DESENTRALISASI FISKAL DAN PERTUMBUHAN EKONOMI, SERTA KAITANNYA DENGAN OTONOMI DAERAH

This study attempts to examine the influence of fiscal decentralization and regional autonomy on regional economic growth in Indonesia by using panel data analysis and the Hodrick-Prescott (HP) filter. This study takes sample at provincial level (selected 19 provinces) in Indonesia in the period of 1994-2010. Furthermore, to represents the fiscal decentralization this thesis uses three indicators, namely expenditure share, revenue share, and local government's own revenue share. Further, regional autonomy is treated as dummy variable with base year of 2004. The result demonstrates that fiscal decentralization is positively associated with economic growth in Indonesia, especially from the revenue side and own revenue side. The findings further strengthens the decentralization theorem and previous studies that mentioned fiscal decentralization play a role in foster the economic growth. In addition, it is also found that the implementation of regional autonomy policy (aggregate decentralization effect) presents positive relationship to economic growth.