Abstract
The purpose of this research is to analyze and to know the effect of degrees of decentralization, financial dependency, financial independence, effectiveness of PAD and the degree of contribution of BUMD to the allocation of capital expenditures of Gowa Regency. This research uses explanative research, which aims to test and obtain empirical evidence of the direct effect of financial performance on the allocation of regional government capital expenditures of Gowa Regency in 2002 until 2016. The data source used is secondary data using multiple linear regression method that is the method of analysis for more than one independent variable. Based on the test results found that the degree of decentralization and financial dependence have a negative and insignificant effect on the allocation of capital expenditure, financial independence has a positive and not significant effect on the allocation of capital expenditure while the effectiveness of PAD and the contribution of BUMD have positive and significant influence on the allocation of capital expenditure. Among the five independent variables, the most dominant effectiveness of PAD (X4) has an influence in the allocation of capital expenditure of the Gowa Regency Government compared to other variables.
Highlights
The political reforms that occurred in 1997 have replaced the centralized government public with a decentralized public
The results showed that the variable X2 (Financial Dependence) had a negative and insignificant effect on Y (Capital Expenditure Allocation)
The results of partial hypothesis testing found that the degree of decentralization and financial dependence had a negative and insignificant effect on the capital expenditure allocation of the Gowa Regency Government
Summary
The political reforms that occurred in 1997 have replaced the centralized government public with a decentralized public. Reforms proclaimed its three fundamental principles, namely transparency, accountability, and democracy. Regional financial management that is carried out economically, efficiently, and effectively or meets the principles of value for money and participation, transparency, accountability, and justice will be able to encourage economic growth. Development activities and the local government cannot be separated from regional financial management policies. Great fiscal authority in the era of decentralization largely determines the budget structure prepared by local governments (APBD). The substance of an APBD shows the effort or seriousness of a regional government in managing regional finances, how much potential revenue will be explored, in which direction regional spending is focused, or where the budget deficit will be financed. From the structure and portion of regional spending, it can be seen that the trend in regional expenditures is inclined towards the administration of government and government apparatus or tends to the implementation of regional development (Adelina & Roxana, 2016; Roesel, 2017)
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