Political budget cycle patterns and the role of coalition parties in shaping Indonesian local government spending

Ghany Ellantia Wiguna and Khoirunurrofik Khoirunurrofik ()
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Ghany Ellantia Wiguna: Universitas Indonesia

Asia-Pacific Journal of Regional Science, 2021, vol. 5, issue 1, No 3, 64 pages

Abstract: Abstract This study aims to investigate political budget cycles motivated by elections in Indonesia and the role of incumbent coalition parties in the degree of budget manipulation in election years. Employing a panel data regression model, we analyzed total revenue and total expenditures, together with their components, to identify budget patterns. The study employed data obtained from 499 districts/cities in Indonesia, covering the 2011–2017 period. With regard to revenue, budget cycles existed in all components of local own revenue. In contrast, they occurred in spending components favorable for community welfare in terms of the spending function. In relation to the type of spending, budget cycles were evident in spending components, goods and services spending, and capital spending. Stronger incumbent party alliances were observed to lead to a higher degree of budget manipulation in election years.

Keywords: Public finance; Budget cycle; Party coalition; Indonesia; D72; D73; H72 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s41685-020-00186-0

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