The purpose of this study is to analyze and determine the influence of fiscal potential and needs in
the model of allocation formulation of regional bottom air (BDB) in North Sumatra province. The
variables used in this study are the performance of the regional bottom aid (Y) as dependent
variable while is total population (X1), poverty index (IKR) (X2), size of region (X3), construction
cost index (CCI) (X4), gross domestic product (GDP) (X5), regional revenue (PAD) (X6), balances
of fund (X7) and income per capita (X8) as independent variables. The data analysis used in this
study is structural equation models, while the population is all the 33 districts/cities in North
Sumatera province, and the sampling technique is using purposive sampling method with
consideration of specific criteria. The findings concluded that the dominant variable in determining
the allocation of the regional bottom aid (BDB) in North Sumatra is the total population,
construction cost index (CCI), the financial fund balance and income per capita.
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