PENGARUH DANA ALOKASI UMUM DAN PENDAPATAN ASLI DAERAH TERHADAP BELANJA PEMERINTAH DAERAH DI PROVINSI DI PULAU JAWA

Abstract

One component of regional finance sources, part of decentralization policy currently transferred by the central government, is the transfer of general allocation fund (DAU) and special allocation fund (DAK). The DAU is given for the regions to finance its govemmental function and authority, whose sources can be exploited from the real income of the local governments (PAD). ln fact, howeven the DAU transfer becomes the primary source of the regional governments to cover its spending. This study intended fo discuss the relationship between the DAU and PAD to localgovernments expenditures in provinces in Java. Based on panel regression analysrs, its concludes that the DAU growth significantly affects the growth of total expendituresof the local govemments, while, in contrast, the PAD does not significantly affect their expenditures' The study also concludes that there is flypaper effect of the DAU and PAD to the regional or local govemments 'expenditures' Similarly, the DAU and PAD have their significant impacts on employee and capital expenditures.