Decentralizing Authority After Suharto: Indonesia's 'Big Bang,' 1998-2010

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Abstract 

When President Suharto's regime fell in 1998, reform leaders in Indonesia responded to public calls for democracy by implementing reforms in the structure of government, decentralizing authority to the country's districts.  This transformation altered the relationship between the Indonesian people and the state, granting greater autonomy to local leaders.  In theory, decentralizing to the district level would reduce demands for separatism in the provinces while strengthening the accountability of local governments to their constituents.  However, the new structures also risked empowering local politicians who might be inexperienced, corrupt or interested in secession, triggering the very disintegration of the country that the reformers sought to prevent.  This policy note outlines the ways in which Indonesia implemented sweeping reforms-consolidating regional and central government services and empowering local governments-while avoiding this governance trap.  It also traces the process by which the government incrementally revised the initial laws and policies as it encountered challenges. 

Richard Bennet drafted this case study with the help of Itumeleng Makgetla and Rohan Mukherjee on the basis of interviews conducted in Jakarta and Surakarta, Indonesia, during April and June 2010. 

Associated Interview(s):  Siti Nurbaya, Hadi Soesastro

Keywords 
civil service
Decentralization
Indonesia
Focus Area(s): 
Balancing the Central and Local
Building a Reform Team and Staff
Civil Service
Decentralization
Critical Tasks: 
Downsizing
Evaluating performance
Diversity management
Ranks and grades
Sequencing reform
Core Challenge: 
Devolution
Country of Reform: 
Indonesia
Type: 
Case Studies
Author: 
Richard Bennet