Linkages between good governance and state asset management reform in Indonesia

  • Neil Efryano Prayoga

    Student thesis: Professional Doctorate


    Better use of public resources continues to be a focus for public sector reform in both developed and developing countries. While the objective of reform is to improve public sector management, lessons learned from Western countries show mixed results. For the past decade, Indonesia has also pursued public sector management reform, with the reform of state asset management (SAM) an integral part of this broader reform. SAM reform was triggered by the establishment of a series of laws in public financial management during 2003 and 2004 that set the foundation for SAM reform in Indonesia and acknowledged the importance of good governance (GG) practices in state financial management. This thesis explores the understanding of SAM reform and prescribed GG practices from the perspectives of government officials working with policy and procedures within the national bureaucracy. It does this through a case study that examines the SAM and GG practices in ministries and agencies within the Indonesian government, with a focus on the Ministry of Public Works. This ministry was selected because of the monetary value and scope of its assets and the officials‟ experience in managing assets. The exploratory nature of the research led to the adoption of a qualitative research methodology using in-depth interviews and document analysis. In this study,25 officials responsible for managing state assets were interviewed. Their understanding of the reform phenomenon is valuable for this research as it captures their experiences of reform processes and provides an important basis for exploring the salience of contemporary reforms in SAM. Based on the perceptions of these officials, links between the SAM reforms, the adoption of GG practices in SAM, and SAM practices were identified. This study found that the respondents, in general, saw Indonesian contemporary SAM reform (2006–2012) as successful. The success of reform can be seen from the perspectives of asset administration, asset reporting and asset utilisation. However, closer analysis of the officials‟ experiences of the importance and commitment to GG principles in SAM showed mixed results. Two sets of factors identified by the respondents are seen as contributing to the success of the reform: a strong focus on laws and regulations, organisation, and processes and procedures; and a strong commitment from all parties involved in SAM to improve SAM practices. However, there were institutional, managerial, and cultural challenges that had deleterious effects on the reform effort as perceived by the officials, such as the capacity of human resources, the scope of assets, and the awareness and commitment to reform. The key finding of this study is that there is a strong link between the reform of SAM, the adoption of GG practices in SAM, and SAM practices in terms of the thoughts and practices of government officials. The link is that they believe that the reform of SAM and the adoption of GG practices in SAM contributed to the improvement in SAM practices. This finding is significant as the link has not been explored in-depth before and is, therefore, the major contribution of this study.
    Date of Award2017
    Original languageEnglish
    SupervisorChris Sadleir (Supervisor), John Halligan (Supervisor) & Wahyu Sutiyono (Supervisor)

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