Study on opportunistic behaviour in regional budgeting with agency theory approach in regency of East Java

The Regional Revenue and Expenditure Budget (APBD) establishment is political process which created relationship between legislative and executive, legislative and public since Regional Autonomy Act No.22 in 1999 was assigned. Those relationships can explain budget framers’ opportunistic behavior to achieve their own group interests in certain sectors expenditure allocation. This study aim to obtain an empirical evidence of the effect of locally-generated revenue (PAD), general allocation funds (DAU) and budget overridden (SiLPA) toward budget framers’ opportunistic behavior in the district/city in East Java. The study was conducted in 38 district/city in East Java by using secondary data from APBD of district/city between year 2011 and 2015. The study samples were 186 samples which obtained by census sampling method. The data was analyzed by multiple linear regression using SPSS program. The result showed PAD, DAU and SiLPA had positive significant effect on the budget framers’ opportunistic behavior. These results can be used as recommendation for local governments to improve budget establishment process.