THE THEORY OF PUBLIC THE THEORY OF PUBLIC ADMINISTRATION

Linkage Master Programmesg gDouble Degree FIA-UNIBRAW and Japanese Universities

Universitas Brawijaya

Lecturer : Prof. Dr. Ir. Ginandjar Kartasasmitajgkar@cbn.net.idwww.ginandjar.comg j

Assistant Professor : Dr.Ir. Deddy S. Bratakusumah, BE, MURP, M.Sc.deddys@bappenas.go.id

GOVERNMENT INSTITUTIONGOVERNMENT INSTITUTION

INSTITUTION

INSTITUTIONS ARE STRUCTURES AND MECHANISMS OF SOCIAL ORDER AND COOPERATION GOVERNING THE COOPERATION GOVERNING THE BEHAVIOR OF TWO OR MORE INDIVIDUALS.

INSTITUTION IS COMMONLY APPLIED TO CUSTOMS AND BEHAVIOR PATTERNS CUSTOMS AND BEHAVIOR PATTERNS IMPORTANT TO A SOCIETY, AS WELL AS TO PARTICULAR FORMAL ORGANIZATIONS OF GOVERNMENT AND PUBLIC SERVICEOF GOVERNMENT AND PUBLIC SERVICE.

(WIKIPEDIA, 2006)

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INSTITUTION

THE ELEMENTS OF INSTITUTION ARE: THE ELEMENTS OF INSTITUTION ARE:

1. VALUE,2. STRUCTURE,,

3. PROCESS

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ORGANIZATION

THE STRUCTURE OF AUTHORITATIVE THE STRUCTURE OF AUTHORITATIVE AND HABITUAL PERSONAL INTERRELATIONS IN AN ADMINISTRATIVE SYSTEM

(WALDO, 1955)

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ORGANIZATION

ORGANIZATIONS ARE SOCIAL UNITS ORGANIZATIONS ARE SOCIAL UNITS (OR HUMAN GROUPINGS) DELIBERATELY CONSTRUCTED AND RECONSTRUCTED TO SEEK SPECIFIC GOALS

(ETZIONI, 1961)

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ORGANIZATION CHARACTERISTICS

1. DIVISIONS OF LABOR, POWER, AND COMMUNICATION RESPONSIBILITIES, DIVISIONS WHICH ARE NOT RANDOM OR DIVISIONS WHICH ARE NOT RANDOM OR TRADITIONALLY PATTERNED, BUT DELIBERATELY PLANNED TO ENHANCE THE DELIBERATELY PLANNED TO ENHANCE THE REALIZATION OF SPECIFIC GOALS,

2. THE PRESENCE OF ONE OR MORE POWER 2. THE PRESENCE OF ONE OR MORE POWER CENTERS WHICH CONTROL THE CONCERTED EFFORTS OF THE ORGANIZATION AND DIRECT THEM TOWARD ITS GOALS; THESE POWER CENTERS ALSO MUST STRUCTURE, WHERE NECESSARY TO INCREASE ITS EFFICIENCY

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NECESSARY, TO INCREASE ITS EFFICIENCY,

ORGANIZATION CHARACTERISTICS

3. SUBSTITUTION OF PERSONNEL, i.e, UNSATISFACTORY PERSONS CAN BE REMOVED AND OTHERS ASSIGN THEIR TASKS THE ORGANIZATION CAN ALSO TASKS. THE ORGANIZATION CAN ALSO RECOMBINE ITS PERSONNEL THROUGH TRANSFER AND PROMOTION.TRANSFER AND PROMOTION.

(ETZIONI, 1961)

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ORGANIZATION THEORIES

1. THE STRUCTURE OF AN ORGANIZATION AFFECTS ITS BEHAVIOR,

2. THE STRUCTURE OF AN ORGANIZATION C S O O S O SAFFECTS THE BEHAVIOR OF ITS WORKERS,

PARTICIPANTS, AND PERHAPS EVEN CASUAL MEMBERSMEMBERS,

3. ORGANIZATIONAL PROCESSES ALSO AFFECT ORGANIZATIONAL AND INDIVIDUAL ORGANIZATIONAL AND INDIVIDUAL BEHAVIOR,

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ORGANIZATION THEORIES

4. ORGANIZATIONS CAN BE RATIONALLY (OR SCIENTIFICALLY) DESIGNED STRUCTURALLY )AND PROCEDURALLY TO ACHIEVE THEIR GOALS IN AN EFFECTIVE AND EFFICIENT MANNERMANNER,

5. ORGANIZATIONS CAN USEFULLY BE CONCEPTUALIZED AS SYSTEMS THAT CONCEPTUALIZED AS SYSTEMS THAT RESPOND TO AND AFFECT THEIR ENVIRONMENTS AND SEEK TO GAIN ENVIRONMENTS AND SEEK TO GAIN INFORMATION ABOUT THE EFFICACY OF THOSE RESPONSES

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ORGANIZATION THEORIES

6. ORGANIZATIONS MAY HAVE CULTURES THAT PARTIALLY DEFINE HOW THEIR MEMBERS CONCEPTUALIZE ORGANIZATIONAL ACTIVITY AND THE ENVIRONMENT

(MARCH, 1965)

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ORGANIZATION THEORIES

IN GENERAL, ORGANIZATIONAL THEORY IS “GENERIC” IN THE SENSE THAT IT DOES NOT MAKE DISTINCTIONS BETWEEN PUBLIC AND PRIVATE ORGANIZATIONSAND PRIVATE ORGANIZATIONS

ALL ORGANIZATIONS SHARE SOME ALL ORGANIZATIONS SHARE SOME CHARACTERISTICS, AND NEARLY ALL SIGNIFICANT ONES ARE REGULATED BY SIGNIFICANT ONES ARE REGULATED BY GOVERNMENTS IN ONE WAY OR ANOTHER

(BOZEMAN, 1987)

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( , )

PUBLIC ORGANIZATION

PUBLIC SECTOR (OR GOVERNMENTAL) ORGANIZATIONS FACE LEGAL-CONSTITUTIONAL. POLITICAL. AND MARKET CONDITIONS THAT DISTINGUISH MARKET CONDITIONS THAT DISTINGUISH THEM FROM MOST PRIVATE ORGANIZATIONSORGANIZATIONS

(ROSENBLOOM & KRAVCHUCK 2005)(ROSENBLOOM & KRAVCHUCK, 2005)

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ORGANIZATION STRUCTURE

Directorate General

Directorate/Bureau/

Division

Section

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WHAT IS BUREAUCRACY?

LITERALLY RULE BY OFFICIALS; THE LITERALLY, RULE BY OFFICIALS; THE ADMINISTRATIVE MACHINERY OF THE STATE OR, MORE BROADLY, A RATIONAL AND RULE-GOVERNED MODE OF ORGANIZATION

(HEYWOOD, 2002)

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BUREAUCRACY CONCEPTS

1. SPECIALIZED JURISDICTIONS, OFFICES, AND TASKS THAT IS A DIVISION OF AND TASKS, THAT IS, A DIVISION OF LABOR AND AUTHORITY REGARDING THE ACHIEVEMENT OF THE ORGANIZATION’S GOALS,

2. A HIERARCHY OF AUTHORITY TO COORDINATE THE ACTIVITIES OF THE SPECIALIZED OFFICES AND INTEGRATE THEIR JURISDICTIONAL AUTHORITYTHEIR JURISDICTIONAL AUTHORITY

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BUREAUCRACY CONCEPTS

3 A CAREER STRUCTURE IN WHICH 3. A CAREER STRUCTURE IN WHICH INDIVIDUAL EMPLOYEES OF THE BUREAUCRATIC ORGANIZATION MOVE THROUGH VARIOUS SPECIALIZATIONS AND RANKS. MOVEMENT IS BASED ON MERIT AND/OR SENIORITYMERIT AND/OR SENIORITY

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BUREAUCRACY CONCEPTS

4. A BUREAUCRATIC STRUCTURE THAT TENDS TO BE PERMANENT IT REMAIN TENDS TO BE PERMANENT. IT REMAIN INTACT REGARDLESS OF THE FLOW OF MEMBERS IN AND OUT OF IT. SOCIETY BECOMES DEPENDENT ON THE BUREAUCRACY’S FUNCTIONING TO THE EXTENT THAT CHAOS RESULTS IF IT IS EXTENT THAT CHAOS RESULTS IF IT IS DESTROYED,

5 BY IMPLICATION BUREAUCRACIES ARE 5. BY IMPLICATION, BUREAUCRACIES ARE LARGE ORGANIZATIONS.

(WEBER, 1947)

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( , )

BUREAUCRACY FUNCTIONS

PROCEDURALLY, BUREAUCRACY IS

IMPERSONAL OR DEHUMANIZINGFORMALISTICFORMALISTICRULE-BOUNDHIGHLY DISCIPLINEDHIGHLY DISCIPLINED

(ROSENBLOOM & KRAVCHUCK 2005)(ROSENBLOOM & KRAVCHUCK, 2005)

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THE POWER POSITION OF THE POWER POSITION OF BUREAUCRACY

BUREAUCRACY IS

HIGHLY EFFICIENTPOWERFULEVER-EXPANDING

(ROSENBLOOM & KRAVCHUCK 2005)(ROSENBLOOM & KRAVCHUCK, 2005)

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INTERGOVERNMENTAL RELATIONSRELATIONS

IGR CONCERN

INTERGOVERNMENTAL RELATION WERE THUS CONCERNED WITH POLICY, THAT IS, WITH , ,CHOOSING COURSES OF ACTION AND ASSESING THEIR PRACTICAL EFFECTS

(WRIGHT, 1988)

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CENTRE-PERIPHERY RELATIONSHIPS

FEDERAL SYSTEMSFEDERAL SYSTEMSUNITARY SYSTEMS

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FEDERAL STATES

CENTRAL / FEDERAL GOVERNMENT

SOVEREIGNITY (SEPARATE CHECKS AND (SPHERES OF CONSTITUTIONAL AUTONOMY)

CHECKS AND BALANCES

PROVINCIAL / STATE GOVERNMENT

(ADAPTED FROM HEYWOOD 2002)

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FEDERALISM

A TERRITORIAL DISTRIBUTION OF A TERRITORIAL DISTRIBUTION OF POWER BASED ON THE SHARING OF SOVEREIGNITY BETWEEN CENTRAL SOVEREIGNITY BETWEEN CENTRAL (NATIONAL) AND PERIPHERAL ONES

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UNITARY STATES

CENTRAL GOVERNMENT

SOVEREIGNITY (CONSTITUTIONAL SUPREMACY)

DEVOLVED /

)

/REGIONAL BODIES

LOCAL GOVERNMENT

(ADAPTED FROM HEYWOOD 2002)

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UNITARY

THESE VEST SOVERIGN POWER IN A THESE VEST SOVERIGN POWER IN A SINGLE, NATIONAL INSTITUTION

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DECENTRALIZATION AND LOCAL AUTONOMYAUTONOMY

WHAT IS DECENTRALIZATION?

DECENTRALIZATION IS THE TRANSFER OF DECENTRALIZATION IS THE TRANSFER OF AUTHORITY AND RESPONSIBILITY FOR PUBLIC FUNCTIONS FROM THE CENTRAL FUNCTIONS FROM THE CENTRAL GOVERNMENT TO SUBORDINATE OR QUASI-INDEPENDENT GOVERNMENT ORGANIZATIONS AND/OR THE PRIVATE SECTOR

(WORLD BANK, 2001)

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WHAT IS DECENTRALIZATION?

DECENTRALIZATION IS THE EXPANSION OF DECENTRALIZATION IS THE EXPANSION OF LOCAL AUTONOMY THROUGH THE TRANSFER OF POWERS AND RESPONSIBILITIES AWAY OF POWERS AND RESPONSIBILITIES AWAY FROM NATIONAL BODY

(HEYWOOD 2002)(HEYWOOD, 2002)

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THE REASONS

ONE OF THE MOST CRUCIAL AND RECURRING ONE OF THE MOST CRUCIAL AND RECURRING DEBATS IN THE DEVELOPING WORLD IS ABOUT THE DEGREE OF CONTROL THAT ABOUT THE DEGREE OF CONTROL THAT CENTRAL GOVERNMENTS CAN AND SHOULD HAVE OVER DEVELOPMENT PLANNING AND ADMINISTRATION

(CHEEMA AND RONDINELLI, 1984)

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THE REASONSIMPROVE EFFICIENCY - BASIS FOR REGIONAL AND LOCAL GOVERNMENT ROLE: ROLE:

1. BETTER MATCH BETWEEN SERVICE 1. BETTER MATCH BETWEEN SERVICE PROVISION AND VOTER PREFERENCES

2. BETTER ACCOUNTABILITY THROUGH CLOSER LINKAGES OF BENEFITS WITH COSTSLINKAGES OF BENEFITS WITH COSTS

3. INCREASED MOBILIZATION OF LOCAL REVENUES

4. BETTER PARTICIPATION OF CLIENTS IN SELECTION OF OUTPUT MIX

(GERVAIS 1999)

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(GERVAIS, 1999)

TYPES OF DECENTRALIZATION

DECENTRALIZATION INCLUDEDECENTRALIZATION INCLUDE:1. POLITICAL2. ADMINISTRATIVE3. FISCAL4. MARKET

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POLITICAL DECENTRALIZATION

POLITICAL DECENTRALIZATION AIMS TO GIVE CITIZENS OR THEIR ELECTED REPRESENTATIVES MORE POWER IN PUBLIC DECISION MAKINGPUBLIC DECISION-MAKING

(WORLD BANK, 2001)

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FISCAL DECENTRALIZATION

FISCAL DECENTRALIZATION INVOLVES SHIFTING SOME RESPONSIBILITIES FOR SHIFTING SOME RESPONSIBILITIES FOR EXPENDITURES AND/OR REVENUES TO LOWER LEVELS OF GOVERNMENT

THE IMPORTANT IS: THE EXTENT TO WHICH LOCAL ENTITIES ARE GIVEN AUTONOMY TO DETERMINE THE ALLOCATION OF THEIR EXPENDITUREALLOCATION OF THEIR EXPENDITURE

(WORLD BANK, 2001)

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ADMINISTRATIVE DECENTRALIZATION

ADMINISTRATIVE DECENTRALIZATION ADMINISTRATIVE DECENTRALIZATION SEEKS TO REDISTRIBUTE AUTHORITY, RESPONSIBILITY AND FINANCIAL RESOURCES FOR PROVIDING PUBLIC SERVICES AMONG DIFFERENT LEVELS OF GOVERNMENTGOVERNMENT

(WORLD BANK, 2001)

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ECONOMIC OR MARKET ECONOMIC OR MARKET DECENTRALIZATION

ECONOMIC OR MARKET DECENTRALIZATION ECONOMIC OR MARKET DECENTRALIZATION WILL INCLUDE PRIVATIZATION AND DEREGULATION THEY SHIFT RESPONSIBILITY DEREGULATION. THEY SHIFT RESPONSIBILITY FOR FUNCTIONS FROM THE PUBLIC TO THE PRIVATE SECTOR PRIVATE SECTOR

(WORLD BANK, 2001)

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FORMS OF DECENTRALIZATION

FORMS OF DECENTRALIZATION INCLUDE:1 DECONCENTRATION1. DECONCENTRATION2. DELEGATION TO SEMI-

AUTONOMOUS AGENCIES3. DEVOLUTION TO LOCAL

GOVERNMENT4 TRANSFER OF FUNCTIONS FROM 4. TRANSFER OF FUNCTIONS FROM

PUBLIC TO NONGOVERNMENT INSTITUITIONINSTITUITION

(CHEEMA & RONDINELLI, 1984)

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DECONCENTRATION

DECONCENTRATION INVOLVES THE DECONCENTRATION INVOLVES THE REDISTRIBUTION OF ADMINISTRATIVE RESPONSIBILITIES ONLY WITHIN THE RESPONSIBILITIES ONLY WITHIN THE CENTRAL GOVERNMENT

(CHEEMA & RONDINELLI 1984)(CHEEMA & RONDINELLI, 1984)

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DELEGATION TO SEMI-AUTONOMOUS AGENCIES

ANOTHER FORM OF DECENTRALIZATION IS ANOTHER FORM OF DECENTRALIZATION IS THE DELEGATION OF DECISION-MAKING AND MANAGEMENT AUTHORITY FOR AND MANAGEMENT AUTHORITY FOR SPECIFIC FUNCTIONS TO ORGANIZATIONS THAT ARE NOT UNDER THE DIRECT CONTROL OF CENTRAL GOVERNMENT MINISTRIES

(CHEEMA & RONDINELLI, 1984)

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DEVOLUTION TO LOCAL GOVERNMENT

ANOTHER FORM OF DECENTRALIZATION ANOTHER FORM OF DECENTRALIZATION SEEKS TO CREATE OR STRENGTHEN INDEPENDENT LEVELS OR UNITS OF INDEPENDENT LEVELS OR UNITS OF GOVERNMENT THROUGH DEVOLUTION OF FUNCTION AND AUTHORITY

(CHEEMA & RONDINELLI, 1984)

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TRANSFER OF FUNCTIONS FROM PUBLIC TO NON-GOVERNMENT INSTITUITION

DECENTRALIZATION TAKES PLACE IN MANY COUNTRIES THROUGH THE TRANSFER OF SOME PLANNING AND ADMINISTRATIVE RESPONSIBILITY OR OF PUBLIC RESPONSIBILITY, OR OF PUBLIC FUNCTIONS, FROM GOVERNMENT TO VOLUNTARY, PRIVATE, OR NON-VOLUNTARY, PRIVATE, OR NONGOVERNMENT INSTITUTIONS

(CHEEMA & RONDINELLI, 1984)(C & O , 98 )

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WHAT IS LOCAL AUTONOMY?

LOCAL GOVERNMENT CAN BE SAID TO BE LOCAL GOVERNMENT CAN BE SAID TO BE AUTONOMOUS IF THEY ENJOY A SUBSTANTIAL DEGREE OF INDEPENDENCE ALTHOUGH DEGREE OF INDEPENDENCE, ALTHOUGH AUTONOMY IN THIS CONNECTION IS SOMETIMES TAKEN TO IMPLY A HIGH MEASURE OF SELF-GOVERNMENT, RATHER THAN SOVEREIGN INDEPENDENCE

(ADAPTED FROM HEYWOOD, 2002)

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FISCAL DECENTRALIZATIONFISCAL DECENTRALIZATION

DECENTRALIZATION OF DECENTRALIZATION OF SPENDING

EFFICIENCY IN ALLOCATION OF RESOURCES IS BEST SERVED BY ASSIGNING RESPONSIBILITY FOR EACH TYPE OF PUBLIC RESPONSIBILITY FOR EACH TYPE OF PUBLIC EXPENDITURE TO THE LEVEL OF GOVERNMENT THAT MOST CLOSELY GOVERNMENT THAT MOST CLOSELY REPRESENTS THE BENEFICIARIES OF THESE OUTLAYSOUTLAYS

(TER-MINASSIAN, 1997)

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CENTRALIZED PROVISION

FOR CENTRALIZED PROVISION CAN BE MADE –AT LEAST ON ALLOCATIVE GROUNDS- ONLY FOR NATIONAL PUBLIC GOODS THAT IS FOR NATIONAL PUBLIC GOODS, THAT IS, GOODS WHOSE BENEFITS EXTEND NATION WIDE OR WHOSE PROVISION IS SUBJECT TO WIDE OR WHOSE PROVISION IS SUBJECT TO SUBSTANTIAL ECONOMIES OF SCALE

(TER-MINASSIAN, 1997)

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REVENUE-RAISING REVENUE RAISING RESPONSIBILITY

BY SEPARATING SPENDING AUTHORITY FROM BY SEPARATING SPENDING AUTHORITY FROM REVENUE-RAISING RESPONSIBILITIES, THESE ARRANGEMENTS OBSCURE THE LINK BETWEEN THE BENEFITS OF PUBLIC BETWEEN THE BENEFITS OF PUBLIC EXPENDITURES AND THEIR PRICE, NAMELY, THE TAXES LEVIED TO FINACE THEM. THUS THEY DO NOT PROMOTE FISCAL RESPONSIBILITY IN SUBNATIONAL POLITICIANS AND THEIR ELECTORATEPOLITICIANS AND THEIR ELECTORATE

(TER-MINASSIAN, 1997)

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CENTRAL GOVERNMENT TAX CENTRAL GOVERNMENT TAX ASSIGNMENT

CENTRAL GOVERNMENT SHOULD BE ASSIGNED TAXES THAT HAVE CERTAIN CHARACTERISTICS:CHARACTERISTICS:

1. THEY ARE LEVIED ON THE MOBILE TAXE 1. THEY ARE LEVIED ON THE MOBILE TAXE BASE,

2. THEY ARE MORE SENSITIVE TO CHANGES IN INCOME THAT IS THEY HAVE HIGHER IN INCOME, THAT IS, THEY HAVE HIGHER INCOME ELASTICITY,

3 THEY ARE LEVIED ON TAX BASES THAT ARE 3. THEY ARE LEVIED ON TAX BASES THAT ARE DISTRIBUTED UNEVENLY ACROSS REGION

(TER-MINASSIAN, 1997)

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SUBNATIONAL TAX SUBNATIONAL TAX CHARACTERISTICS

1 THE TAX BASE SHOULD BE RELATIVELY 1. THE TAX BASE SHOULD BE RELATIVELY IMMOBILE, TO ALLOW LOCAL AUTHORITIES SOME LEEWAY IN VARYING RATES WITHOUT LOSING MOST OF THEIR TAX BASELOSING MOST OF THEIR TAX BASE,

2. THE TAX YIELD SHOULD BE ADEQUATE TO MEET LOCAL NEEDS AND SUFFICIENTLY MEET LOCAL NEEDS AND SUFFICIENTLY BOUYANT OVER TIME (THAT IS, IT SHOULD EXPAND AT LEAST AS FAST AS EXPENDITURES)EXPENDITURES)

3. THE TAX YIELD SHOULD BE RELATIVELY STABLE AND PREDICTABLE OVER TIME

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SUBNATIONAL TAX

4. IT SHOULD NOT BE POSSIBLE TO EXPORT MUCH, IF ANY, OF THE TAX BURDEN TO NON-RESIDENTSRESIDENTS

5. THE TAX BASE SHOULD BE VISIBLE, TO ENSURE ACCOUNTABILITYENSURE ACCOUNTABILITY

6. THE TAX SHOULD BE PERCEIVED TO BE REASONABLY FAIR BY TAXPAYERS

7. THE TAX SHOULD BE RELATIVELY EASY TO ADMINISTER EFFICIENTLY AND EFFECTIVELY

(BIRD & VAILLANCOURT, 1998)

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INTERGOVERNMENTAL TRANSFER

SINCE MOST MAJOR TAXES ARE TYPICALLY SINCE MOST MAJOR TAXES ARE TYPICALLY ASSIGNED TO THE CENTRAL GOVERNMENT, WHILE SUBSTANTIAL AND GROWING EXPENDITURE RESPONSIBILITIES ARE EXPENDITURE RESPONSIBILITIES ARE DEVOLVED TO REGIONAL AND LOCAL GOVERNMENTS, SIZEABLE VERTICAL ,IMBALANCES EMERGE AT THE SUBNATIONAL GOVERNMENT LEVEL

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INTERGOVERNMENTAL TRANSFER

THERE ARE ALSO HORIZONTAL IMBALANCES THERE ARE ALSO HORIZONTAL IMBALANCES, BECAUSE THE CAPACITY TO RAISE OWN REVENUES DIFFERS ACROSS JURISDICTIONS, ,DEPENDING ON THE DISTRIBUTION OF THEIR ASSIGNED TAX BASES, AND ALSO BECAUSE DIFFERENT REGIONS MAY FACE DIFFERENT COSTS AND DEMAND PRESSURES IN MEETING THEIR ASSIGNED EXPENDITURE THEIR ASSIGNED EXPENDITURE RESPONSIBILITIES

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INTERGOVERNMENTAL TRANSFER

THESE IMBALANCES MUST BE ADDRESSED THESE IMBALANCES MUST BE ADDRESSED THROUGH INTERGOVERNMENTAL TRANSFERS, OR BORROWING BY DEFICIT JURISDICTIONS, ,OR A COMBINATION OF THE TWO

(TER-MINASSIAN, 1997)

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LOCAL FINANCE IN INDONESIA

SOURCES

LOCAL REVENUES EQUITY FUND OTHERS

LOCAL TAXES

RETRIBUTIONS

SHARING REVENUES GIFT

RETRIBUTIONS

REVENUES FROM LOCAL ASSETS

GENERAL ALLOCATED FUND

EMERGENCY FUND

LOANLOCAL ASSETS

OTHERS

SPECIAL ALLOCATED FUND

LOAN

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THANK YOU

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