The Effect of Participatory Budgeting on Budget Risk Avoidance, Budget Slack and Organizational Performance Accountability
Abstract
Research aims: This study aims to analyze the role of participatory budgeting in influencing budgeting risk, budgetary slack, and organizational performance accountability. Budgeting is a fundamental management tool that functions as a mechanism for planning, coordination, supervision, performance evaluation, and motivation. However, the involvement of multiple parties in the budgeting process creates both opportunities and challenges. While participatory budgeting enhances transparency, information quality, commitment, and motivation, it may also trigger dysfunctional behaviors such as budgetary slack, information asymmetry, and conflicts of interest.
Design/Methodology/Approach: Using a deductive qualitative approach based on literature review, this article examines the behavioral aspects of budgeting, agency theory perspectives, and the ethical implications of budgetary slack.
Research findings: The findings indicate that participatory budgeting can improve performance accountability by increasing ownership, strengthening organizational commitment, and reducing budget variance. Nevertheless, excessive or poorly managed participation may increase budgeting risks, including inaccurate cost estimates, operational risks, financial risks, and opportunistic behavior. Risk aversion and information asymmetry are identified as key factors contributing to the emergence of budgetary slack.
Conclusion:
The study concludes that participatory budgeting positively affects managerial performance and organizational accountability when supported by ethical standards, transparency, strict supervision, and effective coordination. Properly managed participation can reduce budgeting risk and minimize budgetary slack, thereby improving efficiency, strengthening governance, and enhancing organizational performance.
References
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Agustami, S., & Arfan, D. (2015). The Effect of Budget Preparation Participation on Budgetary Slack with Organizational Commitment as a Moderating Variable. Jurnal Riset Akuntansi Dan Keuangan, 3(2). https://doi.org/10.17509/jrak.v3i2.6613
Aliabadi, F. J., Mashayekhi, B., & Gal, G. (2019). Budget Preparers’ Perceptions and Performance-Based Budgeting Implementation: The Case of Iranian Public Universities and Research Institutes. Journal of Public Budgeting, Accounting and Financial Management, 31(1), 137–156. https://doi.org/10.1108/JPBAFM-04-2018-0037
Almagfirah, H., & Syahadat, E. F. (2021). The Influence of Participatory Budgeting to Budgetary Slack in Local Government at Majene Regency. Afebi Accounting Review, 6(2), 113. https://doi.org/10.47312/aar.v6i2.507
Argyris, C. (2013). The impact of budgets on people. In The evolution of behavioral accounting research (RLE accounting) (pp. 1–39). Routledge.
Baiman, S. (1982). Agency Research in Managerial Accounting: A Survey. Journal of Accounting Literature, 154–213.
Bangun, N. (2017). Partisipasi Anggaran Dan Kinerja Manajerial Melalui Psychological Capital &Amp; Persepsi Terhadap Inovasi (Penelitian Empiris Pada Satuan Kerja Perangkat Daerah Di Provinsi Dki Jakarta). Jurnal Akuntansi, 21(2), 278. https://doi.org/10.24912/ja.v21i2.199
Barrainkua, I., & Espinosa-Pike, M. (2018). The influence of auditors’ commitment to independence enforcement and firms’ ethical culture on auditors’ professional values and behaviour.
Broman, S. L. de S., & Rocha-Pinto, S. R. d. (2023). Truces (Re)construction at the Boundaries of Budgeting Routines. Rausp Management Journal, 58(1), 39–54. https://doi.org/10.1108/rausp-02-2022-0074
Chong, V. K., & Khudzir, N. F. (2018). The Effect of Mutual Monitoring and Need for Achievement on Budgetary Slack in a Team-Based Environment. Advances in Accounting Behavioral Research, 21, 1–19. https://doi.org/10.1108/S1475-148820180000021001
Dunn, P., & Sainty, B. (2020). Professionalism in Accounting: A Five-Factor Model of Ethical Decision-Making. Social Responsibility Journal, 16(2), 255–269. https://doi.org/10.1108/SRJ-11-2017-0240
Ehsan, M. N., Jamaluddin, A., Tanggamani, V., Nordin, E., & Hussain, W. S. (2023). Budgetary Slack: Does It Hurt Organisations? International Journal of Academic Research in Business and Social Sciences, 13(6). https://doi.org/10.6007/ijarbss/v13-i6/17594
Elhamma, A., & Taouab, O. (2015). Budgetary evaluation, environmental uncertainty and performance: case of Moroccan firms. American Journal of Service Science and Management, 2(1), 1–6.
Gill, A., Mand, H. S., Biger, N., & Mathur, N. (2018). Influence of religious beliefs and spirituality on decision to insure. International Journal of Emerging Markets, 13(5), 780–800. https://doi.org/10.1108/IJoEM-07-2017-0235
Herawati, N., Munah, F., Noviana, E., & Askar, N. (2024). The Relationship Between Breastfeeding Mother’s Knowledge and Feeding Exclusive Breastfeeding at PMB a Bogor City. Jurnal Multidisiplin Indonesia, 3(8). https://doi.org/10.58344/jmi.v3i8.1774
Ishida, S., & Iwasawa, K. (2025). Budgetary Participation and Top Managers’ Earnings Forecasts. Journal of Management Accounting Research, 37(2), 95–120. https://doi.org/10.2308/JMAR-2023-001
Jatmiko, B., Laras, T., & Rohmawati, A. (2020). Budgetary Participation, Organizational Commitment, and Performance of Local Government Apparatuses. Journal of Asian Finance Economics and Business, 7(7), 379–390. https://doi.org/10.13106/jafeb.2020.vol7.no7.379
Kenis, I. (1979). Effects of budgetary goal characteristics on managerial attitudes and performance. The Accounting Review, 54(4), 707–721.
Kurnianto, S., & Sulistyawati, R. (2023). Role of Organizational Politics in the Relationship of Participative Budgeting With Budgetary Slack and Performance Based Budgeting. Jurnal Riset Akuntansi Dan Bisnis Airlangga, 8(1), 1470–1487. https://doi.org/10.20473/jraba.v8i1.45747
Kusniawati, H., & Lahaya, I. A. (2017). Pengaruh partisipasi anggaran, penekanan anggaran, asimetri informasi terhadap kelonggaran anggaran di SKPD Kota Samarinda. ACCOUNTABLE: Jurnal Ekonomi Dan Keuangan, 14(2), 144–156.
Leach-López, M. A., Stammerjohan, W. W., Lee, E., & Stammerjohan, C. A. (2015). Relationship of budget participation conflict and job performance of South Korean managers. Cross Cultural Management, 22(4), 608–629. https://doi.org/10.1108/CCM-02-2014-0026
Mardiasmo. (2004). Public Sector Accounting. Andi Offset.
Matiin, N. (2024). Penganggaran perusahaan. Penerbit Tahta Media.
Milani, K. (1975). The relationship of participation in budget-setting to industrial supervisor performance and attitudes: a field study. The Accounting Review, 50(2), 274–284.
Milosavljević, M., Spasenić, Ž., & Krivokapić, J. (2023). Bibliometric Review of Participatory Budgeting: Current Status and Future Research Agenda. International Journal of Financial Studies, 11(3), 104. https://doi.org/10.3390/ijfs11030104
Mirza, B., & Adi, M. (2020). Truth Vs. Slack Inducing Paradox: How Does Compensation Scheme Mitigate Social Pressure On Budgetary Slack? The Indonesian Journal Of Accounting Research, 23(2).
Nasrun, M. (2018). The Effect of TQM and Budget Participation on Managerial Performance in Corporate Manufacturing in Industrial Area Makassar. Atestasi Jurnal Ilmiah Akuntansi, 1(1), 70–84. https://doi.org/10.57178/atestasi.v1i1.175
Nurkholis, N., & Iqbal, S. (2023). Government Budgetary Slack (Case Study at the Directorate General of Highways Ministry of Public Works and Housing). Eduvest - Journal of Universal Studies, 3(9), 1636–1649. https://doi.org/10.59188/eduvest.v3i9.910
Pradana, B. G. V. (2021). The Role of Psychological Capital and Leader Member-Exchange on Participatory Budgeting and Managerial Performance. Media Ekonomi Dan Manajemen, 36(1). https://doi.org/10.24856/mem.v36i1.1695
Putri, N. P. D. P. K., & Dwija, I. G. A. M. A. (2025). Environmental Uncertainty As A Moderator Of The Influence Of Participative Budgeting And Budgetary Emphasis On Budgetary Slack In Three-Star Hotels In Badung Regency. International Journal Of Financial Economics, 2(1), 257–271.
Risandini, T., Prayogo, Y., & Ifazah, L. (2024). Pegaruh Kejelasan Sasaran Anggaran dan Sistem Pelaporan Terhadap Akuntabilitas Kinerja. Journal of Islamic Accounting Competency, 4(1), 79–95.
Saripudin, S., & Siswantoro, D. (2020). The Effect of Participatory Budgeting on Managerial Performance With Moderating Variables. Jurnal Aset (Akuntansi Riset), 12(1), 17–31. https://doi.org/10.17509/jaset.v12i1.23383
Sinaldi, A. H., Riduwan, A., & Priyadi, M. P. (2023). The Effect of Moral Equity, Locus of Control, Environmental Uncertainty, Organizational Commitment, Reward, and Motivation on Budgetary Slack: Participatory Budgeting as a Moderating Variable. Lead Journal of Economy and Administration, 2(1), 22–41. https://doi.org/10.56403/lejea.v2i1.122
Sinervo, L., Bartocci, L., Lehtonen, P., & Ebdon, C. (2024). Toward Sustainable Governance With Participatory Budgeting. Journal of Public Budgeting Accounting & Financial Management, 36(1), 1–19. https://doi.org/10.1108/jpbafm-11-2023-0205
Sulistyowati, E. (2024). The Leader of the East Java Province Community Empowerment Agency Performance: Participatory Budgeting, Leadership Style, and Work Motivation Factors. Public Management and Accounting Review, 5(1), 32–46. https://doi.org/10.61656/pmar.v5i1.123
Wulandari, N. E., & Mutmainah, S. (2011). Pengaruh partisipasi penyusunan anggaran Terhadap kinerja aparat pemerintah Daerah: Kepuasan Kerja dan Komitmen Organisasi sebagai variabel moderating (Studi empiris pada Pemerintah Daerah Kabupaten Demak).
Agustami, S., & Arfan, D. (2015). The Effect of Budget Preparation Participation on Budgetary Slack with Organizational Commitment as a Moderating Variable. Jurnal Riset Akuntansi Dan Keuangan, 3(2). https://doi.org/10.17509/jrak.v3i2.6613
Aliabadi, F. J., Mashayekhi, B., & Gal, G. (2019). Budget Preparers’ Perceptions and Performance-Based Budgeting Implementation: The Case of Iranian Public Universities and Research Institutes. Journal of Public Budgeting, Accounting and Financial Management, 31(1), 137–156. https://doi.org/10.1108/JPBAFM-04-2018-0037
Almagfirah, H., & Syahadat, E. F. (2021). The Influence of Participatory Budgeting to Budgetary Slack in Local Government at Majene Regency. Afebi Accounting Review, 6(2), 113. https://doi.org/10.47312/aar.v6i2.507
Argyris, C. (2013). The impact of budgets on people. In The evolution of behavioral accounting research (RLE accounting) (pp. 1–39). Routledge.
Baiman, S. (1982). Agency Research in Managerial Accounting: A Survey. Journal of Accounting Literature, 154–213.
Bangun, N. (2017). Partisipasi Anggaran Dan Kinerja Manajerial Melalui Psychological Capital &Amp; Persepsi Terhadap Inovasi (Penelitian Empiris Pada Satuan Kerja Perangkat Daerah Di Provinsi Dki Jakarta). Jurnal Akuntansi, 21(2), 278. https://doi.org/10.24912/ja.v21i2.199
Barrainkua, I., & Espinosa-Pike, M. (2018). The influence of auditors’ commitment to independence enforcement and firms’ ethical culture on auditors’ professional values and behaviour.
Broman, S. L. de S., & Rocha-Pinto, S. R. d. (2023). Truces (Re)construction at the Boundaries of Budgeting Routines. Rausp Management Journal, 58(1), 39–54. https://doi.org/10.1108/rausp-02-2022-0074
Chong, V. K., & Khudzir, N. F. (2018). The Effect of Mutual Monitoring and Need for Achievement on Budgetary Slack in a Team-Based Environment. Advances in Accounting Behavioral Research, 21, 1–19. https://doi.org/10.1108/S1475-148820180000021001
Dunn, P., & Sainty, B. (2020). Professionalism in Accounting: A Five-Factor Model of Ethical Decision-Making. Social Responsibility Journal, 16(2), 255–269. https://doi.org/10.1108/SRJ-11-2017-0240
Ehsan, M. N., Jamaluddin, A., Tanggamani, V., Nordin, E., & Hussain, W. S. (2023). Budgetary Slack: Does It Hurt Organisations? International Journal of Academic Research in Business and Social Sciences, 13(6). https://doi.org/10.6007/ijarbss/v13-i6/17594
Elhamma, A., & Taouab, O. (2015). Budgetary evaluation, environmental uncertainty and performance: case of Moroccan firms. American Journal of Service Science and Management, 2(1), 1–6.
Gill, A., Mand, H. S., Biger, N., & Mathur, N. (2018). Influence of religious beliefs and spirituality on decision to insure. International Journal of Emerging Markets, 13(5), 780–800. https://doi.org/10.1108/IJoEM-07-2017-0235
Herawati, N., Munah, F., Noviana, E., & Askar, N. (2024). The Relationship Between Breastfeeding Mother’s Knowledge and Feeding Exclusive Breastfeeding at PMB a Bogor City. Jurnal Multidisiplin Indonesia, 3(8). https://doi.org/10.58344/jmi.v3i8.1774
Ishida, S., & Iwasawa, K. (2025). Budgetary Participation and Top Managers’ Earnings Forecasts. Journal of Management Accounting Research, 37(2), 95–120. https://doi.org/10.2308/JMAR-2023-001
Jatmiko, B., Laras, T., & Rohmawati, A. (2020). Budgetary Participation, Organizational Commitment, and Performance of Local Government Apparatuses. Journal of Asian Finance Economics and Business, 7(7), 379–390. https://doi.org/10.13106/jafeb.2020.vol7.no7.379
Kenis, I. (1979). Effects of budgetary goal characteristics on managerial attitudes and performance. The Accounting Review, 54(4), 707–721.
Kurnianto, S., & Sulistyawati, R. (2023). Role of Organizational Politics in the Relationship of Participative Budgeting With Budgetary Slack and Performance Based Budgeting. Jurnal Riset Akuntansi Dan Bisnis Airlangga, 8(1), 1470–1487. https://doi.org/10.20473/jraba.v8i1.45747
Kusniawati, H., & Lahaya, I. A. (2017). Pengaruh partisipasi anggaran, penekanan anggaran, asimetri informasi terhadap kelonggaran anggaran di SKPD Kota Samarinda. ACCOUNTABLE: Jurnal Ekonomi Dan Keuangan, 14(2), 144–156.
Leach-López, M. A., Stammerjohan, W. W., Lee, E., & Stammerjohan, C. A. (2015). Relationship of budget participation conflict and job performance of South Korean managers. Cross Cultural Management, 22(4), 608–629. https://doi.org/10.1108/CCM-02-2014-0026
Mardiasmo. (2004). Public Sector Accounting. Andi Offset.
Matiin, N. (2024). Penganggaran perusahaan. Penerbit Tahta Media.
Milani, K. (1975). The relationship of participation in budget-setting to industrial supervisor performance and attitudes: a field study. The Accounting Review, 50(2), 274–284.
Milosavljević, M., Spasenić, Ž., & Krivokapić, J. (2023). Bibliometric Review of Participatory Budgeting: Current Status and Future Research Agenda. International Journal of Financial Studies, 11(3), 104. https://doi.org/10.3390/ijfs11030104
Mirza, B., & Adi, M. (2020). Truth Vs. Slack Inducing Paradox: How Does Compensation Scheme Mitigate Social Pressure On Budgetary Slack? The Indonesian Journal Of Accounting Research, 23(2).
Nasrun, M. (2018). The Effect of TQM and Budget Participation on Managerial Performance in Corporate Manufacturing in Industrial Area Makassar. Atestasi Jurnal Ilmiah Akuntansi, 1(1), 70–84. https://doi.org/10.57178/atestasi.v1i1.175
Nurkholis, N., & Iqbal, S. (2023). Government Budgetary Slack (Case Study at the Directorate General of Highways Ministry of Public Works and Housing). Eduvest - Journal of Universal Studies, 3(9), 1636–1649. https://doi.org/10.59188/eduvest.v3i9.910
Pradana, B. G. V. (2021). The Role of Psychological Capital and Leader Member-Exchange on Participatory Budgeting and Managerial Performance. Media Ekonomi Dan Manajemen, 36(1). https://doi.org/10.24856/mem.v36i1.1695
Putri, N. P. D. P. K., & Dwija, I. G. A. M. A. (2025). Environmental Uncertainty As A Moderator Of The Influence Of Participative Budgeting And Budgetary Emphasis On Budgetary Slack In Three-Star Hotels In Badung Regency. International Journal Of Financial Economics, 2(1), 257–271.
Risandini, T., Prayogo, Y., & Ifazah, L. (2024). Pegaruh Kejelasan Sasaran Anggaran dan Sistem Pelaporan Terhadap Akuntabilitas Kinerja. Journal of Islamic Accounting Competency, 4(1), 79–95.
Saripudin, S., & Siswantoro, D. (2020). The Effect of Participatory Budgeting on Managerial Performance With Moderating Variables. Jurnal Aset (Akuntansi Riset), 12(1), 17–31. https://doi.org/10.17509/jaset.v12i1.23383
Sinaldi, A. H., Riduwan, A., & Priyadi, M. P. (2023). The Effect of Moral Equity, Locus of Control, Environmental Uncertainty, Organizational Commitment, Reward, and Motivation on Budgetary Slack: Participatory Budgeting as a Moderating Variable. Lead Journal of Economy and Administration, 2(1), 22–41. https://doi.org/10.56403/lejea.v2i1.122
Sinervo, L., Bartocci, L., Lehtonen, P., & Ebdon, C. (2024). Toward Sustainable Governance With Participatory Budgeting. Journal of Public Budgeting Accounting & Financial Management, 36(1), 1–19. https://doi.org/10.1108/jpbafm-11-2023-0205
Sulistyowati, E. (2024). The Leader of the East Java Province Community Empowerment Agency Performance: Participatory Budgeting, Leadership Style, and Work Motivation Factors. Public Management and Accounting Review, 5(1), 32–46. https://doi.org/10.61656/pmar.v5i1.123
Wulandari, N. E., & Mutmainah, S. (2011). Pengaruh partisipasi penyusunan anggaran Terhadap kinerja aparat pemerintah Daerah: Kepuasan Kerja dan Komitmen Organisasi sebagai variabel moderating (Studi empiris pada Pemerintah Daerah Kabupaten Demak).
Published
2026-04-22
How to Cite
ANSORI, Wakhid; PANGARIBUAN, David; NURYATI, Tutty.
The Effect of Participatory Budgeting on Budget Risk Avoidance, Budget Slack and Organizational Performance Accountability.
SAR (Soedirman Accounting Review) : Journal of Accounting and Business, [S.l.], v. 11, n. 1, p. 01 - 16, apr. 2026.
ISSN 2598-0718.
Available at: <https://jos.unsoed.ac.id/index.php/sar/article/view/18830>. Date accessed: 15 sep. 2026.
doi: https://doi.org/10.32424/1.sar.2026.11.1.18830.
Section
Articles
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