularly in income side and expenditure sides since the implementation of decentralization in the beginning year 2001. The purpose of this research is to investigate the influence of fiscal decentralization components on the public expenditure. This research used data of the local budget realization which consisting of balance fund, others revenue, local original revenue, and public expenditure that was obtained from financial statement regencies and municipalities in Indonesia. The selection is based on consideration that regencies and municipalities have similar characteristic of economic and geographic and also the result of the research would be expected to give a description of general condition. As for the data source was from Directorate General of Local and Central Financial Balance and also Directorate General of Financial Balance and Budget. The results of this research proved fiscal decentralization through component of balance fund significantly positive influence in increasing original revenues while others revenue is not. Regarding with the public expenditure, both of balance fund and local original revenue positively influence on the public expenditure, while others revenue is not significantly influence. It indicated that there was dependence on receipt from central government through balance fund on regencies and municipalities in order to stimulate the increasing of local original revenue and improving public service in Indonesia. Therefore, decentralized system is expected to be better respond to local preferences and needs and to promote competition among local units in the provision of public goods and services.