The Impact of Financial Condition on Public Governance Among Provincial Government in Indonesia

Nurwiyanta

Abstrak

This study aims to investigate the impact of financial condition on public governance among provincial government in Indonesia. Short-term solvency and financial flexibility were used as a proxy for financial condition. Meanwhile, public governance was measured by The Index of Governance published by The Partnership for Governance Reform of Indonesia. Local Government’s age was used as a control variable. Thirty three provincial governments indexed by The Partnership for Governance Reform of Indonesia 2012were used as a sample. Results from multiple regression analysis show that short-term solvency has a positive and significant association with the Governance Index (Public Governance), but financial flexibility does not. Meanwhile, F-Test shows that financial condition variables simultaneously affect public governance among provincial government in Indonesia. The result implies that a good financial condition will make it easier for provincial government to implement good governance. Hence, good public governance need a good financial conditions. Keywords : Financial Conditions, Local Government, Public Governance, Local Autonomy