Inequality Aversion in The Center's Disbursement in Indonesia Budget in 2016
Decentralization in Indonesia had a major impact on Indonesia's fiscal system. The new system is considered more
just, especially for regions that have natural resources, economic potential, and human resources. This study examine how far
the allocation from the Central to the Region in Indonesia contains an effort to reduce income disparities between regions.
Using the CES and Kolm Pollack function specifications this study examines the content of aversion disbursement fund from
central to regional in Indonesia in 2016. Equal-unequal concern is seen from relative sizes, in which the allocation of funds to
regions in equal proportion will not causing changes in relative inequality aversion. It is also seen the aversion of absolute
inequality where inequality will not change if the government gives an increase in the same amount.
Index Terms—Autonomy, Inequality aversion, Indonesia budget