APAKAH TRANSFER PEMERINTAH BERSIFAT MELEKAT? MENELUSURI FLYPAPER EFFECT DI BERBAGAI PROVINSI DI INDONESIA

Purpose: By examining the impact of general allocation funds (DAU), special
allocation funds (DAK), revenue-sharing funds (DBH), and Locally-generated
revenue (PAD) on regional expenditure from 2021 to 2025, this study aims
to re-examine the phenomenon of the flypaper effect on Indonesian local
governments.
Research Method: Panel data regression analysis is the tool of choice for
this quantitative investigation. This study's population comprises Indonesian
provinces, and the sample comprises 165 panel observation points,
collected through purposive sampling over a 5-year observation period. The
EViews 14 program is used to process the data.
Results and Discussion: Both the general allocation fund (DAU) and the
revenue-sharing fund (DBH) positively affect regional expenditure. However,
the effects are not statistically significant, according to the study's findings.
However, locally generated revenue (PAD) and the Special Allocation Fund
(DAK) have a significant positive effect on regional expenditure. These
results demonstrate that reliance on federal transfer money has less impact
on regional expenditure than the capacity of local governments to generate
locally generated revenue. There is substantial evidence that DAK affects
regional spending, although this impact is much lower than PAD's. This
proves that the flypaper impact on regional expenditure is nonexistent.
Implications: According to these results, local governments must continue
working toward greater financial independence by making the most of PAD
sources such as regional taxes, levies, and asset management. Meanwhile, it
is the central government's responsibility to ensure that regional
development is still supported through funding transfers.
Originality: The results of this research disprove the hypothesis that
regional expenditure by Indonesian provinces is subject to the flypaper
effect.