An Analysis of the Role of DAK Fisik and PAD in Road Infrastructure Development: An Integrative Review

Abstract

Accelerating road infrastructure development is one of the priorities in strengthening regional connectivity in Indonesia. Infrastructure development is an integral part of achieving the Sustainable Development Goals (SDGs) targets, particularly SDGs 9 which focuses on industry, innovation, and infrastructure, as well as SDGs 11 which focuses on sustainable cities and communities. However, the effectiveness of road infrastructure development in Indonesia highly depends on regional financing structures. This study aims to analyze the impact of the Physical Special Allocation Fund (DAK Fisik) and Regional Original Revenue (PAD) on the provision of road infrastructure in Indonesia. The approach used in this study is a Systematic Literature Review with an integrative review method by examining various relevant empirical research results. The results show that the DAK Fisik has varying effects on the provision of road infrastructure. In some studies, DAK Fisik shows a significant positive effect on capital expenditure that supports road development, but in other studies, DAK Fisik does not show a significant effect. Meanwhile, PAD consistently shows a significant positive effect in supporting the provision of road infrastructure because PAD reflects regional fiscal independence and the flexibility of regional governments in allocating budgets. In addition, the literature indicates that road infrastructure development plays a role in driving economic growth through increased regional connectivity, production mobility, and economic activity. This study implies that increasing the efficiency of DAK Fisik management and optimizing PAD are key factors in supporting the provision of road infrastructure in Indonesia. The results of this study are expected to provide policy recommendations regarding the importance of reforming independent regional budget governance so that SDGs targets in the regional connectivity sector can be achieved without the risk of fiscal vulnerability.

Keywords:  Road Infrastructure, DAK Fisik, PAD, Regional Connectivity, Fiscal Decentralization