Advantages of Decentralization for the Indonesian Economy

Advantages of Decentralization – Decentralization is one of the important elements in government. However, the principle has strengths, and advantages.

To find out, an in-depth analysis is needed so that an understanding of the basic notion of decentralization can be formed, and valid conclusions can be obtained.

In order to know more about decentralization. Here are some complete reviews that we have presented to you.

Definition of Decentralization

Decentralization is an effort made by the government in the context of handing over central government policies to regional governments in order to regulate their respective regions. In short, decentralization is the granting of authority or responsibility from the central government to regional governments.

Meanwhile, based on KBBI (Big Indonesian Dictionary), decentralization is a system of government that gives more power to regional governments, as well as the delegation of some of the leadership’s authority to subordinates or the center to branches, and others.

Meanwhile, in terms of language, decentralization comes from the Dutch language which has a combination of two words, namely de which means “off” and centerum which means “center.” The term actually tends towards policies in an organization which can simply be interpreted as a delegation of authority.

Understanding According to Experts

The definition of decentralization according to experts, including the following:

1. According to Syamsudin Haris (2006)

According to Vincent Ostrom in Syamsudin Haris (2006), if decentralization is understood from the perspective of state society relations, it will be known that the true existence of decentralization is none other than to bring the state closer to the people in such a way that between the two of them can give birth to a dynamic interaction, both to the decision-making process as well as in implementing policies.

2. According to Bambang Yudoyono (2003)

In line with this, Joseph Riwu Kaho (1991) in Bambang Yudoyono (2003) put forward reasons why the government needs to decentralize power over regional governments.

These reasons are based on the desired ideal conditions as well as provide a philosophical basis for the administration of regional government in accordance with the system of government adopted by the state.

3. According to Henry Maddick (1963)

Henry Maddick, stated that decentralization is the legal transfer of power to handle certain fields/functions to autonomous regions.

4. According to Rondinelli, Nellis, and Cheema (1983)

Rondinelli, Nellis, and Cheema (1983), stated that decentralization is the creation or strengthening, both financially and legally, of subnational government units whose implementation is substantially outside the direct control of the central government.

5. According to Rondinelli (1983)

Rondinelli (1983), decentralization is the delegation, planning, decision-making, and administrative authority from the central government to regional organizations, regional administrative units, semi-autonomous organizations, local governments or non-governmental organizations or non-governmental organizations.

Forms of Decentralization

As for the various forms of main activity implementation of decentralization. It is useful to distinguish between these various concepts, to see the various conceptual dimensions of this type of government. The following are some of the forms that have been practiced by governments from various countries:

1. Deconcentration of Administrative Authority

Deconcentration in question, is not related to the handover or delegation of authority to make decisions or the flexibility in making decisions, when there is a shift in work from the central department to its representatives in the regions.

2. Delegation of Authorities

The delegation in question is the handing over of specific tasks to an organization that is directly under central supervision, where decision-making and managerial authority has previously been delegated.

3. Devolution of Local Government

Certain functions are carried out independently by units created by the central government. Where this condition refers to the central government transferring authority to local governments in terms of decision-making, finance, and management. That is what is called devolution of local government.

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4. Transfer of Functions from Government to Private

This is commonly known as privatization, which means that everything related to planning, implementation, and certain responsibilities is handed over by authoritarianism and power to private organizations.

Types of Decentralization

Decentralization not only has various meanings and forms, this principle also has several types and each function, including the following:

1. Politics

The first type of decentralization is politics. This type has the aim of being an encouragement to the community and elected representatives so that they can be more partial in a public decision-making. This has received democratic support by giving greater influence to citizens, as well as representation in the formulation and implementation of a policy, although it is often associated with pluralistic politics and representative government.

2. Administration

The second type of decentralization is administration. This type aims to restore authority, responsibility and financial resources to carry out public service delivery activities between various levels of government. In addition, it also has three main forms, namely delegation, deconcentration, and devolution.

3. Fiscal

The next type of decentralization is called fiscal. This type has the goal that the regions have the opportunity to explore more sources of funds in supporting the effective functioning of the fiscal. These funds are obtained either locally or transferred from the central government. This type of decentralization also has the authority to make a decision regarding spending.

4. Economy or Market

This last type of decentralization is the economy or the market. This type aims to provide full responsibility for everything related to the public sector to the private sector.

Decentralization Goals

The main purpose of this one decentralization is to realize the welfare of the Indonesian people as a whole. Of course, you already know that Indonesia has a very wide area. Managing such a large country from one place is very difficult. Therefore it takes cooperation from all parties to make it stand firmly.

Social inequality is a problem that has always existed in Indonesia. The central part is considered the most advanced, while the place that is farthest from the center of inequality is very pronounced. You can see it from the very pronounced difference in infrastructure. Actually all regions have potential like Jakarta but the central government cannot implement it alone.

This is where the role of local government begins to emerge. Actually, there is no need to be similar to the city of Jakarta, as long as local people can fulfill their needs and potential to the fullest, then this can boost the country’s economy as a whole.

In implementing this system, of course, it requires several goals to be achieved in order to carry out a vision and mission. Some of these objectives are divided into several sections, including the following:

1. Prevent Financial Concentration

The authority to manage the finances of the regional government is delegated from the central government to the regional government. Improving general welfare in the regions can be carried out properly in line with the budgeting and realization that has been formed.

2. Forms of Local Government Democracy

This system is a form of democratizing local government efforts to link the community so that it takes responsibility for administering government.

3. Improvement of Regional Socio-Economy

This government system also assists regional governments in compiling various programs in an effort to improve the social economy at the regional level.

Advantages of Decentralization

The advantages of decentralization can be felt from various parties, not only local governments, but also all Indonesian people can feel it. Such are the advantages of decentralization.

1. As a Way to Realize a State with the Principles of Democracy

Indonesia is a country based on democracy. This decentralization is a form of democracy in Indonesia. The principle of democracy does not only apply to politics, but also to other sectors such as the economy.

In this way, it is hoped that all parties can go hand in hand in accordance with what was desired by previous Indonesian leaders who had created this principle first. It can also reduce jealousy which is very risky to occur in underdeveloped areas. All Indonesian people have the right to have the same facilities. Although the whole has not been realized, but at least slowly this is being implemented.

2. Providing opportunities for regions to develop their potential

Each region has different potential. Someone who is right in developing the potential of the area itself is of course a local child who comes from the area itself. Because they are the ones who know, and know their own area.

From here the local community will be given an authority to manage their natural resources, free to carry out export activities, free to issue a policy related to the region and everything related.

3. Improving the Regional Economy

When a region succeeds in developing its own potential, the economy will contribute. That is because the community is well off, needs can also be met properly. This is where no one competes to make the best area. Each region can be the best with its own version. Regions that produce a lot, of course, will make the country’s economy with this area increase.

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4. Reducing Long-winded Bureaucracy

The bureaucracy in Indonesia does look long if it is entirely controlled by the center. Even if setting up a business requires obtaining a permit from the central government, this will of course be tiring for small and medium entrepreneurs. With the presence of decentralization, everything can be implemented in each region. In fact, there are also many central government agencies that have representative offices in the regions.

5. Helping the Work of the Central Government Become More Effective

The central government has a lot of work to do. If everything is implemented by the central government, of course this will take quite a long time. This advantage of decentralization makes the work of the central government more effective because there are local governments that are helping.

Even though it is given an authority to carry out various matters related to the regions, the central government always carries out monitoring so that regional government work is carried out in accordance with the guidelines or directions and regulations that apply in Indonesia. It is not surprising that the president often holds meeting agendas with various regional heads.

The advantages of decentralization in Indonesia

Indonesia implements a principle of regional autonomy, namely that local governments have the authority to manage their own affairs, regional regulations and the economy. This makes the impact of decentralization that has been implemented where the central government hands over authority to local governments.

Of course, the implementation of this hope will bring up a positive or negative impact. One of the advantages is that it can encourage the regional economy to accelerate again. however, even so this principle still has drawbacks with one example being the increasing complexity in the process of administering government.

In the government system in Indonesia, there are several advantages, and also disadvantages of decentralization. Well,
here is the review.

1. Become More Effective

Government administration so that it can be more effective as in all regions, because there is no need to wait for a direction directly or from the center.

2. Alleviate Government Work

When each region carries out its own governmental activities, the work of the central government will become lighter. Efforts to reduce the accumulation of work owned by the central government are implemented as the right effort.

3. Bureaucracy doesn’t need to be too long

It cuts through the stages of procedures in the bureaucracy so that it can make the government system more efficient.

4. More Cost Efficient

In the absence of a long bureaucracy, and market and financial authority is also held by the regional government, regional expenditures become more controlled, so public services become faster and more efficient.

5. Measurable Regional Progress

The local government will pay more attention to lagging areas. Local governments are becoming more focused on developing their regions, and developing plans from various government agencies that are more integrated.

6. Improving Central and Regional Relations

The central government will always take part in various decisions, so that the relationship between the center and the regions will always be well established.

Advantages of Decentralization for the Economy in Indonesia

Indonesia is a very broad country in terms of territory, so it is very difficult to monitor it directly from a distance. This also applies to the economic sector. In order to continue to develop, all regions should not only rely on the center.

The regional party must be able to carry out an initiative in advancing its own place. This is where the advantages of decentralization proclaimed by the Indonesian government in recent years. Decentralization is the transfer of some of the powers from the central government to regional governments in order to implement various policies and measures to improve the welfare of the people in the regions. Partial delegation of powers is true, but the main laws and regulations will always refer to the central government.

This was what Indonesia did at the end of this year to increase the potential of each region. The central government continues to issue spending funds for the regions, but the regions are still allowed to have their own way of obtaining funds from other sources.

An example of the transfer of authority that applies in Indonesia, consists of:

1. The authority to regulate and supervise education policies in an area.
2. The authority to regulate the direct election of regional heads.
3. The DPRD is allowed to make laws that have been adapted to the needs of the people in their respective regions.
4. The authority to improve one of the leading sectors of each respective region. For example, if a region is advanced in the fisheries sector, the regional government can further develop the fisheries potential.

It can be concluded that this decentralization can also have an impact on performance in various sectors.

So, those are some explanations about the meaning and advantages of decentralization . Until now the system is still run by the Indonesian state. And no significant problems occurred. Therefore, many other countries try to follow the example of implementing this system because the system has proven to be very effective.