Budget surplus determinants in Indonesian regional government budgets from a budgetary slack behaviour point of view

This study contemplates the impact of budgetary slack behaviour on surplus in regional government budgets (Anggaran Pendapatan dan Belanja Daerah or APBDs) in provincial governments throughout Indonesia. Using data for the APBD of all Indonesian provincial governments from 2008 to 2012, the results show that budgeting behaviours motivated by self- interest, myopic behaviour, and dependence on transfers from central government all impact on budget surplus. On the other hand, deposit utilization for reasons of self-interest has an insignificant impact on budget surplus. These behaviours are modified by self-interest motivations related to avoiding uncertainty and the inability to predict future budgets, and these factors lead provincial governments to continue to use incremental budgeting methods. This study contributes to the literature of budgeting by investigating slack behaviour using secondary data to objectively investigate the topic and to complement findings from primary data used in previous studies. This contribution will enable easier detection of slack behaviour using existing data