Desentralisasi Fiskal

1. DESENTRALISASI FISKAL
Ir. Deddy S. Bratakusumah, BE, MURP, M.Sc, PhD
deddys@bappenas.go.id
2014

2. DEDDY S BRATAKUSUMAH, 2016 2
BIODATA
Deddy Supriady Bratakusumah, PhD was born in Bandung, Indonesia in December 19, 1954. His elementary educations was
completed in Bandung. He was graduated the degree of Civil Engineer from State Polytechnic (ATN) in 1977, and the degree of
Sanitary Engineer from Institute of Technology Bandung (ITB) in 1983. In August 1991 he was granted the degree of Master of
Urban and Regional Planning from School of Architecture, University of Miami, Florida, USA. He received Master of Science
degree in Regional Science from Cornell University, Ithaca, New York, USA, in January 1996, and finally he granted the PhD in
Regional Science in May 1996 from Cornell University, USA.
He also attended some short courses: (1) The Economics Institute, University of Colorado, Boulder, USA, 1989, (2) The Harvard
Institute of Affordable Housing, Harvard University, USA, 1990, (3) The Institute for Public-Private Partnerships, Washington,
DC., 1995, (4) JICA, Training Course on Local Government Administration for Indonesia, Hiroshima, Japan, 2001, (5) The Johns
Hopkins University and LAN-RI, Training of Trainers (TOT) on Learning Organization and Systems Thinking (LOST), Jakarta,
2003, (6) Endeavour Executive Award, University of New South Wales, Sydney, Australia, 2008, (7) Innovative Government, Lee
Kuan Yew School of Public Policy, Singapore, 2009, (8) Change Management in a Globalized World, London School of
Economics and Political Science, London, 2012, (9)Training for Trainers on Monitoring and Evaluation, Takushoku University,
Tokyo, Japan, 2015, (10) Urban Nexus Training of Trainers (ToT), German Cooperation, GIZ and Bappenas, Jakarta, 2018. (12)
Japan-IMF Macroeconomic Seminar for Asia (JIMS), National Graduate Institute for Policy Studies (GRIPS), Tokyo, Japan, 2019.

3. DEDDY S BRATAKUSUMAH, 2016 3
His carreer began as an individual consultant in some consulting firms from 1977 until 1986. Since 1986 he is working as
Civil Servant at National Development Agency (Bappenas)/Ministry of National Development Planning, his position among
others; (1) Development Planner, (2) Chief of the Local Autonomy Study Center, (3) Chief of the National Civil Servant
Training Center, (4) Advisory Expert to Minister on Governance and Local Autonomy, (5) Deputy Minister for Governance,
and (6) Senior Planner and Trainer in Governace.
During his tenure he is also serving as lecturer in IPB University, University of Indonesia, Pasundan University, Brawijaya
University and Esa Unggul University. He is academic rank is “Lektor”.
Email Address: deddys@bappenas.go.id
pakbrata@gmail.com
Mobile: +62 816968367

4. FISCAL DECENTRALIZATION

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THE NECESSITY FOR FISCAL DECENTRALIZATION
(BENNET, 1990)
1. EFFICIENCY VALUES- “MAXIMIZATION” OF SOCIAL WELFARE
TAKING INTO ACCOUNT INABILITY OF THE PUBLIC SECTOR TO
CONTAIN THE SAME PRICE SIGNALS AS THE PRIVATE SECTOR, TO
REGULATE SUPPLY AND DEMAND;
2. GOVERNANCE VALUES INCLUDING RESPONSIVENESS AND
ACCOUNTABILITY, DIVERSITY, AND POLITICAL PARTICIPATION.

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DIMENSION OF POWER AND RESPONSIBILITY BETWEEN CENTRAL AND LOCAL
GOVERNMENTS DEPENDS ON THESE FACTORS:
1. WHAT RANGE OF PUBLIC SERVICES THEY FINANCE;
2. WHETHER THEIR REVENUES ARE COMMENSURATE WITH THESE
RESPONSIBILITIES;
3. HOW MUCH REAL CHOICE THEY HAVE IN ALLOCATING THEIR BUDGET TO
INDIVIDUAL
4. SERVICES;
5. WHETHER THEY CAN DETERMINE THE RATES OF THEIR TAXES AND CHARGES
FACTORS FOR FISCAL DECENTRALIZATION
(DAVEY, 2003)

7. DECENTRALIZATION OF SPENDING
EFFICIENCY IN ALLOCATION OF RESOURCES IS BEST SERVED BY ASSIGNING
RESPONSIBILITY FOR EACH TYPE OF PUBLIC EXPENDITURE TO THE LEVEL OF
GOVERNMENT THAT MOST CLOSELY REPRESENTS THE BENEFICIARIES OF
THESE OUTLAYS
(TER-MINASSIAN, 1997)
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8. CENTRALIZED PROVISION
FOR CENTRALIZED PROVISION CAN BE MADE –AT LEAST ON ALLOCATIVE
GROUNDS- ONLY FOR NATIONAL PUBLIC GOODS, THAT IS, GOODS WHOSE
BENEFITS EXTEND NATION WIDE OR WHOSE PROVISION IS SUBJECT TO
SUBSTANTIAL ECONOMIES OF SCALE
(TER-MINASSIAN, 1997)
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9. REVENUE-RAISING RESPONSIBILITY
BY SEPARATING SPENDING AUTHORITY FROM REVENUE-RAISING
RESPONSIBILITIES, THESE ARRANGEMENTS OBSCURE THE LINK BETWEEN THE
BENEFITS OF PUBLIC EXPENDITURES AND THEIR PRICE, NAMELY, THE TAXES LEVIED
TO FINACE THEM. THUS THEY DO NOT PROMOTE FISCAL RESPONSIBILITY IN
SUBNATIONAL POLITICIANS AND THEIR ELECTORATE
(TER-MINASSIAN, 1997)
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10. CENTRAL GOVERNMENT TAX ASSIGNMENT
CENTRAL GOVERNMENT SHOULD BE ASSIGNED TAXES THAT HAVE CERTAIN
CHARACTERISTICS:
1. THEY ARE LEVIED ON THE MOBILE TAXE BASE,
2. THEY ARE MORE SENSITIVE TO CHANGES IN INCOME, THAT IS, THEY HAVE
HIGHER INCOME ELASTICITY,
3. THEY ARE LEVIED ON TAX BASES THAT ARE DISTRIBUTED UNEVENLY ACROSS
REGION
(TER-MINASSIAN, 1997)
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11. SUBNATIONAL TAX
SUBNATIONAL TAX CHARACTERISTICS
1. THE TAX BASE SHOULD BE RELATIVELY IMMOBILE, TO ALLOW LOCAL
AUTHORITIES SOME LEEWAY IN VARYING RATES WITHOUT LOSING MOST OF
THEIR TAX BASE,
2. THE TAX YIELD SHOULD BE ADEQUATE TO MEET LOCAL NEEDS AND
SUFFICIENTLY BOUYANT OVER TIME (THAT IS, IT SHOULD EXPAND AT LEAST AS
FAST AS EXPENDITURES)
3. THE TAX YIELD SHOULD BE RELATIVELY STABLE AND PREDICTABLE OVER TIME
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12. SUBNATIONAL TAX
4. IT SHOULD NOT BE POSSIBLE TO EXPORT MUCH, IF ANY, OF THE TAX BURDEN
TO NON-RESIDENTS
5. THE TAX BASE SHOULD BE VISIBLE, TO ENSURE ACCOUNTABILITY
6. THE TAX SHOULD BE PERCEIVED TO BE REASONABLY FAIR BY TAXPAYERS
7. THE TAX SHOULD BE RELATIVELY EASY TO ADMINISTER EFFICIENTLY AND
EFFECTIVELY
(BIRD & VAILLANCOURT, 1998)
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13. INTERGOVERNMENTAL TRANSFER
SINCE MOST MAJOR TAXES ARE TYPICALLY ASSIGNED TO THE CENTRAL
GOVERNMENT, WHILE SUBSTANTIAL AND GROWING EXPENDITURE
RESPONSIBILITIES ARE DEVOLVED TO REGIONAL AND LOCAL GOVERNMENTS,
SIZEABLE VERTICAL IMBALANCES EMERGE AT THE SUBNATIONAL GOVERNMENT
LEVEL
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14. INTERGOVERNMENTAL TRANSFER
THERE ARE ALSO HORIZONTAL IMBALANCES, BECAUSE THE CAPACITY TO RAISE
OWN REVENUES DIFFERS ACROSS JURISDICTIONS, DEPENDING ON THE
DISTRIBUTION OF THEIR ASSIGNED TAX BASES, AND ALSO BECAUSE DIFFERENT
REGIONS MAY FACE DIFFERENT COSTS AND DEMAND PRESSURES IN MEETING
THEIR ASSIGNED EXPENDITURE RESPONSIBILITIES
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15. INTERGOVERNMENTAL TRANSFER
THESE IMBALANCES MUST BE ADDRESSED THROUGH INTERGOVERNMENTAL
TRANSFERS, OR BORROWING BY DEFICIT JURISDICTIONS, OR A COMBINATION OF
THE TWO
(TER-MINASSIAN, 1997)
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16. THANK YOU
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