Corruption and Public Procurement: A Study of Budget Leakage in Regional Governments

Abstract

Public procurement is a high-risk area for corruption, especially at the regional government level in Indonesia. This study examines budget leakage caused by corrupt practices in local procurement processes, focusing on the mechanisms, scale, and institutional factors that enable misuse of public funds. Employing an empirical approach combining audit reports, procurement data, and interviews with procurement officials and watchdog agencies, the paper identifies common corruption patterns including collusive bidding, fraud, and favoritism. Results indicate significant financial losses and inefficiencies, exacerbated by weak enforcement and limited transparency in local governments. The study argues for the urgent need to strengthen procurement regulations, enhance digital procurement systems, and promote civil society participation to curb corruption and improve fiscal responsibility. By highlighting regional procurement vulnerabilities, this research adds to the global understanding of corruption in decentralized governance systems.