Transparency, Accountability, and Financial Performance: The Role of Civil Servant Capacity

Fatmawati Fatmawati () and Arifuddin Arifuddin
Additional contact information
Fatmawati Fatmawati: Hasanuddin University
Arifuddin Arifuddin: Hasanuddin University

A chapter in Proceedings of the 10th International Conference on Accounting, Management, and Economics (10th ICAME 2025), 2026, pp 361-380 from Springer

Abstract: Abstract This study examines how transparency and accountability affect the financial performance of local governments in Indonesia, emphasizing civil servant capacity as a moderating influence. Using new public management and principal-agent theories, with institutional theory and resource-based view, we propose a framework suggesting that transparency and accountability directly affect financial outcomes, depending on the local bureaucracy's human capital strength. Our hypotheses are tested using a cross-sectional design that integrates primary survey data from 120 local governments with verified administrative records. The results of the moderated multiple regression analysis show that transparency and accountability significantly enhance financial performance, as measured by budget realization rates, revenue collection efficiency, and fiscal discipline. Importantly, these effects are significantly moderated by civil servant capacity: in high-capacity environments, the link between governance and performance is nearly three times stronger than in low-capacity settings. Simple slope analysis demonstrates that transparency and accountability lead to substantial performance improvements only when the local bureaucracy has adequate professional, technical, and institutional capability. These findings highlight that effective fiscal governance requires adopting the right policies and developing human capital to implement them. We discuss the theoretical implications for public administration scholarship and offer practical recommendations for policymakers in Indonesia and other decentralized democracies. We contend that investing in civil servant capacity building is fundamental to translating good governance principles into tangible outcomes.

Keywords: Transparency; Accountability; Financial Performance; Civil Servant Capacity (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6239-709-5_26

Ordering information: This item can be ordered from
http://www.springer.com/9789462397095

DOI: 10.2991/978-94-6239-709-5_26

Access Statistics for this chapter

More chapters in Advances in Economics, Business and Management Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().