Local government spending and service delivery in Indonesia: the perverse effects of substantial fiscal resources

<p>Local government spending and service delivery in Indonesia: the perverse effects of substantial fiscal resources. <i>Regional Studies</i>. This study examines the impact of local government expenditure on service delivery in Indonesia. District spending positively influences education, health and infrastructure service access – but only up to a point, after which the relationship becomes negative. The quadratic spending effects disappear for districts managed by directly elected executives and those that perform well on their financial audits. For these arguably less corrupt districts the impact of spending on services is positive across the entire range of expenditure. The consistently beneficial impact of less corrupt district spending on service access is mitigated, however, by rising dependence on intergovernmental transfers.