DRIVING SOCIETAL PROGRESS THROUGH LEGAL REFORMS IN PUBLIC FINANCIAL MANAGEMENT: STRENGTHENING ACCOUNTABILITY, TRANSPARENCY, AND EFFICIENCY IN INDONESIA

Abstract

This paper examines how legal reforms in public financial management (PFM) drive societal progress in Indonesia by enhancing accountability, transparency, and efficiency in budget management. Key legal frameworks, including the 1945 Constitution (UUD 1945) and the package of State Finance Laws, such as Law No. 17/2003 on State Finance, Law No. 1/2004 on State Treasury, Law No. 15/2004 on Audit of State Financial Management, Law No. 14/2008 on Public Information Disclosure, Law No. 25/2004 on National Development Planning System, and Law No. 30/2014 on Government Administration, have shaped fiscal policies, tax regulations, and public expenditures. Using a qualitative approach, this study analyzes secondary data from legal documents, academic literature, and government reports to assess the impact of these reforms on financial oversight and public trust. The findings highlight improvements in transparency through initiatives such as open data platforms and e-Government systems, which have reduced financial mismanagement and strengthened fiscal discipline. However, challenges remain, including political interference, institutional weaknesses, and regulatory enforcement gaps, which limit the effectiveness of these reforms. To address these barriers, the paper advocates for an integrated approach that combines legal, economic, and institutional reforms to promote long-term fiscal sustainability and economic resilience. By aligning legal frameworks with the principles of Pancasila and modern governance practices, Indonesia can build a transparent and accountable public finance system that fosters equitable development and strengthens public confidence in government financial management.