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Administrative overspending in Indonesian districts: The role of local politics

  • Bambang Suharnoko Sjahrir
  • Krisztina Kis-Katos
  • Guenther G. Schulze

    ()

    (Department of International Economic Policy, University of Freiburg)

We analyze the determinants of the excessive administrative spending of local governments in Indonesia. In an unbalanced panel data set of 399 districts for 2001‐2009, we show that the proliferation of districts has not led to increased administrative spending; instead a lack of political accountability is responsible for this excess. The degree of political competition influences the level of administrative spending significantly; newly introduced direct elections of district heads, however, did not curtail the waste.

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File URL: http://www.vwl.uni-freiburg.de/iwipol/REPEC/fre/wpaper/DP24_Sjahrir_Kis-Katos_Schulze_Administrative_overspending_in_indonesian_districts.pdf
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Paper provided by Department of International Economic Policy, University of Freiburg in its series Discussion Paper Series with number 24.

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Length: 37 pages
Date of creation: Jul 2013
Date of revision: Jul 2013
Handle: RePEc:fre:wpaper:24
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