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indonesia_mapPopulation: 246,864,191

HDI ranking: 121/187

HDI score: 0.629

Indonesia has pursued what has come to be called the “big bang” method of decentralization reforms with a relatively dramatic shift from the highly centralized state run for over three decades by General Suharto to deep decentralization of most government functions to the district level. Following this trajectory, local government reforms have dominated the country’s policy agenda since 1999 (World Bank, 2002).

Local governance at a glance

  • At the subnational level, Indonesia is divided into provincial and city/district levels of government. Provinces and city/districts have their own legislative bodies called Dewan Perwakilan Rakyat Daoerah and their own government system. Local and provincial governments are autonomous administrative and territorial bodies within the unitary state (World Bank, 2006).
  • The city of Jakarta has its own autonomous government equivalent to the provincial level (UCLG, 2007).
  • The local parliament elects a governor who heads the province. City governments are led by a major and district governments by a regent. Mayors and governors are directly elected in an open list system (World Bank, 2006).
  • The Ministry of the Interior oversees the local governments and the Ministry of Finance and Supreme Audit Board is responsible for finances (UCLG, 2007).

Women must make up 30% of nominees for members of the People’s Representative Council and Regional House of Representatives of the subnational level (Quota Project, 2014).

Civil society actors

  • The Partnership for Governance Reform (Kemitraan) works to advance good governance, transparency, decentralization and an empowered civil society. The organization pioneered a national governance index that measures and ranks the performance of provinces based on good governance principles (Kemitraan, 2014).
  • Satunama is an organization that works to promote transparency, accountability and anti-corruption in governance (Satunama, 2011).

Capacity building institutions

  • The Association of Indonesian Municipalities (APEKSI) conducts capacity building activities for city governments, including themes covering local finance, civil service reforms, corruption, and “gender responsive planning and budgeting” (APEKSI, 2014).
  • The Indonesian Municipal Councils Association (ADEKSI) consists of 93 municipal councils and provides them with workshops on good governance that cover “public policy management, budgeting, organizational development, information and communication and code of conduct.” ADEKSI also consults municipal councils on drafting local regulations and on their implementation with public participation (DELGOSEA, 2014).

Fiscal control

  • Law 25/1999 requires the central government to transfer at least 25% of domestic net revenues to the subnational level. Of this amount, 10% is transferred to provincial governments and 90% to local governments. Local governments rely mainly on these transfers and have full discretion of their use (World Bank, 2006).
  • The central government determines local taxes and rates. The local governments may create new local taxes, but they are subject to central government approval (UCLG, 2007; UCLG 2010).

Key initiatives for participatory local governance

  • In 1999, “Autonomy Laws’ were passed that ushered in a new era of decentralization: Law No. 22/1999 gave more autonomy to districts over public works, health, education and other duties. Law No. 25/1999 provided for fiscal decentralization (UCLG, 2007)
  • In 2004, the Laws were amended to allow for the direct election of Bupati and Mayors (UCLG, 2007).

Challenges for participatory local governance

  • Decentralization has created greater local independence and a “local egos” that may be unproductive when facing problems that require cooperation with other regions (UNESCAP, 2003).
  • While decentralization has increased the responsibilities of local governments, they have not been allocated adequate funds to meet these responsibilities. Local governments have had to make additional efforts to increase their revenue to cover the costs of development (UNESCAP, 2003).


List of sources:

Association of Indonesian Municipalities (APEKSI), 2014:

Indonesian Municipal Councils Association (ADEKSI), 2013:

Partnership for Democratic Local Governance in Southeast-Asia (DELGOSEA), 2014: “ADEKSI – Association of Indonesian Municipal Councils Indonesia.”

Quota Project, 2014: “Indonesia.”

Sautanama, 2011:

The Partnership for Good Governance Reform (Kemitraan), 2014:

UN Economic and Social Commission for Asia and the Pacific (UNESCAP), 2003: “Country Reports on Local Government Systems: Indonesia.”

United Cities and Local Governments (UCLG), 2007: “UCLG Country Profiles: Indonesia.”

United Cities and Local Governments (UCLG), 2010: “Local Government Finance: The Challenges of the 21st Century.”

United Nations Development Program (UNDP), 2012: “International Human Development Indicators: Indonesia.”

World Bank, 2002, Hofman B. and K. Kaiser: “Can Decentralization Help Rebuild Indonesia?”

World Bank, 2006, Shah, A.: “Public Sector Governance and Accountability Series: Local Governance in Developing Countries.”