IMPLEMENTASI DESENTRALISASI FISKAL DALAM UPAYA MENGENTASAN KEMISKINAN DI KABUPATEN DAN KOTA PROVINSI JAWA BARAT

Abstract

The implementation of fiscal decentralization is driven by the belief that the regional government is the vehicle that best understands the needs of regional communities rather than the central government. This delegation of authority is then followed by budget allocation and provision of public goods to the regional government. This then opens up a new assessment that simply fiscal decentralization has an impact on poverty alleviation. However, the report on the implementation of fiscal decentralization over two decades in Indonesia shows that the rapidly increasing allocation of transfer funds has not been accompanied by a rapid reduction in poverty rates. Therefore, this research aims to determine the effect of fiscal decentralization indicators on the percentage of poverty, namely local government revenue, fiscal balance transfers and local government spending. By using Panel Least Square (PLS) regression estimates, we used specific samples based on districts and cities in West Java from 2014 to 2019. The regression results show that regional income can significantly reduce poverty, while the allocation of fiscal balance transfers makes poverty increase. Apart from that, local government spending was found to have no significant influence on the percentage of poverty. This paper is expected to help the government in carrying out financial management that is right on target. The ineffective allocation of balanced transfers in West Java needs to be responded by the regional government according to the priority scale in each disctrict or city.