REIMAGINING DECENTRALIZATION: EMPOWERING NEIGHBORHOOD UNITS (RT) THROUGH DIRECT FISCAL ALLOCATION FOR LOCAL RESILIENCE IN KUTAI KARTANEGARA

Abstract

This study examines the implementation of micro-fiscal decentralization through the "RT-Ku Terbaik" Program in Kutai Kartanegara Regency as an alternative to the failure of top-down governance. This policy delegates fiscal autonomy directly to the Neighborhood Association (RT) unit to encourage local independence and reduce socio-economic disparities. Using a descriptive case study approach with quantitative support, this study analyzes institutional mechanisms and empirical results of budget absorption patterns. The results show that fiscal injections at the micro-level have successfully stimulated the local economy and absorbed unskilled labor, evidenced by a drastic decline in unemployment among those with primary education by 87% (2021-2024) and an increase in the Human Development Index (HDI). However, these findings also reveal an "inequality paradox": amidst the decline in absolute poverty, income inequality (Gini Ratio) actually increased from 0.269 (2022) to 0.307 (2024), accompanied by a surge in educated unemployment. This study concludes that micro-fiscal decentralization is highly effective as a social safety net instrument, but is inadequate to address structural inequalities without complementary policies targeting the formal sector.