The Determinants of Local Government Performance

Abstract

This research aims to examine the determinants of local government performance in Indonesia. Data were collected from 114 local governments in Java Island from 2016 to 2019 through observation. The independent variables used are regional status, total assets, capital expenditure, independence level, and balancing funds. Meanwhile, the dependent variable is local government performance measured by the ratio of income to costs incurred. This research uses multiple regression to test the determinants factor of local government performance. The results showed that total assets, capital expenditure, and independence level positively affect local government performance. This indicates an increase in assets, increase in capital expenditure, and independent level has significant impact on improving local government performance. However, regional status and balancing funds do not have a significant impact on the performance.