Skip to main content
Original Research Article Open Access SINTA 2 Accredited

The Effect of Local Revenue and Balancing Funds on the Economy of Bali Province in 2012-2019

Authors

  • Asika Cahyaning Tiwi Pradana 1
  • Akhmad Mun’im 2* Corresponding author
  • 1 Statistics of Gorontalo Utara
  • 2 Directorate of Production Accounts of Statistics Indonesia
  • *Corresponding author
DOI
10.21787/jbp.14.2022.439-451
Published & Pages
26 December 2022 · pp. 439-451
Manuscript History
Received18 Sep 2022 Accepted9 Nov 2022 Published26 Dec 2022
License
CC Attribution-NonCommercial-ShareAlike 4.0
Read PDF 859 KB Cite

2,064 Views 1,135 Downloads

Abstract

The implementation of Law Number 32 of 2004 concerning regional autonomy required Indonesia to change its economic development system from centralized to decentralized. One form was fiscal decentralization which aimed to promote social welfare and regional independence. However, the economic growth of several regions fluctuated, even though the fiscal decentralization instrument issued by the central government continued to increase. One of the provinces in Indonesia that have implemented a fiscal decentralization policy is Bali. It is categorized as one of the very-good provinces in terms of economic independence, reaching 53 percent, and tent to receive increasing local revenue every year. However, its economy seems to remain relatively high. This study aims to estimate the effect of fiscal decentralization as seen from PAD and balancing funds to the economic growth in districts/cities of Bali Province in 2012-2019. By using panel data regression analysis, this study examines the effect of PAD and balancing funds in the districts/cities of Bali Province and their effects on Bali’s economic growth. This study finds that the best model explaining the influence among those variables is the Fixed Effects Model (FEM) with Seemingly Unrelated Regression (SUR). The results show that the DAU and the combination of the utilization of regional income that includes PAD and other legal regional income have a positive and significant effect on economic growth in the districts/cities of Bali Province. Therefore, optimizing the use of regional revenues, both in the form of PAD and Other Legitimate Regional Revenues, may increase economic growth.

Keywords:

Read the Full Text

The full text of this article is available as PDF. Version of record published in Vol. 14 No. 3 (2022).

Open PDF

References

40 references
  1. Anwar, M. L., Palar, S. W., & Sumual, J. I. (2016). Pengaruh DAU, DAK, PAD terhadap Pertumbuhan Ekonomi dan Kemiskinan (Kota Manado Tahun 2001-2013). Jurnal Berkala Ilmiah Efisiensi, 16(2). https://ejournal.unsrat.ac.id/v3/index.php/jbie/article/view/12377
  2. Ardiyani, N. R. (2017). Pengaruh Pendapatan Asli Daerah (PAD), Dana Alokasi Umum (DAU) dan Dana Alokasi Khusus (DAK) terhadap Pertumbuhan Ekonomi di Eks-Karesidenan Surakarta Tahun 2011-2015 [Undergraduate Thesis, Universitas Muhammadiyah Surakarta]. http://eprints.ums.ac.id/54677/
  3. Azis, M. (2016). Pengaruh Dana Bagi Hasil Bukan Pajak/Sumber Daya Alam Dana Alokasi Umum (DAU) dan Pendapatan Asli Daerah (PAD) terhadap Pertumbuhan Ekonomi di Kabupaten Malinau. Inovasi: Jurnal Ekonomi, Keuangan dan Manajemen, 12(1), 49–63. https://doi.org/10.30872/jinv.v12i1.799
  4. Badan Litbang Depdagri RI & Fisipol–UGM. (1991). Pengukuran Kemampuan Keuangan Daerah Tingkat II dalam Rangka Otonomi Daerah yang Nyata dan Bertanggung Jawab. Badan Litbang Depdagri RI.
  5. Bodman, P. (2011). Fiscal Decentralization and Economic Growth in the OECD. Applied Economics, 43(23), 3021–3035. https://doi.org/10.1080/00036840903427208
  6. Christia, A. M., & Ispriyarso, B. (2019). Desentralisasi Fiskal dan Otonomi Daerah di Indonesia. Law Reform, 15(1), 149–163. https://doi.org/10.14710/lr.v15i1.23360
  7. 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
  8. Eliza, Z., Muhammad, S., & Nasir, M. (2014). Analisis Pengaruh Dana Perimbangan terhadap Pertumbuhan PDRB di Provinsi Aceh. Jurnal Ilmu Ekonomi, 2(1), 44–54. https://jurnal.unsyiah.ac.id/MIE/article/view/4660
  9. Fandana, F. (2015). Analisis Pengaruh Pendapatan Asli Daerah, Dana Perimbangan, Belanja Pembangunan, dan Tenaga Kerja terhadap Pertumbuhan Ekonomi Daerah Pasca Otonomi Daerah di Indonesia (Analisis Data Panel 2009-2013). Politeknik Statistika STIS.
  10. Filippetti, A., & Sacchi, A. (2016). Decentralization and Economic Growth Reconsidered: The Role of Regional Authority. Environment and Planning C: Government and Policy, 34(8), 1793–1824. https://doi.org/10.1177/0263774X16642230
  11. 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
  12. Gujarati, D. N., & Porter, D. C. (2008). Basic Econometrics (5th ed.). McGraw-Hill Publishing.
  13. 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
  14. Irvan, I. P., & Karmini, N. L. (2016). Pengaruh Pendapatan Asli Daerah, Dana Perimbangan terhadap Pertumbuhan Ekonomi dengan Belanja Modal Sebagai Variabel Intervening. E-Jurnal Ekonomi Pembangunan, 5(3), 338–362. https://ojs.unud.ac.id/index.php/eep/article/view/18193
  15. Ismail, A. G. b, Hamzah, M. Z., & Ritonga, J. T. (2004). Fiscal Decentralization and Economic Growth: Evidence from Selected Muslim Countries. Economic Journal of Emerging Markets, 9(2), 109–116. https://doi.org/10.20885/ejem.v9i2.615
  16. Ivanyna, M., & Shah, A. (2011). Decentralization and Corruption: New Cross-Country Evidence. Environment and Planning C: Government and Policy, 29(2), 344–362. https://doi.org/10.1068/c1081r
  17. Kusumawati, L., & Wiksuana, I. G. B. (2018). Pengaruh Pendapatan Daerah terhadap Pertumbuhan Ekonomi di Wilayah Sarbagita Provinsi Bali. E-Jurnal Manajemen, 7(5), 2592–2620. https://doi.org/10.24843/EJMUNUD.2018.v07.i05.p12
  18. Kwon, O. (2012). Fiscal Decentralization: An Effective Tool for Government Reform?: Fiscal Decentralization. Public Administration. https://doi.org/10.1111/j.1467-9299.2012.01982.x
  19. Lestari, Z. D. (2020). Pengaruh Pertumbuhan Ekonomi, Pendapatan Asli Daerah dan Dana Alokasi Umum terhadap Anggaran Belanja Modal Kabupaten/Kota di Provinsi Bali Periode 2016-2018 [Undergraduate Thesis, Sekolah Tinggi Ilmu Ekonomi Indonesia]. http://repository.stei.ac.id/id/eprint/3248
  20. Lin, J. Y., & Liu, Z. (2000). Fiscal Decentralization and Economic Growth in China. Economic Development and Cultural Change, 49(1), 1–21. https://doi.org/10.1086/452488
  21. Litvack, J., Ahmad, J., & Bird, R. (1998). Rethinking Decentralization in Developing Countries. The World Bank. https://doi.org/10.1596/0-8213-4350-5
  22. Mawarni, Darwanis, & Abdullah, S. (2013). Pengaruh Pendapatan Asli Daerah dan Dana Alokasi Umum terhadap Belanja Modal serta Dampaknya terhadap Pertumbuhan Ekonomi Daerah (Studi pada Kabupaten dan Kota di Aceh). Jurnal Akuntansi, 2(2), 80–90.
  23. Nguyen, L. P., & Anwar, S. (2011). Fiscal Decentralisation and Economic Growth in Vietnam. Journal of the Asia Pacific Economy, 16(1), 3–14. https://doi.org/10.1080/13547860.2011.539397
  24. Oates, W. E. (1999). An Essay on Fiscal Federalism. Journal of Economic Literature, 37(3), 1120–1149. https://doi.org/10.1257/jel.37.3.1120
  25. Panji, I. P. B., & Indrajaya, I. G. B. (2016). Pengaruh Dana Perimbangan terhadap Pertumbuhan Ekonomi dan Tingkat Kemiskinan di Provinsi Bali. E-Jurnal Ekonomi Pembangunan, 5(3), 316–338. https://ojs.unud.ac.id/index.php/eep/article/view/17579
  26. Pasichnyi, M., Kaneva, T., Ruban, M., & Nepytaliuk, A. (2019). The Impact of Fiscal Decentralization on Economic Development. Investment Management and Financial Innovations, 16(3), 29–39. https://doi.org/10.21511/imfi.16(3).2019.04
  27. Permanasari, W. A. (2013). Pengaruh Dana Alokasi Umum (DAU), Dana Alokasi Khusus (DAK), Pendapatan Asli Daerah (PAD), dan Belanja Modal terhadap Pertumbuhan Ekonomi (Studi Kasus Kabupaten/Kota di Provinsi Jawa Tengah Tahun 2009-2011) [Undergraduate Thesis, Universitas Muhammadiyah Surakarta]. http://eprints.ums.ac.id/25969/
  28. Rahmah, A. R., & Zein, B. (2016). Pengaruh Pendapatan Asli Daerah, Dana Alokasi Umum dan Dana Bagi Hasil terhadap Pertumbuhan Ekonomi di Provinsi Aceh. JIMEKA (Jurnal Ilmiah Mahasiswa Ekonomi Akuntansi), 1(1), 213–220. https://jim.unsyiah.ac.id/EKA/article/view/768
  29. Risepdo, F. (2015). Analisis Pengaruh Fiskal Stress. DAU, dan Belanja Modal terhadap Pertumbuhan Ekonomi Kabupaten/Kota di Provinsi Sumatera Barat Era Otonomi Daerah. Politeknik Statistika STIS.
  30. Saleh. (2017). Pengaruh Pendapatan Asli Daerah (PAD), Dana Alokasi Umum (DAU), Dana Alokasi Khusus (DAK) dan Dana Bagi Hasil (DBH) terhadap Pertumbuhan Ekonomi Daerah dengan Belanja Daerah Sebagai Variabel Moderating pada Kabupaten dan Kota di Provinsi Jawa Tengah Tahun 2010-2014 [Undergraduate Thesis, Universitas Muhammadiyah Surakarta]. http://eprints.ums.ac.id/49066/
  31. 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
  32. 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
  33. Sari, D. G. Y. A., Kepramareni, P., & Novitasari, N. L. G. (2017). Pengaruh Pertumbuhan Ekonomi, Pendapatan Asli Daerah, Dana Perimbangan dan Sisa Lebih Pembiayaan Anggaran terhadap Alokasi Belanja Modal Kabupaten/Kota Se-Bali. Krisna: Kumpulan Riset Akuntansi, 9(1), 15–29. https://www.ejournal.warmadewa.ac.id/index.php/krisna/article/view/325
  34. Setyawan, H. B. (2013). Efektivitas Transfer Pusat terhadap Perekonomian Provinsi Lampung. Jurnal BPPK, 6(1), 29–40. https://jurnal.bppk.kemenkeu.go.id/jurnalbppk/article/view/73
  35. Sitepu, Y. L. (2017). Pengaruh Pendapatan Asli Daerah, Dana Perimbangan, Transfer Pemerintah Provinsi dan Sisa Lebih Pembiayaan Anggaran terhadap Belanja Modal pada Kabupaten/Kota di Sumatera Utara dengan Produk Domestik Regional Bruto Sebagai Variabel Moderating [Thesis, Universitas Sumatera Utara]. https://repositori.usu.ac.id/handle/123456789/625
  36. Slavinskaitė, N. (2017). Decentralization and Economic Growth Reconsidered: The Role of Regional Authorityfiscal Decentralization and Economic Growth in Selected European Countries. Journal of Business Economics and Management, 18(4), 745–757. https://doi.org/10.3846/16111699.2017.1292312
  37. Stone, S. B. (2015). The Effect of Fiscal Decentralization on the Financial Condition of Municipal Government. International Journal of Public Administration, 38(6), 453–460. https://doi.org/10.1080/01900692.2014.949740
  38. Suarjana, A. A. G. M., & Dewi, N. I. K. (2018). Pengaruh Pendapatan Asli Daerah (PAD) dan Dana Perimbangan terhadap Pengembangan Infrastruktur pada Pemerintah Provinsi Bali. Jurnal Bisnis dan Kewirausahaan, 14(2), 66–79. https://doi.org/10.31940/jbk.v14i2.1040
  39. Temenggung, Y. A., Moenek, R., Suwanda, D., & Mulyadi, M. (2020). The Fiscal Capacity of the New Autonomous Region (DOB) in Increasing Economic Growth and Eradication of the Poor. Jurnal Bina Praja, 12(1), 75–87. https://doi.org/10.21787/jbp.12.2020.75-87
  40. Wijayanti, N. K. H., & Darsana, I. B. (2015). Pengaruh Pendapatan Asli Daerah dan Dana Alokasi Umum terhadap Kesejahteraan Masyarakat melalui Pertumbuhan Ekonomi (Studi Kabupaten/Kota di Provinsi Bali Periode 2008-2013). E-Jurnal Ekonomi Pembangunan, 4(9), 1164–1193. https://ojs.unud.ac.id/index.php/eep/article/view/15512

Copyright & Open Access License

Copyright (c) 2022 Author(s). This article is licensed under CC Attribution-NonCommercial-ShareAlike 4.0.