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The Origins of Regional Autonomy in Indonesia: Experts and the Marketing of Political Interests


This article argues that, in contrast with prevalent choice-theoretic accounts of institutional origins in new democracies, the passage of Indonesia's regional autonomy laws in 1999 took place despite the interests of powerful political actors rather than because of them. Lacking the past experience to calculate retrospectively the likely electoral payoff from supporting an effort to devolve political power to Indonesia's city and regency governments, New Order–era political elites in Jakarta gambled on the advice of a team of experts. The experts assured them that supporting the effort would give them strong and salient reformist credentials on the eve of free elections. The conclusion of the article suggests that the political origins of regional autonomy in Indonesia have broad implications for the understanding of institutional genesis in new democracies, and that the potential impact of expert advisers is a fruitful focus of future research.

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Thanks to Jason Brownlee, Ketut Putra Erawan, Bill Liddle, Rizal Panggabean, Dan Slater, and David Waldner for comments on earlier versions of this article. Special thanks go to Andi Mallarangeng, former deputy minister, and to Ryaas Rasyid, minister of regional autonomy, who gave generously of their time during a busy election season, and to Kevin O'Rourke, who as always was generous with his time in sharing his encyclopedic knowledge of Indonesia's political elite.

1. They were Hamid Awaluddin, Djohermansyah Djohan, Afan Gaffar, Andi Mallarangeng, Ryaas Rasyid, Ramlan Surbakti, and Anas Urbaningrum. Team 7 actually predated Suharto's fall: Hartono, Suharto's minister of home affairs, brought the members together under Ryaas Rasyid's leadership to design and coordinate political reforms. O'Rourke Kevin, “Interview with Ryaas Rasyid,” VanZorge Report, November 1999. Thanks to Kevin O'Rourke and Bill Liddle for extensive conversations about this period.

2. Author's interview with Andi Mallarangeng, October 29, 2003; see also Hosen Nadirsyah, “Indonesian Political Laws in Habibie Era: Between Political Struggle and Law Reform,” Nordic Journal of International Law 72, no. 4 (2003): 490491.

3. Republic of Indonesia, Undang-Undang Nomor 22 Tahun 1999 Tentang Pemerintahan Daerah (Law no. 22, 1999, on regional government), and Undang-Undang 25 Tahun 1999 Tentang Perimbangan Keuangan Antara Pemerintah Pusat Dan Daerah (Law no. 25, 1999, on fiscal relations between central and regional government).

4. Under Suharto's New Order, electoral interference was accompanied by a process by which members of parliament were appointed rather than directly elected. It was a sort of closed-list proportional system in which the ruling Golkar allowed only two other parties to contest elections and then had to approve the candidates they could name to parliament.

5. Indeed, their pressures were successful in another arena of institutional reform: electoral laws. Party leaders were successful at pushing for a variant on proportional representation that looked to provide candidates with a meaningful incentive to build local support but that in actuality left most seat-allocating power in the hands of Jakarta-based party leaders.

6. My research in late 2003 and early 2004, three years after implementation and just before Indonesia's second posttransition parliamentary elections, revealed little concern for regional autonomy as a national issue, even among local party leaders. This despite the apparent determination of President Megawati Sukarnoputri to roll back significant portions of the regional autonomy law and to reclaim much authority for the executive branch. Indeed, the two parties that made regional autonomy a central issue for their platforms in the 2004 elections—both led by nationally known political personalities, one of whom was Ryaas Rasyid—captured less than 2 percent of the total vote and only 4 of 550 seats in the incoming DPR. Author's interviews in Jakarta, Yogyakarta, and Denpasar, October–November 2003.

7. Cohen John and Peterson Stephen, “Administrative Decentralization: A New Framework for Improved Governance, Accountability, and Performance,” Working Paper, Harvard Institute for International Development, 1997.

8. See Boone Catherine, “Decentralization as Political Strategy in West Africa,” Comparative Political Studies 36, no. 4 (May 2003): 355380; O'Neill Kathleen, “Decentralization as An Electoral Strategy,” Comparative Political Studies 36, no. 9 (November 2003): 1068–1091; Eaton Kent, “Designing Subnational Institutions: Regional and Municipal Reforms in Postauthoritarian Chile,” Comparative Political Studies 37, no. 2 (March 2004): 218–244; and Garman Christopher, Haggard Stephan, and Willis Eliza, “Fiscal Decentralization: A Political Theory with Latin American Cases,” World Politics 53, no. 2 (January 2001): 205–236. One notable exception is Pauline Jones Luong, “Economic ‘Decentralization’ in Kazakhstan: Causes and Consequences,” in Luong Pauline Jones, ed., The Transformation of Central Asia: States and Societies from Soviet Rule to Independence (Ithaca: Cornell University Press, 2003).

9. Law No. 25, the partner bill that specified fiscal balances between center and region, underwent more substantial modification, in part because none of its original authors in Team 7 were trained economists. For discussions of the debates over this second law and clear statements from most of the major parties to the negotiations, see Republika, February 12, 1999, March 16, 1999, and April 7, 1999; Suara Karya, February 20, 1999, and February 23, 1999; Kompas, February 22, 1999, March 31, 1999, April 22, 1999, and July 30, 1999; Bisnis Indonesia, February 22, 1999; Suara Pembaruan, April 8, 1999; and Media Indonesia, April 20, 1999, and April 24, 1999.

10. Geddes Barbara, “A Comparative Perspective on the Leninist Legacy in Eastern Europe,” Comparative Political Studies 28, no. 2 (July 1995): 239.

11. Boone , “Decentralization,” footnote 3.

12. O'Neill , “Decentralization,” footnote 3.

13. Luong Pauline Jones, “Economic ‘Decentralization’ in Kazakhstan,” 182212.

14. Garman , Haggard , and Willis , “Fiscal Decentralization.” See especially p. 209 for a discussion of the potential costs and payoffs for presidents who initiate decentralization.

15. Samuels David, “Federalism and Democratic Transitions: The “New” Politics of the Governors in Brazil,” Publius 30, no. 2 (Spring 2000): 5254.

16. Hadiz Vedi, “Reorganizing Political Power in Indonesia: A Reconsideration of So-called ‘Democratic Transitions’,” Pacific Review 16, no. 4 (2003).

17. By this I mean countries in which democratic government, if it existed previously, was in the sufficiently distant past that generational change has removed from active politics actors and organizations with direct experience in democracy. This is one scope condition of the argument I develop here.

18. Kaminski Marek M., “How Communism Could Have Been Saved: Formal Analysis of Electoral Bargaining in Poland in 1989,” Public Choice 98, no. 1–2 (January 1999): 83109.

19. Gryzmala-Busse Anna, Redeeming the Communist Past (Cambridge: Cambridge University Press, 2002).

20. Mallarangeng Andi, quoted in Far Eastern Economic Review, September 17, 1998.

21. Author's interview with Andi Mallarangeng, April 8, 2004.

22. Rasyid M. Ryaas, “Regional Responses to Central Government Authority: A Comparative Study of South Sulawesi and Aceh” (masters thesis, Northern Illinois University, 1988); Rasyid M. Ryaas, “State Formation, Party System, and the Prospect for Democracy in Indonesia: The Case of Golongan Karya, 1967–1993” (PhD diss., University of Hawai'i-Manoa, 1994).

23. Quoted in Suara Karya, August, 25, 1998, emphasis added.

24. Merdeka, September 30, 1998, emphasis added.

25. See Republic of Indonesia, Peraturan Pemerintah Republik Indonesia Nomor 45 Tahun 1992 Tentang Penyelenggaraan Otonomi Daerah Dengan Titik Berat Pada Daerah Tingkat II (Government regulation no. 45, 1992, on the enactment of regional autonomy with centrality for level II regions).

26. For example, see the overview of this debate in Kompas, October 19, 1998.

27. This rapid drafting process also garnered criticism from NGO and civil society groups in Indonesia, who complained that only governors and bupatis had been consulted at the subnational level. See Down to Earth (August 2000), (accessed August 9, 2004). For their part, Team 7 members replied that NGO leaders, when asked to provide consultation, either failed to appear at scheduled meetings or had not read background materials pertinent to consultation meetings.

28. There is a broader point to be observed from this pragmatism on the part of the members of Team 7. I do not mean to suggest that they wrote a wholly idealistically driven law and sold it willy-nilly to Habibie and the DPR; they did not. They worked pragmatically to produce a regional autonomy law that (1) would be more palatable to nationalists than federalism, and (2) tracked administratively with a much more limited bill under construction at the Ministry of Home Affairs, whose approval the bill would need.

29. Team 7 later wrote a draft of the law on intergovernmental fiscal relations that underwent much more substantial revision after consultation with the Ministries of Finance and Home Affairs and the party factions in the DPR. I owe thanks to an anonymous reviewer for pushing me to clarify the process by which Law 25 was produced and revised.

30. Author's interview with Ryaas Rasyid, April 12, 2004. It was unclear whether Habibie meant that he would rather pass on any form of regional autonomy or simply one that devolved power to provincial-level governments.

31. Author's interview with Andi Mallarangeng, April 8, 2004.

32. Thanks to Rizal Panggabean for describing it in these terms.

33. Indeed, there is some evidence to support this. Amid dramatic changes in the electoral performance of PDI-P, Partai Demokrat, and Partai Keadilan Sejahtera, among others, Golkar captured almost exactly the same share of votes nationally in 1999 and 2004—roughly 22 percent. Habibie could not know this in 1998, of course.

34. The constitution gave the parliament the authority to elect the president. While under Suharto this election became more ritual than anything else, it gave the party blocs the dominant role in the post-Suharto political system.

35. This preference actually ran counter to the interests of Golkar, at least, but remained the central position of all three official parties in the last Suharto-appointed parliament. Party leaders apparently failed to realize that their extensive regional ties would provide them with a first-comer's advantage in fielding good candidates for single-member districts. Thanks to Bill Liddle for bringing this to my attention.

36. Author's interview with Ryaas Rasyid, April 12, 2004.

37. Republika, February 12, 1999.

38. Quoted in Bisnis Indonesia, February 20, 1999. Subianto was one of the appointees of Habibie himself in the aftermath of the resignations that accompanied Suharto's. A long-time ministry official without a political clique of his own to protect, Subianto largely served simply as Habibie's voice.

39. Functional Development (Golkar) faction spokesman Nailiu J. M., quoted in Suara Karya, February 20, 1999.

40. Shari'a is the Arabic word for Islamic law. “Hindu Shari'a” refers to the Hindu majority on the island of Bali, whose population is only roughly 8 percent Muslim, as opposed to the 90 percent majority nationwide. The fear on Java was that Hindus on Bali might use regional autonomy to enact religious laws discriminating against the small Muslim minority on the island.

41. Kompas, March 31, 1999.

42. PPP fraction spokesman Chozin Chumaidy, quoted in Suara Karya, February 20, 1999. Suara Karya was closely aligned to Golkar at this point, so it is somewhat surprising to see such contradictory language in an article that before this quote lays out the Golkar fraction's concerns about national disintegration.

43. Ibid.

44. ABRI fraction spokesman Namoeri Anoem, quoted in Suara Karya, February 23, 1999.

45. See Jakarta Post, February 23, 1999, and Bisnis Indonesia, March 2, 1999.

46. For discussions of the final negotiations on transfers and subsidies, see Suara Karya, March 16, 1999, and Suara Pembaruan, April 8, 1999. On the final agreement to vote on the law, see Kompas, April 24, 1999, and Media Indonesia, April 24, 1999.

47. The New Order parliament reserved large blocks of seats for representatives from all branches of the Indonesian armed forces and for the police.

48. The effort to water down regional autonomy continued throughout the Megawati presidency. One of only four bills under consideration by the outgoing parliament in late 2003 (which in the next parliament would reflect a considerably lower number of total seats for the Golkar-PDIP axis) was one that would return many areas of authority to the central government and make mayors and regents formal representatives of the president. I was accidentally invited to a “discussion session” on October 29, 2003, in which a draft of this “recentralization” law was presented by the Ministry of Home Affairs to a handful of regional autonomy specialists, including Ryaas Rasyid and Andi Mallarangeng, well before its existence became public. The debate over the bill at this meeting was, by Indonesian standards, extraordinarily raucous, and the cross-table yelling subsided only after sunset when, because the meeting took place during Ramadan, participants could break their fast and eat dinner. The bill was later withdrawn by the Megawati administration.

49. Article 107 established a quota for automatic election in any given district: the number of valid votes divided by the number of seats in that district. Given that there were often eight or ten times as many candidates as seats available, it is unsurprising that only about 5 percent of the incoming DPR was elected by surpassing the quota; the rest were selected by party leaders. Hadar Gumay of the Center for Electoral Reform confirmed that Article 107 was crafted and forced into the bill by the leaderships of Golkar and PDIP. Author's interview with Hadar Gumay, October 31, 2003.

50. Later rounds of bargaining and conflict over institutional changes may, and probably will, come to reflect dynamics that lean closer to full-information models as actors acquire greater certainty about how issues affect their political power and how they play with voters.

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Journal of East Asian Studies
  • ISSN: 1598-2408
  • EISSN: 2234-6643
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