The Determinants Factors of Regional Financial Independence

DOI

10.2991/aer.k.211106.087How to use a DOI?

Keywords

local own-source revenue; balanced fund; other lawful local revenue; regional financial independence

Abstract

This study’s objective is to examine the determinants of regional financial independence, namely local own-source revenue, balanced fund, and other lawful local revenues. The method used was multiple regression analysis in provincial governments of Maluku and Papua in 2010-2019. The Government of Maluku and Papua Province were chosen as the objects of study because, according to the summary issued by the Directorate General of Fiscal Balance, the Ministry of Finance of Indonesia, these two provinces are those with the lowest regional financial independence ratio compared to other provinces. This study used census techniques by taking all populations as a sample. The data analysis used statistical descriptive analysis. The result indicates that the effect of the determinants factors on regional financial independence is significant. Only the variable of other lawful local revenues has an insignificant impact on regional financial independence. Therefore, the other two factors, local own-source revenue and balanced fund, require more attention from the government in order for the provinces to be financially independent. Institutional strengthening in Maluku and Papua Provinces can be done through organizational restructuring according to regional needs, increase human resource capacity, and modernization of regional taxation administration.

Copyright

© 2021 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Jouzar Farouq Ishak
PY  - 2021
DA  - 2021/11/23
TI  - The Determinants Factors of Regional Financial Independence
BT  - Proceedings of the 2nd International Seminar of Science and Applied Technology (ISSAT 2021)
PB  - Atlantis Press
SP  - 559
EP  - 564
SN  - 2352-5401
UR  - https://doi.org/10.2991/aer.k.211106.087
DO  - 10.2991/aer.k.211106.087
ID  - Ishak2021
ER  -