Intergovernmental Transfer and the Flypaper Effect – Evidence from Municipalities/Regencies in Indonesia

Kang, Younguck; Setyawan, Dhani

doi:10.2139/ssrn.2065638

Cited by 5 publications

(9 citation statements)

References 10 publications

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“…Untuk menguji hipotesis yang telah dirumuskan, penelitian ini pertama-tama menggunakan model sederhana sebagaimana diajukan oleh Kang & Setyawan (2012) dan Solikin (2016). Ada dua alasan yang melandasi penggunaan model yang telah mereka kembangkan.…”

Section: Metode Penelitianunclassified

“…Pertama, dua penelitian ini juga mengoptimalkan data secara nasional, sehingga analogi yang sama dapat digunakan sebagai justifikasi atas penggunaan model tersebut pada penelitian ini. Kedua, penelitian oleh Kang & Setyawan (2012)…”

Section: Metode Penelitianunclassified

“…Berbeda dengan data yang digunakan dalam penelitian oleh Kang & Setyawan (2012) dan Solikin (2016) penelitian ini menggunakan data seluruh provinsi di Indonesia dari tahun 2010 sampai dengan tahun 2019. Data level provinsi digunakan karena alasan ketersediaan data.…”

Section: Metode Penelitianunclassified

“…Serupa dengan penelitian oleh Kang & Setyawan (2012), penelitian ini juga menunjukkan bahwa pendapatan pajak daerah lebih mempengaruhi besarnya belanja pemerintah daerah dibandingkan dengan jumlah Dana Perimbangan. 2 Berdasarkan model sederhana ini, Kang & Setyawan (2012) menyampaikan gagasan bahwa secara empiris tidak terdapat fenomena flypaper effect pada kebijakan belanja publik. Sehingga dalam penelitian mereka, disimpulkan bahwa kebijakan belanja pemerintah daerah lebih responsif terhadap fluktuasi Pendapatan Asli Daerah daripada Dana Perimbangan.…”

Section: Hasil Penelitianunclassified

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Apakah fenomena flypaper effect asimetris terjadi pada kebijakan belanja pemerintah daerah?

Swasito

2021

Jurnal Pajak dan Keuangan Negara

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Fluctuation in local government revenue will shift local government spending. This study aims to identify and analyze the response of local government spending policies to an increase or decrease in transfer funds from the central government (Balance Fund) and local own revenue (known as Pendapatan Asli Daerah). The study utilizes data from provincial governments throughout Indonesia for the 2010-2019 period. This study finds that local government spending policies are more responsive to increases or decreases in local government revenues in the form of DAU, meaning that there is a flypaper effect phenomenon. In addition, this study also found that the decline in DAU also caused a contraction in public spending, which means that there is no asymmetrical flypaper effect. Kenaikan atau penurunan pendapatan pemerintah daerah akan meningkatkan atau menurunkan belanja pemerintah daerah Tujuan dari penelitian ini adalah untuk mengidentifikasi dan menganalisis respons kebijakan belanja pemerintah daerah terhadap kenaikan atau penurunan dana transfer dari pemerintah pusat (Dana Perimbangan) dan Pendapatan Asli Daerah. Penelitian menggunakan Penelitian ini menemukan bahwa kebijakan belanja pemerintah daerah lebih responsif terhadap kenaikan atau penurunan penerimaan daerah berupa DAU, artinya ada fenomena flypaper effect pada kebijakan belanja publik di Indonesia. Selain itu, penelitian ini juga menemukan bahwa penurunan penerimaan daerah berupa DAU juga menyebabkan kontraksi pada belanja publik, yang artinya flypaper effect yang ada tidak bersifat asimetris.

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Section: Metode Penelitianunclassified

Section: Hasil Penelitianunclassified

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Apakah fenomena flypaper effect asimetris terjadi pada kebijakan belanja pemerintah daerah?

Swasito

2021

Jurnal Pajak dan Keuangan Negara

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“…This is to say that, instead of being a supplementary fund to encourage own-source revenue generation, intergovernmental transfers have rather replaced own-source revenue generation ability of local governments which is contrary to the policy provision of intergovernmental transfers (Zigiene, 2012). Studies have argued that allowing intergovernmental transfers to reduce own-source revenue mobilization erodes local autonomy of local governments and makes local governments an agent for political manipulation of the Central Government, thus re-centralizing the decentralized bodies to serve the political interest of the Central government (Dick-Sagoe, 2013;Kang & Setyawan, 2012;Poschl & Weingast, 2013;Rao & Singh, 1998). This is the main motivation for the conduct of this study.…”

Section: Introductionmentioning

confidence: 99%

Flypaper Effect of Intergovernmental Transfers and Incentives to Improve Own-Source Revenue Mobilization of Local Governments in the Central Region of Ghana

Dick-Sagoe¹,

Tingum²

2021

JSS

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Flypaper effect and the fiscal interest model have been employed to explain the fiscal behaviour of local government officials in the Central Region of Ghana. Central government transfers or grants have taken dominion over local government expenditure compared with own-source revenues, creating a situation known as the flypaper effect. Using panel data for 17 local governments from 2008 to 2015, the study examined the fiscal behavior of local government officials when presented with intergovernmental fiscal transfers and own-source revenues. The analysis employed the panel data analysis of fixed effects and random effects. However, given the optimal unbiased results, the Generalized Least Squares (GLS) is estimated to account for heteroscedasticity and serial autocorrelation. The results show that central government transfers contribute more to local government expenditure than local governments' own-source revenues. This situation confirms the flypaper effect on local governments in the Central Region, thus explaining the fiscal behavior of the local governments. Whilst the system of intergovernmental transfers in Ghana has been very successful in directing resources towards the local governments, it may be counterproductive in encouraging the local governments in raising their revenue at the local level as demonstrated by the presence of the flypaper effect.

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Flypaper effects of Central Transfers on the spending behaviour of Ghana’s central region local governments: Does status matter?

Dick-Sagoe

Tingum²,

Asare‐Nuamah³

2022

MKP

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Fiscal system incentivises local government officials to depend on central government’s transfers to fund their budgets. This paper examines whether district and municipal status local government officials exhibit the same spending behaviour when presented with central government’s transfers. The paper uses the panel data model to estimate the flypaper effect on district and municipal status local governments in the Central Region of Ghana from 2008 to 2015. The result shows differences in spending behaviour between district and municipal status local governments, where the flypaper effect is more pronounced on municipal status local governments (52.6%) than district status local governments (44.8%). Though municipal local governments are financially better in raising own-source revenues compared to the district local governments, the design of the fiscal system tends to make municipal local governments more reliant on central transfers than on expenditure of own-source revenues. This reduces interest in raising own-source revenue and its expenditure, a situation which has an adverse long-term impact on decentralisation in terms of citizen empowerment and participation. The study recommends an optimal level of central transfers which will serve the purpose of correcting vertical and horizontal imbalances, as in theory, and at the same time promote the ideals of decentralisation (citizen empowerment and participation).

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Intergovernmental Transfer and the Flypaper Effect – Evidence from Municipalities/Regencies in Indonesia

Cited by 5 publications

References 10 publications

Apakah fenomena flypaper effect asimetris terjadi pada kebijakan belanja pemerintah daerah?

Apakah fenomena flypaper effect asimetris terjadi pada kebijakan belanja pemerintah daerah?

Flypaper Effect of Intergovernmental Transfers and Incentives to Improve Own-Source Revenue Mobilization of Local Governments in the Central Region of Ghana

Flypaper effects of Central Transfers on the spending behaviour of Ghana’s central region local governments: Does status matter?

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