Publication Details |
| Category | Text Publication |
| Reference Category | Conference papers |
| URL | https://www.conftool.com/isee2010/index.php?page=browseSessions&form_session=124&presentations=show&downloads=show |
| Title (Primary) | Ecological fiscal transfers at the provincial level in Indonesia |
| Title (Secondary) | International Society for Ecological Economics (ISEE) 11th Biennial Conference "Advancing Sustainability in a Time of Crisis", Oldenburg and Bremen (Germany), 22 -25 August 2010 |
| Author | Mumbunan, S.; Ring, I.; Lenk, T. |
| Year | 2010 |
| Department | OEKON |
| Page From | 1 |
| Page To | 34 |
| Language | englisch |
| Keywords | Ecological fiscal transfers; intergovernmental fiscal transfers; environment; protected area; fiscal equalization; Indonesia |
| Abstract | A region of ecological importance which produces uncompensated cross-spatial positive spillovers is often comparatively in a higher fiscal need due to the cost it incurs fornature conservation. This is an observed phenomenon of both developed and developing, and centrally organized or decentralizing countries, including Indonesia. There are a number of policy options for appropriately acknowledging and introducing fiscal needs for nature conservation into the system of intergovernmental fiscal transfers. Here, the fiscal instrument of lump-sum or general purpose transfers is proposed, by introducing an explicit ecological indicator into Indonesia's existing fiscal formula of deriving a jurisdiction's fiscal need. In addition to present socio-economic dimensions, protected area - as a plausible proxy for the ecological dimension that fulfils the required condition of simplicity for fiscal need calculation - is incorporated into the country's existing and functioning fiscal transfer system. Building on the already existing area-based approach in the calculation of a jurisdiction's fiscal need, we run simulations of different proportions of a newly introduced indicator related to protected area and area in general. The purpose is twofold: (i) to examine the impact of new ecological fiscal transfers on the configuration of transfer distribution, and (ii) to examine the equalization effect of the ecological fiscal transfers. Both examinations are carried out at the level of provincial government. Our results suggest that - compared to the baseline scenario of real DAU transfers in fiscal year 2007 - the new ecological fiscal transfers would benefit roughly a third of the Indonesian provinces due to their protected area coverage with an average increase of DAU transfers from ca. 4.4 to 13.1 percent, depending on the weighting of protected area against general area. As the simulations do not assume extra funds for ecological fiscal transfers, but Mumbunan, S., Ring, I., Lenk, T.: Ecological fiscal transfers at the provincial level in Indonesia ISEE 2010, 22-25 August 2010, Oldenburg, Germany 2 are modeled with available funds for DAU transfers, about two thirds of the provinces would receive less transfers in the range of -1.7 to -5.2 percent. However, in another line of interpretation, this means that all provinces losing with the introduction of a protected area indicator into the fiscal transfer system presently free ride on those provinces that stand out for their high protected area coverage, and thus, currently contribute without any financial compensation of their costs to nature and biodiversity conservation of national and global relevance. From a public finance perspective and looking at the dimension of distributive equity, our results interestingly suggest that the new ecological fiscal transfers are more equalizing than the existing general purpose transfers. Furthermore, the equalizing effect increases as the proportion of protected area increases. |
| Persistent UFZ Identifier | https://www.ufz.de/index.php?en=20939&ufzPublicationIdentifier=10333 |
| Mumbunan, S., Ring, I., Lenk, T. (2010): Ecological fiscal transfers at the provincial level in Indonesia International Society for Ecological Economics (ISEE) 11th Biennial Conference "Advancing Sustainability in a Time of Crisis", Oldenburg and Bremen (Germany), 22 -25 August 2010 Universität Oldenburg, Oldenburg, 1 - 34 |
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