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The impact of mayor-council coalitions on local government spending, service delivery, and corruption in Indonesia

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  • Blane D. Lewis
  • Adrianus Hendrawan

Abstract

This study examines the impact of majority coalitions on local government spending, service delivery, and corruption in Indonesia. The investigation finds that majority coalitions, i.e. those coalitions for which participating political parties control greater than half of council seats, cause a shift in local government spending towards health sector activities and induce improvements in citizen health service access—but only for a year or two, after which the positive effects disappear. The study shows that budget fraud starts to become problematic in the last two years of the coalition’s life. Majority coalition support for the local health spending and service agenda dissipates quickly as attention turns to corrupting the budget, via increased infrastructure outlays and associated rent-seeking. We hypothesize that budget fraud serves, in part, to finance subsequent rounds of local parliamentary and executive elections.

Suggested Citation

  • Blane D. Lewis & Adrianus Hendrawan, 2018. "The impact of mayor-council coalitions on local government spending, service delivery, and corruption in Indonesia," Departmental Working Papers 2018-19, The Australian National University, Arndt-Corden Department of Economics.
    • Handle: RePEc:pas:papers:2018-19
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    More about this item

    Keywords

    majority coalitions; local government spending and service delivery; corruption; regression discontinuity; Indonesia;
    All these keywords.

    JEL classification:

    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories

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