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Jurnal Kebijakan Ekonomi

Abstract

The implementation of fiscal decentralization has brought significant changes to the management of public finances in Indonesia. Decentralization has been empirically proven to increase the size of government (ratio of government spending to output). Good institutional quality is considered as an important factor to ensure government spending is effective and able to contribute positively to the economy. This study aims to determine whether the influence of government size on economic growth depends on the quality of the institution. The study uses the level of analysis in 491 districts / municipalities in Indonesia during 2011-2017. Using Ordinary Least Square (OLS) estimation method, empirical results show that government size has a negative and significant effect on regional economic growth. By using an indicator of institutional quality, namely the democracy index, the empirical results of this study show the difference in the effect of government size depending on the quality of the institution. The negative effect of government size tends to be greater in regions with low institutional quality.

Bahasa Abstract

Pelaksanaan desentralisasi fiscal telah membawa perubahan yang signifikan terhadap pengelolaan keuangan publik di Indonesia. Desentralisasi secara empiris terbukti meningkatkan ukuran pemerintah ( rasio pengeluaran pemerintah terhadap output). Kualitas kelembagaan yang baik dianggap sebagai faktor penting untuk memastikan pengeluaran pemerintah efektif dan mampu memberikan kontribusi positif bagi perekonomian. Penelitian ini bertujuan untuk mengetahui apakah pengaruh ukuran pemerintah terhadap pertumbuhan ekonomi tergantung pada kualitas institusi. Penelitian ini menggunakan tingkat analisis di 491 kabupaten/kota di Indonesia selama tahun 2011 – 2017. Dengan menggunakan metode estimasi Ordinary Least Square (OLS), hasil empiris menunjukkan bahwa ukuran pemerintah berpengaruh negatif dan signifikan terhadap pertumbuhan ekonomi daerah. Dengan menggunakan indikator kualitas kelembagaan yaitu indeks demokrasi, hasil empiris penelitian ini menunjukkan adanya perbedaan pengaruh ukuran pemerintah tergantung pada kualitas lembaga. Pengaruh negatif ukuran pemerintah cenderung lebih besar di daerah dengan kualitas kelembagaan yang rendah.

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