Political budget cycles in Indonesia at the district level

•First to analyze political budget cycles (PBCs) in newly democratized Indonesia.•First to analyze PBCs for indirect and direct elections in the same country.•PBCs exist only for direct elections, especially if the incumbent runs for reelection.•PBCs are clearly identified due to exogenous and different timing of elections.•Shows that the identification of PBCs may require a disaggregated approach.

We find significant political budget cycles (PBCs) for Indonesian districts only for direct, not for indirect, elections. PBCs are significantly stronger if the incumbent runs for reelection. They are well identified due to the exogenously different timing of elections.