## Indonesia: Managing Decentralization

_IMF Working Papers, August 1, 2002_

## Source details

**Canonical URL:** [Indonesia: Managing Decentralization](https://www.imf.org/en/publications/wp/issues/2016/12/30/indonesia-managing-decentralization-15944)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/30/indonesia-managing-decentralization-15944/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/30/indonesia-managing-decentralization-15944/index.json)
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## Bibliographic details
- Authors: Ehtisham Ahmad, Ali M. Mansoor
- Published: August 1, 2002
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451855821.001

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### Summary
- The process of decentralization in Indonesia was initiated after a long period of autocratic rule.
- Despite the political imperatives, there is a need to carefully sequence the fiscal decentralization to ensure that financing follows the assignment of functions.
- The functions should be commensurate with the capacity to provide public services.
- The paper argues for the proper sequencing to avoid jeopardizing macroeconomic stability or the effective delivery of public services.

### Key findings and arguments
- Fiscal decentralization must be carefully sequenced so that financing follows the assignment of functions.
- Assignments of functions should be commensurate with the capacity to provide public services.
- Improper sequencing could jeopardize macroeconomic stability.
- Improper sequencing could undermine the effective delivery of public services.

### Policy recommendations and implications
- Sequence fiscal decentralization to align financing with assigned functions.
- Ensure functional assignments match local capacity to provide services.
- Prioritize sequencing measures that protect macroeconomic stability.
- Implement sequencing to safeguard effective delivery of public services.

### Subjects and keywords
- Subject: Expenditure, Labor, Oil, gas and mining taxes, Public employment, Revenue administration, Taxes, Vehicle taxes
- Keywords: administration, central government, decentralization, decentralization process, District government, expenditure responsibility, gas and mining taxes, government, Habibie government, Intergovernmental Relations, Oil, Public employment, revenue, sequenced decentralization, state administration, Vehicle taxes, WP

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## Content in this bundle

- **Indonesia: Managing Decentralization - WP/02/136**
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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/indonesia-managing-decentralization-15944_