Local Government Capital Spending in Indonesia: Impact of Intergovernmental Fiscal Transfers

    Research output: Contribution to journalArticle

    Abstract

    Indonesian policymakers intend to increase capital spending, especially on traditional infrastructure, at all levels of government in order to stimulate economic growth. Intergovernmental capital grants can have very significant impact on encouraging such spending at the subnational level. The main problems with capital transfers in the Indonesian context are that grant funding has stagnated at low levels and the proportion of funding allocated to infrastructure has declined considerably. Given current institutional constraints, the likelihood of increasing grant funding for subnational infrastructure is dubious, which suggests that economic growth in Indonesia may remain suboptimal for the near future.
    Original languageEnglish
    Pages (from-to)76-94
    JournalPublic Budgeting and Finance
    Volume33
    Issue number1
    DOIs
    Publication statusPublished - 2013

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