Publication: A Note on the Indonesian Sub-National Government Surplus, 2001-2006
Loading...
Published
2008-01
ISSN
Date
2017-09-08
Author(s)
Editor(s)
Abstract
The Indonesian government has devolved significant expenditure authority to sub-national units since 2001. New sub-national government expenditure assignments have been paid for by a substantial increase in intergovernmental transfers to lower levels of government. The center has decided against devolving any significant new tax authority to the regions, at least for the time being. This note examines some fundamental issues related to these unspent funds. The paper has two particular objectives. First, the paper describes the basic features of sub-national government surplus and reserves since decentralization, including their size and spatial distribution. Second, it seeks to explain the observed variation in surplus across sub-national governments, according to some standard hypotheses. The paper proceeds as follows. First, some basic information regarding the buildup and geographic distribution of sub-national reserves is offered. Second, the methodological approach to the study of sub-national government surpluses is detailed. Third, the results of the econometric examination are presented and discussed. Finally, the note closes with a summary of the main findings and a proposal for some additional research that might be useful in the continuing development of central policy in this area.
Link to Data Set
Citation
“Lewis, Blane D.. 2008. A Note on the Indonesian Sub-National Government Surplus, 2001-2006. © World Bank. http://hdl.handle.net/10986/28246 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Sub-National Performance Incentives in the Intergovernmental Framework(World Bank, Washington, DC, 2008-06)This paper provides background for the Government of Indonesia as it considers if and how to introduce more robust local government performance incentives into the intergovernmental fiscal framework. The next section briefly examines the forces that have driven the recent national wave of interest in improving local government performance. This is followed by a review of the relatively limited set of local government performance incentives currently in force in Indonesia. The fourth section provides a conceptual overview of how to think about the possible expansion of local government incentive programs, outlining the potential role(s) of such programs in general and the key issues involved in designing and implementing them. The fifth section tentatively considers a number of options for additional local government incentives in Indonesia that the central government may wish to consider pursuing. The paper concludes with an outline of next steps for moving forward with the possible development of more purposeful and meaningful performance incentives in Indonesia's intergovernmental fiscal framework.Publication Philippines : Study on Local Service Delivery(Washington, DC, 2011-03)This policy note analyzes the composition of public expenditures that support devolved services (including the resource allocation decisions that support these expenditures), an assessment of the quality of local service delivery based on available local data, and an evaluation of the interactions between various public entities that finance and provide local services. The report includes reviews of local capital investments, local road sector, and the local health sector. The findings from the case studies suggest the need for the rationalization, harmonization, and simplification of local planning and budgeting requirements prescribed by national government oversight agencies. There is also strong need for the national government to clarify the assignment of administrative responsibility for local roads in order to improve the planning and coordination of investments. Finally, the Department of Health should continue to build on its comprehensive reform agenda, which is focused on creating incentives for the local government unit's health sector performance and strengthening systems of local accountability for the province-wide health system.Publication Revising Vietnam's State Budget Law (2002) : Proposals Drawing on International Experience(World Bank, Vietnam, 2014-04-08)This Policy Note is designed to inform the Government of Vietnam and National Assembly (notably the Committee on Finance and Budgetary Affairs, CFBA) discussions on the revision of the State Budget Law (SBL) (2002) by drawing on good international practices in budget management. It is part of the World Bank s ongoing policy dialogue with and advice to the Government and the National Assembly on revisions to the SBL (2002). The SBL (2002) has provided a strong basis for regulating Public Finance Management (PFM) in Vietnam since 2004, when the Law became effective. It has helped the government to allocate and spend public resources in an effective manner, thereby contributing to delivery of important public service outcomes. The SBL (2002), however, needs to be revised to enhance Vietnam s fiscal regulatory framework and accountability. The Policy Note covers seven broad areas including: (i) the coverage and layout of the SBL (2002); (ii) the budget framework for fiscal policy making; (iii) budget approval processes at the National Assembly and Provincial People s Councils; (iv) specific budget classification and definition issues; (v) intergovernmental fiscal relations; (vi) budget execution, accounting, reporting and audit; and (vii) extra-budgetary activities. The issues in the Policy Note were prioritized based on earlier discussions with representatives from the Government, National Assembly, and local authorities, and views expressed at the CFBA and United Nations international conference on SBL (2002) revision held in Ninh Binh at the end of September 2013.Publication Development of 13 Mozambican Municipalities in Central and Northern Mozambique : Summary report(World Bank, 2011-04-01)The objective of this study on the Development of 13 Mozambican Municipalities in Central and Northern Mozambique is to assess the impact that the 2008 reforms on own-source revenues is having on the municipal revenue potential. To do so, it calculates the revenue potential of four fiscal and three non-fiscal revenue sources. The analysis shows that there is substantial untapped revenue potential at the municipal level, with estimates indicating that -in the case of the most buoyant local revenue sources- municipalities are only collecting about half of the revenue potential. In the worst cases, municipalities are collecting far less than 10 percent of the total revenue potential of a local revenue source. The fact that a revenue gaps exists is not only an indication of weak municipal performance. Municipalities have relatively recently been created and it takes time, capacity, and effort, to consolidate their revenue functions. Tax administration is overall still weak and a series of vacuums exist on the municipal fiscal legislation. The analysis reveals that the current revenue instruments at the disposal of municipalities are generally appropriate municipal revenue instruments, so that efforts at the national and municipal levels should be made to build the capacity of the local tax administration to collect these revenues. The report provides specific suggestions on ways to strengthen the revenue collection for the main municipal revenue instruments. However, in addition to increasing municipal tax effort, the expenditure needs of municipalities are so demanding that additional intergovernmental transfers and tax sharing arrangements should also be considered as a building block of municipal finances in Mozambique. The results of this study aim to become part of the ongoing dialogue with the municipalities and national tax authorities to expand the understanding of municipal revenues in Mozambique on the basis of more sound empirical evidence. The scope of this analysis was limited to a sample of six municipalities. In-depth case studies were prepared for each of these municipalities, upon which the current Summary Report is based. The six case municipalities include: Beira, Cuamba, Marromeu, Nacala, Ribaue, and Vilankulo. To bring the Summary Report and the six municipal cases together in the most effective way, the current report follows the same structure as each of the municipal cases. The diagnosis of the current situation is presented in Section 2, followed by a discussion on the estimation of municipal revenue potential in Section 3. Proposals and recommendations regarding the strengthening of municipal revenue collection are presented in Section 4.Publication Service Delivery and Decentralization in Sri Lanka : Assessment and Options(Washington, DC, 2006-05-15)This report assesses Sri Lanka's experience with decentralization to date and discusses options for decentralization and implications for service delivery in three sectors: roads, solid waste and health. The selected sectors illustrate the considerations relevant to the decentralization decision and its future direction. The services selected cover a range of central, provincial and local responsibilities in delivery and illustrate how the cause of success or failure of service delivery is rooted in the institutional framework, division of responsibility, funding mechanisms i.e. incentives and accountability. The effective provision of these services requires a clear understanding of the service delivery goals, technical capacity, adequate assets and recurrent inputs to deliver services. Each sector has its particular needs and to some extent can be considered independently, but the political realities effectively require that any constitutionally mandated and elected level of government have some corresponding responsibilities.
Users also downloaded
Showing related downloaded files
Publication Lebanon Economic Monitor, Fall 2022(Washington, DC, 2022-11)The economy continues to contract, albeit at a somewhat slower pace. Public finances improved in 2021, but only because spending collapsed faster than revenue generation. Testament to the continued atrophy of Lebanon’s economy, the Lebanese Pound continues to depreciate sharply. The sharp deterioration in the currency continues to drive surging inflation, in triple digits since July 2020, impacting the poor and vulnerable the most. An unprecedented institutional vacuum will likely further delay any agreement on crisis resolution and much needed reforms; this includes prior actions as part of the April 2022 International Monetary Fund (IMF) staff-level agreement (SLA). Divergent views among key stakeholders on how to distribute the financial losses remains the main bottleneck for reaching an agreement on a comprehensive reform agenda. Lebanon needs to urgently adopt a domestic, equitable, and comprehensive solution that is predicated on: (i) addressing upfront the balance sheet impairments, (ii) restoring liquidity, and (iii) adhering to sound global practices of bail-in solutions based on a hierarchy of creditors (starting with banks’ shareholders) that protects small depositors.Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.