Financial Transparency Practices and Public Trust in Local Government Institutions

Abstract

Financial transparency has become a fundamental principle in strengthening accountability and public confidence in local government institutions. This study examines the relationship between financial transparency practices and public trust in local government institutions by exploring how access to financial information, openness in budget management, and disclosure practices contribute to citizens’ perceptions of government credibility. This research employed a mixed-method approach combining a quantitative survey and qualitative interviews with citizens and local government stakeholders. The quantitative data were collected from 250 respondents who had experience accessing or receiving information related to local government financial management, while qualitative data were obtained through semi-structured interviews to gain deeper insights into transparency practices. The findings indicate that financial transparency practices have a significant positive relationship with public trust in local government institutions. The results show that accessibility of financial information, clarity of budget reporting, and consistency in providing public financial disclosures are key factors influencing citizens’ trust. The analysis reveals that local governments with stronger transparency mechanisms tend to demonstrate higher levels of perceived accountability, integrity, and institutional credibility. However, the findings also indicate that transparency alone is insufficient; public engagement and effective communication strategies are necessary to ensure that financial information is understandable and meaningful for citizens. This study highlights that improving financial transparency practices can serve as a strategic mechanism for strengthening government legitimacy and rebuilding public trust. The findings contribute to public administration literature by emphasizing the importance of transparency not merely as an administrative obligation but as a relational process between government institutions and citizens. Practically, this research suggests that local governments should enhance digital financial disclosure systems, simplify financial information presentation, and encourage greater public participation in monitoring public resource management.