The Impact of Interim Executive on Own-source Revenue and Local Government Spending

Doddy Purwoharyono; Rus'an Nasrudin

doi:10.24843/JEKT.2026.v19.i02.p04

Authors

Doddy Purwoharyono University of Indonesia
Rus'an Nasrudin

DOI:

https://doi.org/10.24843/JEKT.2026.v19.i02.p04

Keywords:

Regional Government, Local Government Taxation, Local Government Expenditures

Abstract

This study examines the fiscal effect of interim local executives appointed by central government in Indonesia during 2022-2023 due to Pilkada Serentak. Using panel data from 508 districts and staggered difference-in-difference, this study estimates causal impact of interim local executives on own-source revenue and local government spending. Results show no significant effect on own-source revenue, but a decline in local government spending under interim leadership. These outcomes are explained by differences in accountability, incentives, and local executive background where interim executives are vertically accountable to the central government, driven by bureaucratic career goals, and often lack local political experience. Interim executives tend to be administratively obedient, but conservative in fiscal policy and less responsive to regional needs. These findings highlight potential trade-offs in appointing interim leaders and call for a careful review of their use in future election cycles to protect local autonomy and decentralization goals.

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