Other Public Sector Study
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Publication
The Need, Capacity and Willingness of Regional Governments to Finance Public Infrastructure from Long-Term Loans
(Washington, DC, 2011-06)This report reviews the need for long-term loans for regional governments, assesses the capacity of regional governments to repay long-term loans, identifies existing constraints to long-term borrowing by the regions, and recommends options for removing or mitigating existing constraints. The Government of Indonesia issued a government regulation on regional borrowing and unlike its legal predecessor, the newer regulation allows regional governments to borrow long term for public infrastructure projects that are indirectly revenue-generating, such as roads and flood control systems. Until the late 1990s, a major portion of long-term loans to regional governments was financed by international financial institutions, mainly the Asian Development Bank and the World Bank. In view of the need to increase investments in public infrastructure, and the absence of a domestic market for long-term financing, Government of Indonesia is currently considering re-opening this window by establishing a Municipal Development Fund in the Ministry of Finance. -
Publication
Support to Civil Service Reform in Indonesia : Report from a Programming Mission to Jakarta
(Washington, DC, 2009-05-07)Civil service reform in Indonesia is needed to sustain the important institutional reform results achieved over the last ten years in various sectors and policy areas and to further consolidate Indonesia as a progressing middle income country. This report summarizes a mission to Indonesia on February 2-13, 2009. The purpose of the mission was to i) map, describe and assess current approach and status of ongoing civil service reform initiatives in selected central government institutions; ii) make recommendations related to scope, focus and approach of continued reforms; and iii) propose to the Government of Indonesia (GOI) a World Bank program of assistance in support of the government's reform agenda. The report is intended to provide a basis for a decision within the Bank on whether and how to continue and scale up an engagement on civil service reform in Indonesia. Aligned with the three objectives, the mission report first provides an introduction to the political economy of civil service reform in Indonesia and an overview and profile of ongoing reform initiatives. It then analyses key civil service challenges, using the dimension in the draft framework for Actionable Governance Indicators as a point of departure. Finally, a possible program for donor support is presented in light of the analysis of key challenges and the political economy of reform. -
Publication
Sub-National Performance Incentives in the Intergovernmental Framework: Current Practice and Options for Reform in Indonesia
(World Bank, Washington, DC, 2008-06)This paper provides background for the Government of Indonesia as it considers if and how to introduce more robust local government performance incentives into the intergovernmental fiscal framework. The next section briefly examines the forces that have driven the recent national wave of interest in improving local government performance. This is followed by a review of the relatively limited set of local government performance incentives currently in force in Indonesia. The fourth section provides a conceptual overview of how to think about the possible expansion of local government incentive programs, outlining the potential role(s) of such programs in general and the key issues involved in designing and implementing them. The fifth section tentatively considers a number of options for additional local government incentives in Indonesia that the central government may wish to consider pursuing. The paper concludes with an outline of next steps for moving forward with the possible development of more purposeful and meaningful performance incentives in Indonesia's intergovernmental fiscal framework. -
Publication
Indonesia : Budget Reform Strategy Priorities
(International Monetory Fund and the World Bank, Washington, DC, 2007-06)This report is designed to assist the authorities develop an overall road map for reforming budget preparation. A specific focus is on the steps to be taken to introduce a medium-term framework for the central government's budget and a performance-based budget. These reforms require important preconditions to be in place, and a substantial change in the culture, incentives and behavior of the public service, and are likely to take several years to complete. Successive Indonesian governments have embarked on various reforms in the budget and public financial management system. New laws for governing budget and planning processes were adopted during 2003-04, which are gradually being implemented. The national development planning agency (BAPPENAS) and spending ministries have developed strategic government and ministerial plans that provide a basis for elaborating the framework for performance measurement and evaluation. Reforms are thus starting from a secure base and can also take advantage of the improved and stable macroeconomic and fiscal conditions, including a low fiscal deficit and a declining government debt ratio.