ANALISIS PENGARUH PELAKSANAAN DESENTRALISASI FISKAL TERHADAP PDRB DI KABUPATEN/KOTA PROVINSI JAWA TENGAH Tahun 2005-2008

Fiscal decentralization’s role of pushing the economic growth has to become a concern of many countries, also in Indonesia. Since 2001, effectively Indonesian government has run the decentralization fiscal as a strategy to accelerate the local development. This policy has brought a big changes in region-expenditure-development of regencies / cities in central java province. During the implementation of fiscal decentralization in 2005-2008, the economic growth of regencies / cities in central java province has fluctuated. This research aims to know the correlation between the impact of fiscal decentralization and the economic growth of regencies / cities in central java province in 2005-2008. This analysis is concern to the components of fiscal decentralization, there are PAD, DAU, and DBH. This research use panel data and the estimation method is Least Square Dummy Variable (LSDV) or also known as Fixed Effect Model (FEM). The estimation result shows the implementation of fiscal decentralization can increase the local expenditure of regencies / cities in central java province, which is it obtained from PAD, DAU, and DBH, then it can be a base of economic development to increase the economic growth. PAD, DAU, and DBH have positive and significant effect to the economic growth of regencies / cities in central java province during 2005-2008