Decentralization Of Indonesia Case Study

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Decentralization on Health Personnels at District Level in Indonesia : Strengths, Weakness, and Challenges Indonesia began a process of rapid government decentralization in 1999 from a formerly strong centralized government structure. The World Bank defines decentralization as “the transfer of authority and responsibility for public functions from the central government to intermediate and local governments or quasi independent government organizations and/or the private sector” (Green, 2005).
As outlined by Bossert, the underlying notion of decentralization "...implies the expansion of choice at the local level." Using a principal/agent approach, Bossert describes this expansion as "decision space", "the range of effective choice that is allowed by the central authorities (the principal) to be utilized by local authorities (the agents)."
In 2001, Indonesia started on a rapid decentralization of government finances and functions. Within a year, more than 70% of central civil servants and services facilities were transferred to the local government and also commenced implementation of a new intergovernmental …show more content…

Prior to decentralization, the central Ministry of Health (MoH) had responsibility to decided how resources were to be allocated in the districts but now the district have control of their public sector health workforce. Even the district have control to allocated their own health workforce, the central government still controls all permanent civil servants and contract staff working at the district level. The staff are paid directly from the centre and it effectively controls hiring, firing, and the condition of employement. However, many public sector staff member contracted at the district level and have been crucial to allowing districts to developed flexibility to control their staff so it will support program plan in each

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