Budget implementation in a risky environment: evidence from the Indonesian public sector
ISSN: 1321-7348
Article publication date: 15 April 2019
Issue publication date: 10 May 2019
Abstract
Purpose
The purpose of this paper is to investigate factors affecting budget implementation among local governments in Indonesia, where rules are relatively strict and risks of facing corruption charges are high.
Design/methodology/approach
This study employs regression analyses using a sample of 1,151 local government-years.
Findings
This study finds that the level of budget implementation is affected by the leadership factors (i.e. mayors’ term, tenure and age) and the proportion of capital expenditures. The level of budget implementation is relatively lower when the mayor is in the second term, is in the early years of the five-year tenure and is over 60 years old. Higher proportion of capital expenditures also reduces the level of budget implementation.
Originality/value
This study contributes to the literature by presenting empirical evidence as to what factors explain the variations in the level of budget implementation among local governments especially under strict rules and a risky environment.
Keywords
Acknowledgements
The author would like to thank two anonymous reviewers and the editor, the participants of the 2016 European Accounting Association annual meeting in Maastricht, the Netherland and of the research workshop at the Department of Accounting, UGM for comments. The author thanks the Faculty of Economics and Business, UGM for the research grant.
Citation
Rakhman, F. (2019), "Budget implementation in a risky environment: evidence from the Indonesian public sector", Asian Review of Accounting, Vol. 27 No. 2, pp. 162-176. https://doi.org/10.1108/ARA-01-2018-0020
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited