By implementing decentralisation program it is expected that the local participation from both local government and local citizens could be more engaged in a policy process. Participation
is important because it could improve the quality of the policy and the policy-making process. Considine 2005, p. 188 states that “participation by members of the public in decision making
over policies and programs is a central aspect of public life. What is more, from the standpoint of democratic theory, the more participation we can engender, the better. If all other costs were held
constant, the ideal decision would be one in which every citizen had their say.” Furthermore, talking about participation is closely related with the transfer of power in
decision making. Arnstein 1969, p. 217 illustrates the level of participation into a ladder which have eight levels of participation ranging from the maximum participation to minimum
participation. Those levels are full control, delegated power, partnership, placation, consultation, informing, therapy and manipulation.The first three levels are categorized as “degrees of full
power while the second three levels are on “degrees of tokenism” and the last two levels are on level “non-participation”.
II.3 The Practice in Indonesia
In the Indonesia’s fiscal decentralisation the GOI seems only emphasis the fiscal distribution rather than to encourage local participation in fiscal management process. It could be
seen in the policy-making and the amendment mechanism of the cornerstone of fiscal decentralisationPadjadjaran University 2005, p. 22-25. It also could be seen in the policy making
process of implementing regulations, annual policy and the allocation process of fiscal transfers The President of Indonesia, 2005. We can easily identify the domination of central government
in Government Regulation PP and Presidential Regulation Keppres on fiscal decentralisation and in the annual budget. The central government has the most authority in deciding the percentage
of revenues sharing and in allocating the grants. Therefore, it could be assumed that in those processes the GOI more likely to play the dominant role and disregard the local participation.
Centralistic and top down process in the policy making in fiscal decentralisation in Indonesia is could be reflected from the composition and the role of the Decentralisation Advisory
Council DPOD. This council comprises of 6 ministers from central government and only 1 governor, 1 regent and 1 mayor from local governments The President of Indonesia, 2005. This
composition is very disproportional compared with the number of local governments in Indonesia which are 33 provinces, 399 regencies and 98 municipal governments Ministry of Home Affair
2009.
Moreover, the council’s authority in fiscal decentralisation process reflects the lack of local participation as well. This council only produces a consideration to be given to the finance minister
who has powerful authority in making the formula for general allocation grants The Government of Indonesia 2005. This condition is getting worse because during this time the finance minister
implements a “one size fits all” approach in making the formula The World Bank 2012, p. 7. In the revenue sharing and specific allocation grant this council does not even have the
slightest authority. The percentages of revenues sharing are fixedly decided by central government in the fiscal decentralisation Act and central government is still raising 91 of total revenues The
World Bank 2012, p. 7. In the specific allocation grants the amount of grants and to which local governments the grants will be transferred are only decided by the finance minister by coordinating
with the technical ministersThe Government of Indonesia 2005.
It could be seen from above description that local participation and transfer of power in fiscal decentralisation policy in Indonesia is merely pseudo participation. The local participation
in this policy making process is limitedly on consultation level or even worse on informing level. Arnstein 1969, p. 217 categorizes those kinds of levels are only on “degrees of tokenism”.
In the case of Indonesia’s fiscal decentralisation, it also could be assumed that the GoI more emphasizes the vertical policy dimension of the coordination in policy making rather than
the horizontal dimension. Colebatch 2002, p. 23 explains that in vertical policy dimensions a policy is perceived as a rule, so that the policy is only formulated by the superior and the sub-
ordinates are not involved in the policy making process. He adds that the subordinates is only has a role to implement the policy instead of to make the policy.
This condition is very contradictory with the spirit of decentralisation and also the good governance theory for a country which has multilevel governments like in Indonesia. Althaus et al
2007, p. 128 states that the coordination in that kind of country should be transversely among the governments because it could support the coherency and it could treat all governments equally. He
explains that this system could be successfully applied by more utilizes loosely linked institution in the policy-making process. For example, in Australia, the most dominant institutions in policy-
making in fiscal decentralisation are the Council of Australian Government COAG and an independent institution called the Commonwealth Grants Commissions CGC instead of
dominated by the central government. III. CONCLUSION
All in all, based on that condition it could be said that in fiscal decentralisation in Indonesia the local governments participation has not been significantlyinvolved in its policy making
process. It also could be said that fiscal decentralisation in Indonesia so far is merely a distribution of fiscal resources from central to local government. While the policies and the allocation process
is almost totally controlled and decided by central government. This condition could makes a hindrance for the decentralisation program in Indonesia which the purpose is to make the local
governments are able to provide services that better satisfy the public needs.
To deal with this problem the GOI is better to adopt a negotiation system in the fiscal decentralisation policy instead of decided and formulated by the central government. It could be
done by improving the role and the authority of DAC to become the most dominant institution in fiscal decentralisation process. After that, the central government should reduce their
representations in DAC and increase the number of local governments’ representations to at least 1 representation for each province. By doing this it is expected that the level of local participation
in fiscal decentralisation policy could be on “partnership level” or even the better on the level of “delegated power”. The other important thing to be done is involving independent parties such as
scholars and NGOs in the policy process. Eventually, the GOI should be fully aware that local participation is very important in fiscal matter because, in fact, almost all national revenues are
collected in local territories and almost all citizens are live in local areas.
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A Shah, R Qibthiyyah A Dita, Washington.
HOW TO IMPROVE LOCAL DEVELOPMENT PERFORMANCE?
Ika Sartika IPDN,
sartika_kharieyahoo.com
ABSTRACT
Many ways can be used to measure local development performance. It can use economic, social, or environmental indicators implemented in each area. This paper analyzes the using of human
development indicators to measure local development performance. The result of the measurement is used to improve local development performance through the achievement of Millennium
Development Goals and human development indicators. Based on some provinces experience, there are some stages that can be done to improve local development performance, that are 1
indicators choice, 2 data arrangement and analysis, 3 planning and budgeting, 4 implementing, 5 monitoring and evaluating, and 6 improvement. But, in fact, there are some
requirements in implementing the stages said above, they are: 1 the availability of uptodate, relevant, and qualified data, 2 strong political goodwill and commitment, 3 local capacity to
handle data collecting and analysis, planning and budgetting, and also monitoring and respons, 4 social empowerment and local participation.
Keywords: human development indicators, improvement, local development, performance
1. INTRODUCTION
One the aim of local autonomy policy is to increase the community welfare through local development implementation that is spread evenly. The essence of local development as
implemented of the Law No. 322004 is to create autonomous local government. Related to this concept, the execution of local autonomy has been oriented to the increasing of the community
welfare focused to absorb local people needs that rise in the community. Hence, local governments are responsible to implement better local development performance. It means local development
should have a good performance based on some indicators that take sides to community welfare.
In the beginning, economic indicators were used to measure local development performance, like GNP Gross National Product or GNPcapita. Based on empirical data from
many countries, it showed that GNP cannot reflect the real people’s quality of life. Though many countries might have high GNPcapita unfortunately it doesn’t mean that their community has
good quality of life. Those data proved that quality of life is unequal with GNPcapita Arief, 2000.
Recently, social and environment indicators are more used to measure local development performance than economic indicators. But, the problem is, it is not easy to create compatible,
valid and reliable indicators to measure local development performance comprehensively. This paper will try to analyze some indicators that used to measure local development performance
especially social indicators.
2. DEVELOPMENT DEFINITION
The essence of development is change the existing state to better condition Tjokroamidjojo and Mustofadidjaja, 1992. So that development activity should be done directed
and planned. It means the step and goal to be attained, must be defined and cleared. Black 1991 said that “Development is such term. It has no precise meaning, no generally
accepted definition”. Moreover, it is appropriate with the essence of development above; Bryant White 1987 gave the meaning of development as “people capability improvement to influence
their future ”. It means development activity done not only give the possibility to group of people
to plan and to do change, but also should able to give opportunity or chance to an individual to do something or to do changes for their future.
The implication of the meaning above is: first, pay attention to “capacity” that is what should be done to develop community and an individual capability to make changes. Second, arrest
“justice” that is to eliminate unfair attention to certain group because it will destroy and reduce their capacity. Third, arising of power and authority, in meaning if only community has certain
power and authority, so they will take development benefit Bryan White, 1987.
The essence of development definition above is the necessity of community involvement and participation, individually or together in every development activity. Actually, development
is an effort series done continually to reach the level of community life that is prosperous extrinsic and intrinsic. The effort is done through the exploitation of potent that is had qualified human,
capability, and the progress of knowledge and technology, and also pay attention to global
