Linking Budget Transparency to Performance through Absorption Efficiency

This study examines how budget transparency translates into better regional financial performance through the mediating role of budget absorption efficiency in Buton, Southeast Sulawesi. A cross-sectional survey of officials responsible for planning, procurement, treasury, and budget execution produced 220 valid responses. Data were analysed using PLS SEM. The measurement model satisfied accepted criteria for reliability, convergent validity, and discriminant validity, and diagnostics indicated that collinearity and common-method concerns were unlikely to bias the results. The structural model supports the theorised mechanism: greater transparency is associated with stronger absorption discipline, and this discipline is positively related to financial performance; a smaller yet meaningful direct association between transparency and performance remains after accounting for the mediator. The findings suggest that transparency delivers value when it is operationalised as routine, predictable disclosure that anchors managerial behaviour during the fiscal year. Practically, early procurement readiness, disciplined cash planning, and prompt communication of budget revisions emerge as actionable levers for converting formal openness into tangible improvements in economy, efficiency, effectiveness, and compliance within an archipelagic district context.