Decentralization and Regional Autonomy in Enhancing the Effectiveness of Regional Financial Management

Abstract

Decentralization is a governance mechanism in which authority and responsibility are transferred from the central government to regional governments, enabling them to manage their own administrative affairs independently. Through this policy, regional governments are expected to improve public service quality, accelerate local development, and strengthen fiscal autonomy. This study aims to examine the relationship between decentralization, regional autonomy, and the effectiveness of regional financial management within the framework of fiscal decentralization policy. The research employs a library research method, involving a comprehensive review and analysis of scientific literature and recent empirical studies. The findings indicate that decentralization can enhance budgetary efficiency, improve responsiveness in local policy-making, and facilitate more adaptive governance. However, challenges remain, including high fiscal dependence on the central government and limited human resource capacity in financial management. Strengthening fiscal independence and ensuring transparency in regional financial administration are identified as critical factors to support the sustainable implementation of regional autonomy, enhance accountability, and optimize the allocation of public resources effectively across diverse local contexts.