Introduction

Indonesia has undergone significant political transformations throughout its history, from colonial rule under the Dutch to dictatorship under Suharto to the current democratic era. A key component of Indonesia’s post-Suharto political reforms has been decentralization, the transfer of authority and responsibility from the central government to local governmental entities.

Decentralization was implemented in Indonesia in 1999 in response to calls for regional autonomy and more equitable development. It also aimed to address secessionist pressures and defuse tensions resulting from the Java-centric policies of previous regimes. By devolving powers to the district and municipal levels, decentralization sought to bring government closer to the people and allow more direct political participation.

This reform marked a major shift in Indonesia’s highly centralized governance system inherited from both colonial rule and Suharto’s authoritarian New Order regime. Over the past two decades, decentralization has substantially recast center-local relations and been hailed as a means to strengthen local democracy and accountability. However, decentralization has also faced significant challenges in implementation across the vast Indonesian archipelago.

As a far-reaching political process, decentralization has impacted regional autonomy, public services, resource allocation, elections, political participation, and power dynamics across this diverse nation. Examining decentralization sheds important light on Indonesia’s post-Suharto political landscape.

Definitions of Decentralization

Decentralization involves transferring authority and responsibility from the central government to local governmental entities. There are three main types of decentralization:

Political Decentralization - This involves the transfer of political power and authority to subnational levels. It allows citizens to elect their own local representatives and enables local governments to have autonomy over decision-making in their jurisdiction. Political decentralization aims to give citizens more direct control over governance.

Administrative Decentralization - This refers to the transfer of responsibility for planning, financing, and management of public functions from the central government to local governments and agencies. The goal is to redistribute administrative workload and increase efficiency. Local authorities get more discretion in implementing policies, rules, and regulations.

Fiscal Decentralization - This entails the decentralization of financial resources and authority. Local governments are given greater control over expenditures, revenue collection, and budgeting. The transfer of financial decision-making powers is intended to allow local authorities to better address the needs and priorities of their constituents.

Decentralization aims to distribute governance responsibilities across different levels of administration and bring decision-making closer to citizens. The extent and balance across these types of decentralization shape governance dynamics.

Decentralization Under Dutch Colonial Rule

The Dutch colonial government implemented a system linking central and local governments. Under this two-tier system, central government officials were deployed locally but retained control over residents in their jurisdictions. While ultimate authority rested with the central colonial rulers, some basic administration and service provision responsibilities were delegated to local leaders.

This system aimed to enhance efficiency by utilizing local intermediaries for basic governance while maintaining Dutch oversight and authority. Local leaders had some fiscal responsibilities for their jurisdictions but lacked true autonomy.

The Dutch also initiated the Ethical Policy during the early 20th century, which aimed to lighten the economic and fiscal burden on localities by involving them in limited decision-making and administration. While the Ethical Policy represented a very modest shift, the fundamental two-tier system connecting central colonial and local administration persisted until it was abolished in 1957 under the Basic Law on Local Administration enacted by the new Indonesian government following independence.

Post-Independence Centralization

Following independence, Indonesia initially retained the two-tier system established under Dutch colonial rule, which linked the central government to local administrative units. However, in 1957 the enactment of the Basic Law on Local Administration led to the abolishment of this two-tier system.

Under the new law, local assemblies and heads of government were eliminated. Local administrators became part of the central government bureaucracy, functioning as agents of the central government rather than representatives of local interests. This reflected the dominance of Javanese political elites and centralized autocratic rule under President Sukarno.

The 1957 law thus marked a shift towards centralization in Indonesia in the post-independence period. Local autonomy and administration were subsumed under central authority. This unitary system concentrated power in the hands of central government officials. Local needs and aspirations took a backseat, as local administrators were appointed by and reported to the central bureaucracy rather than local residents.

Post-Suharto Decentralization Reforms

The decentralization process accelerated in Indonesia following the fall of Suharto’s authoritarian New Order regime in 1998 amidst economic, political and social crises. Significant political reforms promoting regional autonomy and decentralization were undertaken, guided by key legislation including Law No. 22/1999 on Regional Governments and Law No. 25/1999 on Fiscal Balance between the Central Government and Regional Governments.

The motivations for these reforms were multifaceted. One major aim was to address the discontent in the regions and curb secessionist movements in resource-rich provinces like Aceh and Papua by granting greater autonomy. Decentralization was also seen as a way to correct the structural imbalance resulting from decades of highly centralized power focused on Java under Suharto’s rule.

The new laws ushered in major changes to center-region relations. Direct local elections were mandated for regional heads and legislative council members. An open candidacy framework enabled direct public participation. Independent regional governments assumed authority over public services like health and education. Most importantly, fiscal decentralization granted regional governments control over a larger share of revenues, empowering them economically.

Overall, these reforms represented a radical shift towards democratization, accountability and empowerment of regional governments in the post-Suharto period. By devolving political, administrative and fiscal powers to subnational units, decentralization aimed to enhance participatory policymaking, service delivery, resource allocation, and realization of local aspirations. However, significant challenges remained.

Outcomes of Decentralization

Decentralization reforms in Indonesia aimed to strengthen democracy and accountability but also brought some challenges.

One major outcome was the introduction of direct elections for regional heads and legislative bodies. This opened opportunities for greater political participation and leadership at the local level. Indonesians could now directly choose their own regional representatives rather than have them appointed from Jakarta.

However, decentralization did not automatically translate into full local accountability. Although elected local officials are in theory accountable to constituents, patronage networks and entrenched power dynamics can persist. There are still issues with transparency and responsiveness.

Additionally, the division of powers between national, provincial, and district governments remains unclear in some domains. This contributes to problems of overlapping authorities and fiscal limitations for regional governments.

Service delivery has been impacted as well. While decentralization empowered regions to address local needs, capacity gaps emerged in social services like health and education. Regional governments struggled to effectively budget, coordinate, and maintain service quality.

Overall, democratic decentralization has been a mixed bag. It opened new opportunities for political participation but endemic issues around accountability, governance, and capacity remain works in progress. As with any major institutional reform, realizing the full benefits takes sustained commitment, resources, and cultural change.

Role of Political Parties

Political parties play a crucial role in Indonesia’s decentralized landscape. The country has a multi-party system, with parties needing to secure votes across a dispersed archipelago to gain power. This promotes national aggregation and coalition-building.

Parties provide the primary linkage between national and local politics. They nominate candidates for regional head elections and develop patronage networks. Strong local party organizations are key for electoral mobilization and monitoring local officials.

Given decentralization, parties cannot simply rely on a centralized patronage system. They must appeal to diverse local interests through adaptable policy platforms and credible local leaders. Parties able to successfully build alliances across the nation and penetrate the grassroots tend to thrive electorally.

Central party leaders distribute resources to maintain nationwide party cohesion and discipline. But decentralization provides local elites more autonomy in managing patronage resources, weakening central control. Tensions can emerge between national and local party interests.

Overall, parties play an instrumental role in national integration, aggregating diverse preferences and facilitating representation. Their structures and strategies have adapted alongside decentralization reforms. Parties continue maneuvering to balance central power with flexibility for provincial and district leaders.

Future Prospects

The future of decentralization in Indonesia will depend on several key factors. Most importantly, the success of local democracy and governance will determine if decentralization continues and deepens. Indonesia needs strong, accountable local leaders that can deliver results for citizens through transparent and participatory governance. Regional autonomy and decentralization will only work if local officials are democratically elected and focused on serving community needs.

Local governments also must demonstrate good governance marked by responsibility, effectiveness, openness, coherence, accountability and respect for the rule of law. With greater autonomy comes greater responsibility to meet basic needs like healthcare, education, infrastructure and economic development. Regions that fail to deliver public services and opportunities risk fueling resentment and unrest.

Finally, improving public services will be essential for decentralization to gain further support. Despite reforms, service delivery has been uneven across Indonesia. While some districts excel, others continue to perform poorly in areas like education and maternal healthcare. Closing these gaps will require increased funding, better policies, and delivery innovations tailored to local contexts. With strong local democracy and governance, decentralization can enable wider access to quality public services.

The trajectory of decentralization thus depends on local leaders embracing participatory democracy, accountable governance and people-centered policies. If regional autonomy can demonstrably improve lives across Indonesia’s diverse landscapes, decentralization will have a bright future. But the path ahead requires dedicated local stewards of democracy and development.

Money Politics and Electoral Implications

The use of money to secure political support, referred to as “Money Politics,” has significantly influenced electoral dynamics in Indonesia. Two key concepts relevant to money politics are patronage and clientelism.

Patronage involves politicians distributing benefits like cash, jobs, projects or preferential access to services in exchange for political support and votes from citizens. These benefits act as divisible incentives that politicians rely on to build their power base. The patron (politician) provides selected benefits to clients (voters) in return for political allegiance.

Clientelism refers to a reciprocal, hierarchical and iterative relationship between patrons and clients. It is a more personalistic form of power relationship compared to pure patronage. Clientelism requires repeated interactions and involves norms of reciprocity where patrons provide concrete rewards and clients reciprocate with political support and votes. However, not all patronage relationships exhibit the core features of genuine clientelism.

The prevalence of money politics and clientelism in Indonesia can be traced to factors like a lack of strong programmatic parties, personalized power structures, income and development disparities, and weak formal institutions. These dynamics shape both national and local electoral landscapes.

At the national level, party elites distribute patronage resources to build loyalty networks. Locally, candidates cultivate patron-client networks, relying on brokers to mobilize voters. Citizens often view patronage as supplemental income rather than unethical or corrupt.

Vote buying and the distribution of club goods like donations to community projects are some common money politics practices. These affect citizens’ voting behavior and electoral outcomes, undermining democratic ideals of accountability. Tackling money politics requires strengthening institutions, campaign finance reforms and reducing socioeconomic disparities that perpetuate clientelism.

Conclusion

Decentralization has been an important part of Indonesia’s democratization process in the post-Suharto era. The reforms to decentralize power and authority aimed to curb separatism, address over-centralization in Java, and strengthen local governance and accountability.

However, the outcomes have been mixed. Overlapping authorities, financial constraints, and issues with transparency and accountability at the local level continue to pose challenges. The role of political parties within decentralized governance has also been crucial and complex. Money politics and patronage relationships have influenced elections.

Looking ahead, the future of effective decentralization depends on strengthening local democracy, improving public services, ensuring good governance, and enhancing cooperation across levels of government. The end goal is to foster participatory, accountable governance that is responsive to local needs across Indonesia’s diverse regions.

If thoughtfully implemented, decentralization can support democratization, equitable development, and unity amidst diversity in Indonesia. But continued reform is needed to fully realize its potential benefits. The interplay between local and national governance will shape the next chapter of Indonesia’s political evolution.