Judul: Impact of fiscal capacity on regional economy and sectoral poverty in Indonesia: a policy simulation analysis
Abstrak: Poverty alleviation is an important agenda of national economic development in Indonesia. In order to accelerate the achievement of economic development goals, Indonesian government has been implementing fiscal decentralization policy since 2001. The policy was successful in increasing the rate of economic growth, but the income inequality became larger so that the poverty rate and the proportion of poor people in agricultural households has been increased. The implementation of fiscal decentralization policy in Indonesia which is focused on fully shifting expenditure assignment from central government to local government has lead to higher local expenditures as local governments strategies to increase their economic growth. However, the revenue assignments authority is limited so that fiscal capacity is low. As a result, the fiscal deficit is overcome by transfer General Allocation Fund (DAU) from the central government and also the local financial structures are mostly depend on DAU. Previous studies found the flypaper effect phenomenon as greater response of local governments in the use of budget sourced from DAU than those from original local revenue (PAD). Accordingly, if flypaper effect occurred in local expenditures with no great impact on poverty reduction then great role of DAU on local financial structure could not accelerating poverty alleviation. Therefore, fiscal capacity should be increased. The objective of this study is to analyze impact of fiscal capacity increasing on fiscal performance, sectoral economic performance, sectoral poverty rates, income inequality, and proportion of poor people in agricultural households by using a model of simultaneous equations system with province and regencies aggregate panel data in 23 provinces during 2005-2011 and Two Stage Least Squares (2SLS) estimation method. The impact analysis of policy simulations is performed on historical period of 2006-2011 and forecast period of 2013-2015. Several important findings are: (1) fiscal capacity influences agriculture and infrastructure expenditures as important factors for agricultural growth and asphalt road infrastructure which further give high effects in reducing poverty rates, income inequality, and proportion of poor peopole in agricultural households; (2) fiscal capacity of local taxes is influenced by per capita Gross Domestic Regional Product (GDRP) and local private investment; (3) fiscal capacity of tax-revenue sharing is influenced by GDRP of non-agricultural sectors which are potentially increasing individual income tax (PPh) as the main source of tax revenue sharing; and (4) the alternative policies of the increasing of local agricultural and industrial expenditures larger than the increasing of trade expenditure, increasing of local portion from tax revenue sharing, and increasing of private direct investments mainly in agricultural provinces will increase fiscal capacity and give great impact on the improvement of fiscal performance, economic performance, and sectoral poverty which are indicated by higher fiscal autonomy rate, sectoral GDRP rate, and sectoral employment rate as well as lower sectoral headcount index, Gini Index, and proportion of poor people in agricultural household. Therefore, to achieve greater local economic growth, lower poverty rates, lower income inequality, and lower proportion of poor people in agricultural households as well as to achieve poverty targets on national development agenda RPJMN 2014 in the amount of 8-10 % and MDGs 2015 in the
Keyword: fiscal capacity, economic growth, income inequality, sectoral poverty

Judul: Impact of government spending on economic performance and poverty allevation in term of fiscal decentralization
Abstrak: The purposes of this study were to analyze the factors affecting the revenue and allocation of national budget and local government spending and its impact on the economy, flypaper effect, and to formulate policy recommendations in term of more effective and efficient government spending. This study used pooled data at the provincial level on period 2005-2010 and a simultaneous equations model applied to capture the behaviour of each variables. The results were: (1) potential local goverment revenue, fiscal need, and central government transfer were factors that determined the local goverment revenue, sharing revenue, and central government transfer, (2) flypaper effect occured on local expenditures, (3) decocentration funding and assistant task in agricultural sector had more affect on the growth of the agricultural sector, (4) sectoral budget allocation has a positive impact on the economic growth, employment, welfare and poverty allevation, especialy on Indonesia Easterm Regions and (5) The increased general fund allocation (DAU) had a greatest impact on fiscal performance and the regional economy (6) increase revenue-sharing and specific fund had positive impact on economic growth and reduce local government depedency on central government budget. Policy recommendations were: (1) enhancing the sources of local revenue potentially to be the alternative policy due to the fact that increased DAU provide the greatest impact to the regional economy, but will lead to increased dependency to the central government, then increasing revenue sharing may improve fiscal capacity and economic performance, (2) realocation of routine spending to development spending may improve economic performance, (3) designing the clearly authorities between central and local government on several sectors, including on the agricultural development that will be able to improve the efficiency and effectiveness of government spending, and (4) Future studies need to be done with the data at the district or town level, and separate spesific fund by sector.
Keyword: fiscal decentralization, deconcentration and assistance tasks, flypaper effect, regional economy.

Judul: Hydroxyapatite-Chitosan Composite Coating on Stainless Steel 316 to Improve Corrosion Resistance
Abstrak: Metals that were used in bone implantation should have good corrosion resistance that were not easily corroded when implanted into the body. Metal corrosion resistance of stainless steel 316 can be enhanced through the metal coating by hydroxyapatite-chitosan composite with composition ratio of hydroxyapatite (gram) and chitosan 3% (mL) 0.2:0, 0.2:0.1, 0.2:0.5, 0.2:1.0, and 0.2:1.5. Besides improving the corrosion resistance of metal, the presence of chitosan also maintain the position of hydroxyapatite on metal surfaces. Corrosion resistance increases with increasing amount of chitosan added and the best composition of hydroxyapatite-chitosan composite was 0.2:1.0.
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