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"This study aims to test the Political Budget Cycle (PBC) in Indonesia as one of the world's largest democracies, specifically testing the presence of PBC across types of local government expenditures. This study further analyzed the effect of changes in expenditure composition during election years on financial local government losses. The financial losses are defined as irregularities in regional finance management found in the Audit Board of The Republic of Indonesia (BPK) audit report. This study uses the data at the district and city levels (local expenditures and financial losses) from 2014 to 2019 and adopts a fixed-effect panel data specification. The empirical estimations show the following evidence: (1) PBC phenomenon occurs in Indonesia, especially on government grants (belanja hibah), expenditure on goods and services, and capital expenditures; (2) There was no difference in PBC behavior between a region having an incumbent running for re-election and a region with incumbents from the previous election; (3) The existence of PBC tend to increase local government (financial) losses."

"Pilkada merupakan salah satu agenda nasional yang harus dilaksanakan setiap lima tahun sekali agar mendapatkan pemimpin yang baik dan berkualitas untuk kesejahteraan rakyat. Tesis ini menyoroti tentang permasalahan dalam pendanaan pilkada. Penelitian dilakukan di 18 daerah, dengan rincian 8 daerah yang mengalami pengurangan anggaran dan 10 daerah yang mengalami penambahan anggaran. Menggunakan teori politik anggaran dari Aaron Wildavsky dan Model ROCCIPI dari Ann Seidman untuk melihat bagaimana proses perubahan anggaran pilkada. Proses penyusunan anggaran terbagi dalam beberapa tahap. Riset difokuskan pada tahap perencanaan dan ratifikasi anggaran. Dengan menggunakan model ROCCIPI (Rule, Opportunity, Capacity, Communication, Interest, Process, Ideology) dapat disimpulkan bahwa dalam pengambilan keputusan penambahan/pengurangan dana hibah tidak hanya melibatkan satu faktor. Semua faktor berperan penting dalam pengambilan keputusan. Pada daerah yang mengalami pengurangan anggaran terdapat faktor opportunity dan interest, tetapi petahana memilih untuk tidak menggunakannya. Peran petahana tidak terlalu berpengaruh justru pemda lah, dalam hal ini TAPD, yang lebih berpengaruh dalam pengurangan tersebut. Hal tersebut dikarenakan kondisi pandemi yang membuat daerah membutuhkan banyak dana untuk mengantisipasi wabah tersebut. Sedangkan dalam penambahan anggaran semua faktor dapat ditemukan dan dipergunakan. Faktor interest petahana dapat ditemukan di enam daerah yang mengalami penambahan anggaran.

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Pilkada is one of the national agendas that must be organized every five years in order to get good and quality leaders for the public welfare. This thesis focuses on the pilkada funding. The research was conducted on 18 regions, 8 of which experienced budget reductions and the other 10 regions got additional budget additions. This thesis using budgeting politics theory from Aaron Wildavsky and ROCCIPI model from Ann Seidman. Budgeting process is divided into several stages and this research focused on the planning and budget ratification. By using the ROCCIPI model (Rule, Opportunity, Capacity, Communication, Interest, Process, Ideology) can be conclude that the decision to increase/deduct funds does not influence by one factor. All factor in ROCCIPI become important in decision making. In the decision to reduce the budget, there are opportunity and interest factor, but the incumbent decide not to use these factors. The research, shows that in the regions that got budget reduction the incumbent’s role was not too involved, but the local government in this case TAPD was more influential in the reduction. This is due to the pandemic conditions that make the region need a lot of funds to cope with the outbreak and thus cutting the election costs. Meanwhile, in areas that experienced additional budgets, all the factor can be found and used. The role of the incumbent and interest factor was quite visible in 6 regions that get additional budgets."

"Penelitian ini bertujuan untuk menguji teori political budget cycle (PBC) di Indonesia sebagai salah satu negara demokrasi terbesar di dunia. Selain itu juga dianalisis bagaimana pengaruh perubahan komposisi belanja dalam political budget cycle tersebut terhadap kerugian daerah. Kerugian daerah merupakan penyimpangan pengelolaan keuangan daerah yang ditemukan dalam hasil audit oleh BPK RI. Dalam penelitian ini data yang digunakan merupakan tingkat kabupaten dan kota periode tahun 2014 s.d. 2019. Spesifikasi model panel data fixed effect digunakan untuk menguji keberadaan fenomena political budget cycle di Indonesia. Selanjutnya, model tobit digunakan untuk mengestimasi dampak perubahan komposisi belanja dalam PBC terhadap kerugian daerah. Berdasarkan hasil empiris, ditemukan bukti sebagai berikut: (1) fenomena PBC terjadi di Indonesia terutama pada belanja hibah, belanja barang, dan belanja modal; (2) tidak ditemukan perbedaan perilaku PBC antara kepala daerah petahana yang kembali mengikuti pilkada dengan kepala daerah petahana yang tidak mengikuti pilkada; (3) PBC menjelang pilkada dapat meningkatkan kerugian daerah; (4) kerugian daerah yang rendah dapat meningkatkan peluang petahana memenangkan pilkada.

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This study aims to test the theory of political budget cycle (PBC) in Indonesia as one of the largest democracies in the world. It is also analyzed the effect of changes in the composition of expenditure in the PBC on regional losses. Regional losses are irregularities in regional finance management found in the results of an audit by BPK RI. In this study, the data used are at the municipalities levels for the period 2014 to 2019. Fixed effect panel data specification model is used to test existence of political budget cycle phenomenon in Indonesia. Furthermore, the tobit model is used to estimate the impact of changes in the composition of expenditure in PBC on regional losses. Based on empirical results, the following evidence is found: (1) PBC phenomenon occurs in Indonesia, especially in donation, goods, and capital expenditure; (2) There was no difference in PBC behavior between region having re-running incumbent and regions that have last-period incumbent; (3) The existence of PBC tends to increase regional losses; (4) A low level of regional losses can increase the chances of the incumbent winning the elections."

"ABSTRAKPenelitian ini bertujuan untuk menguji theory opportunistic cycles di Indonesia sebagai negara new democracy. Selain itu juga dianalisis mengenai bagaimana pengaruh fragmentasi dan akses media terhadap magnitude political budget cycle (PBC).

Dalam penelitian ini data yang digunakan pada level kabupaten/kota periode 2007-2013. Spesifikasi standar dari dynamic panel data digunakan untuk menguji peran fragmentasi dan media terhadap magnitude PBC. Model logit digunakan untuk mengestimasi mengenai dampak perubahan komposisi belanja terhadap peluang menang petahana.

Berdasarkan hasil empiris, ditemukan bukti sebagai berikut : (1) political budget cycle terjadi di Indonesia terutama pada belanja pendidikan, kesehatan, birokrasi dan sosial; (2) fragmentasi berperan dalam memperkuat terjadinya PBC terutama belanja pendidikan; (3) dampak akses media terhadap magnitude PBC cenderung memperkuat magnitude PBC belanja infrastruktur dan memperlemah magnitude PBC pada belanja birokrasi; (4) perubahan komposisi belanja kesehatan, infrastruktur dan birokrasi, serta dukungan partai politik dapat meningkatkan peluang menang petahana dalam pemilihan kepala daerah.

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ABSTRACTThis paper tests the theory of opportunistic cycles in Indonesia as a new democracy. It also investigate the effect of political fragmentation as well as access to mass media on magnitude of the political budget cycle.

The study used local government data in the period 2007-2013. Standard specifications of dynamic panel data are used to test the role of fragmentation and media on magnitude of PBC. The logit model is used to examine how  composition of spending affect the chances of incumbents to win election.

Based on empirical results, evidence is found as follows: (1) political budget cycle occurs in Indonesia, especially in education, health, bureaucratic and social expenditure; (2) fragmentation plays a role in strengthening the occurrence of PBCs, especially education spending; (3) the impact of media access on the magnitude of PBC tends to strengthen the PBC's magnitude of infrastructure spending and weaken the PBC's magnitude on bureaucratic spending; (4) changes in the composition of health spending, infrastructure and bureaucracy, and the support of political parties can increase the chances of winning incumbents in regional head elections."