Public Services Performance on Education, Health and Infrastructure During Fiscal Decentralization Era

Abstraksi

In recent years, fiscal decentralization has been advocated among countries worldwide. Fiscal decentralization has many reasons to be adopted around the world, the common motive is that fiscal decentralization was considered to have potential impact to improve the performance of the public sector. However, recent studies argue that the conventional wisdom may remain true in developed countries, but it is not the case in developing countries. The conventional argument is the decentralization provision of public goods will increase the efficiency of resource allocation may not be applicable in developing countries. This study wants to prove that argument by using panel data from 33 provinces in Indonesia year 2010-2014. The objective of this study is to answer the fundamental question that has arisen, whether the implementation of fiscal decentralization will make public service performance in Indonesia getting better and more efficient or on the contrary. The result of this study can be input for decision maker to formulate better policy on fiscal decentralization with proper, implicit or explicit assumptions, such as local voter preferences in developing countries that have not been able to reflect local budget outcomes as in developed countries.