Strengthening National Financial Stability Through Effective Fiscal Decentralization and Public Financial Governance

Abstract

Regional autonomy represents a central pillar of modern governmental reform aimed at improving public welfare and enhancing the efficiency of public service delivery. The delegation of authority from the central government to local governments is expected to foster policies that are more responsive to societal needs and capable of optimizing local economic potential. Nevertheless, the implementation of fiscal decentralization frequently encounters challenges, particularly fiscal disparities among regions, limited human resource capacity, and persistent dependence on central government transfers. Effective public financial governance plays a crucial role in ensuring transparency and accountability, while the adoption of accrual-based public accounting contributes to greater efficiency in financial management and strengthens public trust. Through a literature review of recent scholarly works, this study examines the interrelationship between regional autonomy, fiscal decentralization, public financial governance, and national financial stability. The findings indicate that well-implemented decentralization can enhance national economic stability through transparent, accountable, and performance-oriented financial management systems that support improved public service quality.