Abstract
This study examines the determinant factors of capital expenditure government, through local own-source revenue, revenue sharing fund, general allocation fund, and special allocation fund. The data was collected from 23 provincial government in Indonesia. The method used is multiple regression in provincial government in 2010-2019. The regression results support all hypotheses, but not the fourth hypothesis. This study shows that provincial government can not to be autonomous and need funding from central government. This study offers a robust link between local own-source revenue and balance fund by examining how their interaction produces a variation in the level of capital expenditure.
Highlights
Since the reform system was initiated in 1998, there has been a change in the government system from centralization to decentralization in Indonesia
The activities that have been done by the government have changed from centralization to decentralization so that the local government does not depend on the state government and the local government can take their rights and obligations independently and autonomously (Pemerintah Indonesia, 2014)
From a government perspective, this study demonstrates the important impact of local ownsource revenue, revenue-sharing fund, and general allocation fund on capital expenditure
Summary
Since the reform system was initiated in 1998, there has been a change in the government system from centralization to decentralization in Indonesia. The principle of regional autonomy is implemented by the Indonesian Government after the reformation in this country. The activities that have been done by the government have changed from centralization to decentralization so that the local government does not depend on the state government and the local government can take their rights and obligations independently and autonomously (Pemerintah Indonesia, 2014). Mentayani & Rusmanto (2013) explained that regional autonomy is implemented in the authority of local government to manage and develop their region. The regional autonomy makes reformation of various government fields, including capital expenditures (Sholikhah & Wahyudin, 2014)
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