Title: Good governance and the impact of government spending on performance of local government in Indonesia

Authors: Ratna Wardhani; Hilda Rossieta; Dwi Martani

Addresses: Accounting Department, Faculty of Economics and Business, Universitas Indonesia, UI Campus Depok 16424, Indonesia ' Accounting Department, Faculty of Economics and Business, Universitas Indonesia, UI Campus Depok 16424, Indonesia ' Accounting Department, Faculty of Economics and Business, Universitas Indonesia, UI Campus Depok 16424, Indonesia

Abstract: This paper studies the links between public spending, good governance, and its outcomes which measured by performance of local governments. This paper aims to examine the effect of government spending and good governance on performance of local government and whether good governance can strengthen the effect of government spending on performance. This paper based on 1,044 observations of local governments in Indonesia from 2009 until 2012. This paper contributes by providing an understanding of the relationship between public spending, governance, and government performance and provides explanation of the mixed evidence that public spending often does not yield the expected outcomes. This research provides interesting empirical evidence that the expenditure of local government in Indonesia is inefficient in increasing performance. In the contrary, the result shows the negative effect of government spending on performance. The good public governance influenced positively toward performance and reduced the inefficiency of government spending.

Keywords: public sector; local government; efficiency; government spending; good governance; Indonesia; government performance.

DOI: 10.1504/IJPSPM.2017.082503

International Journal of Public Sector Performance Management, 2017 Vol.3 No.1, pp.77 - 102

Received: 30 Dec 2015
Accepted: 11 Oct 2016
Published online: 27 Feb 2017 *

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