Iqbal Lhutfi

Determinants Of Budgetary Slack: The Influence Of Budget Preparer Behaviour In Local Government

Introduction

Determinants of budgetary slack: the influence of budget preparer behaviour in local government . Budgetary slack in local government: This study reveals how preparer behavior impacts it, crucial for public sector transparency and accountability.

Abstract

This study aims to examine the influence of budget preparers’ behaviour on budgetary slack within the local government context, specifically in the Pariaman City Government. Employing a quantitative approach, primary data were collected through questionnaires distributed to 34 respondents, including heads and staff of regional apparatus organisations (OPD) involved in the budgeting process for at least three consecutive years. The study applies simple linear regression analysis to assess the relationship between the behaviour of budget preparers and the occurrence of budgetary slack. The results demonstrate that budget preparers’ behaviour has a significant positive effect on budgetary slack (p < 0.05; R² = 0.135), indicating that individual characteristics and values play a crucial role in shaping budget-related outcomes. The findings highlight the importance of understanding personality-driven behaviours in enhancing budget transparency and accountability in public sector organisations. This research contributes to the literature by providing empirical evidence on the behavioural determinants of budgetary slack in Indonesian local governments, and offers practical implications for policymakers to design interventions that foster ethical behaviour and reduce slack in the budgeting process. Limitations and directions for future research are also discussed.

Review

This study tackles a pertinent issue in public sector financial management, investigating the influence of budget preparers’ behaviour on budgetary slack within the context of the Pariaman City Government, Indonesia. Employing a quantitative approach, the research utilizes primary data gathered from 34 key local government officials through questionnaires. The core finding, derived from simple linear regression analysis, indicates a statistically significant positive effect of budget preparers’ behaviour on budgetary slack. This suggests that individual characteristics and values play a crucial role in shaping budget outcomes, thereby contributing valuable empirical evidence to the literature on behavioural determinants of budgetary slack in an under-researched geographical context. While the study provides a clear objective and a direct analytical approach, certain methodological aspects merit consideration. The sample size of 34 respondents, although potentially comprehensive for the specific local government, is relatively small, which could impact the generalizability of the findings to broader populations or other local government units. Additionally, the reliance on simple linear regression, while establishing a direct relationship, may oversimplify the complex web of factors influencing budgetary slack. The reported R² value of 0.135, though statistically significant, suggests that budget preparers’ behaviour explains a modest proportion of the variance in budgetary slack, implying that other substantial determinants are yet to be accounted for. A more detailed elucidation of the specific "behaviours" measured would also enhance the robustness and interpretability of the results. Notwithstanding these points, the research offers a commendable initial step in empirically linking individual behaviour to budgetary outcomes in a public sector setting. The emphasis on understanding "personality-driven behaviours" and the call for interventions to foster ethical conduct are highly relevant, providing actionable insights for policymakers striving to enhance budget transparency and accountability. Future research could significantly build upon this foundation by employing larger and more diverse samples, utilizing more advanced statistical models to capture multivariate relationships, and further disaggregating specific behavioural traits (e.g., opportunism, risk aversion, ethical decision-making) and their differential impacts on various forms of budgetary slack. This study thus lays important groundwork for continued inquiry into the human dimension of public financial management.

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