This document discusses theories of public administration and organization. It defines key concepts like institutions, organizations, and bureaucracy. It also discusses different models of government, including federalism and unitary systems. A major focus is on decentralization and local autonomy. Decentralization involves transferring authority and responsibilities from central governments to lower levels like regional or local governments. This can take different forms such as deconcentration, delegation, or devolution. The document also examines fiscal decentralization and assigning tax responsibilities between central and subnational governments.

1. THE THEORY OF PUBLIC
ADMINISTRATION
Linkage Master Programmes
g g
Double Degree FIA-UNIBRAW and Japanese Universities
Universitas Brawijaya
Lecturer : Prof. Dr. Ir. Ginandjar Kartasasmita
jgkar@cbn.net.id
www.ginandjar.com
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Assistant Professor : Dr.Ir. Deddy S. Bratakusumah, BE, MURP, M.Sc.
deddys@bappenas.go.id

2. GOVERNMENT INSTITUTION

3. INSTITUTION
INSTITUTIONS ARE STRUCTURES AND
MECHANISMS OF SOCIAL ORDER AND
COOPERATION GOVERNING THE
BEHAVIOR OF TWO OR MORE
INDIVIDUALS.
INSTITUTION IS COMMONLY APPLIED TO
CUSTOMS AND BEHAVIOR PATTERNS
IMPORTANT TO A SOCIETY, AS WELL AS
TO PARTICULAR FORMAL ORGANIZATIONS
OF GOVERNMENT AND PUBLIC SERVICE
SERVICE.
(WIKIPEDIA, 2006)
3

4. INSTITUTION
THE ELEMENTS OF INSTITUTION ARE:
1. VALUE,
2. STRUCTURE,
,
3. PROCESS
4

5. ORGANIZATION
THE STRUCTURE OF AUTHORITATIVE
AND HABITUAL PERSONAL
INTERRELATIONS IN AN
ADMINISTRATIVE SYSTEM
(WALDO, 1955)
5

6. ORGANIZATION
ORGANIZATIONS ARE SOCIAL UNITS
(OR HUMAN GROUPINGS)
DELIBERATELY CONSTRUCTED AND
RECONSTRUCTED TO SEEK SPECIFIC
GOALS
(ETZIONI, 1961)
6

7. ORGANIZATION CHARACTERISTICS
1. DIVISIONS OF LABOR, POWER, AND
COMMUNICATION RESPONSIBILITIES,
DIVISIONS WHICH ARE NOT RANDOM OR
TRADITIONALLY PATTERNED, BUT
DELIBERATELY PLANNED TO ENHANCE THE
REALIZATION OF SPECIFIC GOALS,
2. THE PRESENCE OF ONE OR MORE POWER
CENTERS WHICH CONTROL THE CONCERTED
EFFORTS OF THE ORGANIZATION AND DIRECT
THEM TOWARD ITS GOALS; THESE POWER
CENTERS ALSO MUST STRUCTURE, WHERE
NECESSARY TO INCREASE ITS EFFICIENCY
NECESSARY, EFFICIENCY,
7

8. ORGANIZATION CHARACTERISTICS
3. SUBSTITUTION OF PERSONNEL, i.e,
UNSATISFACTORY PERSONS CAN BE
REMOVED AND OTHERS ASSIGN THEIR
TASKS.
TASKS THE ORGANIZATION CAN ALSO
RECOMBINE ITS PERSONNEL THROUGH
TRANSFER AND PROMOTION.
(ETZIONI, 1961)
8

9. ORGANIZATION THEORIES
1. THE STRUCTURE OF AN ORGANIZATION
AFFECTS ITS BEHAVIOR,
2. THE STRUCTURE OF AN ORGANIZATION
AFFECTS THE BEHAVIOR OF ITS WORKERS,
C S O O S O S
PARTICIPANTS, AND PERHAPS EVEN CASUAL
MEMBERS
MEMBERS,
3. ORGANIZATIONAL PROCESSES ALSO AFFECT
ORGANIZATIONAL AND INDIVIDUAL
BEHAVIOR,
9

10. ORGANIZATION THEORIES
4. ORGANIZATIONS CAN BE RATIONALLY (OR
SCIENTIFICALLY) DESIGNED STRUCTURALLY
)
AND PROCEDURALLY TO ACHIEVE THEIR
GOALS IN AN EFFECTIVE AND EFFICIENT
MANNER
MANNER,
5. ORGANIZATIONS CAN USEFULLY BE
CONCEPTUALIZED AS SYSTEMS THAT
RESPOND TO AND AFFECT THEIR
ENVIRONMENTS AND SEEK TO GAIN
INFORMATION ABOUT THE EFFICACY OF
THOSE RESPONSES
10

11. ORGANIZATION THEORIES
6. ORGANIZATIONS MAY HAVE CULTURES THAT
PARTIALLY DEFINE HOW THEIR MEMBERS
CONCEPTUALIZE ORGANIZATIONAL
ACTIVITY AND THE ENVIRONMENT
(MARCH, 1965)
11

12. ORGANIZATION THEORIES
IN GENERAL, ORGANIZATIONAL THEORY IS
“GENERIC” IN THE SENSE THAT IT DOES
NOT MAKE DISTINCTIONS BETWEEN PUBLIC
AND PRIVATE ORGANIZATIONS
ALL ORGANIZATIONS SHARE SOME
CHARACTERISTICS, AND NEARLY ALL
SIGNIFICANT ONES ARE REGULATED BY
GOVERNMENTS IN ONE WAY OR ANOTHER
(
(BOZEMAN, 1987)
, )
12

13. PUBLIC ORGANIZATION
PUBLIC SECTOR (OR GOVERNMENTAL)
ORGANIZATIONS FACE LEGAL-
CONSTITUTIONAL. POLITICAL. AND
MARKET CONDITIONS THAT DISTINGUISH
THEM FROM MOST PRIVATE
ORGANIZATIONS
(ROSENBLOOM & KRAVCHUCK, 2005)
KRAVCHUCK
13

14. ORGANIZATION STRUCTURE
Directorate General
Directorate/Bureau
/
Division
Section
14

15. WHAT IS BUREAUCRACY?
LITERALLY,
LITERALLY RULE BY OFFICIALS; THE
ADMINISTRATIVE MACHINERY OF THE
STATE OR, MORE BROADLY, A RATIONAL
AND RULE-GOVERNED MODE OF
ORGANIZATION
(HEYWOOD, 2002)
15

16. BUREAUCRACY CONCEPTS
1. SPECIALIZED JURISDICTIONS, OFFICES,
AND TASKS THAT IS, A DIVISION OF
TASKS, IS
LABOR AND AUTHORITY REGARDING THE
ACHIEVEMENT OF THE ORGANIZATION’S
GOALS,
2. A HIERARCHY OF AUTHORITY TO
COORDINATE THE ACTIVITIES OF THE
SPECIALIZED OFFICES AND INTEGRATE
THEIR JURISDICTIONAL AUTHORITY
16

17. BUREAUCRACY CONCEPTS
3.
3 A CAREER STRUCTURE IN WHICH
INDIVIDUAL EMPLOYEES OF THE
BUREAUCRATIC ORGANIZATION MOVE
THROUGH VARIOUS SPECIALIZATIONS
AND RANKS. MOVEMENT IS BASED ON
MERIT AND/OR SENIORITY
17

18. BUREAUCRACY CONCEPTS
4. A BUREAUCRATIC STRUCTURE THAT
TENDS TO BE PERMANENT. IT REMAIN
PERMANENT
INTACT REGARDLESS OF THE FLOW OF
MEMBERS IN AND OUT OF IT. SOCIETY
BECOMES DEPENDENT ON THE
BUREAUCRACY’S FUNCTIONING TO THE
EXTENT THAT CHAOS RESULTS IF IT IS
DESTROYED,
5.
5 BY IMPLICATION, BUREAUCRACIES ARE
IMPLICATION
LARGE ORGANIZATIONS.
(
(WEBER, 1947)
, )
18

19. BUREAUCRACY FUNCTIONS
PROCEDURALLY, BUREAUCRACY IS
IMPERSONAL OR DEHUMANIZING
FORMALISTIC
RULE-BOUND
HIGHLY DISCIPLINED
(ROSENBLOOM & KRAVCHUCK, 2005)
KRAVCHUCK
19

20. THE POWER POSITION OF
BUREAUCRACY
BUREAUCRACY IS
HIGHLY EFFICIENT
POWERFUL
EVER-EXPANDING
(ROSENBLOOM & KRAVCHUCK, 2005)
KRAVCHUCK
20

21. INTERGOVERNMENTAL
RELATIONS

22. IGR CONCERN
INTERGOVERNMENTAL RELATION
WERE THUS CONCERNED WITH
POLICY, THAT IS, WITH
, ,
CHOOSING COURSES OF ACTION
AND ASSESING THEIR PRACTICAL
EFFECTS
(WRIGHT, 1988)
22

23. CENTRE-PERIPHERY RELATIONSHIPS
FEDERAL SYSTEMS
UNITARY SYSTEMS
23

24. FEDERAL STATES
CENTRAL /
FEDERAL
GOVERNMENT
CHECKS AND SOVEREIGNITY (SEPARATE
(
BALANCES SPHERES OF
CONSTITUTIONAL
AUTONOMY)
PROVINCIAL /
STATE
GOVERNMENT
(ADAPTED FROM HEYWOOD 2002)
24

25. FEDERALISM
A TERRITORIAL DISTRIBUTION OF
POWER BASED ON THE SHARING OF
SOVEREIGNITY BETWEEN CENTRAL
(NATIONAL) AND PERIPHERAL ONES
25

26. UNITARY STATES
SOVEREIGNITY
CENTRAL (CONSTITUTIONAL
GOVERNMENT SUPREMACY))
DEVOLVED /
REGIONAL BODIES
LOCAL
GOVERNMENT
(ADAPTED FROM HEYWOOD 2002)
26

27. UNITARY
THESE VEST SOVERIGN POWER IN A
SINGLE, NATIONAL INSTITUTION
27

28. DECENTRALIZATION AND LOCAL
AUTONOMY

29. WHAT IS DECENTRALIZATION?
DECENTRALIZATION IS THE TRANSFER OF
AUTHORITY AND RESPONSIBILITY FOR PUBLIC
FUNCTIONS FROM THE CENTRAL
GOVERNMENT TO SUBORDINATE OR QUASI-
INDEPENDENT GOVERNMENT
ORGANIZATIONS AND/OR THE PRIVATE
SECTOR
(WORLD BANK, 2001)
29

30. WHAT IS DECENTRALIZATION?
DECENTRALIZATION IS THE EXPANSION OF
LOCAL AUTONOMY THROUGH THE TRANSFER
OF POWERS AND RESPONSIBILITIES AWAY
FROM NATIONAL BODY
(HEYWOOD,
(HEYWOOD 2002)
30

31. THE REASONS
ONE OF THE MOST CRUCIAL AND RECURRING
DEBATS IN THE DEVELOPING WORLD IS
ABOUT THE DEGREE OF CONTROL THAT
CENTRAL GOVERNMENTS CAN AND SHOULD
HAVE OVER DEVELOPMENT PLANNING AND
ADMINISTRATION
(CHEEMA AND RONDINELLI, 1984)
31

32. THE REASONS
IMPROVE EFFICIENCY - BASIS FOR
REGIONAL AND LOCAL GOVERNMENT
ROLE:
1. BETTER MATCH BETWEEN SERVICE
PROVISION AND VOTER PREFERENCES
2. BETTER ACCOUNTABILITY THROUGH CLOSER
LINKAGES OF BENEFITS WITH COSTS
3. INCREASED MOBILIZATION OF LOCAL
REVENUES
4. BETTER PARTICIPATION OF CLIENTS IN
SELECTION OF OUTPUT MIX
(GERVAIS,
(GERVAIS 1999)
32

33. TYPES OF DECENTRALIZATION
DECENTRALIZATION INCLUDE
INCLUDE:
1. POLITICAL
2. ADMINISTRATIVE
3. FISCAL
4. MARKET
33

34. POLITICAL DECENTRALIZATION
POLITICAL DECENTRALIZATION AIMS
TO GIVE CITIZENS OR THEIR ELECTED
REPRESENTATIVES MORE POWER IN
PUBLIC DECISION MAKING
DECISION-MAKING
(WORLD BANK, 2001)
34

35. FISCAL DECENTRALIZATION
FISCAL DECENTRALIZATION INVOLVES
SHIFTING SOME RESPONSIBILITIES FOR
EXPENDITURES AND/OR REVENUES TO
LOWER LEVELS OF GOVERNMENT
THE IMPORTANT IS:
THE EXTENT TO WHICH LOCAL ENTITIES ARE
GIVEN AUTONOMY TO DETERMINE THE
ALLOCATION OF THEIR EXPENDITURE
(WORLD BANK, 2001)
35

36. ADMINISTRATIVE DECENTRALIZATION
ADMINISTRATIVE DECENTRALIZATION
SEEKS TO REDISTRIBUTE AUTHORITY,
RESPONSIBILITY AND FINANCIAL
RESOURCES FOR PROVIDING PUBLIC
SERVICES AMONG DIFFERENT LEVELS OF
GOVERNMENT
(WORLD BANK, 2001)
36

37. ECONOMIC OR MARKET
DECENTRALIZATION
ECONOMIC OR MARKET DECENTRALIZATION
WILL INCLUDE PRIVATIZATION AND
DEREGULATION THEY SHIFT RESPONSIBILITY
DEREGULATION.
FOR FUNCTIONS FROM THE PUBLIC TO THE
PRIVATE SECTOR
(WORLD BANK, 2001)
37

38. FORMS OF DECENTRALIZATION
FORMS OF DECENTRALIZATION INCLUDE:
1.
1 DECONCENTRATION
2. DELEGATION TO SEMI-
AUTONOMOUS AGENCIES
3. DEVOLUTION TO LOCAL
GOVERNMENT
4.
4 TRANSFER OF FUNCTIONS FROM
PUBLIC TO NONGOVERNMENT
INSTITUITION
(CHEEMA & RONDINELLI, 1984)
38

39. DECONCENTRATION
DECONCENTRATION INVOLVES THE
REDISTRIBUTION OF ADMINISTRATIVE
RESPONSIBILITIES ONLY WITHIN THE
CENTRAL GOVERNMENT
(CHEEMA & RONDINELLI 1984)
RONDINELLI,
39

40. DELEGATION TO SEMI-AUTONOMOUS
AGENCIES
ANOTHER FORM OF DECENTRALIZATION IS
THE DELEGATION OF DECISION-MAKING
AND MANAGEMENT AUTHORITY FOR
SPECIFIC FUNCTIONS TO ORGANIZATIONS
THAT ARE NOT UNDER THE DIRECT
CONTROL OF CENTRAL GOVERNMENT
MINISTRIES
(CHEEMA & RONDINELLI, 1984)
40

41. DEVOLUTION TO LOCAL GOVERNMENT
ANOTHER FORM OF DECENTRALIZATION
SEEKS TO CREATE OR STRENGTHEN
INDEPENDENT LEVELS OR UNITS OF
GOVERNMENT THROUGH DEVOLUTION OF
FUNCTION AND AUTHORITY
(CHEEMA & RONDINELLI, 1984)
41

42. TRANSFER OF FUNCTIONS FROM PUBLIC
TO NON-GOVERNMENT INSTITUITION
DECENTRALIZATION TAKES PLACE IN MANY
COUNTRIES THROUGH THE TRANSFER OF
SOME PLANNING AND ADMINISTRATIVE
RESPONSIBILITY,
RESPONSIBILITY OR OF PUBLIC
FUNCTIONS, FROM GOVERNMENT TO
VOLUNTARY, PRIVATE, OR NON-
NON
GOVERNMENT INSTITUTIONS
(C
(CHEEMA & RONDINELLI, 1984)
O , 98 )
42

43. WHAT IS LOCAL AUTONOMY?
LOCAL GOVERNMENT CAN BE SAID TO BE
AUTONOMOUS IF THEY ENJOY A SUBSTANTIAL
DEGREE OF INDEPENDENCE, ALTHOUGH
INDEPENDENCE
AUTONOMY IN THIS CONNECTION IS
SOMETIMES TAKEN TO IMPLY A HIGH
MEASURE OF SELF-GOVERNMENT, RATHER
THAN SOVEREIGN INDEPENDENCE
(ADAPTED FROM HEYWOOD, 2002)
43

44. FISCAL DECENTRALIZATION

45. DECENTRALIZATION OF
SPENDING
EFFICIENCY IN ALLOCATION OF RESOURCES
IS BEST SERVED BY ASSIGNING
RESPONSIBILITY FOR EACH TYPE OF PUBLIC
EXPENDITURE TO THE LEVEL OF
GOVERNMENT THAT MOST CLOSELY
REPRESENTS THE BENEFICIARIES OF THESE
OUTLAYS
(TER-MINASSIAN, 1997)
45

46. CENTRALIZED PROVISION
FOR CENTRALIZED PROVISION CAN BE MADE
–AT LEAST ON ALLOCATIVE GROUNDS- ONLY
FOR NATIONAL PUBLIC GOODS THAT IS,
GOODS, IS
GOODS WHOSE BENEFITS EXTEND NATION
WIDE OR WHOSE PROVISION IS SUBJECT TO
SUBSTANTIAL ECONOMIES OF SCALE
(TER-MINASSIAN, 1997)
46

47. REVENUE-RAISING
REVENUE RAISING
RESPONSIBILITY
BY SEPARATING SPENDING AUTHORITY FROM
REVENUE-RAISING RESPONSIBILITIES, THESE
ARRANGEMENTS OBSCURE THE LINK
BETWEEN THE BENEFITS OF PUBLIC
EXPENDITURES AND THEIR PRICE, NAMELY,
THE TAXES LEVIED TO FINACE THEM. THUS
THEY DO NOT PROMOTE FISCAL
RESPONSIBILITY IN SUBNATIONAL
POLITICIANS AND THEIR ELECTORATE
(TER-MINASSIAN, 1997)
47

48. CENTRAL GOVERNMENT TAX
ASSIGNMENT
CENTRAL GOVERNMENT SHOULD BE
ASSIGNED TAXES THAT HAVE CERTAIN
CHARACTERISTICS:
1. THEY ARE LEVIED ON THE MOBILE TAXE
BASE,
2. THEY ARE MORE SENSITIVE TO CHANGES
IN INCOME THAT IS, THEY HAVE HIGHER
INCOME, IS
INCOME ELASTICITY,
3.
3 THEY ARE LEVIED ON TAX BASES THAT ARE
DISTRIBUTED UNEVENLY ACROSS REGION
(TER-MINASSIAN, 1997)
48

49. SUBNATIONAL TAX
SUBNATIONAL TAX CHARACTERISTICS
1.
1 THE TAX BASE SHOULD BE RELATIVELY
IMMOBILE, TO ALLOW LOCAL AUTHORITIES
SOME LEEWAY IN VARYING RATES WITHOUT
LOSING MOST OF THEIR TAX BASE
BASE,
2. THE TAX YIELD SHOULD BE ADEQUATE TO
MEET LOCAL NEEDS AND SUFFICIENTLY
BOUYANT OVER TIME (THAT IS, IT SHOULD
EXPAND AT LEAST AS FAST AS
EXPENDITURES)
3. THE TAX YIELD SHOULD BE RELATIVELY
STABLE AND PREDICTABLE OVER TIME
49

50. SUBNATIONAL TAX
4. IT SHOULD NOT BE POSSIBLE TO EXPORT
MUCH, IF ANY, OF THE TAX BURDEN TO NON-
RESIDENTS
5. THE TAX BASE SHOULD BE VISIBLE, TO
ENSURE ACCOUNTABILITY
6. THE TAX SHOULD BE PERCEIVED TO BE
REASONABLY FAIR BY TAXPAYERS
7. THE TAX SHOULD BE RELATIVELY EASY TO
ADMINISTER EFFICIENTLY AND EFFECTIVELY
(BIRD & VAILLANCOURT, 1998)
50

51. INTERGOVERNMENTAL TRANSFER
SINCE MOST MAJOR TAXES ARE TYPICALLY
ASSIGNED TO THE CENTRAL GOVERNMENT,
WHILE SUBSTANTIAL AND GROWING
EXPENDITURE RESPONSIBILITIES ARE
DEVOLVED TO REGIONAL AND LOCAL
GOVERNMENTS, SIZEABLE VERTICAL
,
IMBALANCES EMERGE AT THE SUBNATIONAL
GOVERNMENT LEVEL
51

52. INTERGOVERNMENTAL TRANSFER
THERE ARE ALSO HORIZONTAL IMBALANCES
IMBALANCES,
BECAUSE THE CAPACITY TO RAISE OWN
REVENUES DIFFERS ACROSS JURISDICTIONS, ,
DEPENDING ON THE DISTRIBUTION OF THEIR
ASSIGNED TAX BASES, AND ALSO BECAUSE
DIFFERENT REGIONS MAY FACE DIFFERENT
COSTS AND DEMAND PRESSURES IN MEETING
THEIR ASSIGNED EXPENDITURE
RESPONSIBILITIES
52

53. INTERGOVERNMENTAL TRANSFER
THESE IMBALANCES MUST BE ADDRESSED
THROUGH INTERGOVERNMENTAL TRANSFERS,
OR BORROWING BY DEFICIT JURISDICTIONS,
,
OR A COMBINATION OF THE TWO
(TER-MINASSIAN, 1997)
53

54. LOCAL FINANCE IN INDONESIA
SOURCES
LOCAL REVENUES EQUITY FUND OTHERS
LOCAL TAXES
SHARING REVENUES GIFT
RETRIBUTIONS GENERAL EMERGENCY FUND
ALLOCATED FUND
REVENUES FROM
LOCAL ASSETS LOAN
SPECIAL ALLOCATED
FUND
OTHERS
54

55. THANK YOU
55