Analisis Kapasitas Fiskal Daerah: Studi Kasus di Kabupaten Gunung Kidul

Abstract

Intergovernmental fiscal transfers are critical elements of public finance in
decentralized countries. In the context of Indonesia’s decentralization reforms,
their design and implementation have significant impacts on the potential revenue
and fiscal capacity of basic public service provision. The case of Indonesia’s 2001
Big Bang decentralization illustrates the challenges associated with implementing
significant reforms in the intergovernmental fiscal system. The practice of
decentralization policy in Indonesia since the time has not generally improved
local development performance yet. This study evaluates fiscal decentralization,
focusing on fiscal capacity as the impacts of the intergovernmental fiscal
equalization transfers, in the case of Gunung Kidul, Yogyakarta. The study shows
a low percentage of its own revenue compared to its total budget. It indicates the
failure of fiscal decentralization policy in improving local government fiscal
capacity.