Financial independence of regencies and cities in Central Java

Abstract

This research aims to identify and to map the financial independence of the local government. This research uses ratio analysis to identify the financial independent analysis and typology to map the local government financial level. The research indicates that the financial independence tends to increase in all regions. Based on the financial independent analysis, Semarang and Tegal have lower financial dependence with the consultative relationship pattern rather than 33 other regions that have higher financial dependent level with the instructive relationship pattern. The mapping results of financial independence are in the following: ten cities or regencies have self-financial dependency below the average toward the central government, seven regencies have self-sufficient above the average toward the central government, and eighteen regencies have self-sufficient below the average toward the central government. AbstrakPenelitian ini bertujuan untuk mengidentifikasi dan memetakan kemandirian keuangan pemerintah daerah. Penelitian ini menggunakan analisis rasio untuk mengidentifikasi analisis independensi dan tipologi keuangan untuk memetakan tingkat keuangan pemerintah daerah. Hasiln penelitian menunjukkan bahwa kemandirian finansial cenderung meningkat di semua daerah. Berdasarkan analisis independensi keuangan, Semarang dan Tegal memiliki ketergantungan finansial yang lebih rendah dengan pola hubungan konsultatif dibandingkan dengan 33 daerah lain yang memiliki tingkat ketergantungan finansial lebih tinggi dengan pola hubungan instruktif. Hasil pemetaan independensi keuangan adalah sebagai berikut, 10 kota atau kabupaten memiliki ketergantungan mandiri di bawah rata-rata terhadap pemerintah pusat, 7 kabupaten memiliki swasembada di atas rata-rata terhadap pemerintah pusat dan 18 kabupaten telah berada di bawah swadaya rata-rata terhadap pemerintah pusat.

Local Own Revenue, Decentralization and Local Financial Independent

“…Whereas the local financial independence has the lowest value of 7.86 and the highest value of 11.43, with an average value of 9.12 and a standard deviation of 1.43. The average value indicates that local financial independence is at a very low level during 2014-2018 (referring to the category of financial independence developed by Fafurida & Pratiwi, 2017).…”

“…Local financial independence means that an area does not experience financial dependence provided by the central government. This forces a region to optimize its sources of income (Erawati & Leny, 2015;Fafurida & Pratiwi, 2017;Tolosang, 2018). The success of development will be influenced by the level of financial independence of an area.…”

What is the Contribution of Local Original Revenue to Regional Financial Independent?

“…The results of research conducted by Fafurida & Pratiwi (2017) show that financial independence tends to increase in all regencies/ cities in Central Java, but is still in the low category. This condition is caused by the local government being able to increase the amount of local original revenue from year to year.…”

Productivity Evaluation of Tourism and Culture for Sustainable Economic Development: Analyzing South Korea’s Metropolitan Regions

“…We classified 16 metropolitan regions in the Republic of Korea into similar regional groups based on the ratio of financial independence and the rate of city region ( Table 1). The ratio of city region is defined as the ratio of the urban to rural population by Statistics Korea, whereas the ratio of local financial dependence is calculated by comparing the amount of transfer revenue received by the region to the total local revenue [70]. Figure 1 shows that we identified four DMUs for further analysis: Group 1 (Grp1): SEL; Group 2 (Grp2): BSN, GWJ, DGU, and GJN; Group 3 (Grp3): ICN, USN, and GGI; and Group 4 (Grp4): GWN, CCB, CCN, JLB, JLN, GSB, GSN, and JJU (see Table 1 for Region's Label).…”