Local government
performance in West Java now has a new, more inclusive benchmark using the
Gender Development Index (GDI) as a key indicator of development success. A
study conducted by Fitria Pandan Sari, Moermahadi Soerja Djanegara, and David
HM Hasibuan from the Institut Bisnis dan Informatika Kesatuan demonstrates that
intergovernmental transfers play a significant role in enhancing local
government performance. This research, covering the 2020–2024 period, is
important because it shifts the focus of regional success from mere economic
growth to the equitable distribution of access to health, education, and living
standards between men and women.
Research Context and
Methodology
Historically, local
government performance evaluations have often relied on macroeconomic
indicators that fail to capture the quality of community well-being.
Consequently, the researchers adopted the GDI to measure the effectiveness of
fiscal policy across 27 regencies and municipalities in West Java. This study
analyzed 135 observations of panel data using a Fixed Effect regression model
to examine how transfer revenue and capital expenditure influence government
performance, with total regional assets acting as a moderating variable.
Key Findings
The analysis of data
from the past five years revealed several key points:
·
Positive Impact of Transfer
Revenue: Transfer revenue received by
regional governments is proven to have a positive and significant influence on
improving government performance. These funds provide the necessary fiscal
space for local governments to finance strategic programs in health and
education.
·
Capital Expenditure and Assets
Underutilized: Directly, capital
expenditure and total assets do not show a significant influence on performance
improvements. This indicates that simply having large assets or high capital
budgets does not automatically translate into better development outcomes.
·
Moderating Role of Total Assets: Total assets were found to weaken the relationship
between transfer revenue and government performance. This occurs because large
assets often carry high maintenance costs, absorbing budgets that could
otherwise be utilized for more productive development programs.
Implications for
Regional Policy
These findings suggest
that local governments should be more transparent and accountable in managing
transfer revenue to ensure direct impacts on inclusive development.
Furthermore, it is recommended that local governments undertake asset
rationalization—including managing or disposing of idle assets—to improve
fiscal flexibility. Improving the quality of capital expenditure planning is
also crucial to ensure that infrastructure investments deliver tangible
benefits to the broader community.
Author Profile:
- Fitria Pandan Sari (Institut Bisnis dan Informatika Kesatuan) – Expertise:
Public Sector Accounting and Financial Management.
- Dr. Moermahadi Soerja
Djanegara- (Institut Bisnis
dan Informatika Kesatuan) – Expertise: Auditing and Public Sector Finance.
- David HM Hasibuan- (Institut Bisnis dan Informatika Kesatuan) – Expertise:
Public Sector Management.
Research Source:
Sari, F. P., Djanegara, M. S., & Hasibuan, D. H. M. (2026). "The Influence of Intergovernmental Transfer and Capital Expenditure on Local Government Performance with Total Assets as a Moderating Variable". Contemporary Journal of Applied Sciences (CJAS), 4(5), 479-496.
DOI: https://doi.org/10.55927/cjas.v4i5.181
URL: https://ntlformosapublisher.org/index.php/cjas
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