The effectiveness of decentralization in Indonesia. A case-study of the development of a marginal area by local authorities

The decentralization system is mandated by the Indonesian Government to enable regional development in the reformation era, specifically after 2004–2005. There were at least two crucial momentums that enforced the decentralization effort by the government; the Regional Government Law (UU Pemerintahan Daerah) which was then revised in 2014, and President Joko Widodo’s (2015–2019) policy of ‘marginal’ development, or development focussing on rural regions and citizens in the lower economic classes. In the last decade, the development process in Indonesia has greatly accelerated, especially in the infrastructure of Indonesia’s many regions. Unfortunately, there is still a significant disparity between the western and the eastern part of Indonesia, and between the urban and the rural areas. Indonesia’s inequality problem is evident in its Gini ratio, which scores at around 0.4, even though in the last five years that number has shown some decrease. Using Bromley’s policy-institution analysis and a ‘time and space’ approach, the disparities of Indonesia’s development, caused by its policies and the arrangements of its respective institutions, can be dissected. The basic pattern of the disparities is apparent, but its gap is evidently growing smaller. Meanwhile, with a time-space approach, that pattern can be clarified further by putting it in the context of regional planning periods. It is apparent that focusing on citizens in the lower economic classes and rural regions can shorten the developmental gap between regions. Moreover, the choice of a more controlled decentralization system is a determining factor in achieving a more equal regional development in Indonesia.