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Ecological fiscal transfers at the provincial level in Indonesia

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  • Mumbunan, Sonny
  • Ring, Irene
  • Lenk, Thomas
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    Abstract

    A region of ecological importance which generates uncompensated cross-territorial positive spillovers has a comparatively higher fiscal need due to the direct and indirect costs it incurs for nature conservation. In order adequately to acknowledge fiscal needs relating to nature conservation, we propose an indicator based on protected area as a means of distributing general-purpose transfers and model the consequences of this for Indonesia's current system of fiscal transfer from the national to the provincial level. The results suggest that about a third of the country's provinces would benefit from the new transfer regime and that the equalizing effect of the transfers increases as the proportion of protected area increases. --

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    Bibliographic Info

    Paper provided by Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS) in its series UFZ Discussion Papers with number 06/2012.

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    Date of creation: 2012
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    Handle: RePEc:zbw:ufzdps:062012

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    Keywords: ecological fiscal transfers; intergovernmental fiscal transfer; biodiversity conservation; protected areas; fiscal equalization; Indonesia;

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    1. Hal Hill & Budy Resosudarmo & Yogi Vidyattama, 2007. "Indonesia’s Changing Economic Geography," Working Papers in Economics and Development Studies (WoPEDS) 200713, Department of Economics, Padjadjaran University, revised Nov 2007.
    2. Boadway,Robin & Shah,Anwar, 2009. "Fiscal Federalism," Cambridge Books, Cambridge University Press, number 9780521518215, April.
    3. Daniel C. Morgan, Jr., 1974. "Fiscal Neglect of Urban Areas by a State Government," Land Economics, University of Wisconsin Press, vol. 50(2), pages 137-144.
    4. Kaul, Inge & Conceicao, Pedro & Le Goulven, Katell & Mendoza, Ronald U. (ed.), 2003. "Providing Global Public Goods: Managing Globalization," OUP Catalogue, Oxford University Press, number 9780195157413, September.
    5. Hajkowicz, Stefan, 2007. "Allocating scarce financial resources across regions for environmental management in Queensland, Australia," Ecological Economics, Elsevier, vol. 61(2-3), pages 208-216, March.
    6. Kumar, Surender & Managi, Shunsuke, 2009. "Compensation for environmental services and intergovernmental fiscal transfers: The case of India," Ecological Economics, Elsevier, vol. 68(12), pages 3052-3059, October.
    7. Engel, Stefanie & Palmer, Charles, 2008. "Payments for environmental services as an alternative to logging under weak property rights: The case of Indonesia," Ecological Economics, Elsevier, vol. 65(4), pages 799-809, May.
    8. List, John A & Bulte, Erwin H & Shogren, Jason F, 2002. " "Beggar Thy Neighbor": Testing for Free Riding in State-Level Endangered Species Expenditures," Public Choice, Springer, vol. 111(3-4), pages 303-15, June.
    9. Ring, Irene, 2002. "Ecological public functions and fiscal equalisation at the local level in Germany," Ecological Economics, Elsevier, vol. 42(3), pages 415-427, September.
    10. Arild Vatn & Daniel Bromley, 1997. "Externalities — A market model failure," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 9(2), pages 135-151, March.
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