Ecological fiscal transfers in Indonesia. Von der Wirtschaftswissenschaftlichen Fakultat. der Universitat Leipzig. genehmigte DISSERTATION

Transcription

1 Ecological fiscal transfers in Indonesia Von der Wirtschaftswissenschaftlichen Fakultat der Universitat Leipzig genehmigte K DISSERTATION zur Erlangung des akademischen Grades Doctor Rerum Politicarum (Dr. rer. pol.) vorgelegt von M.Sc, Sonny Mumbunan geboren am in Minahasa, Indonesien. Gutachter: Prof. Thomas Lenk Prof. Bernd Hansjiirgens Tag der Verleihung: C

2 Table of contents Summary Acknowledgements Table of contents List of figures List of tables List of abbreviations iii v vii xi xiii xiv 1. Introduction 1 1. Ltjlesearch motivation and problem Objectives and research questions Structure of the study 9 2. The conceptual framework for ecological fiscal transfers Economic foundation of fiscal federalism Division of fiscal functions The allocative dimension The distributive dimension The stability dimension Responsibility assignment of public function Passive fiscal transfer Active fiscal transfer Intergovernmental fiscal transfers The mechanism for fiscal transfer design Normative requirements Requirements in compliance with a fiscal axiomatic system Requirements for technical implementation 45

3 Requirements for the fiscal transfer mechanism Vertical fiscal transfers The instruments A taxonomy of intergovernmental fiscal transfer programs Horizontal fiscal transfers The normative concept of fiscal transfer Practical approaches in determining of fiscal transfer The determination of fiscal capacity The determination of fiscal need Fiscal gap The inclusion of ecological issues into fiscal federalism and fiscal transfer Environmental federalism A note on terminology The adjectives "environmental" and "ecological" The "public" and the ecological public function Empirical works on the proposal of EFT Ecological fiscal transfers in praxis: Revenue-sharing arrangement in Brazil and general-purpose transfer in Portugal Proposals of ecological fiscal transfers Recapitulation of the concept and further research questions The Indonesian intergovernmental fiscal transfer system Administrative structure and fiscal transfer system The fiscal system prior to decentralization The evolution of the fiscal transfer system The elements of past fiscal transfers General-purpose transfer 115 Vlll

4 Specific-purpose transfer The present fiscal transfer system General purpose grant (DAU) Basic allocation grant Fiscal gap formula The iteration process of DAU allocation Specific-purpose grant (DAK) Revenue-sharing fund (DBH) Shared revenues from taxes Shared revenues from natural resources The financing of environmental expenditures and ecological public functions Before decentralization The transition period and the present Policy options for ecological fiscal transfers The incorporation of ecological indicators into the fiscal need formula Policy options for "greening" the revenue-sharing schemes Assigning shared revenues from taxes (DBH Pajak) on the basis of an ecological indicator Earmarking shared revenues from natural resources (DBH SDA) for environmental purposes The extension of ecological public functions in the specific-purpose fund (DAK Lingkungan) A summary of the policy options An excursus: Channeling global REDD funds into the Indonesian fiscal system The simulation of ecological fiscal transfers at the provincial level General-purpose transfer and the area approach 182

5 5.1.1 Why a general-purpose transfer, why a DAU? The present area approach and its extension The importance of area-based approach Extending the present area approach Simulations, results and limitations The simulation The fiscal need formula Choice of parameter values Assumptions, data and the simulation process Results and discussions The impact on fiscal distribution Spatial distribution of transfer The equalization effect Potential shortcomings of the simulation Conclusions and perspectives for further research Conclusions Perspectives for further research 236 Annex 239 References 246