Autonomy an obscure ideal

Muhammad Sauri Hasibuan, Researcher, Fortech, Jakarta

Much of the decentralization which has taken place in the past decade has been motivated by political concerns. In Latin America, decentralization has been an essential part of the democratization process as discredited autocratic central regimes were replaced by elected governments operating under new constitutions. In Africa, the spread of multiparty political systems is creating demand for more local voices in decision- making. In some countries, such as Ethiopia, decentralization has already been undertaken.

In the extreme, decentralization represents a desperate attempt to keep the country together in the face of various pressures by granting more autonomy to all localities or by forging federations. A variation on this theme hes been decentralization as an outcome of prolonged civil wars, such as in Mozambique and Uganda, where opening political opportunities at the local levels has allowed for greater participation by all the former warring factions in the governance of the country.

The transition economies of the former socialist states have also massively decentralized as the old central apparatus crumbled. In Indonesia, decentralization has happened in the absence of any meaningful alternative governance structure to provide local government services, and it appears to be motivated by the need to improve service delivery to large populations and the recognition of the limitations of the central administration.

There are a multitude of design issues that affect the impact of different types of decentralization on efficiency, equity and macro stability.

The specific services to be decentralized and the type of decentralization will depend on economies of scale affecting technical efficiency and the degree of spillover effects beyond jurisdictional boundaries.

In the case of Indonesia, significant amounts of money should be invested to enhance the country's human resource capacity, especially at the municipal/regency and provincial levels. In practice, all services do not need to be decentralized in the same way or to the same degree.

The market is an ultimate form of decentralization in that the consumer can acquire a tailor-made product from a choice of suppliers. The nature of most local public services limits this option and establishes a government role in ensuring the provision of these services.

Where it is possible to structure competition either in the delivery of service, or for the right to deliver the service, the evidence indicates that the service will be delivered more efficiently. Although uncommon in practice, local governments have successfully competed for the right to provide certain local services.

In the array of local public services in any particular country, a mix of solutions from deconcentration to managed competition or privatization is likely to co-exist. Although politics are the driving force behind decentralization in most countries, fortunately in Indonesia decentralization may be one of those instances where good politics and good economics may serve the same end.

The political objectives of increasing political responsiveness and participation at the local level can coincide with the economic objectives of better decisions about the use of public resources and increasing willingness to pay for local services.

Apart from the enhancement of the capacity-building issue, each level of the governmental hierarchy in Indonesia should absorb and fully understand the following five conditions for the successful implementation of decentralization:

o The decentralization framework must link, at the margins, local financing and fiscal authority to the service provision responsibilities and functions of the local government -- so that local politicians can cover the costs of their decisions and deliver on their promises.

o The local community must be informed about the costs of services and service delivery options involved and the resource envelope and its sources -- so that the decisions they make are meaningful.

o Officials at all levels should fully understand that the present organizational arrangement should be reengineered so as to be able to adapt to constant change brought about by globalization pressures, and can flexibly move to accommodate demands from the private sector and the community at large.

o There must be a mechanism by which the community can express its preferences in a way that it is binding on the politicians so that there is credible incentive for people to participate;

o There must be a system of accountability that relies on public and transparent information which enables the community to effectively monitor the performance of the local government and react appropriately to that performance -- so that politicians and local officials have an incentive to be responsive.

To better prepare for implementation, the particular areas need to undertake policy action research. This research would need, among other things, to analyze the relevant data and information on the development experience of the role of the private sector (notably small and medium enterprises).

Such an examined historical experience would help stakeholders pass judgments on the beliefs, attitudes, norms and practices that need to be discarded, and those that need to be reinforced in the light of future decentralization needs.