Corruption Among Regional Heads: Is It Really Due to Political Costs?

The recent string of sting operations by the Corruption Eradication Commission (KPK) that have ensnared several regional heads has prompted various proposals to curb corruption in the regions. One such proposal came from Home Affairs Minister Tito Karnavian, who linked the high rate of corruption among regional heads to the substantial political costs required to win elections, while their official income is deemed insufficient. From this assumption emerged the idea of increasing the welfare of regional heads, even providing incentives in the form of a percentage of locally-generated revenue (PAD) as a driver for improved performance and an effort to reduce corruption. At first glance, this idea sounds reasonable. However, upon closer examination, the underlying logic is problematic. Public policy should not be built on vague assumptions about ‘political costs’, especially if the costs in question stem from practices outside the legal framework. Instead of solving the root of the problem, this proposal risks shifting the focus from reforming political financing governance to providing compensation for distortions that should be eradicated. The fundamental issue is that the high cost of regional elections is not solely derived from official campaign expenditures. Research by LP3ES with KITLV Leiden, Gadjah Mada University, and Diponegoro University shows that these costs largely come from political dowries, vote-buying, and financing informal political networks. If these illicit payments are an inseparable part of election costs, raising the salaries of regional heads will not address the source of the problem, as any increase would still compete with the need to finance dowries and patronage networks that are far larger. Official campaign finance reports from the 2024 regional elections indicate that even in provincial races, reported expenditures only amount to tens of billions of rupiah, a figure dwarfed by the suspected informal costs. This contrast reveals that the argument for raising official income is built on a shaky premise. If the reference is to official costs, they are not large enough to justify a pay rise; if it refers to unofficial costs, the state would be preparing compensation for expenses that should never have existed in the first place. Countries with more orderly political financing systems, such as Germany and France, have taken a different path by limiting donations, enforcing strict spending caps, and mandating transparent public reporting, rather than raising the salaries of elected officials as an anti-corruption tool. Furthermore, the PAD-based incentive scheme carries an even more complex risk. Most locally-generated revenue comes from business permits, mining, and land use—sectors that are already highly vulnerable to corruption by regional heads. If a percentage of PAD is promised as a personal incentive, a regional head has a direct financial reason to boost that revenue as quickly as possible, for instance by easing permits while ignoring crucial regulatory requirements. Rather than reducing corruption, this scheme risks creating a new motive to accelerate it. This risk is not merely hypothetical. In mid-2025, the Regent of Pati raised the Land and Building Tax by 250 percent to catch up on locally-generated revenue, sparking the largest demonstration in the regency’s history and leading to riots before the policy was revoked. A similar pattern spread to Cirebon and Bone, and the Ministry of Home Affairs recorded that over one hundred regencies and cities have raised land and building tax rates since 2024, with twenty of them increasing by more than 100 percent. This pursuit of PAD occurred without any personal incentive for the regional head. If leaders were to receive a direct percentage of the PAD they generate, this already socially volatile drive would have a powerful new justification to intensify. The deeper question is why such an expensive political financing structure has been allowed to persist for so long. One answer is that those with the most power to dismantle it are the very parties that have benefited from it. The political parties that receive dowries from prospective candidates are the same parties that sit in parliament and have the authority to revise campaign finance laws. Dismantling the political dowry system would mean parties losing one of their own sources of funding.