BUDGET RATCHETING AS A MODERATION OF THE INFLUENCE OF REGIONAL ORIGINAL INCOME AND PROFIT-SHARING FUNDS ON REGIONAL EXPENDITURE

Abstract

This research aims to test and analyze the influence of local revenue and profit-sharing funds on regional spending, as well as the influence of budget ratcheting on local revenue and profit-sharing funds on regional spending. This research was conducted in districts and cities in West Nusa Tenggara Province, with observation years starting in 2017–2021. The sample determination method in this research is the purposive sampling method, with predetermined criteria. This research uses secondary data in the form of Regency/City Revenue and Expenditure Budget (RREB) data and Budget Realization Reports (BRR), which are published on the official website of the Directorate General of Fiscal Balance, Ministry of Finance of the Republic of Indonesia. This research uses a quantitative approach with data analysis techniques using SPSS 26. The research results show that local revenue has a positive effect on regional spending, profit-sharing funds do not have a positive effect on regional spending, budget ratcheting strengthens the influence of local revenue on regional spending, and budget ratcheting weakens the influence of profit-sharing funds on regional spending.

Keywords

• regional original income
• profit-sharing funds
• budget ratcheting
• regional expenditure