SUMMARY
In many countries, relationship between decentralization of government activities and the extent of rent extraction by private parties is an important element in the recent debate on institutional design. The topic of corruption was actively, openly and debated in Indonesia by government, its development partners, and a broadly based group of political and civil society leaders are engaged in meetings and exchange on a daily basis. In the ongoing debate on corruption a lot of attention is paid to the role of public sector salaries, particularly in the decentralization era. Based on this phenomenon, the authors want to analyze the relationship between corruption and decentralization. Using OSL model, we can find a very strong and consistent positive association between the two variables across a sample of region, thereby providing some support for theories of decentralization that emphasize its benefits. This association is robust to controlling for a wide range of potential sources of omitted variable bias as well as endogeneity bias. Keywords: Corruption, Decentralization, OSL Model Abstrak.Di banyak negara, hubungan antara desentralisasi pemerintah dan tingkat ekstraksi sewa oleh pihak swasta merupakan elemen penting dalam perdebatan baru pada desain institusional. Topik korupsi secara aktif, terbuka dan diperdebatkan di Indonesia oleh Pemerintah, mitra pembangunan, dan kelompok berbasis luas dari para pemimpin politik dan masyarakat sipil yang terlibat dalam pertemuan dan pertukaran setiap hari. Dalam perdebatan tentang korupsi banyak perhatian diarahkan untuk peran gaji sektor publik, terutama di era desentralisasi. Berdasarkan fenomena ini, penulis ingin menganalisis hubungan antara korupsi dan desentralisasi. Menggunakan OSL model, kita dapat menemukan hubungan positif yang sangat kuat dan konsisten antara dua variabel di seluruh sampel dari daerah, sehingga memberikan beberapa dukungan untuk teori desentralisasi yang menekankan manfaat. Asosiasi ini adalah kuat untuk mengendalikan berbagai kemungkinan potensial dari upaya menghilangkan sebagian variabel serta bias endogenitas. Kata Kunci: Korupsi, Desentralisasi, OSL Model REFERENCES,Ades, Alberto and Di Tella, Rafael, 1994, “Competition and corruption” Institute of Economics and Statistics Discussion Papers 169. University of Oxford.____, 1995, “National champions and corruption: some unpleasant competitiveness arithmetic”.University of Oxford. Photocopy.Barro, Robert, 1992, “Human capital and economic growth”. in policies for long run economic growth. 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