This research aims to analyses the effect of pendapatan asli daerah (PAD) and dana perimbangan on Capital expenditure in Regency of Banyuasin. Research finding shown that during period of y e ars 2004-2007, PAD has a little effect on Capital expenditure and there is decreasing on that effect for 4 years. It is because little contribulion of components from PAD. While dana perimbangan has a sign…