Russian Journal of Agricultural and Socio-Economic Sciences (Jul 2019)
THE EFFECT OF LOCAL GOVERNMENT OWN REVENUE AND REVENUE SHARING FUNDS ON ECONOMIC PERFORMANCE AND COMMUNITY WELFARE THROUGH CAPITAL EXPENDITURE OF REGENCY / CITY IN BALI PROVINCE, INDONESIA
Abstract
The consequence of implementing regional autonomy in Indonesia is the adequate financial capacity of regional governments to improve service to improve welfare for the community. The non-leveling of financial resources and regional economic potential causes an imbalance in the level of welfare between regions. The purpose of this study is to analyze: 1) the effect of local government own revenue and revenue sharing funds on capital expenditure, 2) the influence of local government own revenue, revenue sharing funds, and capital expenditure on economic performance, 3) the influence of local government own revenue, revenue sharing funds, capital expenditure, and economic performance on the community welfare, and 4) the effect of local government own revenue, revenue sharing funds on the community welfare through capital expenditure and economic performance of Regency / cities in Bali Province. This study uses secondary data in the form of panel data during the years 2010 - 2017 of Regency / cities in Bali Province. Data collected is data on Local Government Own Revenue (PAD), Revenue Sharing Funds (DBH), Capital Expenditures obtained from the Bali Provincial Finance Bureau, and data on per capital income and Human Development Index (HDI) obtained from the Provincial Statistics Agency (BPS) Office Bali. The data is then analyzed by path analysis using Partial Leas Square (PLS) software. This study concludes that local revenue has a positive effect on capital expenditure, but revenue-sharing funds have no significant effect on regency / cities in Bali Province during 2010 - 2017. Local government owns revenue, revenue sharing and capital expenditure have a positive effect on economic performance. Local government owns revenue, revenue sharing funds, capital expenditure, and economic performance have a positive effect on the community welfare. Local government own revenue, revenue sharing funds affect the community welfare through capital expenditure and economic performance of Regency/cities in Bali Province. With the imbalance of the Community welfare in the Province of Bali, it is recommended that the central government increase the balance funds for regency/cities whose HDI is still low.
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