Andi Armayudi Syam, Andi Ahmad Malikul Afdal

Political Budget Cycle in Local Elections in Indonesia: A Systematic Review

Introduction

Political budget cycle in local elections in indonesia: a systematic review. Explore political budget cycles in Indonesian local elections. Systematic review reveals incumbents increase spending (social aid, infrastructure) before polls, impacting fiscal accountability and local democracy.

Abstract

Political budget cycles (PBC) refer to patterns in which incumbents manipulate government budget policies in the run-up to elections to enhance their electoral chances. This article presents a systematic review of the recent literature on PBC in the context of regional elections in Indonesia. The review findings show that PBC at the local government level in Indonesia did occur significantly after the direct election era began. A number of empirical studies consistently find a pattern of increasing public spending and budget deficits in the years leading up to regional elections, especially in spending items that are visible and benefit voters (such as social assistance and local infrastructure projects). For example, social assistance and regional grant spending tend to increase drastically in election years, which contributes to a decrease in budget surpluses and an increase in short-term liabilities of local governments. This PBC is stronger when incumbent regents/mayors are running for re-election and when incumbents are supported by a large party coalition. On the other hand , the shift from indirect to direct elections at the regional level has been accompanied by a shift in spending patterns, including a decrease in capital spending around election periods. In terms of political effects, increased populist spending has been shown to be associated with higher incumbent vote acquisition, although this effect is influenced by the level of local electoral competition. Overall, the practice of political budget cycles in Indonesian regional elections signals challenges for fiscal accountability and the quality of local democracy.

Review

This systematic review addresses a highly pertinent topic concerning the integrity of local governance and electoral processes in Indonesia, focusing on political budget cycles (PBCs). The article effectively synthesizes existing literature to demonstrate the significant occurrence of PBCs at the local government level since the advent of direct elections. A key finding is the consistent pattern of increased public spending and budget deficits, particularly in highly visible, voter-centric areas such as social assistance and local infrastructure, leading up to regional elections. This initial assessment establishes the review's timely relevance and its core contribution in consolidating empirical evidence on PBCs in this specific context. The review provides valuable detail on the manifestation and drivers of these budget manipulations. It elaborates on how spending on items like social assistance and regional grants drastically escalates in election years, contributing to fiscal strain characterized by reduced budget surpluses and higher short-term liabilities for local governments. The analysis insightfully identifies moderating factors, noting stronger PBC effects when incumbent regents/mayors seek re-election and are backed by robust party coalitions. Furthermore, the review highlights a curious shift towards decreased capital spending around election periods post-direct elections, and importantly, links increased populist spending to enhanced incumbent vote acquisition, albeit modulated by the level of local electoral competition. These findings offer a nuanced understanding of the mechanics and political implications of PBCs in Indonesia. Overall, this systematic review makes a strong contribution by consolidating a body of evidence that clearly signals substantial challenges for fiscal accountability and the quality of local democracy in Indonesia. While the abstract does not explicitly detail the methodological limitations inherent in synthesizing diverse empirical studies, the findings themselves provide a compelling case for further research into policy interventions and institutional reforms to curb such electoral manipulation of public finances. The work serves as an important resource for scholars, policymakers, and civil society organizations concerned with good governance and democratic integrity in decentralised systems.

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