| dc.description.abstract | The history of economic development has shown that New Order built the strong governmental within the political stability as it is a necessary condition to accelerate development in all sectors especially in economic sector. In term of political stability, the government built the centralized political and governmental structure. However, the centralized development couldnot fairly distribute the output of development. The development was dominated by central region. Moreover, in provincial region, development was concentrated in its city, only few in some districts, besides that, there is not a fairly distributed between district. Disparity of economic development already pushed the regional autonomy movement. The movement accomodated by Government and Representatives by issues the Law No.22 Year 1999 and Law No.25 Year 1999. The research objectives are (1) to describe the fiscal performance before and after fiscal decentralization policy (2) to analyze the factors which influence districts and municipalities fiscal and economy performance (3) to evaluate the impact of fiscal decentralization policy and changes of non fiscal variable on district and municipalities fiscal and economy performance, and (4) to forecast the impact of fiscal decentralization on districts and municipalities fiscal and economy performance in 2006-2008 . Constructed North Sumatera’s Fiscal decentralization Econometric Model consists of three blocks that is (1) distric fiscal block (2) invesment and infrastructure block, and, (3) economic performance block. Using pool data (cross section 17 districts, and municipalities and time series 1990-2003). Model is estimated by 2SLS (two stage least squares) method, SYSLIN procedure and historical simulation and forecasting by SIMNLIN procedure. The research concludes that (1) districts and municipalities sources before and after fiscal decentralization policy are dominated by central government equalization transfer fund (2) the central government equalization transfer is determined by level of economy, social and physical condition of the districts and municipalities, on the other hand the income level and job opportunities are influenced by the degree of investment certainty and wage level (3) the increase General Transfer Fund (Dana Alokasi Umum) to the districts and municipalities has raised the level of income, job opportunities and distribution of income (especially in the districts), and (4) the increase of General Transfer Fund (Dana Alokasi Umum) in the future will be expected rise up the government revenue and expenditure, income, job opportunities and distribution of income (especially in districts). Policy Implications are (1) the government should reduce the routine expenditure and allocate them to be development expenditure because it results in region fiscal and economic performance positively (2) the government should managed wage policy properly and carefully, because inappropriate wage policy will cause to most of fiscal and economic performance, and (3) should decrease transaction cost in order to alleviate fiscal deficit and the central government should relocate higger revenue source to the region. | id |
