Regional Economic Growth: Effectiveness of Local Revenues and Equalization Funds

Abstract

The rapid development of regions requires a large allocation of development funds, causing local government spending to also increase. The amount of regional expenditure is determined by the amount of income of the region concerned. Regional income plays an important role in the welfare of the community and creating regional independence. This study aims to determine and analyze the effect of Regional Native Income and Equalization Fund on Economic Growth in Maros Regency. This research was conducted in Maros district, South Sulawesi Province, Republic of Indonesia. This research uses a quantitative approach with data collection methods in the form of data collection through documentation and available data. The source of data in this study is in the form of secondary data, namely in the form of documents regarding the realization of local original income and equalization funds obtained from the Regional Finance and Assets Agency of Maros Regency and data on the realization of economic growth seen from the Gross Regional Domestic Product on the basis of constant prices obtained from the Regional Development Agency of Maros Regency. Data analyzed using multiple linear regression analysis with IBM SPSS statistical program version 25.0. The results showed that (1) Regional Original Income had a positive and significant effect on Economic Growth, (2) the Equalization Fund had a positive but not significant effect on economic growth.