Increase fiscal independence

Oct 13, 2025 by talynt.org 6 views

The Effect of Local Government Size, Ratio of Independence, and Population on Transparency of Financial Information in Sumatra, 2018-2020

Introduction

Transparency in local government financial information is a crucial aspect of good governance, as it enables citizens to hold their leaders accountable for the use of public funds. However, the factors that influence transparency in local government financial information are complex and multifaceted. This study aims to analyze the effect of local government size, ratio of independence, and population on transparency of financial information in Sumatra, Indonesia, during the period 2018-2020.

Background

Local governments in Indonesia are responsible for managing a significant portion of the country's budget, and transparency in their financial information is essential for ensuring accountability and good governance. However, the size of the local government, ratio of independence, and population can all impact the level of transparency in financial information. A larger local government may have more resources, but it may also be more complex to manage, potentially leading to decreased transparency. On the other hand, a higher ratio of independence may indicate a greater ability to rely on local sources of income, which can create incentives for increased transparency. Finally, a larger population may increase the demand for transparency, but it may also create challenges in managing financial information effectively.

Methodology

This study used a purposive sampling technique to select 17 samples from the Regional Government Web in Sumatra. The data obtained was then processed using SPSS 20 software. The study analyzed the effect of local government size, ratio of independence, and population on transparency of financial information in Sumatra during the period 2018-2020.

Results

The results of this study showed that the size of the local government and the population partially did not affect the transparency of financial information in Sumatra during the period 2018-2020. However, the ratio of independence showed a significant positive effect on transparency of financial information. Interestingly, when the size of the regional government, the ratio of independence, and the population were analyzed simultaneously, these three factors had a significant effect on transparency of local government financial information.

In-Depth Analysis

The findings of this study show that the transparency of local government financial information does not only depend on the size or population of the area, but rather the fiscal independence of the local government. This shows the importance of the ratio of independence as the main indicator in increasing transparency, which in turn can increase public accountability.

Local Government Size

Although the size of the local government is often associated with larger capacity and resources, this study proves that size alone is not enough to ensure transparency. Larger local governments may have more resources, but if there is no good management, the results can be the same as the smaller local government.

Ratio of Independence

Ratio of independence is one of the important factors because it reflects the ability of local governments to rely on its own source of income rather than depending on the transfer of funds from the central government. When the local government is able to finance its operational activities from its own source of income, this creates incentives to increase transparency to the public. Success in increasing transparency not only creates public trust, but also allows better supervision of the use of the budget.

Total Population

The results showing the population do not significantly affect transparency can reflect that a larger population does not automatically increase the demand or demand for transparency. In fact, in some cases, regions with larger populations may face challenges in managing financial information effectively.

Conclusion

Overall, the results of this study provide valuable insights for stakeholders in the field of regional government. Efforts to increase financial transparency must be focused on increasing fiscal independence, while paying attention to other factors such as efficient management and public participation. Through a better understanding of these factors, it is hoped that regional governments on the island of Sumatra can build public trust and increase accountability in the management of public finances.

Recommendations

Based on the findings of this study, the following recommendations are made:

Increase fiscal independence: Local governments should strive to increase their fiscal independence by relying on local sources of income rather than depending on transfers from the central government.
Improve management: Local governments should prioritize efficient management and public participation to ensure that financial information is transparent and accessible to the public.
Build public trust: Local governments should focus on building public trust by increasing transparency and accountability in the management of public finances.
Address challenges: Local governments should address challenges in managing financial information effectively, particularly in regions with larger populations.

Limitations

This study has several limitations, including:

Sample size: The sample size of 17 samples may not be representative of the entire population of local governments in Sumatra.
Data quality: The quality of the data obtained from the Regional Government Web may be affected by various factors, such as data accuracy and completeness.
Methodology: The purposive sampling technique used in this study may not be the most effective method for selecting samples.

Future Research

Future research should aim to address the limitations of this study by:

Increasing sample size: Future studies should aim to increase the sample size to ensure that the results are more representative of the entire population of local governments in Sumatra.
Improving data quality: Future studies should prioritize improving data quality by using more accurate and complete data sources.
Using more effective methodology: Future studies should consider using more effective methodology, such as random sampling, to select samples.

Conclusion

In conclusion, this study provides valuable insights into the factors that influence transparency of financial information in local governments in Sumatra, Indonesia. The findings of this study show that the ratio of independence is a significant predictor of transparency, while the size of the local government and population do not have a significant effect. The study also highlights the importance of fiscal independence, efficient management, and public participation in increasing transparency and accountability in the management of public finances.
Frequently Asked Questions (FAQs) about the Effect of Local Government Size, Ratio of Independence, and Population on Transparency of Financial Information in Sumatra, 2018-2020

Q: What is the main objective of this study?

A: The main objective of this study is to analyze the effect of local government size, ratio of independence, and population on transparency of financial information in Sumatra, Indonesia, during the period 2018-2020.

Q: What is the significance of this study?

A: This study is significant because it provides valuable insights into the factors that influence transparency of financial information in local governments in Sumatra, Indonesia. The findings of this study can help policymakers and stakeholders in the field of regional government to develop effective strategies for increasing transparency and accountability in the management of public finances.

Q: What is the definition of transparency in the context of this study?

A: In the context of this study, transparency refers to the availability and accessibility of financial information to the public, including citizens, civil society organizations, and the media.

Q: What is the ratio of independence, and how does it relate to transparency?

A: The ratio of independence refers to the ability of local governments to rely on their own sources of income rather than depending on transfers from the central government. A higher ratio of independence is associated with increased transparency, as local governments are more likely to prioritize transparency and accountability in the management of public finances.

Q: What is the relationship between local government size and transparency?

A: The study found that local government size does not have a significant effect on transparency. This suggests that larger local governments may not necessarily have more transparent financial information, and that other factors such as management and public participation are more important in determining transparency.

Q: What is the relationship between population and transparency?

A: The study found that population does not have a significant effect on transparency. This suggests that a larger population does not automatically increase the demand or demand for transparency, and that other factors such as management and public participation are more important in determining transparency.

Q: What are the implications of this study for policymakers and stakeholders in the field of regional government?

A: The findings of this study have several implications for policymakers and stakeholders in the field of regional government. Firstly, they suggest that efforts to increase transparency and accountability in the management of public finances should focus on increasing fiscal independence, improving management, and promoting public participation. Secondly, they highlight the importance of building public trust and increasing transparency in local government financial information.

Q: What are the limitations of this study?

A: This study has several limitations, including a small sample size, potential biases in the data, and the use of a purposive sampling technique. Future studies should aim to address these limitations by increasing the sample size, improving data quality, and using more effective methodology.

Q: What are the future research directions based on this study?

A: Future research should aim to build on the findings of this study by:

Increasing the sample size to ensure that the results are more representative of the entire population of local governments in Sumatra.
Improving data quality by using more accurate and complete data sources.
Using more effective methodology, such as random sampling, to select samples.
Exploring the relationship between transparency and other factors, such as corruption and public participation.

Q: What are the practical implications of this study for local governments in Sumatra?

A: The findings of this study have several practical implications for local governments in Sumatra. Firstly, they suggest that local governments should prioritize increasing fiscal independence, improving management, and promoting public participation to increase transparency and accountability in the management of public finances. Secondly, they highlight the importance of building public trust and increasing transparency in local government financial information.