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Can Indonesia Decentralise Successfully? Plans, Problems And Prospects

Author

Listed:
  • James Alm
  • Robert Aten
  • Roy Bahl

Abstract

Indonesia is engaged in an unprecedented social and economic experiment. Responsibility for much government expenditure is being decentralised, largely to local (district) rather than to provincial governments. If this process is successful, the world's most centralised large country could become one of its most decentralised. This paper considers the issues arising as preparations for decentralisation are finalised, and as the socialisation of its plans and practices is considered by the central government, the People's Representative Council, the decentralised units of government, and the public. These issues were identified partly through interviews with local government officials. They include policy and administrative matters yet to be resolved, such as local budgeting, financial management and auditing practices, personnel decentralisation, local taxation, borrowing by local governments, and the match between revenues and expenditures. A major theme is the importance of a continuing national and local discussion on the goals and processes of decentralisation.

Suggested Citation

  • James Alm & Robert Aten & Roy Bahl, 2001. "Can Indonesia Decentralise Successfully? Plans, Problems And Prospects," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 37(1), pages 83-102.
  • Handle: RePEc:taf:bindes:v:37:y:2001:i:1:p:83-102
    DOI: 10.1080/000749101300046537
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    Citations

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    Cited by:

    1. Takahiro Akita & Awaludin Aji Riadi & Ali Rizal, 2019. "Fiscal Disparities in Indonesia under Decentralization: To What Extent Has General Allocation Grant(DAU) Equalized Fiscal Revenues?," Working Papers EMS_2019_05, Research Institute, International University of Japan.
    2. World Bank, 2003. "Decentralizing Indonesia : A Regional Public Expenditure Review Overview Report," World Bank Publications - Reports 14632, The World Bank Group.
    3. Milawati Milawati & Abdul Rozak Fahrudin, 2021. "How is the Performance of Education in Indonesia?," International Review of Management and Marketing, Econjournals, vol. 11(1), pages 29-35.
    4. Manof Shresta, 2002. "An Overview of Intergovernmental Fiscal Relations in Nepal," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0205, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    5. Peter Timmer, 2018. "Pro-poor growth in Indonesia: Challenging the pessimism of Myrdal's Asian Drama," WIDER Working Paper Series wp-2018-103, World Institute for Development Economic Research (UNU-WIDER).
    6. Akhmad Rizal Shidiq, 2003. "Decentralization And Rent Seeking In Indonesia," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 51, pages 177-207, June.
    7. Bambang Brodjonegoro & Jorge Martinez-Vazquez, 2004. "An Analysis of Indonesia's Transfer System: Recent Performance and Future Prospects," Chapters, in: James Alm & Jorge Martinez-Vazquez & Sri Mulyani Indrawati (ed.), Reforming Intergovernmental Fiscal Relations and the Rebuilding of Indonesia, chapter 8, Edward Elgar Publishing.
    8. Kuncoro, Ari, 2002. "The new laws of decentralization and corruption in Indonesia:examination of provincial and district data," ERSA conference papers ersa02p053, European Regional Science Association.
    9. Blane Lewis, 2001. "The New Indonesian Equalisation Transfer," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 37(3), pages 325-343.
    10. James Alm, 2019. "Can Indonesia Reform Its Tax System? Problems And Options," Working Papers 1906, Tulane University, Department of Economics.
    11. Victoria A Beard, 2005. "Individual Determinants of Participation in Community Development in Indonesia," Environment and Planning C, , vol. 23(1), pages 21-39, February.
    12. Takahiro Akita & Sachiko Miyata, 2018. "Spatial Inequalities in Indonesia, 1996–2010: A Hierarchical Decomposition Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 138(3), pages 829-852, August.
    13. Peter Timmer, 2018. "Pro-poor growth in Indonesia: Challenging the pessimism of Myrdal’s Asian Drama," WIDER Working Paper Series 103, World Institute for Development Economic Research (UNU-WIDER).
    14. Yogi Vidyattama, 2016. "Inter-provincial migration and 1975–2005 regional growth in Indonesia," Papers in Regional Science, Wiley Blackwell, vol. 95, pages 87-105, March.
    15. Takahiro Akita & Awaludin Aji Riadi & Ali Rizal, 2021. "Fiscal disparities in Indonesia in the decentralization era: Does general allocation fund equalize fiscal revenues?," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(6), pages 1842-1865, December.
    16. Hal Hill, 2002. "Spatial Disparities in Developing East Asia: a survey," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 16(1), pages 10-35, May.
    17. Amelia Bruce & Donovan Storey, 2010. "Networks of Waste: Informal Economic Systems and Sustainability in Bali, Indonesia," Local Economy, London South Bank University, vol. 25(3), pages 176-189, May.
    18. Roy Bahl & Jorge Martinez-Vazquez, 2013. "Sequencing Fiscal Decentralization," Annals of Economics and Finance, Society for AEF, vol. 14(2), pages 641-687, November.
    19. N. A. Phelps, 2004. "Archetype for an archipelago? Batam as anti-model and model of industrialization in reformasi Indonesia," Progress in Development Studies, , vol. 4(3), pages 206-229, July.
    20. Anne Booth, 2003. "Decentralisation and Poverty Alleviation in Indonesia," Environment and Planning C, , vol. 21(2), pages 181-202, April.
    21. Ari Perdana & Deni Friawan, 2007. "Economic Crisis, Institutional Changes and the Effectiveness of Government : the Case of Indonesia," Governance Working Papers 21905, East Asian Bureau of Economic Research.

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