P I C E E B A, 1ST PICEEBA 2018

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Does increasing central government transfer improve local government performance? A Case of Aceh Province
Heru Fahlevi, Muhardiansyah Muhardiansyah, Aliamin Aliamin

Last modified: 2018-06-28

Abstract


This study aimed to evaluate the performance of Aceh – province after receiving an significant transfer fund under Special Autonomy Fund/SAF (Dana Otonomi Otsus/ Dana Otsus) started in 2008. Data is collected from secondary sources between 2009 and 2016 namely, financial reports of Aceh government. A descriptive quantitative analysis is carried out to analysis the performance of Aceh government before and after the SAF implementation. This study demonstrates that having more money does not necessarily mean improved performance of local government. Based on the financial ratio analysis, the performance before and after the SAF implementation has increased slightly. Additionally, the expenditures have raised gradually particularly the operational expenditures. This will be problematic after the end of SAF as the portion of own source revenue (or pendapatan asli daerah) on the total revenue is smaller than the portion of the operational expenditures. Thus, it is imperative for the Aceh government to increase the own source revenue through creating more revenue centers.


Keywords


local government; Special Autonomy Fund; intergovernmental transfer; Indonesia