Abstract:

The purpose of this study is to analyze the effect of political factors on the local governments’ financial performance in Indonesia. Political factors are measured using the percentage of legislative members from government support parties (coalitions) or non-government supporting parties (opposition). Financial performance is measured using the proportion of owned-source revenue to total revenue. The sample of this research is the district/city government in Indonesia in 2015-2016. The analytical method used is multiple regression. The results show that there is no effect of political factors (both coalition and opposition) on the financial performance of local governments. This result indicate that legislators carry out oversight functions well, regardless of whether they have the same or different political affiliations from the executive.