This research aims to determine the factors influencing local government’s expenditure as well as to confirm the occurrence of flypaper effect at the local government’s expenditure at the districts/ city of Yogyakarta Special Region Province. The study surveyed all districts and city in the province during the period of 2008 – 2014. The analysis technique used was panel data regression. The results of this study indicate that the Locally-generated Revenue (Indonesian term: PAD) and the General Allocation Fund (the DAU) have positive and significant effect on local government’s expenditure (the Regional Expenditure). The result also shows that there is flypaper effect on local government’s expenditure at districts of Yogyakarta Special Region Province.
Keywords: Flypaper Effect, Regional Expenditure, Locally-generated Revenue , General Allocation Fund.
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