Volatilitas Penerimaan dan Belanja Pemerintah Daerah

Abstract

The volatility of local government revenues and expenditures has a crucial impact on the health of the regional economy. Therefore, it is essential to understand how fluctuations in the various components of regional income affect spending volatility. This study investigates the relationship between changes in local tax revenues and grants from the central government and the spending volatility of the Indonesian provincial government in the period 2015-2019. This study finds evidence that the volatility of local government spending is positively associated with the volatility of grant receipts and negatively related to the local tax revenues volatility. In addition, this study also shows that an increase or decrease in tax and grant revenue causes regional spending volatility.