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FISCAL DECENTRALIZATION AND REGIONAL INCOME DISPARITY IN JAVA

Kus Endarto, S.E., Prof. Chen Guanghui

2011 | Tesis | S2 Magister Ek.Pembangunan

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The relationship of 2001 fiscal decentralization to economic growth and regional income disparity concerns a lot of arguments. Many studies focused on the province level found that fiscal decentralization has favorable impact on both economic growth and equality (Aritenang, 2009; Wibowo, 2008; and Widhiyanto, 2008). According to Law 22/1999, revised by Law 32/2004, the implementation of fiscal decentralization is emphasized at the district/city. The focus of this study is to analyze the impact of fiscal decentralization and regional income disparity in Java, by employed utilize 103 districts/cities on Java Island during 1994-2008 and more appropriate way of estimation. The result of this study conclude that it is hard to say that there is a positive impact of the fiscal decentralization to the economic growth of districts/cities on Java Island. On the other hand, this study also found that there is unclear relation between the fiscal decentralization to the regional income disparity in districts/cities on Java Island.

Kata Kunci : fiscal decentralization, and regional income disparity


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