Performance Accountability in Indonesian Local Governments: Does Monitoring Really Work?

Abstract

This study aims to empirically examine whether the monitoring activities on local government implementation really matter for local government performance accountability. Based on a sample of decentralized Indonesia during 2010-2019, we test this by measuring monitoring activities of local government at district and city levels. Using panel data set of 514 local governments, our results show that the monitoring activities, conducted by external audit and the public, positively affect local government performance accountability. In contrast, legislative monitoring negatively affects performance accountability. These findings suggest that the external audit plays a fundamental role in monitoring activities at the local governments. In addition, direct public monitoring can enhance performance accountability through intensifying human development and a greater democracy. As for legislators, the composition between government coalition and opposition should also be suitable for the effectiveness of monitoring.