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.