ACCOUNTING & FINANCE CORNER
Monday January 20th 2020

Determinants of Local Government Performance in Indonesia

Dwi Martani dan Dyah Setyaningrum

Abstract

This study aims to analyze determinants of local governments’ performance in Indonesia. It examines the effect of several factors on local governments’ performance, including organizational commitment, management incentives, monitoring, legitimacy, and institutional incentives. Performance is measured by score of Governance Performance Evaluation of Local Government (EKPPD). This research analyzes local government of regencies/cities in Indonesia for 2009-2012. The results reveal that all determinants have positive impact on local governments’ performance. Follow up of audit recommendation, dependence on the central government, portion of non-routine expenditures, size of legislative, voting results of local governments’ head, and local governments’ wealth have positive impact on the performance. This study provides implication that local governments should enhance commitment to complete all recommendations from BPK as well as to increase budget allocation for non-routine expenditure in order to have better performance. Through intergovernmental funds, the central government is able to upgrade public services and welfare therefore it improves local governments’ performance. Monitoring held by legislative members should also be improved in order to have better performance.

 

Keywords: local government, institutional incentives, performance, organizational commitment, legitimacy monitoring

Dipresentasikan pada Asian Academic Accounting Association 16th Annual Conference, Bandung, Jawa Barat, Indonesia, 15 – 17 November 2015, Penyelenggara: FEB UI. Determinants of Local Gov…

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