Decentralization in Nation State Building of Indonesia

Introduction：Today, many countries, regardless of developed or developing, are trying to promote decentralization. According to Manor, as his quoting of Nickson’s argument, decentralization stems from the necessity to strengthen local governments as proxy of civil society to fill the yawning gap between the state and civil society (Manor [1999]: 30). With the end to the Cold War following the collapse of the Soviet Union rendering the cause of the “leadership of the central government to counter communism” meaningless, Manor points out, it has become increasingly difficult to respond flexibly to changes in society under the centralized system. Then, what benefits can be expected from the effectuation of decentralization? Litvack-Ahmad-Bird cited the four points: attainment of allocative efficiency in the face of different local preferences for local public goods; improvement to government competitiveness; realization of good governance; and enhancement of the legitimacy and sustainability of heterogeneous national states (Litvack, Ahmad & Bird [1998]: 5). They all contribute to reducing the economic and social costs of a central government unable to respond to changes in society and enhancing the efficiency of state administration through the delegation of authority to local governments. Why did Indonesia have a go at decentralization? As Maryanov recognizes, reasons for the implementation of decentralization in Indonesia have never been explicitly presented (Maryanov [1958]: 17). But there was strong momentum toward building a democratic state in Indonesia at the time of independence, and as indicated by provisions of Article 18 of the 1945 Constitution, there was the tendency in Indonesia from the beginning to debate decentralization in association with democratization. That said debate about democratization was fairly abstract and the main points are to ease the tensions, quiet the complaints, satisfy the political forces and thus stabilize the process of government (Maryanov [1958]: 26-27). 　　　What triggered decentralization in Indonesia in earnest, of course, was the collapse of the Soeharto regime in May 1998. The Soeharto regime, regarded as the epitome of the centralization of power, became incapable of effectively dealing with problems in administration of the state and development administration. Besides, the post-Soeharto era of “reform (reformasi)” demanded the complete wipeout of the Soeharto image. In contraposition to the centralization of power was decentralization. The Soeharto regime that ruled Indonesia for 32 years was established in 1966 under the banner of “anti-communism.” The end of the Cold War structure in the late 1980s undermined the legitimate reason the centralization of power to counter communism claimed by the Soeharto regime. The factor for decentralization cited by Manor is applicable here. 　　　Decentralization can be interpreted to mean not only the reversal of the centralized system of government due to its inability to respond to changes in society, as Manor points out, but also the participation of local governments in the process of the nation state building through the more positive transfer of power (democratic decentralization) and in the coordinated pursuit with the central government for a new shape of the state. However, it is also true that a variety of problems are gushing out in the process of implementing decentralization in Indonesia. 　　　This paper discusses the relationship between decentralization and the formation of the nation state with the awareness of the problems and issues described above. Section 1 retraces the history of decentralization by examining laws and regulations for local administration and how they were actually implemented or not. Section 2 focuses on the relationships among the central government, local governments, foreign companies and other actors in the play over the distribution of profits from exploitation of natural resources, and examines the process of the ulterior motives of these actors and the amplification of mistrust spawning intense conflicts that, in extreme cases, grew into separation and independence movements. Section 3 considers the merits and demerits at this stage of decentralization implemented since 2001 and shed light on the significance of decentralization in terms of the nation state building. Finally, Section 4 attempts to review decentralization as the “opportunity to learn by doing” for the central and local governments in the process of the nation state building. 　　　In the context of decentralization in Indonesia, deconcentration (dekonsentrasi), decentralization (desentralisasi) and support assignments (tugas pembantuan; medebewind, a Dutch word, was used previously) are defined as follows. Dekonsentrasi means that when the central government puts a local office of its own, or an outpost agency, in charge of implementing its service without delegating the administrative authority over this particular service. The outpost agency carries out the services as instructed by the central government. A head of a local government, when acting for the central government, gets involved in the process of dekonsentrasi. Desentralisasi, meanwhile, occurs when the central government cedes the administrative authority over a particular service to local governments. Under desentralisasi, local governments can undertake the particular service at their own discretion, and the central government, after the delegation of authority, cannot interfere with how local governments handle that service. Tugas pembantuan occur when the central government makes local governments or villages, or local governments make villages, undertake a particular service. In this case, the central government, or local governments, provides funding, equipment and materials necessary, and officials of local governments and villages undertake the service under the supervision and guidance of the central or local governments. Tugas pembantuan are maintained until local governments and villages become capable of undertaking that particular service on their own.

Vietnamese Local State-owned Enterprises (SOEs) at the Crossroads: Implications of SOE Restructuring at the Local Level

This paper aims to capture the changing features of local SOEs under the national SOE restructuring program in the 2000s. The national policy on SOE reform in this phase had an effect of considerably clarifying and narrowing down the raison d'être of SOEs, which has been put into practice at the local level through provincial master plans. Consequently, some signs of an important change are observed: the structure of the local SOE sector is being standardized to a certain extent, and the remaining local SOEs are becoming more geared to the needs of a market economy. This trend would have far-reaching implications for the policy implementation and public service delivery by localities, which in turn would affect the long-term development of non-state sectors.

Separation of Control and Cash-Flow Rights of State Owned Listed Enterprises: Channels of Expropriation after the Discriminated Share Reform in China

Literature on agency problems arising between controlling and minority owners claim that separation of cash flow and control rights allows controllers to expropriate listed firms, and further that separation emerges when dual class shares or pyramiding corporate structures exist. Dual class share and pyramiding coexisted in listed companies of China until discriminated share reform was implemented in 2005. This paper presents a model of controller to expropriate behavior as well as empirical tests of expropriation via particular accounting items and pyramiding generated expropriation. Results show that expropriation is apparent for state controlled listed companies. While reforms have weakened the power to expropriate, separation remains and still generates expropriation. Size of expropriation is estimated to be 7 to 8 per cent of total asset at mean. If the "one share, one vote" principle were to be realized, asset inflation could be reduced by 13 percent.

How has financial deepening affected poverty reduction in India? : empirical analysis using state-level panel data

This paper examines empirically whether financial deepening has contributed to poverty reduction in India. Using unbalanced panel data for 28 states and union territories between 1973 and 2004, we estimate models in which the poverty ratio is explained by financial deepening, controlling for international openness, inflation rate, and economic growth. From the dynamic generalised method of moments (GMM) estimation, we find that financial deepening and economic growth alleviate poverty, while international openness and the inflation rate have the opposite effect. These results are robust to changes in the poverty ratios in rural areas, urban areas, and the whole economy.

Restructuring the state budget system for disinflation and exchange rate unification in Myanmar

The installment of a new government has augmented the prospect for implementing disinflation and exchange rate unification in Myanmar. A close look at the state budget shows that the reform of the budget system for state economic enterprises (SEEs) is essential. Reforms need to hold the replacement of controlled prices including the official exchange rate with market prices in SEE operations, and the separation of the SEEs from the state budget. But separating the SEEs from the state budget will necessitate careful planning to cope with SEE bankruptcies which would imposes another fiscal burden on the government. Therefore, economic viability must be a criterion for the continuation of their operations.

Caste, land, and migration : a preliminary analysis of a village survey in an underdeveloped state in India

This paper explores migration from Bihar, one of the most underdeveloped states in India, by paying particular attention to social class (caste) and landholdings. After describing details of individual migrants, we present our preliminary findings on the determinants of migration, based on our field survey of 200 households in four villages in 2011. In terms of social class, Muslims are more likely to migrate, but Scheduled Castes do not show a high propensity to migrate as is stated in some of the existing literature where the underclass is said to be more mobile. In terms of landholdings, the probability that someone will migrate is high among the landless and smaller landholders but it decreases as the size of the landholding increases. However, as the size of the landholding increases still further, a reverse effect of landholding on decisions regarding migration moves in, with the decline in probability becoming less and less. This result confirms a non-linear relationship between landholdings and the decision to migrate. Some further research questions are raised in the paper.

The innovation process of a privately-owned enterprise and a state-owned enterprise in China

This study compares the innovation process of a privately-owned enterprise and a state-owned enterprise in China using their patent data. Huawei and ZTE were selected for this study because they experienced the same historical environment in the same industry from the same region in China leaving their owner types as their critical difference. This study investigates the difference in the innovation process in R&D between a privately-owned and a state-owned enterprise by analyzing (1) domestic and international patent application pattern, (2) co-application and co-applicants, (3) knowledge accumulation inside Huawei and ZTE, and (4) knowledge spillover to domestic and foreign firms.

State-business relations in the smaller gulf monarchies -- the role of business actors in the decision-making process

The Arab monarchies of the Gulf have been undergoing striking socio-economic changes caused by the ending of the rent-based welfare state model on which they had largely relied since the 1950s. In this perspective, this paper aims at examining the comparative role of local business communities in affecting the orientations and the outcomes of the policies implemented during the period of high oil prices in the 2000s. This paper pays a special attention to the impact of the Arab Spring on the state-business relations in two of the smaller Gulf monarchies (Bahrain and Oman).

State of the Art and Future Trends in Grid Codes Applicable to Isolated Electrical Systems

Isolated electrical systems lack electrical interconnection to other networks and are usually placed in geographically isolated areas—mainly islands or locations in developing countries. Until recently, only diesel generators were able to assure a safe and reliable supply in exchange for very high costs for fuel transportation and system operation. Transmission system operators (TSOs) are increasingly seeking to replace traditional energy models based on large groups of conventional generation units with mixed solutions where diesel groups are held as backup generation and important advantages are provided by renewable energy sources. The grid codes determine the technical requirements to be fulfilled by the generators connected in any electrical network, but regulations applied to isolated grids are more demanding. In technical literature it is rather easy to find and compare grid codes for interconnected electrical systems. However, the existing literature is incomplete and sparse regarding isolated grids. This paper aims to review the current state of isolated systems and grid codes applicable to them, specifying points of comparison and defining the guidelines to be followed by the upcoming regulations.

Immucillin H, a powerful transition-state analog inhibitor of purine nucleoside phosphorylase, selectively inhibits human T lymphocytes

Transition-state theory has led to the design of Immucillin-H (Imm-H), a picomolar inhibitor of purine nucleoside phosphorylase (PNP). In humans, PNP is the only route for degradation of deoxyguanosine, and genetic deficiency of this enzyme leads to profound T cell-mediated immunosuppression. This study reports the biological effects and mechanism of action of Imm-H on malignant T cell lines and on normal activated human peripheral T cells. Imm-H inhibits the growth of malignant T cell leukemia lines with the induction of apoptosis. Imm-H also inhibits activated normal human T cells after antigenic stimulation in vitro. However, Imm-H did not inhibit malignant B cells, colon cancer cell lines, or normal human nonstimulated T cells, demonstrating the selective activity of Imm-H. The effects on leukemia cells were mediated by the cellular phosphorylation of deoxyguanosine and the accumulation of dGTP, an inhibitor of ribonucleotide diphosphate reductase. Cells were protected from the toxic effects of Imm-H when deoxyguanosine was absent or when deoxycytidine was present. Guanosine incorporation into nucleic acids was selectively blocked by Imm-H with no effect on guanine, adenine, adenosine, or deoxycytidine incorporation. Imm-H may have clinical potential for treatment of human T cell leukemia and lymphoma and for other diseases characterized by abnormal activation of T lymphocytes. The design of Imm-H from an enzymatic transition-state analysis exemplifies a powerful approach for developing high-affinity enzyme inhibitors with pharmacologic activity.

A Fiberless Seed Mutation in Cotton Is Associated with Lack of Fiber Cell Initiation in Ovule Epidermis and Alterations in Sucrose Synthase Expression and Carbon Partitioning in Developing Seeds1

Fiber cell initiation in the epidermal cells of cotton (Gossypium hirsutum L.) ovules represents a unique example of trichome development in higher plants. Little is known about the molecular and metabolic mechanisms controlling this process. Here we report a comparative analysis of a fiberless seed (fls) mutant (lacking fibers) and a normal (FLS) mutant to better understand the initial cytological events in fiber development and to analyze the metabolic changes that are associated with the loss of a major sink for sucrose during cellulose biosynthesis in the mutant seeds. On the day of anthesis (0 DAA), the mutant ovular epidermal cells lacked the typical bud-like projections that are seen in FLS ovules and are required for commitment to the fiber development pathway. Cell-specific gene expression analyses at 0 DAA showed that sucrose synthase (SuSy) RNA and protein were undetectable in fls ovules but were in abundant, steady-state levels in initiating fiber cells of the FLS ovules. Tissue-level analyses of developing seeds 15 to 35 DAA revealed an altered temporal pattern of SuSy expression in the mutant relative to the normal genotype. Whether the altered programming of SuSy expression is the cause or the result of the mutation is unknown. The developing seeds of the fls mutant have also shown several correlated changes that represent altered carbon partitioning in seed coats and cotyledons as compared with the FLS genotype.

Real-time monitoring of electrochemically active biofilm developing behavior on bioanode by using EQCM and ATR/FTIR

In the current study, the relationship between current and biomass and bio-adhesion mechanism of electrogenic biofilm on electrode were investigated using EQCM and ATR-SEIRAS linking electrochemistry. The results indicated that cellular biomass of biofilm on QCM-crystal surface showed maximum value of 6.0 μg/cm2 in initial batch and 11.5 μg/cm2 in the second batch on mature biofilm, producing a similar maximum current density of 110 μA/μg. Especially, the optimum cell biomass linking high electricity production ratio (110 μA/μg) occurred before maximum biomass coming, implying that over-growth mature biofilm is not an optimum state for enhancing power output of MFCs. On the other hand, the spectra using ATR-SEIRAS technique linking electrochemistry obviously exhibited water structure adsorption change at early biofilm formation and meanwhile the water adsorption accompanied the adsorbed bacteria and the bound cells population on the electrode increased with time. Meanwhile, the direct contact of bacteria and electrode via outer-membrane protein can be confirmed via a series spectra shift at amide I and amide II modes and water movement from negative bands displacing by adsorbed bacteria. Our study provided supplementary information about the interaction between the microbes and electrode beyond traditional electrochemistry.