Development of DKI Jakarta Regional Fiscal Capacity in 2014-2019

Setyowati, Milla Sepliana; Widiarto, Aldy; Indriani, Indriani

doi:10.4108/eai.5-8-2020.2301220

Cited by 2 publications

(1 citation statement)

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“…Following Azizah et al (2022), Setyowati et al (2020), Oktavilia et al (2020) and Saragih (2016), fiscal capacity in this study is measured using income and expenditure approaches and specific measurement ratios. For the measurement of regional financial performance, several ratio analyses can be performed based on data sourced from the regional budget (Mahmudi, 2010).…”

Section: Introductionmentioning

confidence: 99%

Exploring the Nexus between Regional Fiscal Capacity and the Convergence of Inclusive Economic Development

Sakti,

Bintoro,

Setyanti

et al. 2024

jcgpp

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In the fiscal decentralisation system, the establishment of fiscal capacity is of paramount importance as local governments must be capable of effectively managing their own financial resources to meet the needs of the local population and advance regional development. Possessing a robust fiscal capacity enables local governments to be more effective in enhancing regional economic growth. This study analyses the influence of regional fiscal capacity on the convergence of inclusive economic development across 34 provinces in Indonesia. Conditional beta convergence analysis is employed on the Inclusive Economic Development Index, which is influenced by the degree of fiscal decentralisation, local financial autonomy, effectiveness of local own-source revenue, indirect expenditure ratio and direct expenditure ratio. This study provides valuable insights revealing visible convergence trends among Indonesia’s 34 provinces indicating crucial progress in achieving inclusive economic development and eliminating inequality. Furthermore, the observed progress underlines the vital role of fiscal capacity, particularly the levels of fiscal decentralisation and direct spending, as a significant driver encouraging a positive trajectory of economic convergence between provinces.

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Section: Introductionmentioning

confidence: 99%

Exploring the Nexus between Regional Fiscal Capacity and the Convergence of Inclusive Economic Development

Sakti,

Bintoro,

Setyanti

et al. 2024

jcgpp

View full text Add to dashboard Cite

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Linking regional investments and revenues at the provincial level to investment loan decisions by local government banks in Indonesia

Aswan,

Dahham Sabbar,

Bashir

et al. 2024

Public and Municipal Finance

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This study aims to analyze how two different types of investments (local domestic and foreign direct investments at the provincial level) and revenues (booked by the provincial governments, general allocation funds, special allocation funds, local taxes, and retribution) affect investment loan decisions by local government banks in Indonesia. The study uses panel data applying ordinary least squares and multiple linear regression. Thus, 144 data were sampled from 2013 to 2021 from 16 local government banks out of Java Island in 21 provinces in Indonesia. The study found that local domestic investment at the provincial level affects investment loan decisions by local government banks. In contrast, foreign direct investment did not affect lending decisions, indicating that local domestic investment contributes to the real local economy at the provincial level. Different results were found in provincial revenues in the form of general and special allocation funds, which negatively affected loan investment decisions, possibly due to provincial revenues utilized to cover the financial deficit and capital expenditure spent chiefly on imported goods. Additionally, local taxes at the provincial level also negatively affect investment loan decisions, possibly due to fluctuations in local tax collection during COVID-19. However, the study found that local retribution contributes to predicting loan investment decisions, suggesting revenue collection by the governments considering local economic conditions. The study findings suggest that provincial governments should direct investments that can impact the local economy and spend their revenues on goods and services that can drive local economic growth. AcknowledgmentThe investment loan made by local government banks, which is associated with local investment and revenue, is part of a research grant project from the Economics and Business Faculty of Hasanuddin University. This project is a result of collaboration with national and international researchers. In carrying out this research, some inputs from people working in local government banks, financial service authorities, and provincial and regency governments are addressed.Thanks to Ahmadi Usman for secondary data and Syahidah Ulhaq for some application programs enabling mapping literature, as well as Israa Natiq Jabar for supervising the result and applied some inputs in the section of research method.

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Development of DKI Jakarta Regional Fiscal Capacity in 2014-2019

Cited by 2 publications

References 1 publication

Exploring the Nexus between Regional Fiscal Capacity and the Convergence of Inclusive Economic Development

Exploring the Nexus between Regional Fiscal Capacity and the Convergence of Inclusive Economic Development

Linking regional investments and revenues at the provincial level to investment loan decisions by local government banks in Indonesia

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