This study explores the flypaper effect in Indonesia using a spatial approach. Covering data from 2000-2014, the paper shows that grants stimulate overspending by local governments even though spatial interdependence is carefully treated. The elasticity of lump-sum grants to expenditure is stronger than the elasticity of matching grants. Further, the elasticity of lump-sum grant is greater on r…
The paper presents the top-down (formula-based) approach in allocation of specific purpose grants for infrastructure (DAK fisik) in education by considering the needs of infrastructure in education. First, we estimate the needs of education infrastructure by calculating the gap between current condition of infrastructures and the minimum required infrastructures in education. Then, we translate…