Sukanto, Sukanto and Juanda, Bambang and Fauzi, Akhmad and Mulatsih, Sri (2018) TRANSFER FUND, REGIONAL EXPENDITURE, POVERTY, AND INCOME INEQUALITY: EVIDENCE FROM BANTEN PROVINCE. In: Strengthening Regional and Local Economies, 23-24 July 2018, Surakarta.
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Abstract
Transfer fund from central to local government have been allocated since 2001 and annually increase significantly. However, the decreasing level of poverty rates and income inequality in the region over the last decade tends to deliberate. Various researches which have been conducted only measuring direct effect of transfer funds to poverty and income inequality and ignoring transmission of transfer fund through regional expenditure and public service. The purposes of study are to analyze regional expenditure pattern and to estimate direct and indirect impact of transfer fund on poverty and income inequality through regional expenditure and public services in Banten Province. The descriptive analysis and dynamic simultaneous equation models using data panel for 2010-2015 was employed in this study. Econometric model is constructed by 4 equation blocks, consisting of regional income, regional spending, public services, and poverty and income inequality. The results indicate that the dependence of local governments on transfer funds is still high at 64.69%, with the average of personnel budget allocation is 50.01%. The largest personnel expenditure is allocated by Pandeglang Regency at 65.29% while the smallest personnel expenditure is allocated by South Tangerang City at 35.44%. The second largest expenditure allocation is the capital expenditure allocation with the average of 25.05%. Meanwhile, the average allocation of goods and services, and administrative expenditures are 23.67% and 21.64%, respectively. The result also shows that general allocation funds significantly affect the increase of personnel expenditure, capital, goods and services, as well as grants and social aid. In addition, specific allocation funds only affect the increase of capital and education expenditures, while revenue sharing funds show a positive effect on personnel expenditure. Local generated revenue (pendapatan asli daerah/PAD) has positive effect on capital expenditure, personnel, and goods and services. Furthermore, transfer funds through health, education, and public works expenditures tend to significantly reduce poverty, but cannot be able to reduce income inequality yet. Keywords: Regional income, regional expenditure, public services, dynamic simultaneous model
| Item Type: | Conference or Workshop Item (Paper) |
|---|---|
| Uncontrolled Keywords: | Regional income, regional expenditure, public services, dynamic simultaneous model |
| Subjects: | H Social Sciences > HJ Public Finance > HJ7461-7980 Expenditures. Government spending |
| Depositing User: | Dr. Sukanto Sukanto |
| Date Deposited: | 09 Mar 2020 02:36 |
| Last Modified: | 09 Mar 2020 02:36 |
| URI: | http://repository.unsri.ac.id/id/eprint/28011 |
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