<![CDATA[This study was prompted by the substantial allocation of Special Autonomy Funds received annually by the provinces of Aceh and Papua, which, ideally, should promote regional fiscal autonomy; however, in practice, dependence on central government transfers remains high in both regions. The study aims to compare regional financial autonomy, the effectiveness of Local Own-Source Revenue (PAD), and the effectiveness of regional expenditure across regency and city governments in the provinces of Aceh and Papua. The research subjects comprise all regencies and cities in the provinces of Aceh and Papua for the period 2021–2022, with a total of 102 observations obtained through saturation sampling. The data used were secondary data in the form of Budget Implementation Reports (LRA) collected through documentation and literature review. This study employed a comparative quantitative approach, comparing three variables: local financial autonomy, the effectiveness of PAD, and the effectiveness of local expenditure. Data analysis was carried out using descriptive statistics, the Shapiro-Wilk normality test, and the non-parametric Mann-Whitney U test, given that the research data were generally not normally distributed. The results indicate a significant difference in local financial autonomy between Aceh and Papua, with Aceh demonstrating a higher level of autonomy. Regarding the effectiveness of local revenue (PAD), there was no significant difference between the two provinces, indicating that their ability to meet PAD targets was relatively comparable. Meanwhile, the effectiveness of local expenditure showed a significant difference, with Aceh demonstrating a higher level of expenditure effectiveness compared to Papua. This study concludes that although both Aceh and Papua have been granted special autonomy status and receive substantial transfer funds, the capacity for local financial management in the two regions remains different, particularly in terms of fiscal autonomy and the effectiveness of expenditure. These findings have implications for local governments, particularly in Papua, to strengthen the optimisation of local revenue and the quality of budget implementation, and provide input for the central government in formulating more targeted regional transfer policies.]]>
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