Legal Lessons
Legal Lessons
In In d o n e s ia , R a y ( 2 0 0 3 ) stated that c o m p lia n c e to th e la w h a s s h o w n a re la tiv e g o o d in tr e n d . T h e p r o b le m w a s th e quality o f h u m a n re s o u rc e s in th e le g is la tiv e a n d e x e c u tiv e m e m b e rs a i th e lo c a l lev eh. it can b e s e e n in th e ir le g a l p ro d u c ts s u c h a s lo c al re g u la tio n f o r n e w ta x in g t e t co n cern o n ly o n b o o s tin g ta x re v e n u e . C o n s e q u e n tly , m o s t lo c a l re g u la tio n s have been d e te rio ra tin g lo c a l e c o n o m ic d e v e lo p m e n t an d
d is c o u r a g in g th e b u s in e s s environm ent a t th e lo c a l le v e l.
W o llm a n n (2 0 0 2 ) s ta te d that G e rm a n y 's fe d e ra l a n d in te rg o v e rn m e n ta l s y s te m is
c h a r a c te r iz e d b y a w id e range o f re s p o n s ib ilitie s an d fu n c tio n s a n d also b y a s ig n ific a n t p o litic a l p r o file , o n e s h o u ld be m indful, h o w e v e r, th a t /it n e e d s to b e re m in d e d th a t the s c o p e o f a u to n o m y a n d action is o ften lim ite d a n d fe tte re d b y th e leg al p ro v is io n s an d fin a n c ia l c o n d itio n s s e t b y tte “ap p er” le v e ls o f g o v e rn m e n t “ fro m a b o v e ” . T h u s , as it w a s p e r c e p tiv e ly o b s e rv e d , the rem ark ab ly s tr o n g ro le w h ic h lo cal g o v e rn m e n t h a s in p o lic y im p le m e n ta tio n in countries lik e G e rm a n y a n d th e S c a n d in a v ia n c o u n trie s g o e s
h a n d in h a n d w ith “ n atio n al system s o f ru le , fin an ce a n d p u b lic a d m in is tra tio n (th a t) s ta n d a rd iz e m u c h o f w h a t local officials c a n d o an d h o w th e y can d o ”
S o c ia l a n d C u ltu ra l Lessons
A l t h o u g h s o c i a l s t r u c t u r e s and c u ltu r e a r e r e g u l a r l y m e n t i o n e d a s d e t e r m i n i n g
f a c t o r s f o r t h e s u c c e s s o f d e c e n tra liz a tio n p r o g r a m s , t h e l i t e r a t u r e r a r e l y p r o v i d e s
c o n c r e t e e x a m p l e s o f th is . G en d er is s u e s , c u l tu r a l d e v e l o p m e n t o r th e i m p o r t a n c e o f n e t w o r k s a n d p a tr o n - c lie n t b ased r e l a t i o n s h i p s in d e c e n t r a l i z a t i o n p r o c e s s e s a n d p r a c t i c e s a r e o f t e n n e g le c te d by th e l i t e r a t u r e o n d e c e n t r a l i z a t i o n . T h e s h o r t a g e o f l e s s o n s r e f l e c t s t h i s s t a t e o fa ffa irs .
Vol. 16, No. 2 December 2007 © Centre for Indonesian Accounting and Management Research Postgraduate Program. Brawijaya University
80 A C r i s is o r C r itic a l D e v e lo p m e n t
T h e d e c e n tr a liz a tio n o f p o litic a l a u th o rity m a y ta k e p la c e a cco rd in g to
p red eterm in ed
c o n te m p o r a r y
m o d e ls ,
but
m u st incorporate
lo ca l
in d ig e n o u s pattern s o f d e c is io n -m a k in g an d au th ority.
H a ijo n o ( 2 0 0 5 ) r e v e a le d t h a t d e c e n tr a liz a tio n p o l ic y in I n d o n e s ia s till n e e d s lo n g p r o c e s s . T h e d e c e n tr a liz a tio n c a n n o t le a d im p r o v e m e n t o f life q u a lity in th e lo ca l le v e l. S o m e o th e r p r o b l e m s r is e in s o m e r e g io n s s u c h a s d is r e g a r d in g o r ig in p e o p le a n d it te n d s f in a lly to , c r e a te n e w r e g i o n s
(pemekaran). S e v e r a l d is tr ic ts h a v e s tip u la te d th a t th e d is tr ic t head (bupati/w alikota) m ust be
a p e r s o n n o t o n ly b o r n in th a t d is tric t b u t
C o n c lu s io n s a n d r e c o m m e n d a t i o n s
D e s p i t e t h e n o t i o n t h a t d e c e n t r a l i z a t i o n i s a n e w t r e n d in g o v e r n a n c e , l o c a l
g o v e r n m e n t i t s e l f is a c t u a l l y n o t a n e w i d e a . I n f a c t , “ m a n y , i f n o t a l l , s o c i e t i e s in
A f r i c a , A s i a a n d L a t i n A m e r i c a h a v e , a t o n e t i m e o r a n o t h e r in t h e i r h i s t o r y , possessed strong traditions of local and regional governance through tribal or community self-help traditions. In many countries, these traditions have long been
s u p p r e s s e d , in p a r t a s a r e s u l t o f e x t e r n a l c o l o n i a l r u l e , a n d in p a r t a s a r e s u l t o f t h e highly centralized nature of many, if not most, post-colonial political regimes and governance systems” (United Nations 1996). In recent years the international
community, and specifically international donor agencies and NGOs, have been concerned with improving these governance systems. According to the United
Nations Development Program, good governance can be defined as “participatory, t r a n s p a r e n t a n d a c c o u n t a b l e . It is a l s o e f f e c t i v e a n d e q u i t a b l e . A n d it p r o m o t e s t h e
rule of law. Good governance ensures that political, social and economic priorities are based on broad consensus in society and that the voices of the poorest and the m o s t v u l n e r a b l e a r e h e a r d in d e c i s i o n - m a k i n g o v e r t h e a l l o c a t i o n o f d e v e l o p m e n t resources” (UNDP 1997).
D e c e n t r a l i z a t i o n is a p r o c e s s t h a t is c o n s i d e r e d t o i m p r o v e g o v e r n a n c e a n d is t h e r e f o r e b e i n g i m p l e m e n t e d in m a n y c o u n t r i e s . D e c e n t r a l i z a t i o n is a p r o c e s s that involves both risks and opportunities. The opportunities include greater popular participation; the ability to design social services to meet specific community needs; the capacity to tailor solutions for local problems to local
Vol. 16, No. 2 December 2007 © Centre for Indonesian Accounting and Management Research
Postgraduate Program, Brawijaya University
The International Journal o f A cco u n tin g an d B usiness S o ciety
conditions; the opportunity for p o lic y i n n o v a t i o n s a n d th e a b i l i t y to “ s c a l e u p ” successes; the ability to
provide social services more efficiently; and the opportunity for increased
accountability t o t h e p e o p l e . D e c e n t r a l i z a t i o n is n o t w i t h o u t s i g n i f i c a n t r i s k s th a t include the possibility that inter-regional inequalities
may be wider, the risk of capture
b y lo c a l e l i t e s , a n d t h e p o s s i b i l i t y o f d i s p a r i t i e s between
governments and the r e s p o n s i b i l i t i e s t h e s e g o v e rn m e n ts m u s t f u l f i l l . F o l l o w i n g w ill b e c o n c l u d e d s o m e l e s s o n s c a n b e l e a r n t m e n tio n e d ab o v e :
the resources
available
to
sub-national