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Local government performance as a mediator between institutional capacity and community welfare in Jambi Province

Jurnal Perspektif Pembiayaan dan Pembangunan Daerah · Vol. 14 No. 2 (2026) · pp. 177–204

DOI
10.22437/ppd.v14i2.55950
ISSN
2355-8520, 2338-4603
Published
2026-06-30
Publisher
Program Magister Ilmu Ekonomi Pascasarjana Universitas Jambi
Language
en
License
creativecommons.org/licenses/by/4.0

Abstract

Fiscal decentralization is intended to improve community welfare by strengthening local governments' fiscal capacity, organizational characteristics, and bureaucratic human resources. However, the mechanisms through which these institutional factors influence welfare remain insufficiently understood. This study investigates the direct and indirect effects of regional financial conditions, government size, and State Civil Apparatus (ASN) conditions on community welfare through local government performance in the district and municipal governments of Jambi Province, Indonesia. The analysis is based on balanced panel data from 11 local governments covering the 2014–2024 period and employs Partial Least Squares Structural Equation Modeling (PLS-SEM) using WarpPLS 8.0. The results indicate that regional financial conditions negatively affect government performance but positively affect community welfare. Government size has no significant effect on government performance but negatively affects community welfare. In contrast, ASN conditions positively influence both government performance and community welfare. Government performance, however, neither significantly affects community welfare nor mediates the relationships between regional financial conditions, government size, ASN conditions, and community welfare. These findings suggest that fiscal capacity and ASN quality contribute to community welfare primarily through direct mechanisms rather than through formal administrative performance. The study contributes to the literature on fiscal decentralization, Public Financial Management Theory, and Public Value Theory by demonstrating that administrative performance alone is insufficient to translate institutional capacity into improved welfare outcomes. The findings further underscore the importance of strengthening expenditure quality, enhancing ASN professionalism, and adopting outcome-oriented performance management to maximize the welfare benefits of fiscal decentralization.

Keywords

Collaboration network of the authors

40 authors · 118 co-authorship links · 5 across different organisations · showing the 40 most connected

Hover or tap a name to highlight its co-authors. Double-click to open the author's page.

  • Hasanuddin University
  • Universitas Halu Oleo
  • State University of Semarang
  • Affiliation unknown
  • Different organisations
  • Same organisation
  • Affiliation unknown
  • Thicker line = more joint articles · bigger circle = more articles
Show as table
Co-authorOrganisationJoint articles
Subyantoro SubyantoroAffiliation unknown9
Yudi YudiAffiliation unknown9
RAHAYU RAHAYUUniversitas Halu Oleo7
Rustono RustonoAffiliation unknown5
Etik UmiyatiAffiliation unknown5
Dheny WahyudhiAffiliation unknown5
Herry LiyusAffiliation unknown4
Sry RositaAffiliation unknown4
Tri Imam MunandarAffiliation unknown4
Misni ErwatiAffiliation unknown4
Wiwik TiswiyantiAffiliation unknown4
Muhammad RidwanHasanuddin University3
Yuliusman YuliusmanAffiliation unknown3
Dheny WahyudiAffiliation unknown3
Netty HerawatyAffiliation unknown3
Enggar Diah Puspa ArumAffiliation unknown3
Mukhzarudfa MukhzarudfaAffiliation unknown3
Amri AmirAffiliation unknown3
Rita FriyaniAffiliation unknown3
Salman JumailiAffiliation unknown3
Asnath Maria FuahAffiliation unknown2
Hari Bakti MardikantoroAffiliation unknown2
Bambang HartonoAffiliation unknown2
Mijil SetyasihAffiliation unknown2
Imam BaehaqieAffiliation unknown2
Runjati RunjatiAffiliation unknown2
Agus NuryatinAffiliation unknown2
Nas Haryati SetyaningsihAffiliation unknown2
Fathur RokhmanState University of Semarang2
Teguh SupriyantoAffiliation unknown2
Amril AmrilAffiliation unknown2
Nurhayani NurhayaniAffiliation unknown2
Afrizal AfrizalAffiliation unknown2
Rizal Adi SaputraUniversitas Halu Oleo1
Sutardi SutardiUniversitas Halu Oleo1

Affiliations come from OpenAlex; journal OAI-PMH metadata carries none. Authors without an OpenAlex ID are matched by name, which can merge or split people.

Metadata source: OAI-PMH (metadata jurnal) https://online-journal.unja.ac.id/index.php/JES/oai, first harvested 6 Nov 2026, last seen 8 Nov 2026.
Original metadata (oai_dc) 
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	<dc:title xml:lang="en">Local government performance as a mediator between institutional capacity and community welfare in Jambi Province</dc:title>
	<dc:creator xml:lang="en">Sam, Iskandar</dc:creator>
	<dc:creator xml:lang="en">Haryadi, Haryadi</dc:creator>
	<dc:creator xml:lang="en">Rahayu, Sri</dc:creator>
	<dc:creator xml:lang="en">Putra, Wirmie Eka</dc:creator>
	<dc:creator xml:lang="en">Sumarni, Sumarni</dc:creator>
	<dc:subject xml:lang="en">Community welfare</dc:subject>
	<dc:subject xml:lang="en">Fiscal decentralization</dc:subject>
	<dc:subject xml:lang="en">Government performance</dc:subject>
	<dc:subject xml:lang="en">Government size</dc:subject>
	<dc:subject xml:lang="en">Regional financial</dc:subject>
	<dc:subject xml:lang="en">State Civil Apparatus (ASN)</dc:subject>
	<dc:description xml:lang="en">Fiscal decentralization is intended to improve community welfare by strengthening local governments' fiscal capacity, organizational characteristics, and bureaucratic human resources. However, the mechanisms through which these institutional factors influence welfare remain insufficiently understood. This study investigates the direct and indirect effects of regional financial conditions, government size, and State Civil Apparatus (ASN) conditions on community welfare through local government performance in the district and municipal governments of Jambi Province, Indonesia. The analysis is based on balanced panel data from 11 local governments covering the 2014–2024 period and employs Partial Least Squares Structural Equation Modeling (PLS-SEM) using WarpPLS 8.0. The results indicate that regional financial conditions negatively affect government performance but positively affect community welfare. Government size has no significant effect on government performance but negatively affects community welfare. In contrast, ASN conditions positively influence both government performance and community welfare. Government performance, however, neither significantly affects community welfare nor mediates the relationships between regional financial conditions, government size, ASN conditions, and community welfare. These findings suggest that fiscal capacity and ASN quality contribute to community welfare primarily through direct mechanisms rather than through formal administrative performance. The study contributes to the literature on fiscal decentralization, Public Financial Management Theory, and Public Value Theory by demonstrating that administrative performance alone is insufficient to translate institutional capacity into improved welfare outcomes. The findings further underscore the importance of strengthening expenditure quality, enhancing ASN professionalism, and adopting outcome-oriented performance management to maximize the welfare benefits of fiscal decentralization.</dc:description>
	<dc:publisher xml:lang="en">Program Magister Ilmu Ekonomi  Pascasarjana Universitas Jambi</dc:publisher>
	<dc:date>2026-06-30</dc:date>
	<dc:type>info:eu-repo/semantics/article</dc:type>
	<dc:type>info:eu-repo/semantics/publishedVersion</dc:type>
	<dc:type xml:lang="en">Peer-reviewed Article</dc:type>
	<dc:format>application/pdf</dc:format>
	<dc:identifier>https://online-journal.unja.ac.id/JES/article/view/55950</dc:identifier>
	<dc:identifier>10.22437/ppd.v14i2.55950</dc:identifier>
	<dc:source xml:lang="en">Jurnal Perspektif Pembiayaan dan Pembangunan Daerah; Vol. 14 No. 2 (2026): Jurnal Perspektif Pembiayaan dan Pembangunan Daerah; 177-204</dc:source>
	<dc:source>2355-8520</dc:source>
	<dc:source>2338-4603</dc:source>
	<dc:language>en</dc:language>
	<dc:relation>https://online-journal.unja.ac.id/JES/article/view/55950/24804</dc:relation>
	<dc:rights xml:lang="en">Copyright (c) 2026 Iskandar Sam, Haryadi Haryadi, Sri Rahayu, Wirmie Eka Putra, Sumarni Sumarni</dc:rights>
	<dc:rights xml:lang="en">https://creativecommons.org/licenses/by/4.0</dc:rights>
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