Local Government Organization and Finance: Indonesia
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Law 22/1999, the responsibility for more than 16,000 service providers (schools, public health centers, and so forth) was reassigned to subnational governments. In addition, for newly decentralized functions, the deconcentrated sectoral offices of the national government in the regions (Kanwils) were merged into local government structures. As a consequence, subnational governments absorbed more than 2.4 million national civil servants, including both administrative and functional staff members such as teachers and health care workers. As shown in table 7.9, in 2002 subnational governments employed more than three-fourths of all civil servants. As regional governments gained control over the newly assigned authorities, a key challenge was to adjust their organizational structures so that they would be capable of managing their new responsibilities and resources efficiently and effectively. Under decentralization, control over many factors related to regional administration and civil service management resides with the regional governments. Law 22/1999 gives districts and provinces the right to determine the size of their civil service and to set up their organizational structure within a framework regulated by the national government: Government Regulation 84/2000 sets limits on the number of departments and other government bodies. The number and structure of government units varies across regional governments, depending on their size, nature, and location. Typically regional government administrations, headed by mayors (bupati or walikota) at the local level and governors at the provincial level, include a regional secretariat (sekda), a planning agency (bappeda), and a number of sectoral departments (dinas), including finance, education and culture, health, infrastructure, agriculture, livestock, fishery, forestry, plantations, industry, social welfare, labor, and tourism (see figure 7.8).
T A B L E 7 . 9 Distribution of Civil Service Employment across Levels of Government before and after Decentralization 1999
2002
Level of government
Number
Percent
Number
National Subnational
3,519,959 485,902
87.9 12.1
930,602 3,002,164
23.7 76.3
4,005,861
100.0
3,932,766
100.0
Total Source: Rohdewohld 2003.
Percent
