The Impact of Fiscal Balance Funds Toward Human Development in Riau Province
DOI:
https://doi.org/10.21787/jbp.15.2023.275-288Keywords:
fiscal balance funds, fiscal decentralization, human development, panel data regressionAbstract
Fiscal decentralization is an effort by the central government to distribute regional development by providing fiscal balance funds to regional governments. The fund aims to promote regional self-sufficiency and community welfare throughout Indonesia. Riau is one of the provinces implementing fiscal balance funds and has high regional income in various sectors. However, the human development of some regions in Riau is unequal, even though the fiscal balance issued by the government continues to increase. This study aims to explore the fiscal balance funds, which consist of revenue sharing funds (DBH), general allocation funds (DAU), special physical allocation funds (DAK Physical), and special non-physical allocation funds (DAK Non-Physical), will affect human development in Riau Province from 2017 to 2022 in terms of health, education, and standard of living. This study used 72 observations from 12 cities/regencies in Riau obtained from Statistics Indonesia, and it was conducted by using a quantitative approach through panel data regression. This study produces three estimation models for each aspect of human development. REM is the model chosen to answer the three research models. The results in the first model showed that DAK Physical and DAK Non-Physical influenced human development in the health aspect. The second model was DAK Non-Physical, which significantly affected human development in education. Finally, DBH, DAU, and DAK Non-Physical significantly affected human development in aspects of decent living standards. Fiscal balance funds affect every aspect of human development in Riau. Fiscal planning and budgeting by local governments in Riau with targeted support are needed to further human development.
Downloads
References
Alexeev, M., & Mamedov, A. (2017). Factors Determining Intra-regional Fiscal Decentralization in Russia and the US. Russian Journal of Economics, 3(4), 425–444. https://doi.org/10.1016/j.ruje.2017.12.007
Appiah, M., Amoasi, R., & Idan Frowne, D. (2019). Human Development and Its Effects on Economic Growth and Development. International Research Journal of Business Studies, 12(2), 101–109. https://doi.org/10.21632/irjbs.12.2.101-109
Apriliani, A. P., & Khoirunurrofik, K. (2020). The Impact of Special Allocation Fund (DAK) for Health on Achievements of Health Development Performance in Indonesia. Economies, 8(3), 72. https://doi.org/10.3390/economies8030072
Arifin, I. A. N., & Setiawati, E. (2023). The Effect of Genuine Revenue, General Allocation Funds and Special Allocation Funds on the Human Development Index. The International Journal of Business Management and Technology, 7(2), 53–59.
Arkum, D., & Amar, H. (2022). The Influence of Economic Growth, Human Development, Poverty and Unemployment on Income Distribution Inequality: Study in the Province of the Bangka Belitung Islands in 2005-2019. Jurnal Bina Praja, 14(3), 413–422. https://doi.org/10.21787/jbp.14.2022.413-422
Azhari, T. M. A. R., Sumaryana, A., Sumadinata, R. W. S., & Deliarnoor, N. A. (2021). The Effects of Locally-Generated Revenue (LGR) and Revenue Sharing Funds (RSF) on Regional Minimum Wages to Promote Human Development Index (HDI) in Banten Province. International Journal of Entrepreneurship, 25(1S), 1–11. https://www.abacademies.org/abstract/the-effects-of-locallygenerated-revenue-lgr-and-revenue-sharing-funds-rsf-on-regional-minimum-wages-to-promote-human-dev-10825.html
Baltagi, B. H. (2021). Econometric Analysis of Panel Data. Springer International Publishing. https://doi.org/10.1007/978-3-030-53953-5
Bojanic, A. (2018). The Impact of Fiscal Decentralization on Accountability, Economic Freedom, and Political and Civil Liberties in the Americas. Economies, 6(1), 8. https://doi.org/10.3390/economies6010008
BPS - Statistics Indonesia. (2022a). Indeks Pembangunan Manusia 2021. BPS - Statistics Indonesia. https://www.bps.go.id/publication/2022/05/11/48b6466dcf14b562df9f17e2/indeks-pembangunan-manusia-2021.html
BPS - Statistics Indonesia. (2022b). [Metode Baru] Harapan Lama Sekolah (Tahun), 2021-2022. BPS - Statistics Indonesia. https://www.bps.go.id/indicator/26/417/1/-new-method-expected-years-of-schooling.html
BPS - Statistics Indonesia. (2022c). [Metode Baru] Pengeluaran per Kapita Disesuaikan (Ribu Rupiah/Orang/Tahun), 2021-2022. BPS - Statistics Indonesia. https://www.bps.go.id/indicator/26/416/1/-new-method-adjusted-per-capita-expenditure.html
BPS - Statistics Indonesia. (2022d). [Metode Baru] Umur Harapan Hidup Saat Lahir (UHH) (Tahun), 2021-2022. BPS - Statistics Indonesia. https://www.bps.go.id/indicator/26/414/1/-new-method-umur-harapan-hidup-saat-lahir-uhh-.html
BPS - Statistics Indonesia. (2022e). Perkebunan. BPS - Statistics Indonesia. https://www.bps.go.id/subject/54/perkebunan.html
Daud, N., & Soleman, R. (2020). Effects of Fiscal Decentralization on Economic Growth and Human Development Index in the Indonesian Local Governments. Management Science Letters, 3975–3980. https://doi.org/10.5267/j.msl.2020.7.012
Delen, D., Pudjiharjo, P., & Susilo, S. (2019). Has Fiscal Decentralization Succeeded in Increasing Quality Economic Growth in East Java? Jurnal Bina Praja, 11(1), 15–29. https://doi.org/10.21787/jbp.11.2019.15-29
Directorate General of Fiscal Balance of the Ministry of Finance of the Republic of Indonesia. (2023). Postur Transfer ke Daerah dan Dana Desa (TKDD).
Dougherty, S., Lorenzoni, L., Marino, A., & Murtin, F. (2022). The Impact of Decentralisation on the Performance of Health Care Systems: A Non-linear Relationship. The European Journal of Health Economics, 23(4), 705–715. https://doi.org/10.1007/s10198-021-01390-1
Fatoni, A. (2020). Fiscal Decentralization Dilemma in Indonesia: Between Corruption Accountability and Probability at Local Levels. Jurnal Bina Praja, 12(1), 101–110. https://doi.org/10.21787/jbp.12.2020.101-110
Fatria, M. A., Harlen, & Setiawan, D. (2020). The Effects of Physical and Non-physical Investments of Government Expenditure in Education and Health Sectors on Human Development Index in Pekanbaru City. Indonesian Journal of Economics, Social, and Humanities, 2(1), 65–77. https://doi.org/10.31258/ijesh.2.1.65-77
Fitriya, N. M., & Witono, B. (2023). The Influence of Regional Original Income, General Allocation Funds, and Special Allocation Funds on the Human Development Index (Conduct Research on Java Island Regencies and Cities During 2019 to 2021). International Journal of Latest Research in Humanities and Social Science (IJLRHSS), 6(1), 176–181.
Gujarati, D. N., & Porter, D. C. (2017). Basic Econometrics (5th ed.). McGraw Hill Education.
Hung, N. T., & Thanh, S. D. (2022). Fiscal Decentralization, Economic Growth, and Human Development: Empirical Evidence. Cogent Economics & Finance, 10(1), 2109279. https://doi.org/10.1080/23322039.2022.2109279
Jin, H., & Jakovljevic, M. (2023). Fiscal Decentralization and the Human Development Index: A Cross-Border Empirical Study. Sustainability, 15(11), 8784. https://doi.org/10.3390/su15118784
Jin, Y., & Rider, M. (2022). Does Fiscal Decentralization Promote Economic Growth? An Empirical Approach to the Study of China and India. Journal of Public Budgeting, Accounting & Financial Management, 34(6), 146–167. https://doi.org/10.1108/JPBAFM-11-2019-0174
Khairi, H. (2021). Balance Between Delegation of Authority and Submission of Regional Revenue Sources in Indonesia. Jurnal Bina Praja, 13(3), 431–443. https://doi.org/10.21787/jbp.13.2021.431-443
Letelier S, L., & Ormeño C, H. (2018). Education and Fiscal Decentralization. The Case of Municipal Education in Chile. Environment and Planning C: Politics and Space, 36(8), 1499–1521. https://doi.org/10.1177/2399654418761888
Martinez‐Vazquez, J., Lago‐Peñas, S., & Sacchi, A. (2017). The Impact of Fiscal Decentralization: A Survey. Journal of Economic Surveys, 31(4), 1095–1129. https://doi.org/10.1111/joes.12182
Miranda‐Lescano, R., Muinelo‐Gallo, L., & Roca‐Sagalés, O. (2023). Human Development and Decentralization: The Importance of Public Health Expenditure. Annals of Public and Cooperative Economics, 94(1), 191–219. https://doi.org/10.1111/apce.12373
Mutiha, A. H. (2018). The Effect of Regional Own-source Revenue, Tax Revenue-sharing Fund, General Allocation Fund and Special Allocation Fund to the Human Development Index (Based on the Study of Provincial Government in Indonesia). KnE Social Sciences, 3(11), 609. https://doi.org/10.18502/kss.v3i11.2792
Nawawi, A., Jaya, W. K., Sumanto, M., & Pangaribowo, E. H. (2021). The Impact of Fiscal Policy on Welfare Improvement in Indonesia: Study of Impact of Premium Assistance Beneficiaries on The National Health Insurance, Physical Special Allocation Fund for Health Sector, Education Sector, and Village Funds to Human Development Index. Populasi, 29(2), 46–64. https://doi.org/10.22146/jp.71691
Nugroho, G. A. (2016). Analisis Pengaruh Pengeluaran Pemerintah Terhadap Pertumbuhan Ekonomi dan Indeks Pembangunan Manusia di Indonesia. Indonesian Treasury Review Jurnal Perbendaharaan Keuangan Negara dan Kebijakan Publik, 1(1), 39–50. https://doi.org/10.33105/itrev.v1i1.57
Pambudi, A., Deni, Hidayati, S., Putri, D., & Wibowo, A. (2021). Special Allocation Fund (DAK) for Education Sector: A Development Policy Evaluation Perspective. Jurnal Ekonomi dan Pembangunan Indonesia, 29, 41–58. https://doi.org/10.14203/JEP.29.1.2021.41-58
Pradana, A. C. T., & Mun’im, A. (2022). The Effect of Local Revenue and Balancing Funds on the Economy of Bali Province in 2012-2019. Jurnal Bina Praja, 14(3), 439–451. https://doi.org/10.21787/jbp.14.2022.439-451
Putra, H. S. (2017). The Linkage of Intergovernmental Transfer and Poverty in Indonesia. Jurnal Bina Praja, 9(1), 29–40. https://doi.org/10.21787/jbp.09.2017.29-40
Putra, I. (2015). Pembangunan Manusia Kabupaten Kepulauan Anambas. Jurnal Bina Praja, 07(02), 173–184. https://doi.org/10.21787/JBP.07.2015.173-184
Rocheleau, B., & Warren, S. (1980). Health Planners and Local Public Finance–The Case for Revenue Sharing. Public Health Reports (Washington, D.C.: 1974), 95(4), 313–320.
Rotulo, A., Epstein, M., & Kondilis, E. (2020). Fiscal Federalism vs Fiscal Decentralization in Healthcare: A Conceptual Framework. Hippokratia, 24(3), 107–113.
Sandjaja, F. R., Nafisa, F., & Manurung, I. N. (2020). The Impact of Fiscal Decentralization on Welfare in Selected Provinces in Indonesia. Jurnal Bina Praja, 12(1), 21–31. https://doi.org/10.21787/jbp.12.2020.21-31
Saputra, N. A. A., & Setiawan, D. (2021). Fiscal Decentralization, Accountability and Corruption Indication: Evidence from Indonesia. Jurnal Bina Praja, 13(1), 29–40. https://doi.org/10.21787/jbp.13.2021.29-40
Sembiring, T. A. (2020). Pengaruh Pendapatan Asli Daerah (PAD), Dana Alokasi Umum (DAU), dan Dana Alokasi Khusus (DAK) Fisik terhadap Pembangunan Manusia di Provinsi Sumatera Utara (Periode 2016 – 2018). Indonesian Treasury Review Jurnal Perbendaharaan Keuangan Negara dan Kebijakan Publik, 5(1), 77–91. https://doi.org/10.33105/itrev.v5i1.167
Setiawan, F., & Aritenang, A. F. (2019). The Impact of Fiscal Decentralization on Economic Performance in Indonesia. IOP Conference Series: Earth and Environmental Science, 340(1), 012021. https://doi.org/10.1088/1755-1315/340/1/012021
Tan, A. (2020). Raising Local Fiscal Autonomy in the Local Autonomy Management (A Study in Bogor Regency). Jurnal Bina Praja, 12(1), 53–63. https://doi.org/10.21787/jbp.12.2020.53-63
Wang, A., & Arah, O. A. (2017). The Impact of Human Development on Individual Health: A Causal Mediation Analysis Examining Pathways Through Education and Body Mass Index. PeerJ, 5, e3053. https://doi.org/10.7717/peerj.3053
Wang, D., Zhang, E., & Liao, H. (2022). Does Fiscal Decentralization Affect Regional High-Quality Development by Changing Peoples’ Livelihood Expenditure Preferences: Provincial Evidence from China. Land, 11(9), 1407. https://doi.org/10.3390/land11091407
Whitman, R. D. (1977). Federal Revenue Sharing and Education. Journal of Education Finance, 3(2), 238–253. https://www.jstor.org/stable/40703135
Wulansari, S., Suryadi, Gaffar, M. F., Mulyani, S., & Yohamintin. (2021). The Implementation of Physical Special Allocation Funds (DAK) at Primary School: 4th International Conference on Research of Educational Administration and Management (ICREAM 2020), Bandung, Indonesia. https://doi.org/10.2991/assehr.k.210212.027
Xu, W., & Lin, J. (2022). Fiscal Decentralization, Public Health Expenditure and Public Health–Evidence From China. Frontiers in Public Health, 10, 773728. https://doi.org/10.3389/fpubh.2022.773728
Yusuf, M. A., & Afendi, A. (2020). The Effect of Transfer Funds to Regions and Village Funds on Human Development Index in Districts of West Java Province in 2015–2018. Journal of Islamic Accounting and Finance Research, 2(2), 153–168. https://doi.org/10.21580/jiafr.2020.2.2.6360
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 Author(s)
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
