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Reforming Intergovernmental Fiscal Relations and the Rebuilding of Indonesia

The ‘Big Bang’ Program and its Economic Consequences Edited by James Alm, Professor and Chair, Department of Economics, Tulane University, US, Jorge Martinez-Vazquez, Regents Professor of Economics and Director, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University, US and Sri Mulyani Indrawati, Minister of Finance, Indonesia
Indonesia is currently facing some severe challenges, both in political affairs and in economic management. One of these challenges is the recently enacted decentralization program, now well underway, which promises to have some wide-ranging consequences. This edited volume presents original papers, written by a select group of widely recognized and distinguished scholars, that take a hard, objective look at the many effects of decentralization on economic and political issues in Indonesia.
Extent: 368 pp
Hardback Price: $167.00 Web: $150.30
Publication Date: 2005
ISBN: 978 1 84376 451 9
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  • Asian Studies
  • Asian Development
  • Asian Economics
  • Development Studies
  • Asian Development
  • Development Studies
  • Economics and Finance
  • Asian Economics
  • Public Finance
Indonesia is currently facing some severe challenges, both in political affairs and in economic management. One of these challenges is the recently enacted decentralization program, now well underway, which promises to have some wide-ranging consequences. This edited volume presents original papers, written by a select group of widely recognized and distinguished scholars, that take a hard, objective look at the many effects of decentralization on economic and political issues in Indonesia.

There are many questions about this program: how will it be implemented, is there capacity at the local level to implement its reforms, is there sufficient local political accountability to make it work, and how will the decentralization affect the broader program of economic growth and stabilization? Topics covered include: the historical and political dimensions of decentralization, its macroeconomic effects, its effects on poverty alleviation, the assignment of expenditure and revenue functions across levels of government, the design of transfers, the role of natural resource taxation and the effects of local government borrowing.

An authoritative, comprehensive collection, Reforming Intergovernmental Fiscal Relations and the Rebuilding of Indonesia will be of interest to economists and policy makers as well as students of public finance, development, and Asian economics.
Contributors: A. Abimanyu, J. Alm, R. Bahl, J. Boex, B. Brodjonegoro, B. Hofman, S.M. Indrawati, Kadjatmiko, K. Kaiser, D.Y. King, B.R. Mahi, J. Martinez-Vazquez, R. Ryaas Rasyid, A. Shah, M. Sidik, M. Simandjuntak, R.A. Simanjuntak, P. Smoke, M. Suwandi, T. Thompson, B. Tumennasan, D. Weist
Contents: 1. Introduction Part I: The History and Politics of the ‘Big Bang’ Decentralization 2. The Making of the ‘Big Bang’ and its Aftermath: A Political Economy Perspective 3. Political Reforms, Decentralization and Democratic Consolidation in Indonesia 4. The Policy of Decentralization in Indonesia Part II: Expenditure and Tax Assignment 5. Expenditure Assignment under Indonesia’s Emerging Decentralization: A Review of Progress and Issues for the Future 6. Local tax Revenue Mobilization in Indonesia’s Decentralizing Era 7. Combining Expenditure Assignment, Revenue Assignment and Grant Design in Indonesia’s Fiscal Decentralization Part III: Closing the Fiscal Gap: Transfers, Borrowing and Natural Resource Revenues 8. An Analysis of Indonesia’s Transfer System: Recent Performance and Future Prospects 9. How Should Revenues from Natural Resources be Shared in Indonesia? 10. Decentralization and Local Government Borrowing in Indonesia Part IV: An Initial Assessment of Progress 11. Indonesian Decentralization: Opportunities Appear but Risks Abound 12. The Indonesian Experience with the Implementation of Regional Autonomy 13. Decentralization and the Challenge for Indonesian Fiscal Sustainability Part V: Lessons from International Experience and the Current State of Decentralization 14. Implementing Decentralized Local Government: A Treacherous Road with Potholes, Detours and Road Closures 15. The Current State of Decentralization Reform in Indonesia: A Postscript Index