Decentralizing Indonesia : A Regional Public Expenditure Review Overview Report
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Washington, DC
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Indonesia has embarked upon a radical
and rapid decentralization program. Regional autonomy is
transforming one of the most centralized countries in the
world into one of the more decentralized ones. If managed
well, a country as large and diverse as Indonesia will
benefit greatly from decentralization, through more
efficient service delivery, but also national unity and
democracy. Yet, not all is well. The Consultative Assembly,
the country's highest constitutional body, has
recognized as much by calling for a thorough evaluation of
the decentralization program, and adjustments of the
decentralization laws, if needed. Indonesia should use the
process of revision as an opportunity to create a consensus
on the type and extent of regional autonomy, and define
better rules of the game to ensure that the benefits of
decentralization will prevail. Rapid decentralization and
its hasty preparation have left much unfinished business.
Some of the issues encountered are merely teething problems
of an ambitious decentralization program, and over time
they can be ironed out. Others could jeopardize the success
of the program itself, undermine the potential efficiency
gains of decentralization, and even trigger fiscal
imbalances and macroeconomic instability over the longer
run. These issues fall into three broad categories: (i) the
assignment of functions over levels of government: (ii)
local capacity to implement the functions; (iii) the
intergovernmental fiscal system; and (iv) accountability at
the local level.
Palabras clave
ACCESS TO INFORMATION, ACCOUNTABILITY, AD HOC GRANTS, ADB, ADMINISTRATIVE LAW, AUDITING, AUTHORITY, AUTONOMY, BORROWING, BUDGET CONSTRAINTS, BUSINESS TAXES, CENTRAL GOVERNMENT, CITIES, CITIZENS, CIVIL SERVICE, CIVIL SERVICE REFORMS, COAL, CONSENSUS, CONSTITUTION, CORRUPTION, DEBT, DEBT SERVICE, DECENTRALIZATION, DECREE, DECREES, DEMOCRACY, DISTRICTS, ECONOMIES OF SCALE, EMPLOYMENT, EQUALIZATION, EXPENDITURES, FINANCIAL INFORMATION, FINANCIAL MANAGEMENT, FINANCIAL RISK, FISCAL, FISCAL INCENTIVES, FISCAL YEAR, FORESTRY, GOVERNMENT AGENCIES, GOVERNMENT REGULATIONS, GOVERNMENT REVENUE, GOVERNMENT SPENDING, GRANT ALLOCATION, GROSS DOMESTIC PRODUCT, INCOME, INSTITUTIONAL ARRANGEMENT, INTERGOVERNMENTAL FISCAL FRAMEWORK, INTERGOVERNMENTAL FISCAL RELATIONS, INTERGOVERNMENTAL FISCAL SYSTEM, INVESTMENT CLIMATE, LACK OF CLARITY, LAWS, LEGISLATION, LEVELS OF GOVERNMENT, LEVIES, LOCAL ACCOUNTABILITY, LOCAL CONSTITUENTS, LOCAL GOVERNMENT, LOCAL GOVERNMENT REVENUE, LOCAL GOVERNMENTS, LOCAL REVENUE, LOCAL TAX, MINISTRY OF FINANCE, MORAL HAZARD, MOTOR VEHICLE TAXES, NATIONAL CIVIL SERVICE, NATIONAL LEVEL, NATIONAL POLICY, NATURAL RESOURCE TAXES, NATURAL RESOURCES, PENSIONS, PROVINCIAL GOVERNMENTS, PUBLIC EXPENDITURE, PUBLIC EXPENDITURE REVIEW, PUBLIC SECTOR, PUBLIC SECTOR EMPLOYMENT, PUBLIC SERVICES, PUBLIC WORKS, REGIONAL DEVELOPMENT BANKS, REPRESENTATIVES, RESOURCE SHARING, REVENUE SHARING, REVENUE SOURCES, TAX RATES, TAX REVENUES, TAX SYSTEM, TRANSPARENCY, WATERSHED PUBLIC EXPENDITURES, DECENTRALIZATION IN GOVERNMENT, REGIONALIZATION, AUTONOMY, REGIONAL COOPERATION, REGIONAL COORDINATION, INTERGOVERNMENTAL FISCAL RELATIONS, INTERGOVERNMENTAL TAX RELATIONS, INTERGOVERNMENTAL TRANSFER OF FUNDS, CIVIL SERVICE REFORMS, LOCAL GOVERNMENT BUDGETS, LOCAL GOVERNMENT EMPLOYEES, LOCAL GOVERNMENT TAXATION, SERVICE DELIVERY, BUSINESS ENVIRONMENT, REVENUE SHARING, TAX ADMINISTRATION, BUDGET IMPLEMENTATION, POLITICAL ACCOUNTABILITY, AUDITING, URBAN AREAS, ACCESS TO INFORMATION, REGIONAL ECONOMIC DISPARITIES, GOVERNMENT SPENDING POLICY, LEGISLATIVE ASSEMBLIES