Is Decentralisation Compatible with the Application of Performance Management? The Impacts of Minimum Service Standards on the Motivation of Local Government to Improve Service Delivery in the Indonesian Decentralised System

Mohammad Roudo, Adrian Campbell, Simon Delay


Abstract. The extent to which decentralisation is compatible with effective performance management that is able to influence the motivation of public sector bodies has been a subject of limited attention in the academic literature. This paper contributes to that limited debate by investigating the extent to which minimum service standards (MSS), a performance management tool directed at local government service delivery, influences the motivation of local governments in highly decentralised systems, such as that in Indonesia. The two research questions are: (a) what influence does MSS have on the motivation of local governments to improve their service delivery performance, and (b) to what extent does decentralisation influence the implementation of performance management. The information used to answer these questions is taken from semi-structured interviews with eighty-three respondents from central government, district and city governments, and the non-governmental sector. The results of this study show that MSS, with its characteristic minimum thresholds, can lead to different patterns of motivation in local governments to improve service delivery. However, MSS only motivates better performance amongst those local governments whose current performance falls just below the required standard. It does not appear to motivate those who are well above or well below the standards. This study also showed the limitations of centrally led performance management systems like MSS to improve performance. They are constrained by the decentralised nature of the system, wherein the autonomy of local governments has to be respected. This implies that decentralisation is, to some extent, not compatible with effective performance management and attempts to improve local service delivery, which requires strong enforcement and effective incentives. However, this does not mean that MSS has no impact at all. Although the impact is limited, MSS, to an extent, helps to improve central-local dialogue in service delivery. This could be a good starting point for the improvement of public services in districts and cities in the future.

Keywords. Minimum service standards (MSS), decentralisation, performance management, public services, local government.

Abstrak. Sejauh mana desentralisasi kompatibel dengan manajemen kinerja yang efektif dapat mempengaruhi motivasi badan-badan sektor publik telah menjadi subyek perhatian yang terbatas dalam literatur akademik. Makalah ini berkontribusi pada perdebatan terbatas tersebut dengan menyelidiki sejauh mana standar pelayanan minimum (SPM), suatu alat manajemen kinerja yang diarahkan pada penyampaian layanan pemerintah daerah, mempengaruhi motivasi pemerintah daerah dalam sistem yang sangat terdesentralisasi, seperti di Indonesia. Dua pertanyaan penelitian mencakup: (a) pengaruh apa yang dimiliki SPM terhadap motivasi pemerintah daerah untuk meningkatkan kinerja penyampaian layanan mereka, dan (b) sejauh mana desentralisasi mempengaruhi pelaksanaan manajemen kinerja. Informasi yang digunakan untuk menjawab pertanyaan-pertanyaan ini diambil dari wawancara semi-terstruktur dengan delapan puluh tiga responden dari pemerintah pusat, kabupaten dan kota, dan sektor non-pemerintah. Hasil penelitian ini menunjukkan bahwa SPM, dengan batas minimum karakteristiknya, dapat menyebabkan pola motivasi yang berbeda di pemerintah daerah untuk meningkatkan penyediaan layanan. Namun, SPM hanya memotivasi kinerja yang lebih baik di antara pemerintah daerah yang kinerjanya saat ini berada di bawah standar yang dipersyaratkan. Tampaknya SPM tidak memotivasi mereka yang jauh di atas atau jauh di bawah standar. Penelitian ini juga menunjukkan keterbatasan sistem manajemen kinerja terpusat seperti SPM untuk meningkatkan kinerja. Mereka dibatasi oleh sifat sistem yang terdesentralisasi, di mana otonomi pemerintah lokal harus dihormati. Ini menunjukkan bahwa desentralisasi, sampai taraf tertentu, tidak kompatibel dengan manajemen kinerja yang efektif dan upaya untuk meningkatkan penyampaian layanan lokal yang membutuhkan penegakan hukum yang kuat dan insentif yang efektif. Namun, ini tidak berarti bahwa SPM tidak berdampak sama sekali. Meskipun dampaknya terbatas, SPM, sampai taraf tertentu, membantu meningkatkan dialog pusat-lokal dalam pemberian layanan. Ini bisa menjadi titik awal yang baik untuk peningkatan pelayanan publik di kabupaten dan kota di masa depan.

Kata kunci. Standar pelayanan minimum (SPM), desentralisasi, manajemen kinerja, layanan publik, pemerintah daerah.


Minimum service standards (MSS); decentralisation; performance management; public services; local government

Full Text:



Ahmad, J., S. Devarajan, S. Khemani, and S. Shah (2006) Decentralization and Service Delivery. In: Ahmad, E., & G. Brosio (Eds.) Handbook of Fiscal Federalism, 240-268. United Kingdom: Edward Elgar.

Alm, J., J.M. Vazquez, and D. Weis (2004) Introduction. In: Alm, J., J.M. Vasquez, S.M. Indrawati (Eds.) Reforming Intergovernmental Fiscal Relations and the Rebuilding of Indonesia: the ‘Big Bang’ Program and its Consequences, 1-14. Massachusetts: Edward Elgar Publishing Limited.

Aritenang, A. (2015) The Impact of AFTA Tariff Reduction on District of Economic Growth. Jurnal Perencanaan Wilayah dan Kota 26(1), 18-27.

Aspinall, E., and G. Fealy (2003) Introduction: Decentralisation, Democratisation and the Rise of Local. In: Aspinall, E., and G. Fealy (Eds.) Local Power and Politics in Indonesia: Democratisation and Decentralisation, 79-92. Singapore: Institute of Southeast Asian Studies.

Bardhan, P., and D. Mookherjee (2006) The Rise of Local Governments: an Overview. In: Bardhan, P., and D. Mookherjee (Eds.). Decentralization and Local Governance in Developing Countries: a Comparative Perspective, 1-52. Massachusetts: MIT Press.

Behn, R.D. (2003) Why Measure Performance? Different Purposes Require Different Measures. Public Administration Review 63(5), 586-606.

Boasiako, K.B.A., and P. Csanyi (2014) Introduction: Decentralization from Global Perspective. In: Boasiako, K.B.A., and P. Csanyi (Eds.) The Theories of Decentralization and Local Government: Implementation, Implication and Realities, a Global Perspective, 9-24. The United States: Stephen F. Austin State University Press.

Braun, D., and D.H. Guston (2003) Principal–agent Theory and Research Policy: an Introduction. Science and Public Policy 30(5), 302-308.

Breton, A. (2002) An Introduction to Decentralization Failure. In: Ahmad, E., and Tanzi (Eds.) Managing Fiscal Decentralization, 31-45. London: Routledge.

Coleman, J. S. (1990) Foundations of Social Theory. Harvard: Harvard University Press.

Crowther, D., and M. Green, M. (2004) Organisational Theory. London: Chartered Institute Personnel and Development.

De Bruijn, H. (2007) Managing Performance in the Public Sector. 2nd edn. London: Routledge.

Fengler, W., and B. Hofman (2009) Managing Indonesia’s Rapid Decentralization: Achievements and Challenges. In: Ichimura, S., and R. Bahl (Eds.) Decentralization Policies in Asian Development, 245-262. Singapore: World Scientific.

Ferrazzi, G. (2005) Obligatory Functions and Minimum Services Standards for Indonesia Regional Government: Searching for a Model. Public Administration and Development 25(2), 227-238.

Firman, T. (2003) Potential Impacts of Indonesia’s Fiscal Decentralization Reform on Urban and Regional Development: Towards a New Pattern of Spatial Disparity. Space and Polity 7(3), 247-271.

Fuhr, H. (2011) The Seven Traps of Decentralization Policy. International Journal of Administrative Science and Organization 18(2), 88-93.

Hofman, B., and Kaiser, K. (2006) Decentralization, Democratic Transition, and Local Governance in Indonesia. In: Bardhan, P., and D. Mookherjee (Eds.) Decentralization and Local Governance in Developing Countries: a Comparative Perspective, 81-124. Massachusetts: MIT Press Books.

Homme, R.P. (1995) The Dangers of Decentralization. The World Bank Research Observer 10(2), 201-210.

Hood, C. (1991) A Public Management for All Seasons? Public Administration 69(1), 3-19.

Huczynski, A., and D. Buchanan (1991) Organizational Behaviour. 2nd edn. Hertfordshire: Prentince Hall International.

Hudawi, A. (2012) The Implementation of Minimum Services Standards in Inpatient Service in Local Hospital in Bekasi District, Indonesia (Pelaksanaan Standar Pelayanan Minimal Rumah Sakit pada Pelayanan Rawat Inap di Rumah Sakit Umum Daerah Kabupaten Bekasi). Depok: Faculty of Public Health University of Indonesia.

Hughes, O. (2003) Public Management and Administration: an Introduction. 3rd edn. Basingtoke: Palgrave Macmillan.

Inside Housing (2016) Out of Commission. Inside Housing, 12 December 2016. Accessed from on 2 June 2017.

Kompas (2015) Service Still Not Based on the Standards (Layanan Belum Sesuai Standard). Kompas, 2015. Accessed from on 21 July 2016.

Kristiansen, S., and Pratikno. (2006) Decentralising Education in Indonesia. International Journal of Educational Development 26(5), 513-531.

Kristiansen, S., and P. Santoso (2006) Surviving Decentralization? Impacts of Regional Autonomy on Health Services Provision in Indonesia. Health Policy 77(3), 247-259.

Laffont, J.J., and J.J. Martimort (2009) The Theory of Incentives: the Principal–agent Model. Princeton: Princeton University Press.

Lane, J.E. (2005) Public Administration and Public Management: the Principal–agent Perspective. Oxon: Routledge.

Lane, J.E. (2013). The Principal–agent Approach to Politics: Policy Implementation and Public Policy Making. Open Journal of Political Science 3(2), 85-89.

Lewis, B.D., and D. Pattinasarany (2009) Determining Citizen Satisfaction with Local Public Education in Indonesia: the Significance of Actual Service Quality and Governance Conditions. Growth and Change 40(1), 85-115.

Li, L.C. (2010) Central–local Relation in the People’s Republic of China: Trends, Processes and Impacts for Policy Implementation. Public Administration and Development 30(3), 177-190.

Milward, H.B., and K.G. Provan (2000) Governing the Hollow State. Journal of Public Administration Research and Theory 10(2), 359-379.

Moorhead, G., and R.W. Griffin (2012) Managing Organizational Behaviour. 10th ed. Australia: South Western Cengage Learning.

Mullins, L.J. (2008) Essential of Organisational Behaviour. 2nd ed. Harlow, England: Prentice Hall.

Mutaqin, T., et al. (2016) The impact of Decentralization on Educational Attainment in Indonesia. In: Holzhacker, R.L., R. Wittek, & J. Woltjer (Eds.) Decentralization and Governance in Indonesia, 79-104. Switzerland: Springer International Publishing.

Parker, L., and G. Gould (1999) Changing Public Sector Accountability: Critiquing New Directions. Accounting Forum 23(2), 108-135.

Polidano, C., and D. Hulme (1999) Public Management Reform in Developing Countries. Public Management: An International Journal of Research and Theory, 1(1), 121-132.

Pollitt, C. (1993) Managerialism and The Public Services: Cuts or Cultural Change in the 1990s. 2nd edn. Oxford: Basil Blackwell.

Pollitt, C., and G. Bouckaert (2011) Public Management Reform: A Comparative Analysis: New Public Management, Governance and the neo-Weberian State. 3rd edn. Oxford: Oxford University Press.

Roudo, M., and T.M. Chalil (2016) De-Polarization in Delivering Public Services? Impacts of the Minimum Service Standards (Mss) to the Quality of Health Services in Indonesia. Journal of Regional and City Planning 27(1), 1-5.

Sinclair, A. (1995) The Chameleon of Accountability: Forms and Discourses. Accounting, Organizations and Society 20(2), 219-237.

Smith, B.C. (1985) Decentralization: the Territorial Dimension of the State. London: Allen and Unwin.

Strategic Asia. (2013) Decentralization Assessment Report. Jakarta: UNDP.

Sullivan, H., and G. Gillanders (2005). Stretched to the Limit? the Impact of Local Public Service Agreements on Service Improvement and Central–local Relations. Local Government Studies. 31(5): 555-574.

The World Bank (2003) Decentralizing Indonesia. Jakarta: The World Bank.

UCLG (2009) Decentralization and Local Democracy in the World: First Global Report. Barcelona: United Cities and Local Government and the World Bank.

Van Dooren, W., G. Bouckaert, and J. Halligan (2010) Performance Management in the Public Sector. London: Routledge.

Vazquez, J.M., and F. Vaillancourt (2011) An Overview of the Main Obstacles to Decentralization. In: Vazquez, J.M., and F. Vaillancourt (Eds.) Decentralization in Developing Countries: Global Perspectives on the Obstacles to Fiscal Devolution, 1-22. The United Kingdom: Edward Elgar Publishing Limited.

Waterman, R.W., and K.J. Meier (1998) Principal–agent Models: An Expansion? Journal of Public Administration Research and Theory 8(2), 173-202.


© 2020 Institut Teknologi Bandung