Abstract

The reformation of the Government of the Republic of Indonesia system, which was marked by the change from centralized to decentralized system, had an impact on the trend of regional expansion. But, from the end of 2014 the government implemented a moratorium on the formation of new autonomous regions with the reason to focus on resolving the problem of the size of the budget deficit before lifting the moratorium. The purpose of this study is to analyze the driving factors of the formation of new autonomous regions in Indonesia during the reformation era and its impact on state finance. This study is a policy study by collecting data and then analyzing it into a conclusion and recommendation. This type of study is a literature study with the method used is descriptive qualitative method. The results of the study show that since the reform era, the formation of a new autonomous region has been very massive. If calculated on average from 1999 to 2014, each year the new regions increase by 13 regions per year. The formation of the new autonomous regions requires considerable preparation and costs, starting from the initial formation to the implementation. In addition, in general the new autonomous regions show higher fiscal dependencies than the old regions. Thus, it can be stated that the establishment of the new autonomous regions has caused pressure on the state finances due to the large amount of funds that must be transferred to new regions

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call

Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.