Decentralisation in Indonesia, this time for real?
An evaluation of the decentralisation project
in the Indonesian government of Central Borneo and Palangka Raya
Bastiaan L. Aardema
With the co-operation of
Bambang Mantikei & Alue
Decentralisation in Indonesia, this time for real?
An evaluation of the decentralisation project
in the Indonesian government of Central Borneo and Palangka Raya
Bastiaan L. Aardema
With the co-operation of
Bambang Mantikei & Alue
ii opdroechen oan Meintje Hepkema-Heida (1912-2001)
Title: Decentralisation in Indonesia, this time for real? An evaluation of the decentralisation project in Central Borneo and Palangka Raya Author: Bastiaan Lykele Aardema
In co-operation with: Bambang Mantikei and Alue
Badan Perencanaan Pembangunan Daerah (Bappeda) Kalteng Universitas Palangka Raya (UNPAR)
Rijksuniversiteit Groningen (RuG) Faculty of Arts
Section Internationale Betrekkingen/Internationale Organisaties Faculty of Management and Organisation
Working Group Matching (WGM)
This report is written as part of the final assignment for the studies Technische Bedrijfweten- schappen and Beleid en Bestuur in Internationale Organisaties at the University of Groningen in 2002.
Technische Bedrijfswetenschappen
First supervisor: drs. J.W. Lageman Second supervisor: ir. W. Lanting Beleid en Bestuur in Internationale Organisaties
Supervisor: drs. A.G. Harryvan
The author is solely responsible for the contents of this report. Following the guidelines of
the Faculty Management & Organisation of the University of Groningen, copyright re-
garding this report rests with the author.
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C ONTENTS
CONTENTS ... III
ACKNOWLEDGEMENTS ... VI
MAPS ...VII
RESEARCH FRAMEWORK... 1
INTRODUCTION...1
HISTORICAL BACKGROUND...1
RESEARCH PURPOSE...3
TERMINOLOGY...5
ANALYTICAL FRAMEWORK AND METHODS OF RESEARCH...7
1 THE REGIONAL GOVERNMENT SYSTEM... 13
INTRODUCTION...13
SURVEY – GOVERNMENT FRAMEWORK...13
Government levels...14
Focus of decentralisation ...16
Government organisation units ...17
The central organisation units...17
The provincial level I organisation units ...18
Territorial and regional councils...19
Staff-units ...20
Vertical agencies ...21
Regional government bodies ...22
The municipal level II organisation units...23
Internal structure of the organisation units ...25
Interregional co-ordination...26
The new decentralisation program ...27
The laws ...29
Shifting from deconcentrated to decentralised ...29
Central versus regional competencies...30
Changes on central level ...32
Changes on provincial level ...32
Changes on municipal level...35
Future changes in the organisation structure ...37
Changes to interregional co-ordination ...37
Interregional and inter-level dispute settlement ...38
Conclusion regarding the government framework...38
ANALYSIS – GOVERNANCE DYNAMICS...39
Society and government ...39
Attitude, culture and behaviour ...40
Regional leadership quality...42
Political and social situation...43
Conclusion regarding society and government ...44
Public administration ...45
Interdepartmental friction ...46
Central or regional public administration...46
Division of responsibilities...47
Unity of command ...50
Nation-wide regulation versus regional adaptation...51
Conclusion regarding the public administration...55
The decentralisation project...56
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Time path and phasing...56
Supervising and supporting implementation...60
Conclusion regarding the decentralisation project ...64
CONCLUSION...65
2 THE REGIONAL GOVERNMENT RESOURCES ... 69
FINANCIAL RESOURCES...69
Survey...69
Regional revenues ...70
Regional expenditures ...73
Financial accountability...74
Towards a new financial system...74
Allocation by origin...76
Allocation by formula ...77
Allocation by specific needs...78
Analysis ...78
The financial arrangement...78
Revenue sufficiency...82
Controlling expenditure levels...84
Regional financial allocation ...86
Financial accountability...88
Conclusion regarding the financial resources ...89
HUMAN RESOURCES...91
Survey...91
Types of civil servants ...92
Rank and position...94
Recruitment and career development...96
Education and training ...101
Work ethic and working conditions ...102
Towards a new distribution of civil servants...105
Analysis ...106
Recruitment and promotion...106
Reward system...107
Competitiveness of regional positions ...108
Qualifications and capabilities...109
The ranking system versus decentralisation ...111
Conclusion regarding the human resources...112
PHYSICAL RESOURCES...113
CONCLUSION...114
3 REGIONAL GOVERNMENT OPERATIONS ...117
TWO CASES...117
PUBLIC WORKS...117
The policy field ...117
Planning and budgeting...119
Institutional framework...120
Kanwil Departemen PU Propinsi Kalimantan Tengah ...121
Dinas PU Propinsi Daerah tingkat I Kalimantan Tengah ...123
Cabang Dinas PU Palangka Raya...126
Dinas PU Kotamadya Daerah tingkat II Palangka Raya...128
Decentralisation and organisational changes...130
Decentralisation and the distribution of authorities ...131
Implementing decentralisation ...132
Decentralisation and personnel...133
Decentralisation and finance ...134
Conclusion regarding Public Works ...134
EDUCATION...136
The policy-field...136
State of affairs in schools...137
Primary schools...138
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Junior secondary schools ...139
Senior secondary schools...140
Expenditure in education ...140
Institutional framework...141
Central institutions...141
Territorial and regional institutions...143
Kanwil Pendidikan Nasional Propinsi Kalimantan Tengah...143
Dinas Pendidikan dan Kebudayaan Propinsi Daerah tingkat I Kalimantan Tengah...146
Kantor Departemen Pendidikan Nasional Kotamadya Palangka Raya ...148
Cabang Dinas Pendidikan dan Kebudayaan Palangka Raya ...149
Decentralisation and the distribution of authorities ...150
National curriculum and regional adaptation ...151
Implementing decentralisation ...153
Decentralisation and personnel...153
Conclusion regarding Education...154
CONCLUSION...155
CONCLUSION ...157
BIBLIOGRAPHY ...163
REGULATIONS (IN CHRONOLOGICAL ORDER) ...168
ANNEX I – THE RULE-BASE
ANNEX II – DATA LISTS
ANNEX III – CONSULTED PERSONS & INTERVIEWEES
ANNEX IV – NATIONAL GOVERNMENT CABINETS
ANNEX V – LIST OF OLD GOVERNMENT AGENCIES IN CENTRAL BORNEO
ANNEX VI – LIST OF OLD GOVERNMENT AGENCIES IN PALANGKA RAYA
ANNEX VII – PROVISIONAL LIST OF NEW AGENCIES IN CENTRAL BORNEO
ANNEX VIII – PROVISIONAL LIST OF NEW AGENCIES IN PALANGKA RAYA
ANNEX IX – EXAMPLES OF REGIONAL BUDGETS
ANNEX X – GLOSSARY
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A CKNOWLEDGEMENTS
This report forms the completion of several wonderful study years at the University of Groningen and abroad. The report itself is part of the final stage of both the study Beleid en Bestuur in Internationale Organisaties (International Policy Studies) and the study Technische Bedrijfswetenschappen (Technical Engineering and Management Science). During its concep- tion, I have become indebted to many people that helped me in various ways. It is here that I would like to thank them all deeply.
Although I will probably overlook many that ought to get a special thank-you as well, I would like to mention several people in particular that helped me during the writing of this report. Concerning Technische Bedrijfswetenschappen, I would like to thank my primary and secondary supervisors drs. John W. Lageman and ir. W. Lanting for all the efforts and time they have put into this project. Especially, the support, inspiration and contacts provided through the framework of Working Group Matching (WGM) have been decisive for the outset of my project on decentralisation within the Indonesian government.
Through the contacts of WGM, I had the opportunity to get to know several interesting and very friendly people in Indonesia. One of these has been dr. I. Made Suwandi from the Ministry of Home Affairs who provided the opportunity to start my research project in Central Borneo. My most profound gratitude however goes out to dra. Yustina who did not only support the research in many substantive and practical ways, but also provided a warm and welcoming environment to work and abide in. In addition, her colleagues Pak Kampily K. Lamey, Pak Suhartoyo, Pak Humala Pontas Pangaribuan and Pak Endardono provided interesting and insightful conversations on Central Borneo and the Indonesian government during many occasions. Of course, I should not forget to thank their staff members Elita, Oya, Nina and Deonsi who treated (and nearly spoilt us) with plentiful delicious food, strange fruits, sweets, kopi tubruk, tea, and above all tasty pisang goreng.
Not only did I get support from the Indonesian government, the University of Palangka Raya assisted the project as well under the direct supervision of vice-rector Prof.dr. Cor- nelis Rintuh. The university provided me with two research partners, Pak Alue and Pak Bambang Mantikei, who helped me in every way they could with retrieving information from the Indonesian government agencies. Their help in translating interviews and ques- tion lists, in arranging interviews and driving me around as well as their critical comments have been invaluable and are still highly appreciated. Without their help, I would not have been able to conduct this research project.
Furthermore, I would like to thank Arjan de Ruijter and Dennis Roeland who performed their own WGM research projects in Palangka Raya at the time, for their friendship and company. With respect to the last months during which I wrote the last parts of this re- port, I am thankful for Ingrid Swart's hospitality and the mutual stimulus to finally finish our respective reports.
Regarding my study Beleid en Bestuur in Internationale Organisaties, I am deeply indebted to my thesis supervisor drs. A.G. Harryvan whose friendliness, co-operation and continuing in- terest made it possible to finish this report in time in order to accept a position as univer- sity teacher. The same gratitude applies to the rest of the Section Internationale Betrekkin- gen/Internationale Organisaties.
Lastly, I would like to thank my mother and Jacques Bieling for never stopping to believe in me during the lengthy process of writing this report.
Bastiaan L. Aardema, Groningen 2002
vii
M APS
viii
1
R ESEARCH FRAMEWORK
I NTRODUCTION
Indonesia is a country comprising more than 13.000 islands, extending over three time- zones and housing more than 700 languages and a similar amount of cultures. It possesses modern bustling industrialised cities with several million inhabitants and tiny traditional agrarian villages where time seems to have maintained a much slower pace. The diversity of the country is easily understated, but it raises the question how to deal with it. Since its declaration of independence on 17 August 1945, Indonesia has answered mainly by putting emphasis on unity under the banner "bhinneka tunggal ika" (unity in diversity) as the means for building a stable united country. This nation building has been performed in several ways such as by having one national language, many nationalistic symbols, a unifying army and a highly centralised government based in Jakarta. Jakarta has ruled and still rules the entire country in a very detailed way and unfortunately, this has caused an abundance of bureaucracy, overhead costs, overlap and regional dissatisfaction with the system.
Regional dissatisfaction with the centralised system even lay at the heart of some of the armed conflicts in the country and this increased fears that the country would possibly face disintegration. Although the circumstances concerning the province East-Timor had several particular characteristics, its independence under the supervision of the United Nations sparked new hopes among other secessionist movements in Indonesia, particu- larly in Irian Jaya and Aceh. In this setting, the regions increasingly demanded more influ- ence, even though most provinces did not strive for (complete) independence. In addition, the international community and the World Bank urged Indonesia to solve the regional conflicts and provide for a more equitable and fair relationship between centre and regions in order to improve stability in the area. Under these internal and external pressures, the Indonesian government started a delicate balancing act between preserving national unity on the one hand and keeping the regions satisfied on the other hand. As part of this bal- ancing act but also to shed the legacy of decades of corrupt central dictatorship, the Indo- nesian government has ventured on a process of decentralisation that should culminate in a decentralised unitary state.
H ISTORICAL BACKGROUND
However, this isn’t the first attempt to provide a more decentralised system in the archi- pelago. The first feeble attempts began during the "Ethical" period of colonialism. The Ethical supporters wanted decentralisation from The Hague to Batavia, from Batavia to the regions and from Dutchmen to Indonesians.
1The Decentralisation Act of 1903 and the Government Reform Act of 1922 resulted for example in (advisory) local councils in the main towns and set only a small first step for the development of a uniform system of regional government in the archipelago. Attempts were made to emancipate the ruling class of native regents (bupati) and relieve them from under the control of their accompa- nying Dutch administrator, the assistant-resident. It should have become a "school of de- mocracy", but never materialised. During the twentieth century, the number of administra- tive specialisms increased quickly and these specialisms (e.g. irrigation, land tax, forestry,
1 M.C. Ricklefs, A history of modern Indonesia since c. 1300, (London, 1993) 160-161.
2
education and health service) were left to European experts instead of the native regents.
After the Japanese military administration from 1942 till 1945, these specialised tasks be- came the domain of central government and they remained there until present days.
2On 17 August 1945, Sukarno and Hatta proclaimed Indonesia independent and together with the aftermath of World War II, this ushered in a turbulent, insecure and unstable period for Indonesia. Sukarno and Hatta envisaged Indonesia as a unitary republic without any states within its borders.
3At the same time, the Dutch tried to re-establish their influ- ence in the region, notably in the eastern part of Indonesia, and restored the old system of direct and indirect rule in the parts of the archipelago that were re-occupied. Once it was realised the colonial era would soon come to an end, the Dutch tried to set up a Dutch- Indonesian union with a federal structure and formed six States and nine Independent Political Entities within the archipelago. Although the Dutch had some military successes, the Indonesians had the upper hand in the political and international arena and thus both sides were forced to come to some sort of agreement. At the end of 1949 the Dutch ac- cepted the sovereignty of Indonesia, but in the process, the Indonesians were forced to give up their ideal of a unitary state. The Republic of Indonesia (Republik Indonesia Prokla- masi) joined the other States and Independent Political Entities and formed together the United States of Indonesia (Republik Indonesia Serikat) with a federal constitution.
Although a federal structure such as developed later on in its neighbouring country Malay- sia seemed to be the most logical solution to managing the diversity of the vast country, its idea was made completely unacceptable to the Indonesians when the Dutch tried to im- pose the new constitution. Consequently, the federation had a very short life of only eight months. Within this period, each of the States and Independent Political Entities had itself merged with the Republic of Indonesia creating one state in the end. Until this very day the notion of federalism is a politically sensitive issue and it should therefor be stressed that decentralisation in the Indonesian context always means decentralisation within the framework of one unitary state.
During its existence as a unitary state, Indonesia started four decentralisation programs with mixed results. The first attempt that failed was Law 1 of 1957 on regional govern- ment. Before it could be implemented fully, it was again abolished in 1959 when President Sukarno returned to the original Constitution of 1945 and started his Guided Democracy.
The second program of Law 18 of 1965 also met a premature ending during 1966 when Sukarno's Old Order was swept away by Soeharto’s New Order. The military was central- ised by Soeharto and slowly became an important power in regional government, which lasted until the late nineties.
By this time the legal-institutional structure of the Indonesian regional government had turned into a complete hodgepodge of partly implemented decentralisation-schemes, which continued well into the 1970s. It came to an end with law 5 of 1974 concerning the Essentials of Government in the Regions (Pokok-pokok Pemerintahan di Daerah) and was later complemented by law 5 of 1979 on Village Government. The two laws introduced a uniform structure of government throughout Indonesia and its general principle was to provide concrete and responsible autonomy. In practice, autonomy was superficial since central government kept its presence in every region and every policy-field, and possessed several channels for keeping regional autonomous agents in check.
42 Dirk Vlasblom, "Indonesische devolutie: sprong in het diepe", NRC (?) (5-1-2001).
3 Elucidation of article 18 of Undang-Undang Dasar Republik Indonesia 1945 – the Constitution of the Republic of Indonesia of 1945.
4 Nicole Niessen, Municipal government in Indonesia. Policy, law and practice of decentralization and urban spatial planning, dissertation, Research School CNWS, Universiteit Leiden, (Leyden, 1999) 41-88.
3
The present decentralisation-program started only recently under the Habibie administra- tion and the dynamic Minister of Home Affairs Rudini.
5One of the main initiators of this project was Rapiuddin Hamarung, head of the Department for Development Research (Badan Penelitian Pengembangan – Litbang) of the Ministry of Home Affairs. Together with his staff, he prepared the decentralisation law in merely two months.
6In May 1999, par- liament finally approved the package of laws that dealt with regional government (law 22/1999), the financial relations between central and regional government (law 25/1999) and the fight against corruption, collusion and nepotism (law 28/1999). The objective of these laws is to implement regional autonomy based on the principles of democracy, par- ticipation of society, equal distribution and justice, and to pay attention to the potential and diversity of the regions. The autonomy is to include the transfer of wide, real compe- tencies that should be made answerable toward the regions themselves in a professional manner.
R ESEARCH PURPOSE
For a successful implementation of the decentralisation, it was deemed necessary to start several research projects in order to map out bottlenecks and possible ways of implemen- tation. Several research-projects on decentralisation have been conducted by the IIP
7, Lit- bang and the UI Jakarta
8. As Rapiuddin Hamarung became interim-governor of the prov- ince Central Borneo in July 1999, while maintaining his position as head of Dirjen Bangda
9in the Ministry of Home Affairs and staying involved in the research of decentralisation, the province of Central Borneo received special attention in the decentralisation project.
10Alongside the aforementioned research projects, a separate co-operation was set up be- tween the University of Groningen
11, Litbang, the Bappeda of Central Borneo
12and the University of Palangka Raya (UNPAR
13). In this co-operation framework, students from Groningen worked together with counterparts from the UNPAR in order to investigate separately the consequences of the decentralisation laws for the province of Central Bor- neo and the municipality of its capital, Palangka Raya. This analysis is one of the results of that co-operation.
The objective of this report is to provide an evaluation of the present process of decen- tralisation in the Indonesian government and particularly its implementation in the prov- ince Central Borneo and the municipality Palangka Raya. For such an evaluation it is nec- essary to acquire a frame of reference that provides a set of criteria based on which this decentralisation program can be judged. Since the implementation of decentralisation will take several years to be finalised, it is not possible to evaluate the efficacy and efficiency of the decentralisation project yet. While having to do without the wisdom of hindsight for
5 Trevor Buising, "A century of decentralisation… Decentralise. Easy to say. Difficult to do", In- side Indonesia, 63, <www.insideindonesia.org/edit63/buising4rev.htm> (July-September 2000;
viewed on 6-2-2001).
6 Personal communication (8-3-2000).
7 Institut Ilmu Pemerintahan – Institute for Government Sciences.
8 Universitas Indonesia – University of Indonesia.
9 Direktorat Jenderal Pembangunan Daerah – Directorate-General of Regional Development.
10 Personal communication (1-3-2000 and 8-3-2000).
11 More specifically within the framework of Work Group Matching (WGM), which is part of the Faculty Management & Organisation of the University of Groningen.
12 Badan Perencanaan Pembangunan Daerah Tingkat I Kalimantan Tengah – Regional Board for Devel- opment Planning level I of Central Borneo.
13 Universitas Palangka Raya – University of Palangka Raya.
4
the moment, the present implementation choices for decentralisation can still be judged on their prudence by comparing the decisions made in the Indonesian decentralisation project with the 'best practice'- advice available from other decentralisation projects. For- tunately, the last couple of decades much research has been conducted in the field of gov- ernmental decentralisation all over the world. Many of the outcomes from these decen- tralisation research projects have found their way into this report inasmuch as they were not too case-specific and were likely to be applicable in a more general fashion. The 'raw' material has been further formalised into separately usable heuristics and systemised into one collection of 'rules' on how to decentralise according to 'best practice'. The formalised and systemised collection of past experiences and lessons provides the criteria by which the present Indonesian decentralisation project can be assessed. This is done by comparing the advice provided by each of the heuristics with the actual implementation choices and circumstances concerning decentralisation in Indonesia.
While taking the formalised and systemised collection of heuristics as a frame of reference, the following research question is used in order to assess the Indonesian decentralisation program:
“To what extent can the decentralisation project of the Indonesian government that started in May 1999 be considered appropriate and adequate in particular with respect to the provincial government of Central Borneo and the municipal government of Palangka Raya?”
In this research question, the terms appropriateness and adequacy function more or less as approximations for efficacy and efficiency, which can not be determined yet, as has been mentioned earlier. The general criteria of appropriateness and adequacy with their respec- tive qualitative and quantitative connotations allow us to compare the policy decisions and circumstances of the Indonesian decentralisation project with the 'best practices' available from the collection of heuristics. In other words, the terms appropriateness and adequacy are operationalised by taking the fulfilment of the heuristics as evaluation criterion.
Nevertheless, the central research question presented here needs to be divided into several sub-fields in order to become more manageable and more compatible with the distinctive subjects that the heuristics cover. To this end, the field of decentralisation and the collec- tion of heuristics are both subdivided into the three general categories: organisation – re- sources – policy operations.
To start with the first sub-field of the organisational framework, both static and dynamic components can be discerned. The static components are reflected in the government structure while the dynamic components are present in the governance processes occur- ring in and around the government structure. As such, the latter components include cul- tural, social and political processes in and around governments. In accordance, this report concentrates first on the following sub-question:
“To what extent can the decentralisation project be considered appropriate for the Indonesian gov- ernment structure and the governance dynamics in particular with respect to Central Borneo and Palangka Raya?”
As can be seen, the question focuses on the appropriateness of the decentralisation pro-
gram and refers thereby principally to its suitability and applicability with regard to the
organisational aspects of the Indonesian government. In concrete, this means that the old
government structure will be surveyed together with the changes brought about by the
new decentralisation laws. This is followed by an analysis of the governance dynamics that
play a role in the context of society and government, in the public administration itself and
in the decentralisation project.
5
On the other hand, adequacy with its quantitative aspect is more applicable to the second sub-field of resources and it relates here specifically to the sufficiency of decentralisation means in terms of regional government resources and their management. Among the re- sources, three categories can be distinguished, namely financial means, human resources and physical assets. Hence, it leads to the following second sub-question of this research report:
“To what extent can the decentralisation project be considered adequate in terms of financial, per- sonnel and physical resources in particular with respect to Central Borneo and Palangka Raya?”
All three types of resources will be discussed, but finance and personnel will get most at- tention since the implications of decentralisation for these resources are more complex and far-reaching. Both financial resources and human resources will be surveyed and ana- lysed separately taking into account the old situation, the changes brought about by the decentralisation laws and the consequences for the management of these resources.
Having completed the assessment of the organisational framework and resources that con- stitute the government system, the research can turn to the actual policy operations that the government system is meant to support and manage. As there are many policy-fields, only two policy-fields are taken to show how their operations will be affected by decen- tralisation. The fields Public Works and Education have been chosen for this, resulting in the final sub-question:
“To what extent can the decentralisation project be considered appropriate and adequate in its con- sequences for regional government operations as exemplified in the policy fields of Public Works and Education?”
Although a selection of the regional policy-fields is always somewhat arbitrary, it should be noted that both policy-fields are obligatory to be decentralised under law 22/1999. Fur- thermore, these two sectors are considered most vital for Central Borneo and Palangka Raya with respect to the future development of the region. In addition, the two policy fields differ in complexity, level of decentralisation and organisation structure, which en- hances the representative characteristics of this limited sample of policy-fields.
T ERMINOLOGY
With regard to the terminology in this research report, some additional explanation is nec- essary on the Indonesian government system in order to avoid confusion in its interpreta- tion. It is important to make a sharp distinction between the concepts of deconcentration and decentralisation, which are related to the parallel government structure in the regions.
Ministries of central government have their own branch offices on provincial level and often also on municipality and regency level. Likewise, the provincial governments have their own branch offices in their municipalities and regencies in many instances as well.
This means that on municipal and regency level, there can be central, provincial and mu-
nicipal agencies working for the same geographical area and on the same policy-field. The
actual arrangement of government agencies is different for each policy field, but the gen-
eral overview of agencies active in regional government can be depicted as in the accom-
panying model. It also gives some idea about the vertical hierarchical relations and the
horizontal dependency relations between the so-called deconcentrated and decentralised
government agencies.
6
Following the definitions of Philip Mawhood
14, deconcentration can be described as the nor- mal practice in a centrally directed hierarchy of public administration to shift outwards geographically the power to make certain types of decision. This means that field officials use their delegated authority to settle a range of individual cases and regulate the work of their own office. The official who holds such authority does not acquire any ‘right’ to it as they are only doing their job in the organisation. Furthermore, these field officials are not obligated to follow advice or suggestions from regional institutions, as they are merely re- sponsible to the central authority.
Decentralisation, on the other hand, is the creation of bodies separated by law from the na- tional centre, in which local representatives are given formal power to decide on a range of public matters. One of the differences is that their political base is not the nation but the region. Their right to make decisions within their limited area of authority is entrenched by law and can only be altered by new legislation. In addition the local representatives have resources, which are spent and invested at their own discretion within their area of author- ity.
In the model the agencies falling under decentralisation are those on the diagonal axis and those under the diagonal axis are deconcentrated agencies from either the national or the provincial government. The definitions of decentralisation and deconcentration are in line with the definitions used within the Indonesian government and Indonesian law. In addi- tion to these principles, the Indonesian government applies the principle of co- administration (tugas pembantuan or medebewind) in some cases. This means that on behalf of the central government, administrative units of the autonomous regional government carry out certain functions that are under the jurisdiction of the central government. Planning and funding of these tasks remain under central government jurisdiction.
Although the presented distinction between deconcentration and decentralisation is very common in scientific literature, it should be stated that in literature there are several sets of definitions in use, which can lead to quite some confusion. Sometimes for instance, the
14 Philip Mawhood (ed.), Local government in the third world, the experience of decentralization in tropical Africa, Africa Institute of South Africa, (1993) 1-2.
Area
Central government in Jakarta
Central government in Central Borneo
Central government in Palangka Raya
Provincial government in Cen-
tral Borneo
Provincial government in Palangka Raya
Municipal government in Palangka Raya
Context: society
Autonomy
7
term devolution is used for decentralisation while the term decentralisation is used as an overall term for deconcentration, delegation, devolution and privatisation.
15A NALYTICAL FRAMEWORK AND METHODS OF RESEARCH
As indicated above, it is necessary to have a frame of reference with which the decentrali- sation program and the Indonesian regional government can be assessed and evaluated. In the last couple of decades, much research has been conducted on what constitute best practices of decentralisation. Unfortunately, most knowledge on these 'best practices' is scattered, vague and not systemised nor formalised. To counter these impracticalities, a more unified frame of reference was needed.
This research initially started out with the goal to provide a final result of practical use for the decentralisation process in Indonesia. To achieve this, it had to be based on the theo- retical insights and practical experiences that social science and the past have offered on the subject of decentralisation. In order to incorporate into a single analytical model the many lessons that these insights and experiences provide, all the encountered lessons have been adapted and restructured into formalised rules or heuristics. In the end, more than seventy rules of thumb on decentralisation were included. The majority of these rules has the form of
IF-
THEN-statements for identifying the exact circumstances for which a rec- ommendation might be valid. Other rules seem to be applicable for all decentralisation- cases. Nevertheless, decentralisation in development countries can be quite different from decentralisation in modern industrialised countries. Therefore, each rule received an addi- tional tag to indicate explicitly whether the rule is considered valid for development coun- tries only or should be valid for all countries in general. In order to avoid any misunder- standings and misinterpretations, an explanation was added to each rule as well as the exact source to make their origin verifiable.
16The collection of these 'best practice' rules forms a rule-set that can be considered as the very core of the analytical framework. Because of practical reasons, not every encountered
‘lesson’ could be incorporated. For one thing, not every possible source for decentralisa- tion-rules could be screened due to the limited amount of time and resources available to this research project. Moreover, many rules found at the end of the screening-process didn’t have to be incorporated, as they became mere repetitions of already included ones and this at least indicated that a fairly complete set of present-day knowledge on decen- tralisation was accomplished. For another, encountered ‘lessons’ were left out if they were too vague, if they were too case-specific or if they did not offer any possibility for solu- tions to the identified problem. Keeping in mind that implementing decentralisation is not an easy task if one considers the countless failed attempts to decentralise, only lessons that offer practical recommendations have been included. It does not mean that every recom- mendation given by these rules will offer specific recipes for solving problems, but at least it should give suggestions for in which direction a solution might be expected.
A collection of separate and formalised rules is unfortunately not enough. To be a practical tool, they had to be systemised and embedded in a consistent framework. In academic literature two different kinds of framework were found which could be applied to analys- ing decentralisation-processes. The first one was the integrated political-economy frame-
15 Dennis A. Rondinelli, John R. Nellis and G. Shabbir Cheema, Decentralization in developing countries, a review of recent experience, The World Bank, (Washington D.C., 1984) 9-26.
16 The complete collection of rules or heuristics can be found in annex I.
8
work for policy analysis by Rondinelli, McCullough and Johnson.
17This framework had the advantage of integrating the two major approaches for analysing decentralisation poli- cies: one is the public choice approach based on neo-classical economic theories and the other is the public policy approach based on theories of public finance and public admini- stration. The disadvantage of this framework was however that it was not very suitable for incorporating the great variety of rules already found. This is not to say that it might not be suitable for a different research set-up.
The other framework of Fleurke, Hulst and De Vries
18provided a simpler structure, which was more adaptable to the specific needs of a rule-base. The elements on which it focused were the particular form of decentralisation, the characteristics of the policy that have to be decentralised, the context of that policy-field and the intended effects of the decentrali- sation project for the public administrative organisation. The theoretical framework also incorporated a rule-base of heuristics based on their research of Dutch experiences with decentralising public administration of the last fifteen years. Though their heuristics are suitable for assisting design decisions, they can be used easily for evaluation purposes as well. As such, their heuristics have been included in the rule base of this research and this basic set should ensure at least that all elemental aspects of decentralisation in general are covered. Together with the many repetitions encountered during the end of the search for heuristics, it should fulfil the general requirement of completeness sufficiently. Nonethe- less, some of their heuristics were not included since they were only applicable to the Dutch public administration in obvious ways. As to the aspects of decentralisation in de- velopment countries that Fleurke's heuristics do not cover specifically, these have been available abundantly from other more specialised sources (e.g. Rondinelli c.s.). With these alterations and additions, Fleurke's theoretical model turned out to be quite suitable and it is therefore used as a primary inspiration for the methodological framework of this re- search.
19Whilst the incorporation of the analytical framework of Fleurke c.s. facilitated fulfilling the requirement of completeness regarding the collection of heuristics and whilst its theoreti- cal set-up corroborated the expected feasibility of a rule-based approach for tackling the analysis of the Indonesian decentralisation program, its categorisation of heuristics was less useful for incorporating the other encountered heuristics. After several unsatisfactory rear- rangements, the heuristics were ordered according to their main issue as far as that was possible. The main categories formed the organisational framework (including social, cul- tural and political issues as well as subjects concerning the public administration and the decentralisation project itself), the availability and management of government resources (especially regarding finance and personnel) and the operational activities related to the policy-fields.
Having formed a fairly complete, formalised and systemised collection of heuristics gave way to utilising a rule-based expert system for analysing the Indonesian decentralisation pro- gram. In general, rule-based expert systems are a class of expert systems in which the main element of the knowledge base is a set of rules. Each rule represents a chunk of know-how
17 Dennis A. Rondinelli, James S. McCullough and Ronald W. Johnson, “Analysing decentralization policies in developing countries: a political-economy framework”, Development and change, 20 (1989) 1, 57-87.
18 F. Fleurke, R. Hulst and P.J. de Vries, Decentraliseren met beleid. Een heuristiek, (The Hague, 1997).
19 The initial idea for a rule-based expert system however came from: Richard M. Burton, Børge Obel e.a., Strategic organizational diagnosis and design, developing theory for application, (Dordrecht, 1998).
This publication contains a rule-based expert system for strategic organisational diagnosis based on the management and organisation theories that have evolved up till now.
9
and functions independently from the other rules.
20One of the advantages is that it is easy to extend the scope or power of the expert system by adding more rules to the knowledge base. This is precisely helpful for an evolving research-field like decentralisation in our case. Another advantage is that it could be used in an automated information system even- tually. Although a paper version of a rule-based expert system is used here, the four classi- cal main components of an expert system can still be identified and they link up with the set-up of this report. The four components are the knowledge base, the workspace, the inference engine and the user interface:
The knowledge base is specific for a particular problem domain (in our case governmen- tal decentralisation), and it stores all kinds of general knowledge on the subject (such as the 'best practice' rules on decentralisation that were found). Normally, these are for- malised into the format of
IF-
THENstatements. The result of the formalisation-process for this research can be found in: annex I – The Rule-base.
The workspace refers to the data available on the specific Indonesian situation with re- spect to their government system and the decentralisation program. These data form the necessary input for the knowledge base rules. In this report, most of the work- space data are supplied in the surveys that precede the analyses of the different sub- jects in this report.
The inference engine is essentially the analysis used for linking the pieces of general knowledge (the 'best practice' rules) to the relevant data from the workspace. Analysis in such cases can be performed by means of data driven reasoning (forward chaining), goal driven reasoning (backward chaining), or a combination of both strategies.
21Con- sequently, the inferences where the heuristics are linked to relevant data concerning the Indonesian decentralisation program can be found in this report in the parts that cover the analyses of the subjects.
20 Klein, Michel and Leif B. Methlie, Expert systems, a decision support approach. With applications in management and finance, (Wokingham, England, 1992) 235.
21 These respective strategies approximately mean: "what can we conclude from the data available?"
and "what data do we need to make this inference?"
Derived from: Michel Klein and Leif B. Methlie, Expert systems, a decision support approach. With applica- tions in management and finance, (Wokingham, Eng- land, 1992) 234.
The classical expert system
Knowledge Rules / heuristics
Analysis by Inference
Users User interface
Input facts
10
The last component of the expert system, the interface, was initially created by setting up an inventory of the necessary input-data for the 'best practice' rules. Later on, the inventory of these input-variables was operationalised into a large collection of ques- tions for the government agencies. These can be found in: annex II – Data lists.
Data gathering in Central Borneo took several stages and several forms. The idea was that by using the heuristics for goal driven reasoning, only the relevant questions had to be asked in order to come to useful conclusions. To this end, the variables that played a role in the application of a heuristic were identified for an inventory of needed input-data. Col- lecting theses input-data could be done in several ways, such as by literature searches, ob- servation and interviews. Conducting a large survey by distributing one single questionnaire among all relevant departments and/or their employees did not seem very useful since the information for most input-variables was quite specific, technical or matter-of-factly and did not require multiple opinions. Instead, structured interviews were chosen as the first method of data gathering. Direct interviews had the advantage of acquiring a feeling for the circumstances and issues that played a role in the particular organisation department concerning the decentralisation. Furthermore, they provided the means for extracting in- formation from the government departments relatively quickly since it meant direct access to the expertise available in the organisation. As time was limited, the interviews were fur- ther accelerated by making use of the input-data lists created from the heuristics. In the first phase, the agencies of Public Works were approached and structured interviews were held with the executive management. This took quite some time from the interviewees, who seemed to be more accustomed to receiving questionnaires to be filled in. In some instances, another interview was needed to finish more or less all the input-variables. In addition, the language barrier played a complicating role at this stage. Sometimes the inter- views were held directly in the Indonesian language, but at other moments additional translations into English were necessary.
At some point, it became apparent that an extra formalisation step was needed to clarify and define more precisely what information was needed from each government agency.
Therefore, complete lists of open questions and multiple-choice questions were drawn up and used for the government agencies that remained for this research.
22In most cases, it was possible to ask for further information after receiving back the question-lists, but this was not possible for all agencies due to lack of time. In the end, the set of data collected by structured interviews was of mixed quality. In several cases, answers weren’t available because the situation was still uncertain and not clear. In some cases the questions were not appropriate, as their subject was not yet at issue in Indonesia. Only in a few cases, in- formation was not provided because of its sensitive nature or out of fear of repercussions.
Nevertheless, co-operation was generally provided in a friendly and helpful way.
23To counter any problems with the reliability and possible gaps in the data that were gath- ered in these interviews, other methods of data gathering were used at the same time. Ob- servation and participating in the day-to-day office life were very instructive on how the Indonesian government functioned culturally and socially. In addition, personal communi- cation apart from the 'official' structured interviews was helpful in retrieving background information (to some extent) on how matters functioned below the surface. The third method of data gathering used in Central Borneo was a search for primary literature in the form of regional and central government documents, regulations, laws and circulars. Partly after returning home from Indonesia, a last method of data gathering was used by search-
22 The question-lists can be found in annex II.
23 A list of all consulted persons and interviewees can be found in annex III.
11
ing secondary literature on the Indonesian regional government and decentralisation in the libraries and on the internet.
From this amalgam of information sources, a coherent picture of the Indonesian regional government and its decentralisation program could be distilled and it proved possible to reach many conclusions by using data driven reasoning (as opposed to the initial goal driven reasoning used for the structured interviews). These conclusions form the heart of the evaluation of the regional government system and its decentralisation program, and in some cases they can be used as recommendations for future improvements.
In the following chapters, the results of the inferences drawn from the Indonesian decen- tralisation-case and the 'best practice' rules of the knowledge base are incorporated in the main text following the subjects of the three research sub-questions as outlined in the ac- companying table. Each time a 'best practice' rule has been used or was relevant in another way, it is indicated in the margin.
Sub-questions Paragraphs Evaluation criteria Methods of data gathering
Survey of
Government structure
See analysis of governance dynamics
Structured interviews, personal communication, primary and secondary literature search Sub-question 1 regarding:
Organisational framework
Analysis of governance dynamics
Heuristics on governance dynam- ics including social, cultural and political subjects
Structured interviews, personal communication, primary and secondary literature search
Financial resources
Heuristics on the availability and management of financial re- sources
Structured interviews, personal communication, primary and secondary literature search
Personnel resources Heuristics on the availability and management of personnel
Structured interviews, observa- tion, personal communication, primary and secondary literature search
Sub-question 2 regarding:
Government resources
Physical resources Only one general heuristic Observation, primary and secon- dary literature search
Public Works Heuristics on the operational activities of policy-fields
Structured interviews, primary and secondary literature search Sub-question 3 regarding:
Policy operations
Education Heuristics on the operational activities of policy-fields
Structured interviews, primary and secondary literature search
12
13
1 T HE REGIONAL GOVERNMENT SYSTEM
I NTRODUCTION
In this first chapter, the organisational aspects of the Indonesian regional government are the central focus, in particular with respect to the province Central Borneo and the mu- nicipality Palangka Raya. These aspects can be divided into static and dynamic elements of the government system. In the survey, the static building blocks of government will be reviewed in order to give a basic understanding of the build-up of the regional government system. For this, the hierarchical relationship between regional government levels and cen- tral government is first explained. This allows us next to study the array of organisation units and competencies as it used to exist. However, the decentralisation program of April 1999 has brought several alterations to the old build-up. After elucidating what the decen- tralisation project is meant to bring about, the consequences and obstacles are discussed for the build-up of each government level. By this, it should become clear to what extent the arrangement of building blocks is changed.
With this necessary background, it is possible to start an analysis of the relationship be- tween the governance dynamics present and the concept of decentralisation. First the so- cial context in which decentralisation has to be performed is taken in order to analyse the more 'soft' factors that should be accommodated by the decentralisation project. Secondly, the context is narrowed down to the public administration in order to analyse its possible frictions with the implementation of decentralisation. Lastly, the decentralisation project itself is scrutinised for assessing to what extent the project is properly conducted. Having analysed the government dynamics, several conclusions can be drawn. The objective thereof should be to give a satisfactory answer to the question to what extent the decen- tralisation project can be considered appropriate for the Indonesian government structure and the governance dynamics. This is done by taking Central Borneo and Palangka Raya as exemplar cases.
S URVEY – G OVERNMENT FRAMEWORK
The first paragraph on government levels will discuss the administrative subdivision of the Indonesian country and the resulting hierarchical relationships between central govern- ment and lower level government. Among the regional government levels, the Indonesian government had to choose one main level for decentralising its central authorities to. The choice made and the motives behind this choice will be discussed in addition.
Subsequently, the relevant government agencies are identified for the three highest levels
of government. First, the discussion of the main central government organisation units
should give an idea of how the national government is organised and where regional gov-
ernment fits in in this arrangement. Secondly, the structure of the provincial and municipal
government layers in Central Borneo and Palangka Raya is treated by distinguishing be-
tween the particular groups of organisation units, their functions and their administrative
nature. Lastly, the common internal features of the regional agencies is treated as well as
the interregional co-ordination instruments that manage the horizontal relations between
the regions.
14
One word of advice is needed with respect to the hierarchical relationships. A clear dis- tinction should be made between territorial and regional entities, though the distinction might be blurred in reality. The territorial entities are associated with the concepts of de- concentration and central government control through its vertical agencies. In contrast, the regional entities refer to the autonomous government apparatus with its independent, decentralised functions. The distinction between territorial and regional or between de- concentrated and decentralised for that matter is essential for a thorough understanding of the Indonesian government system.
Having described and discussed the old government system, the decentralisation program is introduced. After looking on the background and content of the decentralisation meas- ures, their consequences are examined for the organisational structure of central, provin- cial and municipal government while following the same format used before. In addition to the consequences for interregional co-ordination, the mechanisms for interregional and inter-level dispute settlement are discussed.
Government levels
To manage all its activities in the archipelago the Indonesian government and its territory are subdivided into several levels. The first two levels below the central level have a decon- centrated subdivision (wilayah administratif – administrative territories) and a subdivision for the decentralised governments (daerah otonom – autonomous regions). In practice, the terri- torial boundaries for the wilayah (the territory) and the daerah (the region) are the same and they are only used to denote the deconcentrated or decentralised context of the subject at hand.
Lately, the number of regions on the first level has grown from 27 to 32 provinces. This number has changed due to the independence of East-Timor and the creation of several new provinces (e.g. on the Moluccas and on Java).
24In the deconcentrated context these regions are called propinsi (provinces), while the name daerah tingkat I (region level I) is used for the decentralised context. Before decentralisation, three provincial regions used to have a special status: the capital city of Jakarta (Daerah Khusus Ibukota Jakarta) and the two Special Regions (Daerah Istimewa) of Aceh and of Yogyakarta. In 2001 though, Aceh and Irian Jaya (or Papua) received another status for special autonomy.
On the second level, the provincial regions are further subdivided into smaller units. In case of deconcentrated matters, a distinction is made between the rural kabupaten (regen- cies) and urban kotamadya (municipalities). Indonesia has more than 249 regencies and 65 municipalities.
25The province Central Borneo used to have six regions: five regencies and the municipality of Palangka Raya. On 10 April 2002 however, the five regencies were cut into thirteen smaller regencies.
26In decentralised matters, both regency and municipality
24 Martian Damanik, “Banten resmi jadi propinsi ke tigapuluh”, Kompas Cyber Media,
<www.kompas.com>, (Jakarta, 4-10-2000).
25 Numbers are from 1997. Source: Kalimantan Tengah dalam angka (Kalimantan Tengah in figures) 1998, Badan Perencanaan Pembangunan Daerah Propinsi Kalimantan Tengah (Bappeda Propinsi Kalteng) and Badan Pusat Statistik Propinsi Kalimantan Tengah (BPS Propinsi Kalteng) 365-366.
26 Out of each of the five original regencies, one or two additional regencies were created. Su- kamara and Lamandau were created out of Kotawaringin Barat; Seruyan and Katingan out of Ko- tawaringin Timur; Pulang Pisau and Gunung Mas out of Kapuas; Barito Timur out of Barito Sela- tan; Murung Raya out of Barito Utara. With the exception of Lamandau, all the new regencies had already been administered separately by a Regent-Assistant (Pembantu Bupati). See also: UU no.
5/2002 tentang pembentukan kabupaten Katingan, kabupaten Seruyan, kabupaten Sukamara, kabupaten Lamandau, kabupaten Gunung Mas, kabupaten Pulang Pisau, kabupaten Murung Raya, dan kabupaten
15
are called daerah tinkat II (regions level II). In case both the deconcentrated and decentral- ised contexts are involved, the names are just combined.
Although these levels are the most important ones, the Indonesian government has several layers more at its disposal. Article 72 of law 5/1974 determined that the kabupaten and ko- tamadya level is subdivided into kecamatan (sub-districts), where necessary in urban areas, kota administratip (administrative towns). A kotamadya can only exist out of kecamatan, while a kabupaten can have kecamatan and kota administratip, in which case these are again subdi- vided into kecamatan. For instance, the kotamadya Palangka Raya consists out of two kecama- tan at present: kecamatan Pahandut and kecamatan Bukit Batu. However, there are plans to increase this number to up to seven kecamatan.
27The province Central Borneo has ap- proximately 85 kecamatan and Indonesia as a whole around 4028.
28The next level below kecamatan was regulated by law 5/1979 on Village Government.
There exists an important distinction within this level between desa (villages) and kelurahan (city quarters). While the kelurahan do not have any measure of local autonomy, the desa still retain some of their historical autonomy, such as over strictly local affairs and the vil-
Barito Timur di provinsi Kalimantan Tengah – law no. 5/2002 regarding the creation of the regency Katingan, the regency Seruyan, the regency Sukamara, the regency Lamandau, the regency Gunung Mas, the regency Pulang Pisau, the regency Murung Raya, and the regency Barito Timur in the province Central Borneo.27 “Penataan kelembagaan perangkat daerah di kota Palangka Raya dalam rangka pelaksanaan un- dang-undang nomor 22 tahun 1999”, municipality of Palangka Raya, (Palangka Raya, 2000) 4.
28 Numbers are from 1997. Source: Kalimantan Tengah dalam angka 1998, 366.
Kota Administratip Administrative Towns
Rukun Tetangga Neighbourhood Associations
Rukun Warga Community Associations Dusun
Village sub-units
Lingkungan Town Quarter sub-units Desa
Villages
Kelurahan Town Quarters Kecamatan
Sub-districts
Kotamadya / Kabupaten Municipalities / Regencies Daerah tingkat II
Regions level II Daerah tingkat I
Regions level I
Propinsi Provinces
Central government
decentralised deconcentrated
16
lage budget. In Palangka Raya, the kecamatan Pahandut has ten kelurahan and the kecamatan Bukit Batu has eleven kelurahan. This might change, since the municipal government wants to increase the number from 21 to 37 kelurahan within its borders.
29The desa in Central Borneo number up to 1,234 while Indonesia even has around 66,545 desa in total.
30The desa and kelurahan are subdivided into dusun and lingkungan respectively.
31The last two levels, though not officially recognised as separate government levels, are the rukun warga (community associations) comprising approximately 100 households each) and the rukun tetangga (neighbourhood associations), which consist out of approximately ten households. These associations are regulated by regulation 7/1983 of the Minister of Home Affairs and function mainly as neighbourhood watchers and mediators between the local population and the government.
32Focus of decentralisation
For this research, the three top levels are the only relevant levels. This is because law 5/1974 and the new law 22/1999 declared the government of daerah tingkat II (regions level II) the ultimate target for decentralisation. The focus on level II instead of on the provin- cial level I seems counterintuitive compared to other decentralised countries where in most cases the first level below the central level is chosen. The official reason behind the Indonesian choice for level II is that this level should be in closer contact with their con- stituencies and that it has a better understanding of the needs and aspirations of the re- spective regions.
33In addition, a form of healthy competition is more likely among level II regions than among level I regions. Still, a more political motive is said to be that the re- gions of level II are too small for separatist movements or federalist aspirations to take root.
34Ironically, the provinces that do pose a separatist threat already received a special autonomy status.
A last factor could be a historical preference for the kabupaten of level II as they are more in harmony with the former system of Javanese authority. This indigenous system used to offer a traditional image of power that is more easily associated with autonomy. According to this line of reasoning, the provinces would have been a somewhat alien entity of Dutch origin.
35Moreover, the institute kabupaten has remained intact since the British interim government of Raffles (1811-1816) which would suggest that the kabupaten is firmly rooted in popular culture.
36The argument however ignores the historical circumstance that the institute of kabupaten was firmly rooted in Java itself while the Outer Regions had many different regional enti- ties. Thus, the preference for municipal-regency level has the appearance of being some-
29 Data from drs. Teras Bahan (Asisten Satu Sekretariat Kota Palangka Raya – Assistant One of the Municipal Secretariat).
30 Numbers are from 1997. Source: Kalimantan Tengah dalam angka 1998, 366.
31 Article 16 and 31 of UU no. 5/1979 tentang pemerintahan desa – law no. 5/1979 regarding village government.
32 Niessen, Municipal government in Indonesia, 85 and 131.
33 Elucidation §I.4.a.(2) of UU no. 5/1974 tentang pokok-pokok pemerintahan di daerah – law no.
5/1974 regarding the essentials of government in the regions
34 Niessen, Municipal government in Indonesia, 107.
35 "The development study on comprehensive regional development plan for the western part of Kalimantan (SCRDP-Kaltengbar), Final report", Japan International Cooperation Agency (JICA), 4 (Tokyo, March 1999) chapter 3, 21.
36 Dirk Vlasblom, "Putten uit Hollandse bestuurservaring" from: Hester Wolters and Hilly Djo- hani-Lapian (eds.), Nederland-Indonesia 1945-1995, een culturele vervlechting, suatu pertalian budaya, Zoo Produkties, (The Hague, 1995) 212-217, there 214.
