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This study aims to investigate the effect of local government spending on the performance of local governments. In addition, this study also examines the moderating role of political dynasties and reelection on the relationship between local government spending and performance. By conducting multiple regression with fixed effect approach on 2774 observation during 2010-2015, it is found that local government expenditure has a positive effect on local government performance. In addition, political dynasties and reelection has no moderating effects, but only direct effects on local government performance. In dynastic local governments, the average performance is lower than the non-dynastic local governments. Furthermore, it is found that reelection motive has a positive effect on the local government performance. For the central government, the findings may be used as the input that the phenomenon of political dynasty are extremely harmful to the quality of organization of local government, thus it is necessary to have mechanism to restrict the practice of political dynasty.