The Effect Of Central Government Transfer Funds On Regional Financial Independence

Abstract

Effective and efficient governance is one of the primary goals in state administration, particularly in the context of decentralization and regional autonomy. Decentralization serves as a strategic policy that grants local governments the authority to independently manage governmental affairs and local resources. This study aims to analyze the influence of Special Allocation Funds (DAK), General Allocation Funds (DAU), and Revenue Sharing Funds (DBH) on regional financial independence in the City of Baubau. The research is motivated by the crucial role of central government transfer funds in supporting the implementation of regional autonomy and enhancing the fiscal capacity of local governments. This study employs a quantitative approach using multiple linear regression analysis. The data utilized are secondary, consisting of regional revenue budget realization reports for the City of Baubau from 2014 to 2024. Testing was conducted through partial tests (t-test), simultaneous tests (F-test), and coefficient of determination tests (R²). The results indicate that partially, Special Allocation Funds (DAK) and General Allocation Funds (DAU) have no significant influence on regional financial independence, while Revenue Sharing Funds (DBH) have a significant influence. However, simultaneously, DAK, DAU, and DBH do not significantly affect regional financial independence. The Adjusted R-Squared value of 0.313 shows that the three independent variables explain only 31.3% of the variation in regional financial independence, with the remainder influenced by other factors outside the research model.