Effect of fiscal decentralization policy of regional economic imbalances towards economy growth in Eastern Indonesia

Arung Lamba; Paulus K. Allo; Ramasoyan Arung Lamba

doi:10.29332/ijssh.v3n2.298

Authors

Arung Lamba
arung.lamba@uncen.ac.id
Universitas Cenderawasih, Papua, Indonesia
Paulus K. Allo Universitas Cenderawasih, Papua, Indonesia
Ramasoyan Arung Lamba Universitas Cenderawasih, Papua, Indonesia

Keywords:

eastern Indonesia, economy, fiscal decentralization, policy, regional growth

Abstract

The current research aimed at analyzing and knowing (1) the influence of fiscal decentralization policy towards economic growth in eastern Indonesia and (2) the influence of fiscal decentralization policy towards regional imbalances decline in eastern Indonesia. In order to reach the aims, panel data was analyzed. It was analyzed by accommodating information that related to cross-section variables and time series. The panel data, substantially, is expected to be able to decrease the problems of omitted-variables. Furthermore, regression effect analysis was applied for estimating the econometric model. The results of the current research have shown that: (1) fiscal decentralization policy influences growth of the regional economy, and (2) the relationship of fiscal decentralization policy with regional imbalance has confirmed that the decentralization fiscal has not got any ability to reduce the imbalances economy of eastern Indonesia.

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