Infrastructure Spending in the Characteristics of the Regions: Towards the Achievement of Sustainable Development Goals
Indonesia is faced with challenges by the increasing infrastructure competitiveness globally. In 2019, Indonesia's competitiveness rank declined to 72nd from 141 countries compared to the previous year (World Economic Forum, 2019). Another challenge is also depicted in achieving Sustainable De...
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| Format: | Article |
| Language: | English |
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Ikatan Akuntan Indonesia
2022-09-01
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| Series: | The Indonesian Journal of Accounting Research |
| Subjects: | |
| Online Access: | https://ijar-iaikapd.or.id/index.php/ijar/article/view/622 |
| _version_ | 1811170691954769920 |
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| author | Diana Sulistyowati Puji Wibowo |
| author_facet | Diana Sulistyowati Puji Wibowo |
| author_sort | Diana Sulistyowati |
| collection | DOAJ |
| description | Indonesia is faced with challenges by the increasing infrastructure competitiveness globally. In 2019, Indonesia's competitiveness rank declined to 72nd from 141 countries compared to the previous year (World Economic Forum, 2019).
Another challenge is also depicted in achieving Sustainable Development Goals (SDGs) 9 dealing with the infrastructure as shown at two indicators that still require special attention. So far, the gaps in infrastructure development still exist in Indonesia after seeing the region's characteristics. The government also supports infrastructure development with a fiscal decentralization system through the Balancing Fund instrument. This study is aimed to analyze the effect of Owned-Source Revenues (OSR) and Balancing Fund Income on infrastructure development in Indonesia by considering mandatory infrastructure spending and aspects of regional characteristics comprising institutional status, geographical conditions, and economic structure. This study analyzes four-panel data regression modeling and the Generalized Method of Moment (GMM) method. The results showed that government intervention in mandatory infrastructure spending could moderate the influence of OSR and Balancing Fund income on infrastructure development. In testing based on regional characteristics, the impact of OSR and Specific Grant (Dana Alokasi Khusus/DAK) on infrastructure development is higher. It has a positive value in regions with better financial independence (urban, Java-Sumatra, and metropolitan). Otherwise, the influence of Block Grant (Dana Alokasi Umum/DAU) and Shared Nontax Revenues (Dana Bagi Hasil/DBH) on infrastructure development is more substantial. It has a significant positive value in regions with a lower financial independence category (district, non-Java-Sumatra, and non-metropolitan). This research also provides novelty in an analysis of mandatory spending on infrastructure. The central government can use this study's results to prioritize or maximize the potential of Subnational Governments (SNGs) in infrastructure development, and the ultimate goal is the achievement of the Infrastructure SDGs in Indonesia. |
| first_indexed | 2024-04-10T17:00:52Z |
| format | Article |
| id | doaj.art-901b5d1967cc46a59666901ee663fcca |
| institution | Directory Open Access Journal |
| issn | 2086-6887 2655-1748 |
| language | English |
| last_indexed | 2024-04-10T17:00:52Z |
| publishDate | 2022-09-01 |
| publisher | Ikatan Akuntan Indonesia |
| record_format | Article |
| series | The Indonesian Journal of Accounting Research |
| spelling | doaj.art-901b5d1967cc46a59666901ee663fcca2023-02-06T13:49:16ZengIkatan Akuntan IndonesiaThe Indonesian Journal of Accounting Research2086-68872655-17482022-09-01253329368 10.33312/ijar.622Infrastructure Spending in the Characteristics of the Regions: Towards the Achievement of Sustainable Development GoalsDiana Sulistyowati0Puji Wibowo1Directorate General of Fiscal Balance, Ministry of FinanceState Finance Polytechnic-STAN, Ministry of FinanceIndonesia is faced with challenges by the increasing infrastructure competitiveness globally. In 2019, Indonesia's competitiveness rank declined to 72nd from 141 countries compared to the previous year (World Economic Forum, 2019). Another challenge is also depicted in achieving Sustainable Development Goals (SDGs) 9 dealing with the infrastructure as shown at two indicators that still require special attention. So far, the gaps in infrastructure development still exist in Indonesia after seeing the region's characteristics. The government also supports infrastructure development with a fiscal decentralization system through the Balancing Fund instrument. This study is aimed to analyze the effect of Owned-Source Revenues (OSR) and Balancing Fund Income on infrastructure development in Indonesia by considering mandatory infrastructure spending and aspects of regional characteristics comprising institutional status, geographical conditions, and economic structure. This study analyzes four-panel data regression modeling and the Generalized Method of Moment (GMM) method. The results showed that government intervention in mandatory infrastructure spending could moderate the influence of OSR and Balancing Fund income on infrastructure development. In testing based on regional characteristics, the impact of OSR and Specific Grant (Dana Alokasi Khusus/DAK) on infrastructure development is higher. It has a positive value in regions with better financial independence (urban, Java-Sumatra, and metropolitan). Otherwise, the influence of Block Grant (Dana Alokasi Umum/DAU) and Shared Nontax Revenues (Dana Bagi Hasil/DBH) on infrastructure development is more substantial. It has a significant positive value in regions with a lower financial independence category (district, non-Java-Sumatra, and non-metropolitan). This research also provides novelty in an analysis of mandatory spending on infrastructure. The central government can use this study's results to prioritize or maximize the potential of Subnational Governments (SNGs) in infrastructure development, and the ultimate goal is the achievement of the Infrastructure SDGs in Indonesia.https://ijar-iaikapd.or.id/index.php/ijar/article/view/622infrastructurefiscal decentralizationregional characteristicsgmm |
| spellingShingle | Diana Sulistyowati Puji Wibowo Infrastructure Spending in the Characteristics of the Regions: Towards the Achievement of Sustainable Development Goals The Indonesian Journal of Accounting Research infrastructure fiscal decentralization regional characteristics gmm |
| title | Infrastructure Spending in the Characteristics of the Regions: Towards the Achievement of Sustainable Development Goals |
| title_full | Infrastructure Spending in the Characteristics of the Regions: Towards the Achievement of Sustainable Development Goals |
| title_fullStr | Infrastructure Spending in the Characteristics of the Regions: Towards the Achievement of Sustainable Development Goals |
| title_full_unstemmed | Infrastructure Spending in the Characteristics of the Regions: Towards the Achievement of Sustainable Development Goals |
| title_short | Infrastructure Spending in the Characteristics of the Regions: Towards the Achievement of Sustainable Development Goals |
| title_sort | infrastructure spending in the characteristics of the regions towards the achievement of sustainable development goals |
| topic | infrastructure fiscal decentralization regional characteristics gmm |
| url | https://ijar-iaikapd.or.id/index.php/ijar/article/view/622 |
| work_keys_str_mv | AT dianasulistyowati infrastructurespendinginthecharacteristicsoftheregionstowardstheachievementofsustainabledevelopmentgoals AT pujiwibowo infrastructurespendinginthecharacteristicsoftheregionstowardstheachievementofsustainabledevelopmentgoals |