Explaining regional variation in local governance: Clientelism and state-dependency in Indonesia

What explains the varied quality of local governance? The worldwide trend to decentralize the responsibilities and budgets of governments has made this question particularly urgent, spurring research that emphasizes the importance of local leadership, civil society and democratic accountability. In this paper we provide an approach to study how informal dimensions of politics impact public service delivery. We seek to explain the varied quality of local governance across Indonesia by focusing on the way in which local economic conditions foster clientelistic practices. To this end we integrate ethnographic fieldwork, an expert survey as well as cross-district statistical regression analyses of local government performance. We argue that the degree of state dependency of local economies impacts the quality of local governance because politicians in state-dependent economies face less constraints when engaging in clientelistic practices. We test this argument through a two-step regression analysis for the period 1999–2013 in which we relate a measure of the quality of public service delivery to expert assessments of the character of local politics, controlling for the potential effects of various local socio-economic and government budget indicators. We find that observed patterns in the variation of the quality of local governance in Indonesia indeed correspond with both variation in perceived intensity of clientelistic practices, as well as the degree of state dependency of local economies. These results suggest that interventions to strengthen local governance need to be attuned to the character of local economies.