Analysis of Flypaper Effect on the District and Municipality Government Expenditures in North Sumatra Province

Abstract

This study aims to analyze the flypaper effect on the district and municipality government expenditures in North Sumatra province. Research data in the form of secondary data sourced from reports on the budget realization report with the study period from 2011 to 2014. The technique of analysis using regression. The sample method using purposive. Sample consists of 27 regencies consisting of 22 districts and 5 municipalities. The results showed flypaper effect on the district and municipality government expenditures in North Sumatra province. However, if the analysis is conducted only on municipality governments in the North Sumatra province there is no flypaper effect on government expenditures. These findings suggest a disparity between district and municipality governments on dependence on transfer funds from the central government. In general, local governments are still dependent on transfer funds provided by the government and are not yet optimal in exploring local own revenues, which are dominated by newly-formed district government of North Sumatra.