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Regional fiscal independence in East Java Province post regional autonomy

Author

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  • Irdam Ahmad

    (STEKPI School of Business and Management)

Abstract

Fiscal dependence has been critized as one of the obstacles in the success of economic development post the regional autonomy. This paper evaluates the level of fiscal independence in districts and cities in East Java Province and the impact of General Allocation Fund and Special Allocation Fund on tax effort of regional government in East Java Province. The result shows that General Allocation Fund significantly affects tax effort, while Special Allocation Fund does not significantly affect tax effort. It also finds that General Allocation Fund influences economic growth, where for one percent increase in General Allocation Fund, regional economic growth increase by 0.28 percent

Suggested Citation

  • Irdam Ahmad, 2011. "Regional fiscal independence in East Java Province post regional autonomy," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 3(2), pages 189-198, April.
    • Handle: RePEc:uii:journl:v:3:y:2011:i:2:p:189-198
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    References listed on IDEAS

    as
    1. de Mello, Luiz Jr, 2000. "Fiscal Decentralization and Intergovernmental Fiscal Relations: A Cross-Country Analysis," World Development, Elsevier, vol. 28(2), pages 365-380, February.
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    More about this item

    Keywords

    Fiscal independence; general allocation fund; special allocation fund; tax effort;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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