The determinants of public service and environmental performance of local governments in Indonesia

Muhammad Arif

Local governments have significant roles to play with respect to providing high-quality public services and maintaining environmental sustainability. However, local communities in developing countries, including Indonesia, still have less access than those in developed countries to effective public services; and are facing increasing risks from environmental degradation. Given these issues for developing countries, this study focuses on the performance of the Indonesian public sector with respect to both the provision of public services and environmental sustainability. This study has two objectives. First, it aims to examine the influences of public sector governance and financial management factors on Indonesian districts' service performance, mediated by financial performance. Second, this study aims to investigate the impacts of public sector governance and financial management factors on districts' environmental performance through the mediating role of financial performance. Indonesia was chosen as an exemplar of developing countries. In this study, public sector governance is represented by financial transparency, accountability, and internal control, while financial management factors are measured by financial flexibility, financial independence, and resource management. Several conceptual models are developed, from which the theoretical relationship between public sector governance, financial management factors, and service and environmental performance are hypothesised. These hypotheses are then tested using a quantitative approach and secondary data. The main findings of this study indicate that public sector governance and financial management factors are positively related to service and environmental performance. The study also confirms the mediation effect of financial performance on service and environmental performance. This study enriches the literature related to the public sectors since it provides incremental evidence regarding the determinant factors of service and environmental performance and develops the theoretical models that investigate the mediating role of financial performance on the performance of local government in a developing country like Indonesia. Future studies in this area could include investigating the effects of other potentially relevant measures, such as innovation and managerial styles.

The determinants of public service and environmental performance of local governments in Indonesia

Files and links (1)

Abstract

Details

Metrics