FLYPAPER EFFECT PADA DAU DAK DAN PAD TERHADAP BELANJA DAERAH PROVINSI JAWA TIMUR

Abstract

The purpose of this research is to provide empirical evidence to the influence of general allocation fund, special
allocation fund, and local own source revenue to the local government expenditure of districts/cities in East Java
province and to provide empirical evidence to the tendency of the occurrence of flypaper effect on the influence of
the general allocation fund to the local expenditure is greater than the influence of local own source revenue to
the local government expenditure of districts/cities in Indonesia. This research has been done by using
quantitative research and causality method. The population is all districts and cities in East Java Province i.e. 38
areas with the observation periods from 2011 to 2015 and the sample collection technique has been conducted by
using purposive sampling. The data analysis technique has been carried out by using multiple linear regressions.
Based on the result of the hypothesis test it can be concluded that: 1) local own source revenue (PAD) gives
positive influence to the local expenditure. 2) General allocation fund (DAU) gives positive and significant
influence to the local expenditure. 3) Special allocation fund (DAK) gives significant and positive influence to
the local expenditure. 4) The coefficient value of the General Allocation Fund is greater than coefficient value of
Local Own Source Revenue, it shows that the flypaper effect has occurred in local expenditure of cities/districts
in East Java Province.
Keywords: PAD, DAU, DAK, local expenditure, flypaper effect.