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Decentralization, fiscal capability and public spending efficiency

Author

Listed:
  • Abdul Hakim
  • Jaka Sriyana

    (Fakultas Ekonomi, Universitas Islam Indonesia
    Fakultas Ekonomi, Universitas Islam Indonesia)

Abstract

Assigning autonomy to regency governments in Indonesia has failed to increase regency?s economies. While it increases regency government role in planning and initiating policies, its impact on economic development has been insignificant. This stems from the lack of institution?s capacity in organizing the bulk funds transfer from the central government which leads to inefficiency in resource allocation. This paper maps these regencies based on their fiscal dependency. This paper also applies Data Envelopment Analysis to identify the efficient and non efficient regencies in such a way that the non efficient regencies might use the efficient ones as the benchmark to increase their efficiency.

Suggested Citation

  • Abdul Hakim & Jaka Sriyana, 2010. "Decentralization, fiscal capability and public spending efficiency," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 2(1), pages 1-12, April.
    • Handle: RePEc:uii:journl:v:2:y:2010:i:1:p:1-12
    as

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    References listed on IDEAS

    as
    1. James L. Butkiewicz & Halit Yanikkaya, 2011. "Institutions and the Impact of Government Spending on Growth," Journal of Applied Economics, Taylor & Francis Journals, vol. 14(2), pages 319-341, November.
    2. Andrew Worthington & Brian Dollery, 2001. "Diversity in Australian Local Government: The Case against the Imposition of Uniform National Standards," International Review of Public Administration, Taylor & Francis Journals, vol. 6(1), pages 49-58, June.
    3. Kalb, Alexander, 2009. "What determines local governments' technical efficiency? The case of road maintenance," ZEW Discussion Papers 09-047, ZEW - Leibniz Centre for European Economic Research.
    4. Kopp, Raymond J. & Diewert, W. Erwin, 1982. "The decomposition of frontier cost function deviations into measures of technical and allocative efficiency," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 319-331, August.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Autonomy; regency government; efficiency;
    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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