The Size of Flypaper Effect in Decentralizing Indonesia

Authors

  • Tengku Munawar Chalil Osaka University

DOI:

https://doi.org/10.36574/jpp.v2i2.37

Keywords:

flypaper effect, intergovernmental transfer, local government expenditure

Abstract

This study explores the flypaper effect in Indonesia using a spatial approach. Covering data from 2000-2014, the paper shows that grants stimulate overspending by local governments even though spatial interdependence is carefully treated. The elasticity of lump-sum grants to expenditure is stronger than the elasticity of matching grants. Further, the elasticity of lump-sum grant is greater on routine expenditure, which shows the overdependency of local governments to lump-sum grant. The over - dependency phenomenon has not changed a lot even after a major change of lump-sum grant formulation being applied by the 2004 decentralization law package.

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Author Biography

  • Tengku Munawar Chalil, Osaka University

    A doctoral student at the Department of Comparative Public Policy, Osaka School of International Public Policy (OSIPP), Osaka University, Osaka, Japan.

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Published

24-09-2018

Issue

Vol. 2 No. 2 (2018): September 2018

Section

Articles

License

This open-access article is distributed under the terms of the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. Copyright © The Indonesian Journal of Development Planning

How to Cite

The Size of Flypaper Effect in Decentralizing Indonesia. (2018). Jurnal Perencanaan Pembangunan: The Indonesian Journal of Development Planning, 2(2), 101-119. https://doi.org/10.36574/jpp.v2i2.37