Optimizing Local Own-Source Revenue Through Retribution Policy Under Fiscal Decentralization: A SWOT-Informed Comparative Evidence Synthesis from Indonesia and Other Developing Countries

Local own-source revenue (locally known in Indonesia as Pendapatan Asli Daerah or PAD) is a central indicator of subnational fiscal independence in developing countries, yet weak administrative capacity, fragmented retribution governance, and uneven decentralization outcomes continue to hold back its optimization. This article reviews recent evidence (2021–2026) on local revenue, retribution policy, fiscal decentralization, and tourism-linked user charges. It centers on Indonesia and draws comparative insights from Kenya, Ghana, Brazil, Iran, Malaysia, and Saudi Arabia. The study uses a structured qualitative literature review with thematic synthesis and a SWOT-informed analytical lens, screening, verifying, and coding peer-reviewed sources to map where institutional contexts converge and diverge. Retribution policy adds substantially to PAD only when digitalized administration, transparent legal frameworks, and sector-specific targeting support it, especially in tourism and waste management. Recurring weaknesses include collection leakages, low compliance, regulatory ambiguity, and limited stakeholder coordination. Opportunities arise from online collection systems, ecotourism monetization, and intergovernmental fiscal reform, while corruption, central-government dependency, and policy inconsistency pose threats. Fiscal independence does not follow automatically from decentralization. It depends on governance quality, administrative modernization, and strategic use of specific sectors. The article proposes a governance-conditional model of retribution effectiveness and offers practical recommendations for local revenue agencies, policymakers, and regional planners working toward sustainable fiscal autonomy.

local own-source revenue; retribution policy; fiscal decentralization

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