Public Sector Reform and Good Governance Improve Local Government Financial Performance Through Accountability and Transparency

Abstract

This study aims to explain how bureaucratic reform and the implementation of good governance principles influence the financial performance of local governments through the strengthening of transparency, accountability, and efficiency in public financial management. Using a narrative approach, this research reviews previous studies that highlight the relationship between accountability and the quality of financial reporting, as well as the effect of internal control on the effectiveness of financial performance. Various studies indicate that although bureaucratic reform has been implemented, its impact on local financial performance remains suboptimal due to structural barriers, organizational culture, and weak bureaucratic integrity. This study emphasizes that the establishment of a robust internal control system and the enhancement of human resource competence are essential to achieving sustainable transparency and public accountability. Therefore, the success of bureaucratic reform largely depends on the synergy among policy design, work culture transformation, and the efficiency of public financial systems. The findings provide a conceptual understanding of how governance reform contributes to fiscal integrity and institutional performance improvement.