Opportunistic behavior and public spending: The case of Indonesia

Abstract

This paper investigates the determinants of opportunistic behavior of executives in the local governments in Indonesia. We study 502 regional governments over the 2008-2013 periods. Opportunistic behavior is measured by the level of social spending and capital expenditures. The main determinants of opportunistic behavior come from the composition of local government income. We also include the integrity of apparatus as the determinant of opportunistic behavior. Our results reveal that the composition of income matters to explain the budget allocation. Some policy implications are discussed.