FENOMENA PLYPAPER EFECT PADA BELANJA DAERAH KABUPATEN/KOTA DI INDONESIA

Doddy Setiawan

Sari

This research aims at examining flypaper effect phenomenon on local government expenditure at local government in Indonesia. The study investigate the effect of local own revenue (PAD), general purpose grant (DAU), specific purpose grant (DAK), and revenue sharing (DBH) on local government expenditure. This research use three control variables: populations, geographic (Java and Non-Java) and newly established local government in Indonesia. The sample of the research are 492 local government and 2413 observations from 2009 – 2013. The result of the study shows that local own revenue (PAD), general purpose grant (DAU) and revenue sharing (DBH) positively affect local government expenditure. However, specific purpose grant have no effect on local government expenditure. The higher local own revenue (PAD), general purpose grant (DAU) and revenue sharing (DBH) increase local government expenditure. Further, the coefficient of local own revenue (PAD) is smaller than general purpose grant (DAU). The local government spending in Indonesia more depends on the general purpose grant (DAU) rather than local own revenue (PAD). The result of the study provide evidence that flypaper effect is exist in Indonesia.

Kata Kunci

flypaper effect; local government expenditure; general purpose grant; revenue sharing

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