Conclusions

In setting out conclusions, a distinction needs to be made between on one hand, general conclusions about governance, and on the other, specific conclusions relating to particular sectors or firms. It is often the case that important aspects of governance issues need to be tackled at the firm or industry level rather than through an economy wide approach. Many issues relating to law reform in Indonesia, for example, are specific to the legal sector and therefore broader generalizations about governance are of quite limited relevance. But broader generalizations can be useful as well, at least in setting out a main framework for reform in any particular sector. The main conclusions that emerge from the issues set out above are as follows. First, effective governance reform at either the national (macro) level or at the level of any specific (micro) sector usually involves at least four key elements:

• The identification of a strategy or vision for change.
• The translation of the strategy into a detailed program for reform; programs should best identify expected results or outcomes set out in measurable performance indicators (MPIs).
• The effective implementation of the program.
• A focus on outcomes or results, and especially including the monitoring of progress against the initial MPIs.

Each of these steps is important seem straightforward enough yet efforts at reform often fail. Second, because issues of governance in Indonesia remain unsettled and contested. This contributes markedly to a worrying situation where many observers comment on the “lack of rule of law” and the fact that arrangements in Indonesia are felt to be kacau.

Measures that might be taken to respond to these issues include:

• Defining the official rules of the game more clearly in each sector; but doing so bearing in mind the current severe constraints on the capacity of the state.
• Streamlining government by simplifying regulations and procedures because, given the limited capacity of the state, there is over-regulation in many sectors in Indonesia at present; government agencies might be encouraged to prepare lists of functions that they intend to eliminate so that they can focus on areas of higher priority.
• Accepting rather then resisting the role of markets; accepting, also, that attempts to suppress prices are frequently counterproductive and have many negative side effects.

Finally, there are many important issues of governance in Indonesia not addressed in this paper: these include the large decentralization of government in recent years, the overall financing of the military budget, the continuing need to tackle a gamut of issues related to the role of SOEs, and the need for legal reform. Each of these topics, however, is properly the subject of a separate paper.

Comment(s)

There are [2] comment(s) for this entry. Post a comment.

1. Peter McCawley, author of this paper
   (posted 30 March 2007 / 11:47:39 AM)
   
   Peter McCawley, author of this policy brief responds to the comment below:
   
   
   
   There seem to be at least two important points which arise from these observations. The first is that while it is certainly true that the three constitutional arms of government are the legislature, the judiciary, and the executive, it is also true that relationship between these three arms of government in Indonesia is as yet rather uncertain. In many areas, the true relationship (that is, the true balance of power) between these three arms in Indonesia is still vague. The relationship between the three arms has varied dramatically in the six decades since Independence in 1945. At times, the executive (in the shape of the President) has been very strong while the other two arms have been weak. More recently, since President Soeharto resigned in 1998, the legislature and the judiciary appear to have expanded their real powers. In short, the definition of the relative powers of real influence and authority in Indonesia between these three arms of government is still, more than is that case in many other countries, a 'work in progress'. The relationships are evolving, and are likely to continue to evolve in the coming decades.
   
   
   
   Second, in practice, other parts of society are important players in the process of governance in Indonesia as well. These other parts of society are generally not specifically mentioned in the Indonesian Constitution but in practice they exercise (to a greater or lesser extent) influence in the broad governance of Indonesian. These groups include the military, the media, and broader parts of civil society (religious organisations, professional groups, trade unions, producer organisations, universities, non-government organisations, think tanks, and so on). Any discussion of governance in Indonesia needs to allow for the role that these other organisations, some of which may be called "non-state actors", play in Indonesian society.
   
   
   
2. golding imoh
   (posted 23 March 2007 / 12:08:30 AM)
   
   The government legislature, judiciary and the executive are the three arms of government we have. The executive that we refer as the president in a country, while the legislature they are the people who enforce the law. Take for instance, if the executive enforces law on the people without passing it to the legislature to confirm it, will it be law? If the legislature makes law and passes it to the executive to sign it, if the executive refuses to sign after 30 days in his office it becomes a law. If the legislature enforces law on the people they want the people to benefit from it and also for the satisfaction of the country.