Public Governance and Financial Performance of Indonesian Local Governments: Evidence from Multiple Stakeholder Perspectives

Abstract

This study aims to examine the effect of public governance implementation, that is explained by 4 variables namely transparency, accountability, legal culture, and public participation on the financial performance of local governments in Indonesia. The private governance research model was adopted in this research to test its effect on performance. A total of 34 regional governments (provincial governments) in Indonesia were used as the object of this research. Moreover, local government transparency is measured by e-governance, local government accountability is measured using audit opinion from the Audit Board of Indonesia, while corruption perception index is used as the indicator of legal culture, public participation represented by the number of latest electoral voters, and local government revenue year 2018 as a proxy for regional financial performance. An analysis of regression is presented by using Eviews version 9 software. The results of the study show that transparency, legal culture and public participation has significant effects on local government revenue. Whereas, accountability does not effect on the financial performance of Indonesian local government.