LINK OF FISCAL DECENTRALIZATION TO POVERTY REDUCTION: INDONESIAN CONTEXT

Abstract: Link of Fiscal Decentralization to Poverty Reduction: Indonesian Context. It is identified from the literature studies that there are links between fiscal decentralization and poverty reduction. However, the links occurs in different ways among countries and local governments. This is a preliminary study which aims at observing the potential link pattern of fiscal decentralization to poverty reduction in Indonesian provinces before and in the period of fiscal decentralization implementation. This descriptive study shows that there is no clear link pattern of fiscal decentralization to poverty reduction in Indonesian context. Three links patterns, namely positive link, negative link, and no link appears differently among provinces. Elaboration at the level of each province using various variables is needed in order to see the clearer link of fiscal decentralization to poverty reduction in Indonesian context.