Flypaper Effect Analysis on Local Government Budgets in Indonesia

This study aims to identify the effect of Local Own-Source Revenue, General Allocation Fund, Special Allocation Fund, Revenue Sharing Fund, Other Lawful Local Revenue, towards the Local Government Budget, as well as conduct the flypaper effect analysis. The object of this research is Districts/Cities in Indonesia. The samples used in this study consist of 472 Districts/Cities in Indonesia in the year 2018. The sampling technique used was the purposive sampling method with previously set criteria. The data used in this study is secondary data that originates from Local Government Financial Reports that are published by the Audit Board of the Republic of Indonesia. The hypothesis testing used in this study is the double linear regression analysis, using SPSS program version 20 with a significance rate of 5%. The result of this study partially shows that Local Own-Source Revenue has a positive effect towards the Local Government Budget with a significance rate of 0,000, General Allocation Fund has a positive effect towards the Local Government Budget with a significance rate of 0,000, Special Allocation Fund has a positive effect towards the Local Government Budget with a significance rate of 0,000, Revenue Sharing Fund has a positive effect towards the Local Government Budget with a significance rate of 0,000, and Other Lawful Local Revenue has a positive effect towards the Local Government Budget with a significance rate of 0,000. The result of this study found the phenomenon of the flypaper effect towards Local Government Budget from the General Allocation Fund, while it was not found from the Special Allocation Fund and Revenue Sharing Fund.