2008年-世界发展银行全球_Sub-National_Performance_Incentives_in_the_Intergovernmental_Framework___Current_Practice_and_Options_for_Reform_in_Indonesia_23页_755kb

Summary of Sub-National Performance Incentives in the Intergovernmental Framework: Current Practice and Options for Reform in Indonesia

Core Content

This document explores the current state and potential reforms of sub-national performance incentives within Indonesia's intergovernmental fiscal framework. It emphasizes the importance of designing effective incentives to improve local government behavior in a decentralized system, particularly in areas such as fiscal responsibility, service delivery, and capacity building.

Main Views

• Decentralization and Incentives: Decentralization requires not only autonomy but also a balance between national goals and local accountability. Local elections alone are insufficient to ensure responsible governance, especially in areas with weak civil society and collective decision-making.

• Current Discontent: There is widespread dissatisfaction with sub-national fiscal performance, characterized by under-spending, inefficient spending, and poor quality of public services like education and water supply.

• Limited Incentive Mechanisms: Indonesia's current system of incentives is fragmented, ad-hoc, and often ineffective. Most mechanisms are either poorly implemented or have unintended consequences.

Key Information

1. Sub-National Spending (2004)

• High administrative spending: Provinces and kabupaten/kota spent 31.6% and 29.9% of their budgets on administration, respectively.
• Low spending on key sectors:
  • Education: 28.8%
  • Infrastructure: 16.8%
  • Health: 7.3%
• Inefficient allocation: Spending on education, health, and infrastructure is below international benchmarks.

2. Sub-National Revenue (2004)

• DAU (General Purpose Grant): Makes up approximately 50% of sub-national revenues and 66% of local government budgets.
• DAK (Special Purpose Grant): Constitutes about 3% of total local government revenue, with growing coverage across 11 sectors by 2008.
• Shared Tax and Non-Tax Revenues: Property tax and oil/gas revenues are shared with sub-national governments, but their impact is limited due to weak implementation and monitoring.

3. Performance Incentives in Practice

• Property Tax: Central government returns a minor share (3.5%) of property tax revenues to local governments based on performance. However, the mechanism is not well implemented and has limited impact.
• Oil and Gas Revenues: A 0.5% increase in sub-national shares is allocated to education, but there is no monitoring or enforcement of how these funds are used.
• DAU: The allocation mechanism includes a wage bill component, which may discourage efficiency in personnel management. The equalization formula also uses potential own-source revenues, which may be influenced by interest earnings on unspent funds rather than real performance.

4. Challenges in Implementation

• Fragmentation and Lack of Coordination: Multiple central agencies are involved, leading to inconsistent and overlapping policies.
• Weak Monitoring and Enforcement: The effects of incentives are not well studied or monitored, and compliance is often not enforced.
• Limited Data: There is a lack of reliable data to assess the impact of existing incentive mechanisms.

5. Opportunities for Reform

• System Reforms: Incentives can be used to promote the adoption of more efficient and transparent fiscal and administrative procedures.
• Service Delivery: Incentives could be designed to improve the quality and accessibility of public services like education and water supply.
• Own-Source Revenue Generation: Encouraging local governments to generate more own-source revenue through better tax collection and management.

Conceptual Framework for Incentive Design

• Broad Target Purposes: Incentives can be aimed at specific reforms, broader development goals, or policy objectives like poverty reduction and environmental protection.
• Specific Objectives: These may include promoting fiscal discipline, improving service delivery, and enhancing local capacity.
• Key Design Issues: Must include clear performance metrics, monitoring mechanisms, and accountability structures.
• Performance Measurement Challenges: Measuring service quality and fiscal efficiency is complex and requires robust data and methodologies.
• Institutional Responsibilities: The design and implementation of incentives require clear roles and responsibilities among central and local governments.

Conclusion

The paper concludes that while Indonesia has made some efforts to introduce performance incentives, these are largely ad-hoc and insufficient. A more systematic and strategic approach is needed to ensure that incentives are effective in promoting better governance, accountability, and service delivery. The next steps include further research, policy alignment, and the development of a coherent framework for incentive-based reforms.