Panel Analysis on the Association of Fiscal Decentralisation and the Size of Government in Indonesia

Sijabat, Rosdiana

doi:10.7763/joebm.2016.v4.392

Cited by 4 publications

(5 citation statements)

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“…This means the higher the current year's local own revenue, the greater the local expenditure current year. Similar positive and significant results were obtained by (Ğbafi & Saruçş, 2004;Sijabat, 2016). As concerns the flypaper effect phenomenon, the study compared the coefficients of each of the control variables when all the variables (transferred funds and own revenue) are regressed simultaneously while controlling for the years' effects.…”

Section: Resultssupporting

confidence: 52%

“…Therefore, FE estimators are more consistent and were applied in the analysis. This test statistic supports the theoretical justification because of the inexistence of time-invariant independent variables in the model and the application of the FE (differencing out time-invariant variables) in the analysis does not exclude any important variables (Sijabat, 2016). Since panel data has both a cross-sectional and a time-series dimension, the data analysis usually encounter heteroscedasticity and serial correlation (Beck, 2001;Hsiao, 2007).…”

Section: Model Specification and Variables Usedsupporting

confidence: 65%

“…When the flypaper effect occurs, there is a likelihood for the re-centralization of decentralized local governments. Thus, local governments which have relatively high vertical imbalances will likely have larger government transfers (Sijabat, 2016). In short, the response of the local government to central government transfer is greater than their local own revenue is the so-called flypaper effect.…”

Section: Resultsmentioning

confidence: 99%

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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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Section: Resultssupporting

confidence: 52%

Section: Model Specification and Variables Usedsupporting

confidence: 65%

Section: Resultsmentioning

confidence: 99%

See 1 more Smart Citation

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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“…-Public sector size. Cassette, Paty (2010), Baskaran (2011), Cantarero, Perez (2012) Liberati, Secchi (2013), Asword et al (2013), Silvia, Maleševic (2014), Sijabat (2016) researches focus on public sector size. The public choice problem is studied based on the size of the government's sector; -Inequality.…”

Section: Overview Of the Literaturementioning

confidence: 99%

Evaluation of the Fiscal Decentralization: Case Studies of European Union

Slavinskaitė¹,

Novotný

Gedvilaitė

2020

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Fiscal decentralization has been widely discussed at various levels and from various perspectives. The Organization for Economic Co-operation and Development (the OECD), similar to the World Bank, also pays great attention to it. Fiscal decentralization has always been an interesting investigation topic, and the researchers, in addition to considering the future of the economy, study this problem from different perspectives, i.e. geographic, political and others. The effect of fiscal decentralization on the economic development of the state has been investigated by various authors. Three different hypotheses provide the proofs of the positive effect of fiscal decentralization. The main advantage of fiscal federalism are efficient and adequate public services which are provided locally through the mobility of the citizens, voting power and competition between the local governments in the created ecosystem. The potential advantages of the competition among the local government powers are similar to the advantages associated with the competition on the private markets. The paper is focussed on fiscal decentralization of the state. It aims to investigate the theoretical aspect of the impact of fiscal decentralization on the economic development to calculate the index of fiscal decentralization and to evaluate the effect of fiscal decentralization on the economic development in the particular states of the European Union. Thus, Bulgaria and Lithuania have the lowest fiscal decentralization index of , while the Czech Republic has the highest index (0.46). The researchers have proved the effect of fiscal decentralization on the economic development of the EU-13 states to be statistically significant and positive. The originality of this paper is that it introduces a theoretical model for evaluating the fiscal decentralization effect on the economic development and assesses the fiscal decentralization effect on the economic development of the particular EU-13 states.

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“…Research works focused on regional inequality or regional income disparties (Akai & Hosio 2009, Song, 2013Sacchi & Salotti 2014;Kyriacou et al 2017); -Public sector size. Choice of cociety is analysed focusing on the size of public sector (Cassette & Paty 2010;Baskaran 2011;Cantarero & Perez 2012;Asword et al 2013;Liberati & Sacchi 2013;Silvia & Maleševic 2014;Sijabat 2016).…”

Section: Introductionmentioning

confidence: 99%

Fiscal decentralisation and economic growth: Is there a relationship?

Slavinskaitė

2017

PROSOC

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The main objective of this paper is to study the concept of fiscal decentralisation and the influence of fiscal decentralisation on economic growth in selected European Union countries during the period of 2004 -2014. Academic interest in fiscal decentralisation began in the 1950s, when the original Tiebout (1950) article on the theory of local government management level cost created a base for never-ending debate about fiscal decentralisation effect on well-being of the country. The empirical literature analysing the influence of fiscal decentralisation on economic growth has emerged since the 1990s. The relevant studies vary as to whether they use time series, cross-sectional or panel data, as to whether they rely on singlecountry or cross-country samples, and they vary in fiscal decentralisation measures, estimation methods and sample composition. The empirical analysis was based on the method of Simple Additive Weighting (SAW) and regression analysis. The data analysis has revealed that there is a relationship between fiscal decentralisation and economic growth.

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Panel Analysis on the Association of Fiscal Decentralisation and the Size of Government in Indonesia

Cited by 4 publications

References 0 publications

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

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

Evaluation of the Fiscal Decentralization: Case Studies of European Union

Fiscal decentralisation and economic growth: Is there a relationship?

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