Fiscal Dependence in a Special Autonomy Region: Evidence from a local government in Eastern Indonesia
Fiscal Dependence in a Special Autonomy Region: Evidence from a local government in Eastern Indonesia

Summary/Abstract: government in the regency of Mimika, one of Indonesia’s eastern regencies. The ratio of fiscal decentralizationis used to calculate the local government’s ability to increase its regional revenue in order to supportdevelopment initiatives in all sectors (Malmudi, 2010) Secondary data of locally generated revenue and totalrevenue from the period 2010-2015 are used to measure the degree of fiscal decentralization. The resultsshow that the degree of fiscal decentralization in the regency remained at a low level, reflected from theaverage value at 12.92 percent with the highest degree at 25.09 percent in 2012. An analysis of fiscaldecentralization in the regency of Mimika in the period 2010 – 2015, indicates that the regency lackedsufficient fiscal capacity, showing heavy dependence upon financing from the central government. The localgovernment is expected to develop Mimika’s potentiality through creative efforts from their apparatus toincrease local revenues. The funds transferred from the central government are intended to be spent on theconsumption of goods and services to support economic activities in the region.

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