Local development in the emerging market: Does integrated government internal control matter?

Download This Article

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

Following the significant local development issues in Indonesia (Pukuh & Widyasthika, 2017; Siburian, 2020), the study aims at examining the effect of an integrated government internal control system (GICS) on various local development measures. We employ secondary data from the government regulating bodies. The study discovers that there are still indeed significant issues in development achievement between West Indonesian and East Indonesian regions. Further empirical analysis finds that integrated GICS maturity and corruption control effectiveness support local development by improving human development, inclusive economic development and reducing poverty. Risk management, however, has not contributed significantly to local development as the effect on the development measures is not significant. The study provides practical implications to the related government bodies for the sake of improving the integrated GICS in Indonesian local government to support the local development agenda. The local governments should commit to the integrated GICS implementation to safeguard public interests specifically in local development outcomes. The role of the Financial and Development Supervisory Agency (BPKP) is also essential to improve the implementation of integrated GICS in which adequate monitoring and regulation support are required.

Keywords: Indonesia, Local Government, Local Development, Integrated Government Internal Control System

Authors’ individual contribution: Conceptualization — S.S.; Methodology — M.M.; Software — S.S.; Validation — M.M. and J.W.; Formal Analysis — S.S.; Investigation — J.W.; Resources — S.S.; Data Curation — J.W.; Writing — Original Draft — M.M. and S.S.; Writing — Review & Editing — J.W.; Visualization — S.S.; Supervision — M.M. and J.W.; Project Administration — J.W.; Funding Acquisition — M.M.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: H11, H70, H83, M40, M41

Received: 23.07.2023
Accepted: 29.05.2024
Published online: 31.05.2024

How to cite this paper: Muhtar, M., Winarna, J., & Sutaryo, S. (2024). Local development in the emerging market: Does integrated government internal control matter? [Special issue]. Journal of Governance & Regulation, 13(2), 307–316. https://doi.org/10.22495/jgrv13i2siart7