Decentralization and Governance in Indonesia

Holzhacker, R., R. Wittek, and J. Woltjer (eds.) (2015). Decentralization and Governance in Indonesia. New York: Springer.


Indonesia over the past two decades has embarked on a process of decentralization as part of a broader process of democratization, which followed earlier periods of centralized governance and authoritarian rule across the archipelago. The purpose of this book is to begin to explore the connections between governance and sustainable society in a wide variety of policy fields in Indonesia, and how reforming governance structures may contribute to societal benefits and the creation of a long-term sustainable society.


This book bridges important theoretical debates related to governance and sustainable society and provides empirical research from Indonesia in important policy areas related to this debate. By placing research in different policy areas in a single volume, the link to the broader concepts of governance, decentralization, and societal outcomes is strengthened. The book builds on the recent interest that has focused on Indonesia and the continued development of democracy in the country. The chapters in the book show a rich variety of decentralized governance arrangements and capacity building at the local level in particular. Central standards (for example for social sustainability, anti-corruption arrangements, or for dealing with direct foreign investment), combined with local innovation (for example for municipal coordination of primary health care or metropolitan transport), are key to Indonesia as a country in a continuing process of transformation.

We identify three key trends in the on-going process of decentralization and governance in Indonesia. First, we find that formal governance, the relation between the national and local government, is characterized by a system of ‘variable geometry multi-level governance’ depending on the policy area. The challenge ahead is strengthening accountability mechanisms to assure national standards while

preserving and encouraging local innovation. Secondly, informal governance mechanisms are evolving to move from ‘hierarchical to network’ forms of governance. Here the challenge is to insure democratic input by citizens and civil society organizations. Finally, we identify a trend toward ‘shared value creation and sustainable cooperation.’ Indonesia is beginning to move from a rather singular policy focus on economic growth to a more complex and developing notion of policymaking for inclusive growth and the creation of a sustainable society for present and future generations. Here the challenge is sound implementation and to increase the effectiveness of governance mechanisms. There is also a noted diffusion of goals, to focus beyond the Jakarta metropolitan area to smaller regional cities, as urbanization continues and rural areas are changing.

This book will be of interest for use in advanced undergraduate and graduate courses related to Southeast Asia in the fields of international relations, political science, public administration, economics, law, sociology, education, public health, and the spatial sciences. It will also be of interest to policymakers and government officials at the national and local level in Southeast Asia and middle-income developing countries, officials and policymakers in institutions of regional governance such as the Association of Southeast Asian Nations (ASEAN), and of global governance such as the United Nations and World Bank. It will also be of interest to civil society organizations and other actors focused on policy development and economic development, health, education, the environment, sustainable transport, etc. The book will also be of interest to business people interested in economic and governance issues, such as the management and governance of in-bound foreign investment, inclusive growth, and corporate governance. Finally, the book should be of interest to citizens in advanced, middle-income, and developing countries motivated to learn more about the links between governance and the creation of a sustainable society for current and future generations.

ISBN 978-3-319-22434-3

Part I Theoretical Reflections on Decentralization and Governance for Sustainable Society

1. Decentralization and Governance for Sustainable Society in Indonesia.

Ronald L. Holzhacker, Rafael Wittek and Johan Woltjer

2.  Good Governance Contested: Exploring Human Rights and Sustainability as Normative Goals

Jilles L.J. Hazenberg

Part II Decentralization and Policy Making

3.  Decentralization and Primary Health Care Innovations in Indonesia

Suwatin Miharti, Ronald L. Holzhacker and Rafael Wittek

4.  The Impact of Decentralization on Educational Attainment in Indonesia

Tatang Muttaqin, Marijtje van Duijn, Liesbet Heyse and Rafael Wittek

5.  Decentralization, Foreign Direct Investment and Development in Indonesia.

K. Kuswanto, Herman W. Hoen and Ronald L. Holzhacker

6.  The Inclusive Growth Concept: Strengths, Weaknesses, and a Research Agenda for Indonesia

Pande Nyoman Laksmi Kusumawati, J. Paul Elhorst and Jakob de Haan

Part III Challenges of Decentralization for Cities to Create Sustainable Futures

7. Metropolitan Governance and Institutional Design: Transportation in the Jakarta Metropolitan Region

Taufiq Hidayat Putra, Johan Woltjer and Wendy Guan Zhen Tan

8. Environmental Governance by Transnational Municipal Networks: The Case of Indonesian Cities.

Annisa Paramita Wiharani and Ronald Holzhacker

Part IV Governance to Limit Opportunities for Corruption in a Decentralized Environment

9.  Institutional Change and Corruption of Public Leaders: A Social Capital Perspective on Indonesia

Mala Sondang Silitonga, Gabriel Anthonio, Liesbet Heyse and Rafael Wittek

10. Corporate Governance and Corruption: A Comparative Study of Southeast Asia

Nureni Wijayati, Niels Hermes and Ronald Holzhacker