Exploring the Nexus between Regional Fiscal Capacity and the Convergence of Inclusive Economic Development
In the fiscal decentralisation system, the establishment of fiscal capacity is of paramount importance as local governments must be capable of effectively managing their own financial resources to meet the needs of the local population and advance regional development. Possessing a robust fiscal cap...
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| Format: | Article |
| Language: | English |
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Pusat Penelitian Ilmu Sosial dan Humaniora Kontemporer
2024-04-01
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| Series: | Journal of Contemporary Governance and Public Policy |
| Subjects: | |
| Online Access: | https://journal.ppishk.org/index.php/jcgpp/article/view/261 |
| _version_ | 1797200503726145536 |
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| author | Rachmad Kresna Sakti Nugroho Suryo Bintoro Axellina Muara Setyanti Rahayu Anzelina Agustin |
| author_facet | Rachmad Kresna Sakti Nugroho Suryo Bintoro Axellina Muara Setyanti Rahayu Anzelina Agustin |
| author_sort | Rachmad Kresna Sakti |
| collection | DOAJ |
| description | In the fiscal decentralisation system, the establishment of fiscal capacity is of paramount importance as local governments must be capable of effectively managing their own financial resources to meet the needs of the local population and advance regional development. Possessing a robust fiscal capacity enables local governments to be more effective in enhancing regional economic growth. This study analyses the influence of regional fiscal capacity on the convergence of inclusive economic development across 34 provinces in Indonesia. Conditional beta convergence analysis is employed on the Inclusive Economic Development Index, which is influenced by the degree of fiscal decentralisation, local financial autonomy, effectiveness of local own-source revenue, indirect expenditure ratio and direct expenditure ratio. This study provides valuable insights revealing visible convergence trends among Indonesia’s 34 provinces indicating crucial progress in achieving inclusive economic development and eliminating inequality. Furthermore, the observed progress underlines the vital role of fiscal capacity, particularly the levels of fiscal decentralisation and direct spending, as a significant driver encouraging a positive trajectory of economic convergence between provinces. |
| first_indexed | 2024-04-24T07:32:41Z |
| format | Article |
| id | doaj.art-27ac33a3bb2240f4bb6ef03cf6238220 |
| institution | Directory Open Access Journal |
| issn | 2722-3981 2722-3973 |
| language | English |
| last_indexed | 2024-04-24T07:32:41Z |
| publishDate | 2024-04-01 |
| publisher | Pusat Penelitian Ilmu Sosial dan Humaniora Kontemporer |
| record_format | Article |
| series | Journal of Contemporary Governance and Public Policy |
| spelling | doaj.art-27ac33a3bb2240f4bb6ef03cf62382202024-04-20T12:08:26ZengPusat Penelitian Ilmu Sosial dan Humaniora KontemporerJournal of Contemporary Governance and Public Policy2722-39812722-39732024-04-0151557010.46507/jcgpp.v5i1.26171Exploring the Nexus between Regional Fiscal Capacity and the Convergence of Inclusive Economic DevelopmentRachmad Kresna Sakti0Nugroho Suryo Bintoro1Axellina Muara Setyanti2Rahayu Anzelina Agustin3Department of Economics, Universitas BrawijayaDepartment of Economics, Universitas BrawijayaDepartment of Economics, Universitas BrawijayaDepartment of Economics, Universitas BrawijayaIn the fiscal decentralisation system, the establishment of fiscal capacity is of paramount importance as local governments must be capable of effectively managing their own financial resources to meet the needs of the local population and advance regional development. Possessing a robust fiscal capacity enables local governments to be more effective in enhancing regional economic growth. This study analyses the influence of regional fiscal capacity on the convergence of inclusive economic development across 34 provinces in Indonesia. Conditional beta convergence analysis is employed on the Inclusive Economic Development Index, which is influenced by the degree of fiscal decentralisation, local financial autonomy, effectiveness of local own-source revenue, indirect expenditure ratio and direct expenditure ratio. This study provides valuable insights revealing visible convergence trends among Indonesia’s 34 provinces indicating crucial progress in achieving inclusive economic development and eliminating inequality. Furthermore, the observed progress underlines the vital role of fiscal capacity, particularly the levels of fiscal decentralisation and direct spending, as a significant driver encouraging a positive trajectory of economic convergence between provinces.https://journal.ppishk.org/index.php/jcgpp/article/view/261convergence analysisfiscal capacityinclusive economic development |
| spellingShingle | Rachmad Kresna Sakti Nugroho Suryo Bintoro Axellina Muara Setyanti Rahayu Anzelina Agustin Exploring the Nexus between Regional Fiscal Capacity and the Convergence of Inclusive Economic Development Journal of Contemporary Governance and Public Policy convergence analysis fiscal capacity inclusive economic development |
| title | Exploring the Nexus between Regional Fiscal Capacity and the Convergence of Inclusive Economic Development |
| title_full | Exploring the Nexus between Regional Fiscal Capacity and the Convergence of Inclusive Economic Development |
| title_fullStr | Exploring the Nexus between Regional Fiscal Capacity and the Convergence of Inclusive Economic Development |
| title_full_unstemmed | Exploring the Nexus between Regional Fiscal Capacity and the Convergence of Inclusive Economic Development |
| title_short | Exploring the Nexus between Regional Fiscal Capacity and the Convergence of Inclusive Economic Development |
| title_sort | exploring the nexus between regional fiscal capacity and the convergence of inclusive economic development |
| topic | convergence analysis fiscal capacity inclusive economic development |
| url | https://journal.ppishk.org/index.php/jcgpp/article/view/261 |
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