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Corruption remains to be a serious problem for developing countries such as Indonesia. Based on this situation, referring to the agency theory and human capital theory, this study analyzes several factors influencing corruption of Provincial Governments in Indonesia which include fiscal decentralization, governmental accountability, e-government, level of wages, and level of education. Having applied a multiple regression analysis, the result of this research indicates that fiscal decentralization brings a significantly negative effect on corruption. This fact means that provinces having a higher fiscal decentralization level tend to have a lower corruption level. However, the research finding also shows that e-government has a positively significant impact on corruption. It means that provinces that implement good e-government tend to have higher corruption level compared to those which do not apply such style of government. In addition, e-government in this study is authorized by the mechanism of financial data disclosure through the provincial government website. The policy implication of this study is intended to optimize the implementation of fiscal decentralization and to evaluate the use of e-government in enhancing the government transparency.

fiscal decentralization, e-government, corruption