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The issue of this study was to examine the effect of political closeness between the executivelegislative and the period of political office of regional heads on changes in the allocation of local government capital spending in Indonesia. Data of samples were collected from 456 districts/cities in Indonesia from 2010 to 2014, using Panel Least Square method using fixed-effect model. From the results of the research shows that political proximity significantly affects the change of capital expenditure allocation and has a positive coefficient which means that the closer the political relationship between the legislature and the executive will lead to greater allocation of regional capital expenditure and the further the relationship between the legislature and the executive will encourage the allocation of expenditure lower capital, while the period of political office has no significant effect on changes in local government capital expenditures.

The Study of Local Politics Effects on Capital Spending Allocation of Regional Government (Case Study at 456 Districts / City in Indonesia)