Flypaper Effect Analysis of General Allocation Fund and Local Own-Source Revenue on Expenditures in Kuningan Regency 2006 – 2020

Nida Putri Awalia; Agus Arifin; Muhammad Farid Alfarisy; Joseph Yakatambu Yaramai

doi:10.32424/1.erjpe.2023.18.1.3341

Flypaper Effect Analysis of General Allocation Fund and Local Own-Source Revenue on Expenditures in Kuningan Regency 2006 – 2020

Nida Putri Awalia, Agus Arifin, Muhammad Farid Alfarisy, Joseph Yakatambu Yaramai

Abstract

This research aims to analyze whether there is a flypaper effect of General Allocation Fund (GAF) and Local Own-Source Revenue (LOSR) on direct and indirect expenditures in Kuningan Regency in 2006 – 2020. Our research uses multiple linear regression, and we find that: (1) GAF and LOSR have positive and significant effect on both direct spending and indirect spending of regional government of Kuningan and (2) GAF has dominant effect on direct and indirect expenditures variables. We conclude that there is a flypaper effect on regional expenditures of Kuningan. It means that the Regional Government of Kuningan is still highly dependent on central government’s fund transfers. This research implies that (1) the Regional Government of Kuningan is expected to maximize the exploration of its local resources gradually, (2) it is necessary to optimize the supervision conducted by the Directorate General of Taxes (DGT) on taxpayers and to explore tax revenues from them and tax objects, (3) the local government needs to have adequate control systems to ensure compliance with management policy procedures, and (4) administrative procedure simplification is also necessary to provide convenience, thereby increasing tax compliance and the percentage of local revenue.

Keywords: GAF, LOSR, Expenditures, Flypaper Effect.

Full Text:

99-109 PDF

References

Al Khoiri, R. H. (2015). Flypaper Effect dan Belanja Daerah di Propinsi Jawa Barat. Jurnal Ilmu Ekonomi, IV(2).

Amalia, F. (2016). Analisis Flypaper Effect LORa Belanja Daerah Kabupaten dan Kota di Provinsi Banten. Jurnal Organisasi Dan Manajemen, VI(1).

Armawaddin, M., Rumbia, W. A., & Afiat, M. N. (2017). Analisis Flypaper Effect Belanja Daerah Kabupaten/Kota di Sulawesi. Jurnal Ekonomi Dan Pembangunan Indonesia, XVIII(1).

Bracco, E., Lockwood, B., Porcelli, F., & Redoano, M. (2015). Intergovernmental Grants as Signals and the Alignment Effect: Theory and Evidence. Journal of Public Economics 123: 78-91.

Cyrenne, P. & Pandey, M. (2015). Fiscal Equalization, Government Expenditures and Endogenous Growth. International Tax and Public Finance 22(2): 311-329.

Ekawarna, S. U. (2017). Analisis Flypaper Effect LORa Belanja Daerah (Studi Komparasi Daerah Induk dan Pemekaran kabupaten/kota di Provinsi Jambi). Jurnal Perspektif Pembiayaan Dan Pembangunan Daerah, IV(3).

Feronika, Rumate, V. A., & Walewangko, E. N. (2017). Pengaruh Pendapatan Asli Daerah dan Alokasi Umum terhadap Belanja Langsung dan Dampaknya terhadap Pertumbuhan Ekonomi di Kota Bitung. Jurnal Pembangunan Ekonomi Dan Keuangan Daerah, XVIII(5).

Gennari, E dan G. Messina. 2014. How Sticky Are Local Expenditure in Italy? Assessing the Relevance of the Flypaper Effect Through Municipal Data. International Tax and Public Finance 21 (2): 324-344.

Ghozali, I. (2013). Aplikasi Analisis Multivariate dengan Program IBM SPSS Update PLS Regresi. Badan Penerbit Universitas Diponegoro.

Hidayah, N., & Setiyawati, H. (2014). Pengaruh Dana Alokasi Umum, Dana Alokasi Khusus dan Pendapatan Asli Daerah terhadap Belanja Langsung di Propinsi Jawa Tengah. Jurnal Akuntansi, XVIII(1).

Kjaergaard, M. (2015). The Flypaper Effect: Do Political Institutions affect Danish Local Governments´ Respons to Intergovernmental Grants? Local Government Studies, 2015, 534-552.

Korzhenevych, A., & Langer, S. (2016). The Flypaper Effect in Germany: An East-Western Comparison. Center of Public and International Economics.

Kurniawan, R., Ratnanto, S., Widodo, D. W., & Santosa, T. D. (2019). Analisis Flypaper Effect Dana Transfer & LOR terhadap Belanja Daerah Kabupaten/Kota di Jawa Timur. Prosiding Seminar Nasional Manajemen, Ekonomi Dan Akuntansi.

Lewis, B. (2013). Local Government Capital Spending in Indonesia: Impact of Intergovernmental Fiscal Transfers. Public Budgeting & Finance 33(1): 76-94.

Linawati, & Sholikhah, M. (2019). Analisis Flypaper Effect LORa Belanja Daerah Kota Kediri. Journal Od Business, Economic, and Accounting, IX(2).

Lisa, Y., Priyagus, & Roy, J. (2017). Pengaruh Pendapatan Asli Daerah dan Dana Perimbangan terhadap Belanja Langsung dan Belanja Tidak Langsung serta Pertumbuhan Ekonomi di Indonesia . Jurnal Ekonomi, Manajemen, Dan Akuntansi, XIX(2).

Mehiriz, K. & Marceau, R. (2014). The Flypaper and Asymmetric Effects of Intergovernmental Grants to Quebec Municipalities. Public Budgeting & Finance 34(1): 85-102.

Nurdini, R., Wiratno, A., & Farida, Y. N. (2015). Analisis Flypaper Effect LORa Dana Alokasi Umum (GAF), Dana Alokasi Khusus (DAK), Dana Bagi Hasil (DBH), dan Pendapatan Asli Daerah (LOR) terhadap Belanja Daerah (BD) Kabupaten/Kota di Jawa Barat. Jurnal Akuntansi Dan Keuangan, II(1).

Oktavia, D. (2014). Flypaper Effect: Fenomena Serial Waktu dan Lintas Kabupaten Kota di Jawa Timur 2003-2013. Jurnal Akuntansi Universitas Jember, XVII(2).

Panda, P. K. dan V. Nirmala. 2013. Central Fiscal Transfers and States' Spending In India: An Analysis of Incentive Effect. Economics Bulletin 33(2): 1229-1246.

Pevcin, P. (2014). Expenditure Effects of Intergovernmental Transfers–the Case of Slovenia. International Public Administration Review 9(4): 31-46.

Pradana, K. F. N., Suharno, & Widarno, B. (2019). Flypaper Effect LORa Pendapatan Asli Daerah dan Dana Alokasi Umum terhadap Alokasi Belanja Daerah Pemerintah Kota Surakarta Tahun 2013 – 2017. Jurnal Akuntansi Dan Teknologi Informasi, XV(4).

Purbarini, E., & Masdjojo, G. N. (2015). Flypaper Effect on Operating Expenditure and Capital Expenditure of the City Government in Indonesia. Jurnal Ekonomi Pembangunan, XVI(1).

Roudo, M., & Chalil, T. M. (2016). Depolarization in Delivering Public Services? Impacts of Minimum Service Standards (MSS) on the Quality of Health Services in Indonesia. Journal of Regional and City Planning.

Salawali, W. A., Kindangen, P., & Lapian, A. L. ch P. (2016). Flypaper Effect LORa Dana Alokasi Umum (GAF) Dan Pendapatan Asli Daerah (LOR) serta Pengaruhnya terhadap Belanja Daerah Kabupaten/Kota di Sulawesi Tengah. Jurnal Pembangunan Ekonomi Dan Keuangan Daerah, XVIII(2).

Saputri, M. A., & Muid, D. (2014). Flypaper Effect LORa Dana Alokasi Umumdan Pendapatan Asli Daerah terhadap Belanja Daerah LORa Kabupaten/Kota di Jawa Tengah Tahun 2011-2012. Diponegoro Journal of Accounting, III(2).

Sari, R. P. (2015). Pengaruh Pendapatan Asli Daerah (LOR), Dana Alokasi Umum (GAF) dan Dana Alokasi Khusus (DAK) terhadap Belanja Daerah di Provinsi Jawa Tengah dan Daerah Istimewa Yogyakarta. Jurnal Akuntansi Keuangan.

Sobel, R. S. & Crowley, G. R. (2014). Do Intergovernmental Grants Create Ratchets in State and Local taxes? Public Choice 158(1): 167-187.

Sour, L. 2013. The Flypaper Effect in Mexican Local Governments. Estudios Economicos 28(1): 165-196.

Sumarsono, H., & Rahmawati, F. (2017). The Phenomenon Flypaper Effect in Balanced Funds, Regional Revenue and Surplus Budget Funding of Economic Growth and Regional Expenditure in Districts/City East Java Province. Journal of Economics and Finance, VIII(1).

Vegh, A. C. & Vuletin, G. (2015). Unsticking the Flypaper Effect in an Uncertain Word. Journal of Public Economics 131: 142-155.

DOI: https://doi.org/10.32424/1.erjpe.2023.18.1.3341