DEMOCRATIC DECENTRALIZATION

Abstract
In one study, James Manor (1999, 101-102) stressed that democratic decentralization is always attended
by an increase in the number of persons who are involved in corrupt acts. This situation according to
Manor can be prevented if strong, democratic, decentralized institutions are allowed to function for
extended periods through a combination of processes: with democratic institutions stimulating (as they
do) the development of civil society; while organized interests, the press, and others acquire skills and
the inclination to make the system work well. In the context of Indonesia, the latest developments
indicates as revealed by the Minister of Home Affairs in a working meeting with the Regional
Representatives Council on January 17, 2011 that so far there are 17 governors (of 33) and 138
regents/mayor (of 497) who became a suspect in criminal cases, especially in corruption case. There are
at least three main causes why those Head of Regions entry into the trap of corruption, namely: due
process of procurement of goods and services through a kickback, mark up, bribery and embezzlement;
due to abuse of social assistance funds through a fictitious proposal, embezzlement and enrich others
parties as well as due to the process of granting certain permissions. Contextually, this situation
occurred due to a very large discretion of the Head of Regions in the management of Local Budgets that
ranging from the budgeting process, utilization and accountability that are laden with his or her political
interests. Corruption occurs commonly associated with leakage in the use of the budget, particularly
from the revenue and spending. This paper tries to discuss, analyze and give an answer why it has
happened and the various efforts that can be done to fix it. Through the literature study, this paper will
attempt to describe the current condition of a number of corruption cases that involving the Head of
Regions in Indonesia.
Keywords: Democratic Decentralization; Corruption; Indonesia; Head of Regions
1. Introduction
In the context of governance, a regional government is considered to assist in the creation of
governance. This can be seen from many expert opinions as quoted by Campos and Hellman (2005 in
World Bank, 2005, 237) that decentralization will make local officials more accountable to constituents
for their performance. However, these conditions cannot simply be achieved. There are a number of
conditions that must be met in order to realize governance in the regional administration, including
establishing mechanisms to promote broad civic participation and more responsive and accountable
local governments (Wong and Guggenheim, 2005 in World Bank, 2005, 253). In addition, according to
Azfar et al (1999, 1) devolution should increase the accountability of government officials and
discourage most forms of corruption where government actions are transparent and civil society is
permitted to operate freely.
* Paper presented at the 2011 Conference on Decentralization and Democratization in Southeast Asia, held by the
Freiburg Southeast Asia Study Group, University of Freiburg, Freiburg, Germany, June 15-17, 2011.
The importance of the mechanism as disclosed by experts above cannot be separated from the fact that
the decentralization also provides greater opportunities for corruption. This is as presented by Monte
and Papagni (2007, 381) by citing opinion from Prud’home (1995) and Tanzi (1995) that corruption may
be greater at the local level because of the greater intimacy and frequency of interaction between
private individuals and officials at more decentralized levels.
Associated with this condition, in one study, James Manor (1999, 101-102) stressed that democratic
decentralization is always attended by an increase in the number of persons who are involved in corrupt
acts. This situation according to Manor can be prevented if strong, democratic, decentralized institutions
are allowed to function for extended periods through a combination of processes: with democratic
institutions stimulating (as they do) the development of civil society; while organized interests, the
press, and others acquire skills and the inclination to make the system work well.
In the context of Indonesia, the latest developments indicates as revealed by the Minister of Home
Affairs in a working meeting with the Regional Representatives Council on January 17, 2011 that so far
there are 17 governors (of 33) and 138 regents/mayor (of 497) who became a suspect in criminal cases,
especially in corruption case. These facts emphasize the condition as expressed by various experts that
the implementation of decentralization in Indonesia was marked by the increasing corruption in
Regional Government. Rinaldi, Purnomo, and Damayanti (2007) for example, revealed that even since
the enactment of Regional Autonomy under the Law No. 22 year 1999 on Regional Government in the
year 2001 there have been trends of corruption in Regional Government which has increased sharply.
This condition occurs according to Chaniago (2004 as quoted in Koran Tempo) as a result of increased
legislative and executive powers in the regions that are not accompanied by a transparent accountability
mechanism to the public.
In connection with a corruption case that involving a number of Head of Regions as disclosed above,
based on data from a number of corruption cases related to Head of Regions that handled by Komisi
Pemberantasan Korupsi (KPK/Corruption Eradication Commission) for example (see Table 2), there are
at least three main causes why those Head of Regions entry into the trap of corruption, namely: due
process of procurement of goods and services through a kickback, mark up, bribery and embezzlement;
due to abuse of social assistance funds through a fictitious proposal, embezzlement and enrich others
parties as well as due to the process of granting certain permissions. Contextually, this situation
occurred due to a very large discretion of the Head of Regions in the management of Local Budgets that
ranging from the budgeting process, utilization and accountability that are laden with his or her political
interests. Corruption occurs commonly associated with leakage in the use of the budget, particularly
from the revenue and spending.
Departing from diverse backgrounds above, this paper tries to discuss, analyze and give an answer why
the situation has happened and the various efforts that can be done to fix it. Through the literature
study, this paper will attempt to describe the current condition of a number of corruption cases that
involving the Head of Regions in Indonesia, especially from the cases that handled by the KPK. In order
to achieve its goal, this paper consists of several parts. The first section will describe the background of
why this theme was raised. The second part will discuss the conceptual study of decentralization and its
relation to corruption. The third section will discuss about some of corruption cases that involving heads
of regions after the big bang decentralization in Indonesia that handheld by the KPK. The fourth section
will analyze the cases and efforts in the future that can be done to prevent it. And the last or fifth part
 will contain the conclusions and recommendations related to policies that must be taken to reduce the
occurrence of similar cases.
2. Conceptualization of decentralization and its link with corruption
According to Bjedov, Madies and Schnyder (2010, 13), the study of the link between decentralization
and corruption is the object of a relatively recent and expanding literature even though we can already
find tracks of this debate in the work of authors such as Brennan and Buchanan (1977; 1980). Related to
this, in the end there are two different views about the linkages between decentralization and
corruption. First view assumes that decentralization can impact positively on the corruption, while
others view consider that decentralization would give a negative impact on corruption. The second view
in my opinion is more due to the non-fulfillment of a number of requirements that should exist in the
implementation of a decentralized policy so that decentralization is actually expected to support the
creation of good governance but in the end it turned out creates conditions for bad governance, which
marked one of them with increasing corruption.
Related to this, the successful implementation of decentralization according to Rondinelli, Nellis and
Cheema (1983, 34-35) will be determined by at least 6 (six) factors, namely: (1) the degree to which
decentralization contributes to achieving broad political objectives, such as promoting political stability;
mobilizing support and cooperation for national development policies; and providing heterogeneous
regions, interests, and communities with a stake in the survival of the political system; (2) the degree to
which decentralization increases administrative effectiveness, by promoting greater coordination among
units of the national government and between them and sub-national administrative units, local
governments, and nongovernmental organizations, or by encouraging closer cooperation among
organizations to attain mutually acceptable development goals; (3) the degree to which decentralization
contributes to promoting economic and managerial efficiency, by allowing government at both the
central and local levels to achieve development goals in a more cost-effective manner; (4) the degree to
which decentralization increases government responsiveness to the needs and demands of various
interest groups within society; (5) the degree to which decentralization contributes to greater selfdetermination
and self-reliance among subordinate units of administration or nongovernment
organizations in promoting development or meeting highly valued needs within society; and (6) The
appropriateness of the means by which policies and programs are designed and carried out to achieve
the goals of decentralization, however they are defined.
In line with the views from Rondinelli, Nellis and Cheema, Kauzya (2005, 9-10) offers 5 (five)
characteristics that should be considered in designing democratic decentralization policy which are: (1)
legal framework: instituting constitutional and legal reforms to devolve power to local structures; (2)
local governance capacity: increasing local governance actors’ ability to act (financial and human
resources, organization, authority); (3) increasing local government accountability; (4) role of civil
society (practice of horizontal decentralization /community empowerment); and (5) socio-economic well
being: (improving quality of life).
To be able to make decentralization can support the creation of good governance particularly in
improving the effectiveness and accountability, then according to Manor (1999) as cited by Johnson
(2001, 527) elected bodies at local levels have adequate funds; they enjoy substantive autonomy; and
lines of accountability exist between elected representatives and citizens, and between non-elected
bureaucrats and elected representatives. In line with Manor opinion, according to the World Bank
Institute (2001, 8) to improve governance and fighting corruption in local governments can be done
through local government reforms that related to simplified administrative procedures; increased citizen
participation in government; and monitoring and evaluation systems. This reform in local government is
part of the reforms implemented nationally.
In terms of accountability, according to Shah (1998, 15) is the key to the success of decentralized
decision making. However it entails institutions and mechanisms for citizen’s voice and exit, norms and
networks of civic engagement; social consensus; preservation instinct of a "stationary bandit" who
monopolizes and rationalizes theft in the form of taxes; judicial accountability; vertical and horizontal
accountability. Meanwhile, regarding public participation according to Shah (1998, 21) is an instrument
that can ensures that public goods are consistent with voter preferences and public sector
accountability. Such participation is possible only if political freedom (voice and exit) is permitted and
political stability prevails. Decentralization strengthens citizen participation by bringing governments
closer to the people they are intended to serve.
In the context of decentralization in Indonesia since the Law No. 22 year 1999 to Law No. 32 year 2004 is
turned out not to produce maximum results, otherwise even the majority showed an indication of
failure (Prasojo, 2009, 121). The failure of this regional autonomy according to Prasojo (2009, 122) is
reflected in an absence of the dimensions of political of equality, local responsiveness and local
accountability in government efficiency, public service, financial management, management of natural
resources, and direct election of head of regions. Further according to Prasojo (2011), in addition to
producing head of regions that innovative and pro- local progress, regional autonomy has also created
some head of regions that are genetically potential to become corrupt. These head of regions is usually
very happy with his or her power and tend to abuse his or her power and authority or may also act
arbitrarily. Not only was not innovative, these power-hungry head of regions is indeed not have a
commitment for progress of his or her regions.
There are at least five causes why so many head of regions become suspects in corruption cases in
addition to the high cost of local elections according to Prasojo (2011): (1) the use of discretion by the
head of regions that is not controlled; (2) the oligarchy and dynasty rule; (3) the incompatibility system;
(4) the lack of central government oversight; and (5) the weakness of civil society oversight. What was
mention by Prasojo about the cause of corruption by head of regions in Indonesia is very consistent with
the opinion in most of the literatures on common causes of corruption. From the literatures it is known
that corruption is caused by a number of factors which have contributed either directly or indirectly. In
addition, the factors causing corruption also can be distinguished among the factors associated with
individual characteristics and structural influences.
Opinions about the causes of corruption by direct and indirect factors can be found in the writings of
Tanzi (1998, 565-576). According to Tanzi, there are at least 6 (six) factors as the direct causes of
corruption, namely: (1) regulations and authorizations; (2) taxation; (3) spending decisions; (4)
provisions for goods and services at below-market prices; (5) other discretionary decisions; and (6)
financing of parties. Meanwhile, the indirect cause of corruption consists of at least 6 (six) factors,
namely: (1) quality of the bureaucracy; (2) level of public sector wages; (3) penalty systems; (4)
institutional controls; (5) transparency of rules, laws and processes; and (6) examples by the leadership.
The explanation of the causes of corruption that associated with the characteristics of individual and
structural influences can be seen in the writings of Nas, Price and Weber (1986, 109). According to them,
the individual-level explanation tends to view the corrupt act as the result of greed or the inability to
withstand temptations on the part of weak or insufficiently ethical officials. Greed, or desire for gain, is
indeed a strong motivator of human behavior, as the literature suggest. While the causes of corruption
from the structural side are caused by 3 (three) things: (1) bureaucratic or organizational; (2) quality of
citizen involvement; and (3) congruence of the legal system to social demands.
Meanwhile, in the view of Shah (2007, 236), the occurrence of corruption in the public sector will be
highly dependent on a multitude of factors, namely: (1) the quality of public sector management; (2) the
nature of accountability relations between the government and citizens; (3) the legal framework; and (4)
the degree to which public sector processes are accompanied by transparency and dissemination of
information. Efforts to address corruption that fail to adequately account for these underlying drivers
are unlikely to generate profound and sustainable results.
3. Review on some of corruption cases that involving head of regions after the big bang
decentralization in Indonesia that handled by KPK
In order to achieve the expected goal, I try to describe a number of corruption cases from the Head of
Regions that handled by KPK since 2004-2010. The cases that presented here are cases that has had
permanent legal force and executed. The reason for the selection of the cases that handled by KPK is
based on the availability of information that can be accessed. As known, KPK every year since 2004,
always publish an annual report that it also contains statistical data, description and status of various
cases of corruption that they are handled, including the cases of corruption that involving the Head of
Regions. However, given the fact that KPK is a new institution that just established in December 2003,
the cases handled by them are cases that started from 2004 while the big bang decentralization in
Indonesia has been conducted since January 2001. Therefore, the cases presented here cannot describe
the progress of cases from before 2001 and in the period 2001-2003. From the various cases, then will
be selected 4 cases to be further described. The selection of cases is based on the availability of
information as well as the different types of case.
By referring to the KPK annual reports during 2004-2010, we could obtained information on various
corruption cases that handled by the KPK, as can be seen in table 1. Based on data in table 1, it can be
seen that from 245 corruption cases handled by the KPK since 2004 to 2010, about 30 cases (12.24%)
are the cases that involving the Head of Regions, of which 8 cases involving the Governor and remain 22
cases involving the Regent/Mayor. Where are averaged, each year there are at least 4 cases of
corruption that involving the Head of Regions. This condition is of course very disturbing for us. It is by
remembering that the cases are only the cases that handled by the KPK. There are still some other cases
of corruption by the Head of Regions that handled by the Attorney General Office that its number is
likely far more than the cases that handled by the KPK. This is related to the size of the KPK compared to
the organization of the Attorney General Office. These conditions also troubling because it is also related
to the important role and large function of a Head of Region in the era of regional autonomy. The
involvement of so many Head of Regions in various corruption cases could indicate that they are still
some problematic in the implementation of decentralization in Indonesia. The practice of
decentralization in Indonesia has not been able to support the implementation of good governance. The
successful implementation of decentralization in support of good governance would be marked by small
number of corruption cases that plagued the regional governments, especially that done and involving a
Head of Region. The large number of corruption cases that involving Head of Region have indicated the
persistence of problems that must be corrected in the implementation of decentralization in Indonesia.
As closing remarks, it can be concluded that the implementation of decentralization in Indonesia in
practice has led to many cases of corruption by head of regions. This occurs as a result of the weakness
or absence of legal framework; mechanisms of accountability and transparency in regional government,
role and participation of the community; and monitoring and evaluation system by the central
government. Mechanisms of accountability and transparency as well as the role and participation of the
community are an issue that is relatively less attention so far from government.
In order to reduce the occurrence of corruption committed by head of regions, various improvement
and reinforcement of the weaknesses had to be done. Strengthening mechanisms of accountability,
transparency and public participation should be the main agenda that must be done by governments
and other stakeholders. In addition, improvements to the legal framework and system of monitoring
and evaluation by the central government to regional governments should still be done.
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