Fiscal Decentralization Dilemma in Indonesia

Between Corruption Accountability and Probability at Local Levels

  • Agus Fatoni Research and Development Agency, Ministry of Home Affairs
Keywords: Regional Autonomy, Regional Government, Fiscal Decentralization, Budget Corruption

Abstract

Decentralization in Indonesia is an unfinished reform and to date, its implementation has not been maximized especially fiscal decentralization. This study aims to investigate the dilemma of fiscal decentralization in Indonesia, between accountability and the probability of corruption at the local level. Data collection in this research is in the form of documentation study to collect secondary data. Secondary data, this study will rely on documentary analysis of official documents from government, NGOs and news items from the media. For data analysis, the study will run analysis processes such as coding, combining emerging codes into themes, verifying themes through theory and follow-up interviews, and drawing conclusions. Whereas the validity mechanism applies member checks, triangulation, multiple sources of data, and looking for counterexamples. This research empirically found that the implementation of fiscal decentralization in Indonesia not only had a positive impact on the financial accountability of local governments but also had a positive impact on the occurrence of corruption in local governments. This means, fiscal decentralization is like two sides of a coin, on the one hand, it is able to increase the financial accountability of local governments, but on the other hand the greater the balance of funds provided by the central government to the regions, the higher the probability of corruption in local governments. Therefore, the supervision of the implementation of fiscal decentralization in order to create good financial governance and minimize corruption in the local government body in Indonesia.

References

Abdullah, H. (2015). Realokasi Kebijakan Fiskal: Implikasi Peningkatan Human Capital dan Pembangunan Infrastruktur terhadap Pertumbuhan Ekonomi dan Kesejahteraan Masyarakat. Jurnal Bina Praja: Journal of Home Affairs Governance, 6(2), 117–128. https://doi.org/10.21787/jbp.06.2014.117-128

Addink, H. (2019). Good Governance. Oxford University Press. https://doi.org/10.1093/oso/9780198841159.001.0001

Akbar, M. R. H. (2013). Analisis Determinan Ekonomi Korupsi di Era Desentralisasi pada 12 Ibukota Provinsi Indonesia. Jurnal Ilmiah Mahasiswa FEB, 1(2). https://jimfeb.ub.ac.id/index.php/jimfeb/article/view/612

Anan, E. (2012). Desentralisasi Fiskal dan Tingkat Korupsi di Indonesia. EBBANK, 3(2), 371–382. http://ebbank.stiebbank.ac.id/index.php/EBBANK/article/view/50

Arifin, T., Trinugroho, I., Prabowo, M. A., Sutaryo, S., & Muhtar, M. (2015). Local governance and corruption: Evidence from Indonesia. Corporate Ownership and Control, 12(4), 194–199. https://doi.org/10.22495/cocv12i4c1p3

Baskaran, T. (2011). Fiscal decentralization, ideology, and the size of the public sector. European Journal of Political Economy, 27(3), 485–506. https://doi.org/10.1016/j.ejpoleco.2011.03.003

Boeije, H. R. (2009). Analysis in Qualitative Research. SAGE.

Carnegie, G. D., & West, B. P. (2005). Making accounting accountable in the public sector. Critical Perspectives on Accounting, 16(7), 905–928. https://doi.org/10.1016/j.cpa.2004.01.002

Chêne, M. (2007). Corruption and Decentralisation in Afghanistan. In U4 Expert Answer. U4 Anti-CorruptionResource Centre. https://www.u4.no/publications/corruption-and-decentralisation-in-afghanistan

Creswell, J. W. (2009). Research Design: Qualitative, Quantitative, and Mixed Methods Approaches (3rd ed.). SAGE Publications.

Crook, R. C., & Sverrisson, A. S. (2001). Decentralisation and Poverty-Alleviation in Developing Countries: A Comparative Analysis or, is West Bengal Unique? In IDS Working Paper Series (130). https://opendocs.ids.ac.uk/opendocs/handle/20.500.12413/3904

Djalil, R. (2014). Akuntabilitas Keuangan Daerah: Implementasi Pasca Reformasi. RMBooks.

Elsye, R. (2014). Implementasi Kebijakan Desentralisasi Fiskal di Provinsi Sumatera Selatan. Sosiohumaniora, 16(2), 171–183. https://doi.org/10.24198/sosiohumaniora.v16i2.5730

Fisman, R., & Gatti, R. (2002). Decentralization and corruption: evidence across countries. Journal of Public Economics, 83(3), 325–345. https://doi.org/10.1016/S0047-2727(00)00158-4

Fontanella, A., & Rossieta, H. (2014). Pengaruh Desentralisasi Fiskal dan Kinerja Terhadap Akuntabilitas Pelaporan Keuangan Pemerintah di Indonesia. Simposium Nasional Akuntansi 17.

Giannoni, M., & Hitiris, T. (2002). The regional impact of health care expenditure: the case of Italy. Applied Economics, 34(14), 1829–1836. https://doi.org/10.1080/00036840210126809

Gideon, J. (2001). The decentralization of primary health care delivery in Chile. Public Administration and Development, 21(3), 223–231. https://doi.org/10.1002/pad.175

Halim, A. (2001). Manajemen Keuangan Daerah: Bunga Rampai. UPP AMP YKPN.

Hartanto, R., & Probohudono, A. N. (2013). Desentralisasi Fiskal, Karakteristik Pemerintah Daerah dan Tingkat Korupsi Pemerintah Daerah pada Tahun 2008 dan 2010. Proceeding Simposium Nasional Akuntansi XVI Manado.

Haryanto, J. (2017). Comparative Analysis of Financial Performance in Fiscal Decentralization Era Among Natural and Non-Natural Resources Region. Jurnal Bina Praja. https://doi.org/10.21787/jbp.09.2017.171-184

Haug, M. (2007). Kemiskinan dan desentralisasi di Kutai Barat: dampak otonomi daerah terhadap kesejahteraan Dayak Benuaq. In CIFOR. Center for International Forestry Research (CIFOR). https://doi.org/10.17528/cifor/002359

Henderson, J. V., & Kuncoro, A. (2011). Corruption and local democratization in Indonesia: The role of Islamic parties. Journal of Development Economics, 94(2), 164–180. https://doi.org/10.1016/j.jdeveco.2010.01.007

Hill, H. (2012). Corruption and development: The Indonesian experience. In S. Khoman (Ed.), A Scholar for All: Essays in Honour of Medhi Krongkaew (pp. 150–164). Thammasat University Press.

Holtzappel, C. J. G., & Ramstedt, M. (Eds.). (2009). Decentralization and Regional Autonomy in Indonesia: Implementation and Challenges. ISEAS–Yusof Ishak Institute. https://www.cambridge.org/core/books/decentralization-and-regional-autonomy-in-indonesia/389B9E1C406C3C9DABF80A02AD4348C7

Huda, N. A., & Sasana, H. (2013). Analisis Dampak Desentralisasi Fiskal Terhadap Outcomes Pelayanan Publik Bidang Pendidikan (Studi Kasus: Provinsi DKI Jakarta). Diponegoro Journal of Economics, 2(1), 1–13. https://ejournal3.undip.ac.id/index.php/jme/article/view/1965

Isufaj, M. (2014). Decentralization and the Increased Autonomy in Local Governments. Procedia - Social and Behavioral Sciences, 109, 459–463. https://doi.org/10.1016/j.sbspro.2013.12.490

Jayani, D. H. (2019, July 13). Sejak 2004 hingga 2019, Terdapat 124 Kepala Daerah Terjerat Korupsi (H. Widowati (Ed.)). Databoks.Katadata.Co.Id. https://databoks.katadata.co.id/datapublish/2019/07/13/sejak-2004-hingga-2019-terdapat-124-kepala-daerah-terjerat-korupsi

Jonas, G. J., & Blanchet, J. (2000). Assessing Quality of Financial Reporting. Accounting Horizons, 14(3), 353–363. https://doi.org/10.2308/acch.2000.14.3.353

Juwono, V., & Mayasari, I. (2019, March 14). Pola Korupsi Pemerintah Daerah dan Pimpinan Transformasional. Kpk.Go.Id. https://www.kpk.go.id/id/berita/publik-bicara/782-pola-korupsi-pemerintah-daerah-dan-pimpinan-transformasional

Kapucu, N. (2009). New Public Management and Governance Perspectives in Understanding Public Management. Public Administration Review, 69(6), 1187–1190. https://doi.org/10.1111/j.1540-6210.2009.02078.x

Kuncoro, A. (2006). Decentralization and Corruption in Indonesia: Manufacturing Firms Survival under Decentralization. In The International Centre for the Study of East Asian Development (2006-25).

Kyriacou, A. P., & Roca-Sagalés, O. (2011). Fiscal decentralization and government quality in the OECD. Economics Letters, 111(3), 191–193. https://doi.org/10.1016/j.econlet.2011.02.019

Liu, C. (2007). What Type of Fiscal Decentralization System has Better Performance? University of Maryland.

Maria, E., Halim, A., Suwardi, E., & Miharjo, S. (2019). Desentralisasi fiskal dan probabilitas terjadinya korupsi: Sebuah bukti empiris dari Indonesia. Jurnal Ekonomi Dan Bisnis, 22(1), 1–22. https://doi.org/10.24914/jeb.v22i1.2036

Merriam, S. B. (1998). Qualitative Research and Case Study Applications in Education: Revised and Expanded from Case Study Research in Education (2nd ed.). Wiley.

Mills, A. (1994). Decentralization and accountability in the health sector from an international perspective: What are the choices? Public Administration and Development, 14(3), 281–292. https://doi.org/10.1002/pad.4230140305

Mimba, N. P. S., Helden, G., & Tillema, S. (2007). Public Sector Performance Measurement in Developing Countries: A Literature Review and Research Agenda. Journal of Accounting and Organizational Change, 3(3), 192–208.

Mudhofar, K., & Tahar, A. (2016). Pengaruh Desentralisasi Fiskal dan Kinerja Terhadap Akuntabilitas Pelaporan Keuangan Pemerintah Daerah di Indonesia: Efek Moderasi dari Kinerja. Jurnal Akuntansi Dan Investasi, 17(2), 176–185. https://doi.org/10.18196/jai.2016.0053.176-185

Muqoyyidin, A. W. (2013). Pemekaran Wilayah dan Otonomi Daerah Pasca Reformasi di Indonesia: Konsep, Fakta Empiris dan Rekomendasi ke Depan. Jurnal Konstitusi, 10(2), 287–309. https://jurnalkonstitusi.mkri.id/index.php/jk/article/view/105

Mursitama, T. N. (2007). Creating relational rents: The effect of business groups on affiliated firms’ performance in Indonesia. Asia Pacific Journal of Management, 23(4), 537–557. https://doi.org/10.1007/s10490-006-9014-3

Patton, M. Q. (1990). Qualitative Evaluation and Research Methods. SAGE Publications.

Purbasari, H., & Bawono, A. D. B. (2017). Pengaruh Desentralisasi Fiskal, Sistem Pengendalian Internal dan Kinerja Pemerintah Daerah Terhadap Akuntabilitas Laporan Keuangan. Riset Akuntansi Dan Keuangan Indonesia, 2(2), 102–108. https://doi.org/10.23917/reaksi.v2i2.4884

Puspasari, N., & Suwardi, E. (2016). The Effect of Individual Morality and Internal Control on The Propensity to Commit Fraud: Evidence from Local Governments. Journal of Indonesian Economy and Business, 31(2), 208–219. https://doi.org/10.22146/jieb.15291

Rinaldi, T., Purnomo, M., & Damayanti, D. (2007). Memerangi Korupsi di Indonesia yang Terdesentralisasi: Studi Kasus Penanganan Korupsi Pemerintahan Daerah. In Justice for the Poor Project (No. 43641; 1). http://documents.worldbank.org/curated/en/593731468040748249/Memerangi-korupsi-di-Indonesia-yang-terdesentralisasi-studi-kasus-penanganan-korupsi-pemerintahan-daerah

Rini, R. A. P. (2019, June 18). Sepanjang 2014-2019, Tercatat 105 Kasus Korupsi Libatkan Pejabat Tinggi Daerah, Ini Daerahnya (J. Simanjuntak (Ed.)). Tribunnews.Com. https://www.tribunnews.com/nasional/2019/06/18/sepanjang-2014-2019-tercatat-105-kasus-korupsi-libatkan-pejabat-tinggi-daerah-ini-daerahnya

Ryan, C., Stanley, T., & Nelson, M. (2002). Accountability Disclosures by Queensland Local Government Councils: 1997–1999. Financial Accountability & Management, 18(3), 261–289. https://doi.org/10.1111/1468-0408.00153

Saputra, B. (2012). Dampak Desentralisasi Fiskal Terhadap Korupsi di Indonesia. Jurnal Borneo Administrator, 8(3), 293–309. https://doi.org/10.24258/jba.v8i3.92

Saragih, J. P. (2003). Desentralisasi Fiskal dan Keuangan Daerah dalam Otonomi. Ghalia Indonesia.

Sari, M., & Arza, F. I. (2019). Pengaruh Karakteristik Pemerintah Daerah Terhadap Kondisi Financial Distress Pemerintah Daerah Kabupaten dan Kota Se-Indonesia Periode 2015-2017. Wahana Riset Akuntansi, 7(1), 1425–1436. http://ejournal.unp.ac.id/index.php/wra/article/view/104566

Sasana, H. (2009). Peran Desentralisasi Fiskal Terhadap Kinerja Ekonomi di Kabupaten/Kota Provinsi Jawa Tengah. Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi Dan Pembangunan, 10(1), 103–124. https://doi.org/10.23917/jep.v10i1.811

Simanjuntak, K. (2015). Implementasi Kebijakan Desentralisasi Pemerintahan di Indonesia. Jurnal Bina Praja, 7(2), 111–130. https://doi.org/10.21787/JBP.07.2015.111-130

Steccolini, I. (2003). Local Government Annual Report: An Accountability Medium? SSRN Electronic Journal. https://doi.org/10.2139/ssrn.376204

Syahruddin, H. (n.d.). Desentralisasi Fiskal: Perlu Penyempurnaan Kebijakan dan Implementasi yang Konsisten. https://docplayer.info/46383870-Desentralisasi-fiskal-perlu-penyempurnaan-kebijakan-dan-implementasi-yang-konsisten.html#show_full_text

Syarif, A. (2017). Desentralisasi Fiskal dan Korupsi: Fakta dalam Era Otonomi Daerah (Studi pada 15 Kabupaten/Kota di Indonesia) [Universitas Gadjah Mada]. http://etd.repository.ugm.ac.id/home/detail_pencarian/110315

Taylor, S. J., Bogdan, R., & DeVault, M. (2015). Introduction to Qualitative Research Methods: A Guidebook and Resource (4th ed.). John Wiley & Sons.

Tirtosudarmo, R. (2008). Paradigma dalam Kebijakan Desentralisasi di Indonesia: Sebuah Kritik Terhadap Dominasi Public Administration School. Jurnal Masyarakat & Budaya, 10(1), 27–52. http://jmb.lipi.go.id/index.php/jmb/article/view/170

Utami, I. S. (2018). Desentralisasi, Korupsi, dan Tambal Sulam Pemerintahan Daerah di Indonesia. Jurnal Pendidikan Kewarganegaraan, 5(1), 35–46. https://doi.org/10.32493/jpkn.v5i1.y2018.p35-46

Valsecchi, M. (2013). Local Elections and Corruption during Democratization: Evidence from Indonesia. https://lir.gu.se/digitalAssets/1457/1457696_130130_mv_corruption.pdf

Wu, X. (2005). Corporate Governance and Corruption: A Cross-Country Analysis. Governance, 18(2), 151–170. https://doi.org/10.1111/j.1468-0491.2005.00271.x

Yin, R. K. (2014). Case Study Research. SAGE Publications, inc.

Yudha, D. M. A. K., Wirakusuma, M. G., & Rasmini, N. K. (2016). Pengaruh Desentralisasi Fiskal pada Pertumbuhan Ekonomi dengan Moderasi Akuntabilitas Pelaporan Keuangan. E-Jurnal Ekonomi Dan Bisnis Universitas Udayana, 5(8), 2461–2490. https://ojs.unud.ac.id/index.php/EEB/article/view/19930

Published
2020-05-28
How to Cite
Fatoni, A. (2020). Fiscal Decentralization Dilemma in Indonesia. Jurnal Bina Praja: Journal of Home Affairs Governance, 12(1), 103-112. https://doi.org/10.21787/jbp.12.2020.101-110
Section
Articles