: Fiscal decentralization policy is enforced in Indonesia nowadays to regulate the relationship between central and local government. A region can determine fiscal policy in their own region in order to local needs fulfillment to be more efficient because the local government is considered knows better about the local people condition and preferences in their own region so that people can be more prosperous. This research analyzes the effect of fiscal decentralization to regional economic growth per capita as an approach of people welfare in every province at Indonesia during the period 2006-2010 by using panel data. Furthermore, this research also analyzes the effect of other variables that can affect regional economic growth per capita, they are labor force and International trade. Based on the result, we can conclude that fiscal decentralization affects positively to regional economic growth per capita so does labor force. But, International trade does not affect and even affects negatively to regional economic growth per capita
