Economics, Econometrics and Finance
8 years ago

Local governments in Indonesia can boost economy without relying on central grants.

Economic Journal of Emerging Markets
Causality between Total Government Expenditure, Total Tax Revenue, and Regional Income in the Case of Municipalities’/ Regency’ Local Government in Indonesia
Haryo Kuncoro

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The study looked at how government spending, tax revenue, and regional income are connected in Indonesian local governments. They found that government spending affects tax revenue, and vice versa. Regional income is influenced by grants from the central government. This suggests that both central and local governments work together to manage finances and improve the local economy without relying heavily on grants.