Mr. Jos van Kesteren for the necessary advice, support and patience they have given me to present the reader with this thesis.

This thesis is the outcome of a compulsory graduation project to complete my study at the Faculty of Management and Organisation at the University of Groningen. It is based on an internship conducted between February and October 2001 at the

Department of Education at the Provincial Government of Bali. The objective of this thesis is to make a contribution in the context of the Otonomi Daerah Program to the decentralisation process of the Indonesian Government. After my internship in Indonesia, I have studied the theories and concepts available for answering my research question, which resulted in this thesis.

I would like to use the preface of this thesis as an opportunity to thank several people for their support, help and contribution.

First of all, I would like to thank my counsellors: Mr. Hen van de Water and

Mr. Jos van Kesteren for the necessary advice, support and patience they have given me to present the reader with this thesis.

Another word of thanks goes to all the government-employees in Bali and Kalimantan who have helped me to understand their organisation, their way of working and their culture.

Most of all I want to thank my neighbour Ani Suryani for her undivided help concerning surviving in Indonesia and especially Bali.

Last but certainly not least, I want to show my gratitude towards my family, who have

made it possible for me to start and finish this graduation project.

MANAGEMENT SUMMARY

This research was initiated in the context of the Otonomi Daerah Program

, a program in which students from the University of Groningen, faculty of Management and Organisation are enabled to conduct a research about the decentralisation process presently occurring in Indonesia.

Within this program the objective of this research is to make a contribution to the decentralisation process of the Indonesian Government promulgated by Law 22/1999 and 25/1999 on regional governance and fiscal balance.

The following research question resulted from this objective:

‘What recommendations for the design of the structure of the Department of Education at the provincial-level can be made in accordance with the laws 22/1999 and 25/1999 on regional governance and fiscal balance?’

To give answer to the above design problem, I analysed the Department of Education as it existed before the implementation of the decentralisation laws. For this analysis I made a specification into a formal and a real structure of the Department of

Education. The results of the comparison between these two structures as well as an interpretation of the differences in terms of theory have formed the base for the recommendations. Furthermore, I examined the contents of the laws 22/1999 and 25/1999 on regional governance and fiscal balance in comparison with the existing laws. The findings of these analyses together with an analysis about the problems originating from the change in structure and the assessment criteria consequent upon it provided the means for recommendations for the design of the structure of the Department of Education.

For the comparison of the formal and real structure of the Department of Education, I used the typologies described by De Leeuw.

This resulted in a conclusion that the typology best suited for the organisation of the Department of Education is called the

‘Fear Organisation’. A fear-organisation is an organisation where the formal organisation completely embraces the real organisation. It can merely exist by the grace of heavy sanctions in case of rule breaking and that these sanctions can stem from culture. This is very much the case with the Department of Education. The culture present at the Department of Education will not change immediately with the implementation of the laws 22/1999 and 25/1999, and has to be considered to make useful recommendations.

When examining the contents of law 22/1999, law 25/1999 and its regulations three fundamental changes in comparison with the existing laws emerged:

• elimination of the hierarchical relationship between the provincial and districts governments;

• the merge of all deconcentrated and decentralised offices at the provincial and the district level;

• the delegation of authority followed by its financing.

i Otonomi Daerah = Regional Autonomy.

ii A.C.J. de Leeuw, Bedrijfskundig management, Primair Proces, strategie en organisatie, Van Gorcum, Assen, 2000.

Within these laws and regulations, the new general function of the Department of Education is described as a mediator of the unitary state, a manager of infrastructural linkages and an implementer of central-government functions.

The laws and regulations examined define for a big part the new structure of the Department of Education. To ensure that the recommendations for the design of the new structure are in compliance with them, they have to be taken into account.

The analysis of the problems resulted in the following assessment criteria:

• enhance a uniform level of education throughout the province;

• reduce the lack of sufficient skills of the employees of the Department of Education for the new task-description;

• reduce the superfluous skills of the employees of the Department of Education for the old tasks now handed over to the districts;

• reduce the lack of sufficient skills of the employees of the Department of Education at the level of regencies/ municipalities for the new task- description;

• reduce the redundancy of the personnel of the Department of Education;

• enhance the co-ordination and evaluation of activities of the districts.

Before making recommendations based on these criteria, I concluded, that I have to consider that my recommendations are to be implemented in a Department typed as a fear-organisation. Therefore, it is of most importance to try to avoid ambiguities in documents, rules and regulations providing the guidelines for the structure. Dualities and ambiguities help to make it possible to work within the margin, and hide behind these procedures and regulations.

Second, the new laws demand a greater degree of imagination, initiative and creativity than ever before from the civil servants. If you want your employees to develop these skills, it is of consequence for the Department of Education to establish a system more focused on reinforcement than rule-breaking. These considerations, make use of consistent and unambiguous rules and rewarding instead of punishing, are vital for the recommendations in the next subsection to be of any help.

The analysis of the problems and their subsequent assessment-criteria resulted in the recommendations mentioned below.

Develop a co-ordination system for the Department of Education both within and between units; horizontal as well as vertical. This co-ordination system:

• reduces the superabundance of personnel;

• enables the province to develop a large scale training program for local officials.

Training programs directed from the provincial level address all criteria:

• employees are given the opportunity to hand over their knowledge;

• employees can built up the necessary knowledge for their new tasks;

• positive influence on the co-ordination and evaluation of activities between districts because of stimulation of communication between different

government-levels;

• more clarity regarding districts who need extra personnel or funding enhancing the uniformity of the education level.

Unfortunately, the implementation of these recommendations even though possible,

will take a long time. Indonesia is in a phase of massive social and economic upheaval

and the priority of the central government lies not with the implementation of the

decentralisation process

TABLE OF CONTENTS

Acknowledgement

Management Summary

Chapter 1 Introduction 1

1.1 Introduction 1

1.2 Decentralisation in Indonesia 2

1.3 Preface to my Research 5

1.4 Conclusion 5

Chapter 2 Problem Definition 6

2.1 Introduction 6

2.2 Research Objective 6

2.3 Conclusion 7

Chapter 3 Methodology 8

3.1 Introduction 8

3.2 Type of Research 8

3.2.1 Research Concept 10

3.2.2 Method of Data-Collection 11 3.3 Quality of Research Design 14

3.3.1 Construct Validity 14

3.3.2 Internal Validity 15

3.3.3 External Validity 15

3.3.4 Reliability 16

3.4 Research Constraints 17

3.4.1 Time Span 17

3.5 Concepts and Definitions 18

3.5.1 Introduction 18

3.5.2 The Concept Decentralisation 18 3.5.3 Formal and Real Structure 21

3.6 Conclusion 21

Chapter 4 Formal Structure of the Department of Education 22

4.1 Introduction 22

4.2 Formal General Government Structure 23 4.3 Formal Structure of the Department of Education 25

4.3.1 Authority 27

4.4 Conclusion 27

Chapter 5 Real Structure of the Department of Education 28

5.1 Introduction 28 5.2 General Government Structure 28 5.3 Structure of the Department of Education 29

5.3.1 Authority 31

5.4 Conclusion 32

Chapter 6 Differences between Formal and Real Structure 33

6.1 Introduction 33

6.2 The Fear Organisation 33

6.3 Conclusion 36

Chapter 7 Formal Organisational Changes 37

7.1 Introduction 37

7.2 General Organisational Changes 37 7.3 Organisational Changes for the Department of Education 38 7.3.1 Changes in Authority 40

7.4 Conclusion 42

Chapter 8 Recommendations for Improvement 43

8.1 Introduction 43

8.2 Analyses of the Problems 43 8.3 Recommendations for Improvement 45

8.4 Conclusion 48

Chapter 9 Closure 49

9.1 Introduction 49

9.2 Closure 49

References 51

Appendix DAPP-Project

Structure of Interview

Organisational Structures

Authorities

CHAPTER 1 INTRODUCTION

1.1 Introduction

Initially, this research started in Palangka Raya, one of the biggest cities on the island Kalimantan. The idea was to conduct a five months research within the framework of the OTODA

program of WGM

. WGM works together with many Indonesian universities and aims at long-lasting relationships with their counterparts to gain experience and knowledge in several fields. The OTODA program, a joint program of WGM with the Indonesian Ministry of Home Affairs is an example of such a long- lasting relationship. Together with local governments and local universities the WGM is researching the organisational consequences of the implementation of law 22/1999 and 25/1999, regarding regional governance and fiscal balance in Indonesia. In Palangka Raya, I was stationed at a government institution called the Bappeda. This planning bureau had quite some experience with foreign WGM researchers. Three other persons from the University of Groningen, previous to my visit had done their internship there as well. Unfortunately, after a few weeks, two ethnic groups started a conflict. The Dayak, the race whose original roots lie in Kalimantan closed in with a group of Madura-people, a race originated from the island Madura situated between Java and Bali. The Madura had successfully started a new living in Kalimantan after being migrated from their island. This migration was in token of a nation wide Transmigration Plan to equalize the population-density of Indonesia and fully supported by the Indonesian Government. Since the migration of the Madura to Kalimantan, localised riots and fights between the two ethnic groups in several areas of Kalimantan were a part of every day’s life. Until February 2001, Palangka Raya had never had any troubles with the two races. Only in this month, after several traumatic and tragic affairs in Sampit where more than six hundred people were killed, the people of Palangka Raya became infected and hatred and jealousy started to grow among the Dayak and the Madura-people. Becaks were burned, houses and shops, mainly from the minority group of the Madura, were ruined and Madura people were abandoned from the city. In this period most of the public institutions were closed, a curfew was established and police and military were mobilised. After a while the situation started to improve, and I was optimistic about continuing my research. This all changed with a visit of President Abdurrahman Wahid to Palangka Raya. This visit led up to gun shooting between two different armies, more riots among the Dayak and Madura-people and even parades with decapitated heads of Madura-man. Together with the University and WGM, I decided it was too dangerous for me to continue and that I had to leave for Jakarta. In Jakarta WGM would contact their relations and help me to conduct my research somewhere safer in Indonesia.

In Jakarta WGM decided not to put any more energy in this project and wanted me to come back to the Netherlands. For me this was very disappointing. After a very long and busy preparation period in Holland, a hectic and docile stay in Palangka Raya and a taste of what Indonesia was like, I was not ready to call it a day. I decided to go and travel through Java and in the meantime explore what options there were for me to continue my research.

1 OTODA is an abbreviation of Otonomi Daerah = Regional Autonomy.

2 Working Group Matching;researchers from the University of Groningen, faculty of Management and Organisation and the University of Indonesia founded WGM in 1990.

Eventually, in Bali an opportunity was given to me. The University of Udayana situated in Denpasar, the capital of Bali, was willing and able to sponsor me, which is a vital part for the renewal of my visa and to help me make contact with the

government agencies necessary for the continuation of my research. Finally, after three months of writing letters, addressing government institutions and bureaucratic red tape, a visit to the Governor resulted in an official approval that enabled me to collect information and conduct interviews at several government institutions. Instead of conducting a five months research in Palangka Raya, I started my research in Bali five months after arriving in Indonesia, working with government agencies

inexperienced with foreign researchers, ignorant of my research and only three months to collect the information needed for my research.

1.2 Decentralisation in Indonesia

As I have mentioned in paragraph 1.1, this research was initiated in the context of the Otonomi Daerah Program, a program in which students from the University of Groningen, faculty of Management and Organisation are enabled to conduct a research about the decentralisation process presently occurring in Indonesia. For a clear comprehension of this research it is of importance that it is understood why Indonesia is trying to decentralise its Republic.

At various times in Indonesia’s post-independence history a number of attempts have been made to establish representative decentralised institutions and to increase the level of regional autonomy. Political considerations often sidetracked these efforts.

Establishing the unity of the country, annexed over a long period of time and under various voluntary and involuntary arrangements, has always been a major concern of national leaders. This concern has tended to make Indonesia’s leaders suspicious of genuine decentralisation.

Since January 2001 two new laws are valid. Law 22/1999 (Undang-Undang 22/1999) on regional governance and law 25/1999 (Undang-Undang 25/1999) on fiscal balance.

These laws have been designed according to the Indonesian notion of ‘pemerintah amanah’ or ‘good governance’, which refers to a clear division of competencies, tasks and responsibilities between central and local authorities, keeping in mind three basic government functions: allocation, distribution and stabilisation and the performance of three main tasks: provision of services, empowerment and development.

The basic underlying principles are legal, political, economic and social equality.

These laws change the present balance of management power and financial relations between the centre and the regions. They are meant to offer a higher degree of decentralisation and more autonomy for the regions.

What accounts for this re-emergence of interest in decentralisation, and why should it be seen as any more genuine than previous official stances on this issue?

The laws on regional government and finance, to promote regional autonomy and decentralisation, may be seen as a means of achieving a variety of different objectives.

This helps to explain why Indonesia is interested in decentralisation.

3 P. Smoke and B.D. Lewis, Fiscal Decentralization in Indonesia, A New Approach to an Old Idea, World Development, Vol. 24, No. 8, p.1281-1288, 1996.

4 M. Noordhoek and L. Schmit, "Public administration and decentralisation in Indonesia", Leiden 1999.

First of all there is the will to preserve the unified state and prevent Indonesia from fragmentation.

Indonesia is characterised by a population with variations in ethnic, religious and cultural backgrounds, provinces isolated from the governing centres and diversities in regional economic bases. Resource-rich provinces like Aceh, Irian Jaya and Riau are mounting the pressure to break away from Jakarta over what is perceived as the plundering of their vast natural resources with little given in return. Much of the argument for the implementation of the laws 22/1999 and 25/1999 rests on the

assumption that greater freedom will bring greater contentment to potential breakaway regions within the boundaries of the unified state Indonesia.

Regional autonomy is also tied up in the Reform Agenda,

and the effort to

democratise Indonesian society.

The devolution of real power is thought to enhance political participation amongst the people, because of the increased levels of interest and involvement in local government, which it brings about.

This process enhances democratic values and performs a systems-maintenance function. Similarly,

decentralisation provides the opportunity for citizens to debate and decide upon those local issues, which matter most to them, thus promoting political education. Lastly, local politics provides a training-ground for local leaders, who can then progress to become national leader.

Another objective of decentralisation is increasing the efficiency and the effectiveness of the government apparatus.

Indonesia is a country with a very large population and land area. To govern a large country from the centre gives diseconomies of scale, which relate to the manpower costs of bureaucratic red tape, the time required to approve local decisions, and the problems of communications.

According to Rondinelli (1984) the central government fails in managing national economic development effectively and efficiently. During the 1980s, manufacturing- led economic growth accelerated urbanisation and generated a steady rise in real disposable incomes. These trends, which have continued into the 1990s, led to a substantial increase in demand for public services in Indonesia’s cities and towns, exacerbating an already serious backlog in infrastructure investment. The central government has simply been unable to keep up with the rapidly growing demand for infrastructure. This situation has serious consequences for some regions in terms of

5 Minister van Buitenlandse Zaken and Minister van Ontwikkelingszaken, Notitie Indonesië, Agenda van Samenwerking, 2000.

6 H. Hull, Striking a Most Delicate Balance: The Implications of Otonomi Daerah for the Planning and Implementation of Development Co-operation Projects, Demography Program, RSSS, ANU, 1999.

http://wbln0018.worldbank.org/eap/eap.nsf/CountryOffice/Indonesia/

7 The Reform Agenda aims to democratise the polity at all levels of government.The Reform Agenda is a product of the Indonesian Government of National Unity formed by President Abdurrahman Wahid and Vice-President Megawati Sukarnoputri in 1999.Prominent among the issues of the Reform Agenda are the demand for prosecutions to end collusion, corruption and nepotism (KKN), the call for substantial increases in the salaries of public servants that will provide the foundations for an honest bureaucracy, and the effort to reduce the involvement of the military in government and private enterprise.

8 H. Hull, Striking a Most Delicate Balance: The Implications of Otonomi Daerah for the Planning and Implementation of Development Co-operation Projects, Demography Program, RSSS, ANU, 1999.

http://wbln0018.worldbank.org/eap/eap.nsf/CountryOffice/Indonesia/

9 D.A. Rondinelli, J.R. Nellis, and G. Shabbir Cheema, Decentralization in Developing Countries, A Review of Recent Experience, The Worldbank, Washington, D. C., U.S.A., 1984.

10 W. Yusuf, Decentralization in Indonesia Part 1: The Indonesian decentralization policy and the District Autonomy Pilot Program, Ministry of Home Affairs, Jakarta, Indonesia, 1997.

http://www.fao.org/SD/ROdirect/ROfo0007.htm

11 J. Alm and R. Bahl, Decentralization in Indonesia: Prospects and Problems, Department of Economics, School of Policy Studies, Georgia State University, U.S.A., 1999.

hindering economic growth and generating the political dissatisfaction that comes with the failure of the centre to provide comprehensive national development planning.

Moreover, the central government of Indonesia has been producing standardised, less- differentiated outputs less suited to local preferences.

According to Faguet (1997) decentralisation, by placing government closer to the people, fosters greater

responsiveness of policy-makers to the will of the citizenry and, it is argued, results in a closer congruence between public preferences and public policy. This is not only because decision-makers in decentralised units are likely to be more knowledgeable about and attuned to the needs of their area than are centralised national-government decision-makers, but also because decentralisation permits these decision-makers to be held directly accountable to the local citizenry through local election.

Another way in which decentralisation might improve public service provision involves information

. The basic argument is that information about local

preferences, along with technical data concerning the production and provision of public services, is so voluminous and complex that central governments are incapable of gathering it all and processing it adequately. Thus important information will not be reported, or will be lost in transit, or will be interpreted incorrectly at the centre, or some other sort of informational obstacle will arise which prevents the centre from knowing what services the periphery most needs and how best to provide them.

In Indonesia administrative capacity is low, decentralisation is seen as a means of creating larger numbers of skilled administrators and managers.

Such skills are only strengthened when administrators have meaningful managerial responsibilities.

Centralisation concentrates experiences in the national capital, and contributes little to developing local leadership and initiatives. Properly carried out decentralisation increases officials’ knowledge of local conditions, motivates community leaders to take an active role, creates better communications between local residents and leaders and between local and national officials, and increases community solidarity and interest in land reform projects.

Decentralisation can also increase the efficiency of central ministries by relieving top management of routine, repetitive tasks and allowing them more time to plan and monitor programs that absolutely require central direction or control.

Diversity in public policy is another argument in favour of decentralisation. Diversity is valued because it offers citizens a greater choice in public services options when they are deciding where to reside; and it is thought to encourage experimentation and innovation in public policy.

Decentralisation will thus result in a variety of policy approaches at the local level, some of which will be more successful than others.

Once given policies have been shown to work, they can be taken up by other decentralised units as well as central government.

To date, Indonesia is in a transitional phase and a lot of problems concerning the implementation of the two new laws are still unresolved. If the decentralisation

process is properly carried out, Indonesia can benefit substantially from it. For now its effectivity is yet unknown.

12 Jean Paul Faguet, Decentralization and Local Government Performance, Technical Consultation on Decentralization, London School of Economics, 1997.

13 D.A. Rondinelli, J.R. Nellis, and G. Shabbir Cheema, Decentralization in Developing Countries, A Review of Recent Experience, The Worldbank, Washington, D. C., U.S.A., 1984.

1.3 Preface to my Research

The objective of this research is to make a contribution to the decentralisation process of the Indonesian Government promulgated by law 22/1999 and 25/1999 on regional governance and fiscal balance. This contribution will be made in the context of the OTODA program, which I already referred to in Chapter 1.2 Decentralisation in Indonesia.

The scope of this objective is very broad, therefore to give this research more depth some boundaries of concession had to be made. This research will first of all focus on the first tier of government levels in Indonesia, the provincial level. Within this tier I decided to focus on the Department of Education Level I of the province of Bali, one of the decentralised sectoral departments. The decision to focus on the Department of Education was made on account of several reasons.

First of all, the choice of department was narrowed down because the focus had to be on a department affected by Law 22/1999 on regional governance and law 25/1999 on fiscal balance, this is the case with many but not all government departments. Second, the Department of Education was recommended to me by Johannes Franciscus de Ruijter, a former student at the University of Groningen, who also in the context of Otonomi Dearah had conducted his internship in Palangka Raya.

According to his research, the Department of Education is greatly affected by the decentralisation laws because it is employing the largest amount of functionaries and is generally seen as one of the more important and developed departments of the Indonesian Government.

This and the fact that the University of Udayana, functioning as an intermediary for the initial contact, was in close contact with the Department of Education made the decision to focus on this department a natural one.

The focus on the first tier of government levels, the provincial level, was a non- deliberate choice. The official approval to conduct interviews and collect information handed over to me by the Governor, assigned my working place at the Department of Education at the provincial level. I then decided to focus on the first tier, so I could fully utilise observation as a way of collecting data.

1.4 Conclusion

This chapter is an introduction to my actual research. It explains the circumstances in which this research was conducted. Furthermore, it states the objective of this

research: to make a contribution in the context of the Otonomi Daerah Program to the decentralisation process of the Indonesian Government promulgated by law 22/1999 and 25/1999. Because of the broadness of this objective I discussed the process of the boundaries of concession I had to make. Next to the above, I reviewed the reasons for Indonesia to decentralise its government agencies, to make this research more

comprehensible. The following chapter will dilate about the problem definition of this research, its objective and the research- and sub-questions consequent upon it.

Chapter three contains the methodology, the quality criteria, research constraints, concepts and definitions valid for this research. Analyses and design to answer the sub-questions stated in chapter one, will be made in chapter four until eight. These analyses and design will lead to a closure written in chapter nine.

14 J.F. de Ruijter, Central Kalimantan, ready for a change?: The impact of decentralisation on the internal labour market of the services for Health and Education, Rijksuniversiteit Groningen, 2000.

CHAPTER 2 PROBLEM DEFINITION

2.1 Introduction

This chapter is a further explication of the objective of this research and its resulting research question. It formulates the sub-questions; respectively the reasons why I think these sub-questions are of importance to answer my research question.

2.2 Research Objective

According to Van der Zwaan (1995, p. 29) a problem definition should be divided into a research objective and a research question. My research objective is stated in the following way:

The objective of this research is to make a contribution in the context of the Otonomi Daerah Program to the decentralisation process of the Indonesian Government promulgated by law 22/1999 and 25/1999 on regional governance and fiscal balance.

Research Question

What recommendations for the design of the formal structure of the Department of Education at the provincial-level (Tingkat I)

can be made in accordance with the laws 22/1999 and 25/1999 on regional governance and fiscal balance?

Sub Questions

Because a research question is not able to state all the specific aspects and elements of the problem, it should be itemised in sub-questions.

The subsequent stated questions are relevant for this research:

1) a. In what way is the structure of the Department of Education formally organised?

b. In what way is the structure of the Department of Education in reality organised?

According to Jägers (1991, p. 12) when designing a new organisation insights in the different elements of the organisation and the consequences of using a specific element is especially important to avoid the risk that the advantages of the present organisation are overlooked. It is crucial that one is aware of the fact that there is a big chance the present organisation is there for a reason.

15 The Department of Education at the provincial-level (Tingkat I) will from now on be referred at as the Department of Education.

16 A.H.van der Zwaan, Organisatie-onderzoek, leerboek voor de praktijk: het ontwerpen van onderzoek in organisaties, Van Gorcum, Assen, 1995.

In this sub-question a specification into formal and real structure is formulated. Even though, the changes promulgated by law 22/1999 and 25/1999 are formal changes. To make recommendations for the Department of Education one can not only analyse the formal present structure by examining the existing laws, procedures and documents.

An analysis of the real structure is necessary. Direct observation and interviews are needed to define the real structure of the organisation of the Department of Education.

2) In what way does the real structure of the Department of Education differ from the formal structure of this Department?

The results of a comparison of the real structure of the Department of Education and the formal structure of this Department as well as an interpretation of the differences in terms of theory will form the base for recommendations for the design of a formal structure.

3) What formal organisational changes in regard to the structure of the Department of Education do the laws 22/1999 and 25/1999 promulgate?

A deeper understanding of the contents of the laws 22/1999 and 25/1999 on regional governance and fiscal balance in comparison with the existing laws is necessary to make sure that the recommendations for the formal structure of the Department of Education are in compliance with these laws.

4) What recommendations for the design of the formal structure can be made to adjust the real structure of the Department of Education within the formal structure promulgated by the laws 22/199 and 25/1999?

An analysis of the problems originating from the change in structure, the assessment- criteria consequent upon it, together with the results of the former sub-questions will provide the means for recommendations for the design of the formal structure of the Department of Education.

2.3 Conclusion

Before answering my research question and its resulting sub questions reviewed in

this chapter, I will use the next chapter to discuss the methodology present in this

research.

CHAPTER 3 METHODOLOGY

3.1 Introduction

Methodology, also known in management science as the management of a research,

aims to enhance the quality of a research. It helps to effectively and efficiently frame a science management based research and augments the outcome of useful results.

In this chapter the following subjects arise: the type of research I am conducting, the concept of this research, the method of data-collection, the quality of a research design and its resulting criteria, research constraints including the time span valid for this research and the concepts and definitions used in this research.

3.2 Type of Research

The type of research I conduct has to give answer to a design problem.

According to De Leeuw (1990, p. 244) organisational design is defined as the choice of a suitable structure for an organisation, taking in account the environment and the objectives.

De Leeuw (1990, p. 244) also specifies what is meant by the concept structure. The concept is broadly interpreted. It states that:

Organisations are described as all the systems of (single or compound) positions (roles, functions) taken by functionaries, together with the tools necessary for the physical operational processes. The structure of an organisation is the collection of relations between these (single or compound) positions.

A design problem should be related to the functioning of the organisation. It is a problem with structural causes and/or can be solved with structural modifications.

To attain my objective of this research,

to make recommendations for the design of the formal structure of the

Department of Education at the provincial-level (Tingkat I) in accordance with the laws 22/1999 and 25/1999 on regional governance and fiscal balance.

I have to give answer to a design problem.

This problem is related to the structure of an organisation, namely the collection of relations between the functions and roles taken by functionaries of the Department of Education. The structure of the Department of Education does not function in

accordance with the laws 22/1999 and 25/1999. The laws 22/1999 and 25/1999 promulgate the change of the present balance of management power and financial relations between the centre and the regions. The problem has a structural cause, because a change of the balance of management power and financial relations is a change in the collection of relations between the roles and functions taken by

functionaries. Accordingly the collection of relations between the roles and functions

17 A.C.J. de Leeuw, Bedrijfskundige Methodologie: Management van onderzoek, Van Gorcum, Assen, 1996.

18 A.C.J. de Leeuw, Organisaties: Management, Analyse, Ontwerp en Verandering, een systeemvisie, Van Gorcum, Assen/Maastricht, 1990 (4).

taken by functionaries of the Department of Education are not in compliance with the new tasks and functions promulgated by these laws.

Therefore this problem is a design problem.

According to De Leeuw (2000, p. 420), design problems are solved by modifying the

organisational form or structure. In this research, I will try to give recommendations

for solving a design problem by modifiying the organisational form or structure, in

this case the relations between the roles and functions taken by functionaries of the

Department of Education, in accordance with the law.

3.2.1 Research Concept

Analyses Design

(a) (b) (c) (d)

Figure (1)

Figure (1) is the graphical interpretation of my research concept, it shows that:

(a) Examination of the theory on decentralisation, formal and real structures and the ideas of De Leeuw (1994) about different typologies for structures together with a situational analysis will provide a referential framework. This referential framework will be used for both the analysis of the old and new decentralisation laws and the analysis of the real organisational structure of the Department of Education (b). The results of these analyses (c) will be systematically classified and interpreted within the scope of the problem definition and processed into recommendations for the design of the formal structure of the Department of Education (d).

OlOldd llaawwss oonn DDeecceenn-- trtraalliissaattiioonn

FFoorrmmaall aanndd RReeaall StStrruuccttuurreess

TThheeoorryy:: t

tyyppoollooggyy foforr ststrruuccttuurreess DeDe LLeeeeuuww

AnAnaallyyssiiss ofof tthhee SiSittuuaattiioonn

ReRe-- f feerreennttiiaall

FrFraammee-- woworrk k

StStrruuccttuurree o off DeDeppaarrtt-- memenntt ooff EdEduuccaattiioonn

inin rreeaalliittyy

AnAnaallyyssiingng ReRessuullttss

ReRe-- ccoommmmeenn--

d daattiioonnss

foforr tthhee foforrmmaall d

deessiiggnn ooff ststrruuccttuurree AnAnaallyyssiingng

ReRessuullttss ThThee

CoConncceepptt D Deecceenn-- t

trraalliissaattiioonn

NeNeww llaawwss onon DDeecceenn-- trtraalliissaattiioonn

3.2.2 Method of Data-Collection

Unit of Analysis

The definition of the unit of analysis is related to the way the initial research question has been defined.

I want to make recommendations for the design of the formal structure of the Department of Education. Therefore, the unit of analysis of this research is the structure of the Department of Education.

Two levels of information are used to analyse the structure of the Department of Education.

• Organisational level; laws, regulations, policies;

• Individual level; behaviour, functions, roles, opinions, relations.

Information on the level of organisations was needed i.e. for the collection of data about the formal structure, formal organisational changes and the contents of the existing and new laws. However, this level is not suitable for the collection of information about the real structure. For this information an individual level is necessary, by observation and questioning actors about their behaviour, functions, opinions and relations in reality.

For this research I used the following methods of data-collection:

Field research:

• Open-ended interviews

• Focused interviews

• Direct observation

As far as field research is concerned, the emphasis is on qualitative methods, meaning that for the production of research data no use has been made of an explicit and fully developed schedule for observation and registration.

To protect myself against biased opinions and easy conclusions, I have acquired a large base of knowledge and ideas by careful study of the available literature and mass media and through

preparatory conversations with well-informed professors from the University Udayana in Denpasar.

Qualitative field research is particularly suitable for a ‘case study’ in Indonesia, where considerable difficulties must be surmounted in order to obtain reliable information.

Observation and open-ended/focused interviews yield more reliable information than surveys or structured interviews.

The questions for which data is sought are likely to cause the respondent difficulty. It must determine what is wanted and then labour to identify and articulate a response.

This difficulty and imprecision in reporting abilities makes a broad flexible net provided by qualitative techniques appropriate.

Furthermore, government officials, who form the largest group of respondents, are either not accustomed to answer direct questions about the relationship between law and the field they are working in, or, on good grounds, are hesitant and even unwilling to answer such questions. Also, as a result of the delicate nature of these issues, respondents prefer to speak in general

19 A.C.J. de Leeuw, Bedrijfskundig management: Primair proces, strategie en organisatie, Van Gorcum, Assen, 2000.

20 N. Niessen, Municipal government in Indonesia. Policy, law and practice of decentralization and urban spatial planning, Research School CNWS, Universiteit Leiden, Leiden, 1999.

21 G. Mc. Cracken,, Qualitative Research Methods, series 13, Sage Publications, Beverly Hills, 1988.

terms, or in terms of ‘the other’, rather than give a report of their owns acts. This also entails that one must proceed very carefully with field research so as to avoid subtle sabotage as much as possible.

Qualitative field research is much more intensive than extensive in its objectives. The selection of respondents must be made accordingly. The first principle is that of ‘less is more’.

The group of respondents offer an opportunity to glimpse the complicated character, organisation, and logic of the field of research. For this research it was more important to work longer, and with greater care, with a few people than more superficially with many of them.

For the reasons mentioned above I used as method of data-collection for field research both open-ended as focused interviews.

In interviews with an open-ended nature, the investigator can ask key respondents for the facts of the matter as well as for the respondents’ opinion about events. The investigator may even ask the respondent to propose his or her own insights into certain occurrences and may use such propositions as the basis for further inquiry.

A focused interview is an interview, in which a respondent is interviewed for a short period of time. The interview may still remain open-ended and assume a

conversational manner, but the interviewer is more likely to be following a certain set of questions derived from the case study protocol.

This interview-technique was especially suitable for me. I conducted the interviews with help from a translator, even though I understood most of the answers spoken in the Indonesian language. I used a translator to try to avoid miscommunications between the interviewer and respondent. Unfortunately the use of a translator slows down the interview and takes away the opportunity for direct feedback, not to mention the fact that the translator is a person with his own biases and misinterpretations. To avoid misinterpretations, I often repeated or summarised the answers given by the respondent and compared the answers given by the translator with my own

interpretation of the answers. A rather more structured interview as is obtained in a focused-interview makes sure that all the relevant questions are asked and enables the translator to prepare himself.

Another source of evidence I used for this research is direct observation. During interviews with my respondents, on visits to the Department of Education and observation of meetings observational evidence was collected. This evidence was used to provide additional information to be crosschecked with other sources of evidence.

Written sources:

• Administrative documents issued by the Government -- official documents, such as laws and government regulations, policy documents, reports about operations of government units, progress reports, and other internal documents.

• Secondary literature -- formal studies about regional government, decentralisation.

A lot of basic issues have been disclosed through the works of foreign academics and development consultants. The World Bank for example has produced a

22 G. Mc. Cracken,, Qualitative Research Methods, series 13, Sage Publications, Beverly Hills, 1988.

23 R. K. Yin, Case Study Research, Design and Methods, Sage Publications, London, 1989 (5).

considerable amount of work, largely drawn from its own experiences with regional government and decentralisation.

• Media reports – news-clippings and other articles appearing in mass media.

In Denpasar, Bali, Indonesia it was difficult to obtain reliable information on paper.

Administrative documents, such as the relevant legislation and policy documents are not always freely available or poorly registered. It requires much time and effort to obtain a comprehensive and reliable set of administrative documents. The government publications were vague about issues like authority, management roles and relations and administrative culture. I compared the documentation obtained in Denpasar with the mass media reports and earlier studies on regional autonomy and decentralisation in Indonesia. Secondary literature such as formal studies or evaluations about the decentralisation process in Indonesia and mass media played an explicit role in the data-collection of my research. I used them as a means to corroborate information from other sources. Secondary literature and mass media evidence that is

contradictory to the data collected from the interviews and administrative documents gives a reason for further investigation of the findings. Furthermore, as cited above, I used both as a base of knowledge and ideas to protect myself from biased opinions and easy conclusions.

Media reports provided the much needed extra information and case material.

Naturally the information collected from the mass media had to be analysed carefully

as well, to make sure not to receive the wrong information caused by media hysteria.

3.3 Quality of Research Design

In this research I am trying to solve a design problem through the medium of a theory for a case, namely the Department of Education.

To judge the quality of a case-study research design, four tests are relevant.

1) Construct validity: establishing correct operational measures for the concepts being studied;

2) Internal validity: establishing a causal relationship, whereby certain conditions are shown to lead to other conditions, as distinguished form spurious

relationships;

3) External validity: establishing the domain to which a study’s findings can be generalised; and

4) Reliability: demonstrating that the operations of a study --such as the data collection procedures-- can be repeated, with the same results.

3.3.1 Construct Validity

This is especially problematic in case study research. Critics of case studies often point to the fact that a case study investigator fails to develop a sufficiently

operational set of measures and that ‘subjective’ judgements are used to collect data.

In this research I want to make recommendations for the design of the formal

structure of the Department of Education. But what constitutes a valid

recommendation? This research makes an analysis of the problems originating from the change in structure. These problems are used as assessment criteria and provide the guidelines for the recommendations made.

To increase the construct validity of my research I used the following methods:

• multiple sources of evidence; evidence from two or more sources, converging on the same set of findings;

• have the case study report reviewed by professors from the University of Udayana.

Multiple sources of evidence provide multiple sources of measures of the same phenomenon, which addresses the problem of construct validity.

This case study uses multiple sources of evidence, such as interviews, observations and written sources (See paragraph 3.2.2). The advantage of multiple sources of evidence is that of triangulation. Triangulation means the compilation of different viewpoints and the examination of their mutual correlation

, the development of converging lines of inquiry. Any findings or conclusion in a case study is likely to be much more convincing and accurate if it is based on several different sources of information, following a corroborate mode.

To obtain triangulation I connected the information from interviews to the observational evidence and written sources. For instance, to increase the construct validity of the recommendations I measured the

24 R. K. Yin, Case Study Research, Design and Methods, Sage Publications, London, 1989 (5).

25 Nicole Niessen, Municipal government in Indonesia. Policy, law and practice of decentralization and urban spatial planning, Research School CNWS, Universiteit Leiden, Leiden, 1999.

26R. K. Yin, Case Study Research, Design and Methods, Sage Publications, London, 1989 (5).

problems originating from the change in structure with three different sources of evidence: observation, interviews and written sources.

I also reviewed my case study with professors from the University Udayana. These informants have elaborate knowledge about the object of research of my case study and are able to give specific insight on how to improve the set of operational measures for my case study. Most important, because this case study does not afflict their work- area, they are less likely to be as biased as the government functionaries. These professors advised me to check the results of the interviews with functionaries of the first level against the opinions of functionaries of the second level. This because the former is handing over authority to the latter, which might constitute in a change of perspective concerning the problems originating from the change of structure.

3.3.2 Internal Validity

Internal validity is only a concern for causal or explanatory studies, where an investigator is trying to determine whether event x led to event y.

If the investigator incorrectly concludes that there is a causal relationship between x en y without knowing that some third factor – z – may actually have caused y, the research design has failed to deal with some threat to internal validity.

In this research I am making causal statements. Together with the analyses of the present structure and theory I want to establish a causal relationship. I want to determine what caused the formal and real structure of the Department of Education to bear a certain proportion to one another, in order to make recommendations for the design of the new formal structure of the Department of Education.

To enhance the internal validity of my case study I relied on theoretical propositions.

First, I relied on the basic proposition that with the examination of the Department of Education a difference can be made between examining the formal and real structure.

Second, I used the typologies of De Leeuw (2000)

to explain why the difference is there. These propositions have shaped the data collection and helped to focus attention on certain data and to ignore other.

3.3.3 External Validity

External validity deals with the problem of knowing whether a study’s findings are generalisable beyond the immediate case study. Critics state that single cases offer a poor basis for generalising. However analytical generalisation with case studies is possible. In analytical generalisation, the investigator is striving to generalise a

particular set of results to some broader theory. This generalisation is not automatic. A theory must be tested through replications of the findings in a second or even a third area, where the theory has specified that the same results should occur.

The central government has already been trying to replicate findings of several case studies concerning decentralisation, like the DAPP-project in 1995.

For this

27 R. K. Yin, Case Study Research, Design and Methods, Sage Publications, London, 1989 (5).

28 The typologies of De Leeuw (2000) are outlined in paragraph 6.2

29 R. K. Yin, Case Study Research, Design and Methods, Sage Publications, London, 1989 (5).

30 More information about the DAPP-project can be found in Appendix I.

research, the case of external validity is not an issue. The objective of this research is to make a contribution in the context of the Otonomi Daerah Program to the

decentralisation process of the Indonesian Government promulgated by law 22/1999 and 25/1999 on regional governance and fiscal balance. Replication of the findings of my thesis and possible generalisation into theory is not what the OTODA program entails or strives for.

3.3.4 Reliability

The objective of reliability is to be sure that, if a later investigator followed exactly the same procedures as described by an earlier investigator and conducts the same case study all over again; the later investigator should arrive at the same findings and conclusions. The goal of reliability is to minimise the errors and biases in a study.

One prerequisite for allowing this other investigator to repeat an earlier study is the need to document the procedures followed in the earlier case.

I approached this problem of reliability by making as many steps as possible as operational as possible by:

• maintaining a chain of evidence;

• developing a case study database.

This case study database increases the reliability of the case study because other

investigators can review the evidence directly and are not limited to my written report.

The case study database I developed contains the structure of the interviews,

references to the functionaries spoken to where possible with names and work-status, references to the laws and literature used and other documents retrieved in Denpasar, Bali. To maintain a chain of evidence I made citations to the relevant portions of the case study database, citing the specific documents and interviews. Furthermore, the database indicates the circumstances under which the evidence was collected.

31 The contents of the OTODA program is explained in paragraph 1.1.

32 R. K. Yin, Case Study Research, Design and Methods, Sage Publications, London, 1989 (5).

3.4 Research Constraints

This research has to conform to several research-constraints during its execution:

• The gathering of data using field research had to take place within a time span of three months. During this period I was stationed in Denpasar, Bali, conducting research for the Province of Bali.

• This research has to comply with the requirements of the Faculty of Management and Organisation on final assignments.

• This research has to take place within the framework of the Indonesian local government (PEMDA) and Working Group Matching (WGM).

• This research has to comply with the rules of the OTODA program. The OTODA program conducts research about the organisational consequences of the

implementation of law 22/1999 and 25/1999. In other words, the contents of these laws are not up for debate.

3.4.1 Time Span

My research entails information of relevant developments that took place before and during my internship at the Department of Education Tingkat I. Relevant

developments occurring after the date of the end of my internship are not in this research included and will not be considered.

Decentralisation process

t = 0 t = 1 t = 2

► t = 0 January 2001

• Official start decentralisation process, implementation of laws 22/1999 and 25/1999 and its government regulations.

► t = 1 February 2001, start internship

• Examination of the real organisational structure as a result of the period before the implementation of the decentralisation laws;

• Examination of the formal organisational structure based on government regulations and laws valid before the implementation of de decentralisation laws;

• Examination of the decentralisation process.

► t = 2 September 2001, end of internship

• No more developments regarding the decentralisation process will be taking

into consideration.

3.5 Concepts and Definitions

3.5.1 Introduction

Decentralisation, formal and real structure are terms frequently used in this research.

For a clear comprehension of this research it is important to rule out any ambiguity concerning the meaning of these terms. This chapter describes a few definitions from an abundance found in literature about the concept decentralisation. More important it states the definition of decentralisation I think is most appropriate for my research.

Furthermore, the terms formal and real structure are explained on the basis of the definitions formulated by de Leeuw (1994, 2000).

3.5.2 The Concept Decentralisation

According to law No. 22/1999 regarding regional governance, Article 1 (e) decentralisation shall be the delegation

of the government authorities by

government to autonomous regions in the context of the Unitary State of the republic of Indonesia.

According to Article 1 (f) deconcentration shall be the delegation of authorities by government to governors as government’s representatives and/or central apparatus.

Since the 1950’s, a large body of academic, professional, and conference generated literature has emerged that seeks to address the various forms, types, and strategies of decentralisation. Many of those contributing to this literature have shown outright indifference to building agreed-upon, comparative frameworks and concepts.

As a result, both written publications and conference discussions on decentralisation are marred by conflicting conceptual definitions, careless application of principles, and unsystematic presentations.

As decentralisation provokes many theoretical and conceptual debates, it demands a precise understanding for one to undertake an empirical analysis of the issues in a specific context. This section will therefore, briefly discuss and distinguish between various forms and types of decentralisation because they have different

characteristics, policy implications, and conditions for success.

I will interpret and rationalise my own theoretical position on what form and type of decentralisation I think is most appropriate for my research.

The World Bank Group states that decentralisation can be seen as a semantic umbrella embracing a variety of concepts. It defines decentralisation as the transfer of authority

33 Delegation, in the context of law 22/1999, refers to the transfer of government decision-making and administrative authority and/or responsibility for carefully spelled out tasks to institutions and organisations that are either under its indirect control or independent.

34 Law 25/1999 on fiscal balance uses the same definitions.

35 J.M. Cohen and S.B. Peterson, Administrative Decentralization: A New Framework for Improved Governance, Accountability, and Performance, Harvard Institute for International Development, Harvard University, 1997.

36 ‘What is decentralization’, http://www1.worldbank.org/publicsector/decentralization/different.htm.

and responsibility for public functions from the central government to subordinate or quasi-independent government organisations and/or the private sector.

According to Faquet (1997) decentralisation in a broad sense is best defined by Rondinelli, et al.:

The transfer of responsibility for planning, management, and resource raising and allocation from the central government to (a) fields of central-government ministries or agencies; (b) subordinate units or levels of government; (c) semi-autonomous public authorities or corporations; (d) area-wide regional or functional authorities; or (e) NGOs/PVOs. (Non-governmental, Private or Voluntary organisations)

This complex multifaceted concept can be categorised in different forms and types.

Cheema, Nellis and Rondinelli have created an analytical classification of

decentralisation by form and type. Forms of decentralisation are classified on the basis of objectives: political, spatial, market, and administrative. Each form is then divided into types.

Briefly, ‘political’ forms of decentralisation are typically used by political scientist interested in democratisation and civil societies to identify the transfer of decision- making power to lower-level government units or to citizens or their elected representatives. ‘Spatial’ decentralisation is a term used by regional planners and geographers involved in formulating policies and programs that aim at reducing excessive urban concentration in a few large cities by promoting regional growth poles that have potential to become centres of manufacturing and agricultural marketing. ‘Market’ forms of decentralisation are generally used by economists to analyse and promote action that facilitates the creation of conditions allowing goods and services to be produces and provided by market mechanisms sensitive to the revealed preferences of individuals. This form of decentralisation has become more prevalent due to recent trends toward economic liberalisation, privatisation, and the demise of command economies. Under it, public goods and services are produced and provided by small and large firms, community groups, co-operatives, private

voluntary associations, and Non-governmental Organisations (NGOs). Finally,

‘administrative’ decentralisation is the focus of lawyers and public administration professionals seeking to describe or reform hierarchical and functional distribution of powers and functions between central and non-central governmental units.

These forms of decentralisation are characterised by types. For instance,

‘administrative’ decentralisation is characterised by three distinct types, namely deconcentration, delegation and devolution.

• Deconcentration redistributes decision making authority and financial and management responsibilities among different levels of the central government. It can merely shift responsibilities from central government officials in the capital city to those working in regions, provinces or districts, or it can create strong field administration or local administrative capacity under the supervision of central

37 ‘What is decentralization’, http://www1.worldbank.org/publicsector/decentralization/different.htm.

38 More elaborate distinctions between these forms and types of decentralisation are well made in:

Dennis A. Rondinelli, Decentralizing Urban Development Programs: A Framework for Analyzing Policy (Washington, D.C., USAID, Office for Housing and Urban Programs, 1990).

39 H. Blair, Spreading Power to the Periphery: A USAID Assessment of Democratic Local Governance, Technical Consultation on Decentralization, Political Science Department, Bucknell University, 1997.

http://www.fao.org/SD/ROdirect/Rofo0000.htm