Impact of Fiscal Transparency on Increased Government Spending during Indonesian Election

DOI

10.2991/978-94-6463-692-5_2How to use a DOI?

Keywords

Fiscal Transparency; Incumbent; Election; Government Spending

Abstract

The Indonesian government is actively promoting good governance, one of which is budgetary openness. Budget transparency is very crucial in municipal government. Its emphasis on transparency makes logical, as it serves a crucial purpose in democracies. In order to increase their prospects of winning reelection, ambitious incumbents increased government spending and decreased taxes during his administration. Fiscal transparency may play an essential role in influencing the political budget cycle, preventing needless content. These studies usually show that increased fiscal transparency leads to better financial performance. Based on the occurrence, academics are interested in analyzing the political budget cycle to determine whether fiscal transparency implemented in Indonesia will effect the political budget carried out by the incumbent during his tenure as Incumbent. This study collected data on social assistance spending from 398 districts and cities in Indonesia that held regional elections. This study relied on secondary data collection methods. In this study, local government spending is measured using variables such as social expenditure and capital expenditure, and transparency is collected from LKPD via the Audit Aboard of the Republic of Indonesia opinions measured using dummy. This study was conducted utilizing e-views and an analysis technique called panel data analysis, specifically the random effect model. This study demonstrates that regions with lower levels of fiscal transparency exhibit political budget cycles in their social spending, whereas locations with high fiscal transparency exhibit political budget cycles in their capital expenditures. The study’s findings revealed that political budgets can still emerge even in areas with a high level of transparency. This attempts to convey a signal to voters to support the prospect of re-election of the incumbent so that the incumbent tries to anticipate their defeat by conducting “budget politicization” which is to carry out a budget deficit by increasing the future allocation of public funds in accordance with his desire, which seeks to captivate the electorate in order to subsequently increase the number of votes elected.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Maria Maranatha Gultom
AU  - Imelda Sinaga
PY  - 2025
DA  - 2025/05/01
TI  - Impact of Fiscal Transparency on Increased Government Spending during Indonesian Election
BT  - Proceedings of the 12th Gadjah Mada International Conference on Economics and Business (GAMAICEB 2024)
PB  - Atlantis Press
SP  - 7
EP  - 20
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-692-5_2
DO  - 10.2991/978-94-6463-692-5_2
ID  - Gultom2025
ER  -