DETERMINAN EFEKTIVITAS PENGARUH KEBIJAKAN DESENTRALISASI FISKAL TERHADAP KEMAMPUAN KEUANGAN DAERAH SERTA DAMPAKNYA PADA PERTUMBUHAN EKONOMI DAERAH (Studi Kasus: Kabupaten/Kota di Jawa Tengah)

Abstract

Various studies on the effects of fiscal decentralization policy as a representation of the implementation of regional autonomy policies do not have a definitive answer to the region's economic growth. This study is intended to find the answer to how the effectiveness of the influence of performance-based budget policy changes at the level of fiscal capacity, fiscal decentralization and local expenditure structure and then the impact is on regional economic growth in the District/City in Central Java Province.

Panel data analysis of the 35 districts/cities in Central Java during the period 2001 to 2010 shows that: (i) the Regional Financial ability effects positively on economic growth, (ii) Fiscal Decentralization parabolic effects (hump-shaped relation) on economic growth areas where the situation is still low fiscal decentralization positive effect on economic growth, but after reaching its highest point, the effect of fiscal decentralization on economic growth is negative, (iii) Expenditure Structure positively effects on regional economic growth,(iv) Performance-Based Budget Policy Changes influence the level of local financial capacity of the different economic growth,(v) Performance-Based Budget Policy Changes cause the financial ability to influence economic growth lower, (vi) Performance-Based Budget Policy Changes do not lead to changes in local financial capacity to influence regional economic growth. It is recommended that the district/city in Central Java to: (i) improve the financial capability through forming components such as the Regional Local Taxes, Levies, Property Management Results Separated Regions and Other Legal PAD, (ii) increase the expenditure structure of the District/City by increasing the proportion of public expenditure or direct spending and improve efficiency of the indirect expenditure.

Keywords:    Fiscal Decentralization, Regional Financial Capability, Economic Growth