Premium
Local Government Capital Spending in Indonesia: Impact of Intergovernmental Fiscal Transfers
Author(s) -
LEWIS BLANE
Publication year - 2013
Publication title -
public budgeting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.694
H-Index - 30
eISSN - 1540-5850
pISSN - 0275-1100
DOI - 10.1111/j.1540-5850.2013.12002.x
Subject(s) - context (archaeology) , capital (architecture) , capital expenditure , government (linguistics) , economics , order (exchange) , indonesian , government spending , economic policy , indonesian government , business , public economics , finance , market economy , geography , linguistics , philosophy , archaeology , welfare
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.