Analysis of Fiscal Decentralization Effect, Economic Growth, Regional Tax and Labor on Income Inequality in Central Sulawesi Province in 2011-2017 Period

Abstract

Fiscal decentralization provides many advantages for the regions to set their own fiscal capacity. The local government has an opportunity to improve its economy efficiently because the government has provided useful knowledge in the allocation of resources. The Government may well provide public goods and services in accordance with the expected public. This study aims to analyze the impact of fiscal decentralization and economic growth on inequality in the region of 11 regencies/city in Central Sulawesi Province during the five-year implementation period, from 2011 to 2015 year. Variables examined its effect on inequality of the region is the degree of fiscal decentralization, the local tax rate, the amount of labor, as well as the economic growth rate of 11 regencies/city in Central Sulawesi Province. The results of the analysis conclude that fiscal decentralization has positive and statistically significant for 27.76245 on inequality between districts region/city in Central Sulawesi Province. During the 5 years of the implementation of fiscal decentralization in Central Sulawesi Province is empirically provable that the economic growth of 11 regencies/city in Central Sulawesi Province to increase each year, but the graph of economic growth increased annually actually increase inequality of the region that occur between regencies/city in the Central Sulawesi Province.