Tans 1 The Impact of Decentralization Reform on the Local Provision of Public Goods:
Process-Tracing in Two Indonesian Districts
Ryan Tans
Department of Political Science
Emory University
rtans@emory.edu
Paper Presented at Southeast Asia: Between the Lines Conference
University of Michigan
December 9, 2011
Comments welcome.
Please do not cite or circulate without author’s permission.
In 1998, Indonesia President Suharto’s authoritarian New Order regime collapsed.
The following year, the Indonesian Parliament passed sweeping reforms that decentralized
the state’s administrative structure and initiated free elections at all levels of government.
Indonesian observers greeted these changes with equal parts optimism and dread. Some
hailed better, more accountable government, while others feared the nation would
disintegrate in the manner of Yugoslavia (Bolton 1999). Such expectations were not
unreasonable, but history did not bear them out.
Ten years on, evidence suggests that the results of reform have been mixed. The
nation’s elections are fair, lively and generally free of violence, but there is concern that the
candidates contesting them are neither representative nor accountable. In a few lucky
districts, local leaders have improved government services, but in other places journalists
insist that reform succeeded only in “decentralizing corruption”.
This paper explores the effect that decentralization has had on local government in
Indonesia. It assesses the plausibility of four mechanisms, drawn from theoretical literature,
linking decentralization to local government performance and provision of public goods. The
Tans 2 expectations of the hypothesized mechanisms are compared to process-tracing evidence
collected from two districts in North Sumatra. It finds less evidence for general theories about
technocratic improvement or widespread elite capture than for more particular hypotheses
predicting the likelihood of patronage or mass politics under certain conditions. It concludes
by suggesting several ways to further specify each mechanism in order to facilitate additional
testing.
Background: Indonesia’s reforms
Decentralization reform in Indonesia delegated legislative, regulatory and civil service
staffing responsibilities to district and municipal governments. Local governments gained the
authority to direct their own bureaucratic agencies, to set budget expenditures, and to collect
some taxes and formulate business regulations within central government limits. In addition,
they took on the responsibility to staff and pay the salaries of the civil servants within their
jurisdictions. However, decentralization did not extend to fiscal structures, despite local tax
collection. The central government in Jakarta retained all significant revenue sources and
continued to fund local governments by disbursing block grants according to a predetermined
formula.
Electoral reform proceeded in two stages. From 1999 – 2005, legislators were elected
directly and in turn elected their executive counterparts. This was the case for local
executives, Governors and the President. A revised election law took effect in 2005 making
executive elections direct, as well.
In addition, Indonesia’s reform era has seen a dramatic proliferation of territorial
jurisdictions. Since 1998, the country has added nearly 200 new districts and 7 new provinces
by sub-dividing previously existing units. These changes have further magnified reforms by
Tans 3 shrinking administrative jurisdictions and electoral constituencies while requiring hundreds
of additional elections (Kimura 2010).
Local executives wield a great amount of power under the new system, especially
now that they are elected directly. They write legislation and introduce bills to the legislature.
They propose the annual budget and prepare annual expenditure reports. And they appoint all
civil servants within their local jurisdiction. As a result, executive office is a highly coveted
post, and its occupants exert far greater influence on local government than any other public
servant.
The reforms applied evenly across the Indonesian archipelago, and it is therefore
puzzling that they seem to have had such an uneven impact (Schulte Nordholt and van
Klinken 2007). Some local executives, such as Gumawan Fauzi from West Sumatra, Herry
Zudianto, mayor of Yogyakarta, and Gede Winasa, in Bali, have received widespread acclaim
for tackling corruption and improving government services, such as education and issuing
business permits. These success stories are generally considered exceptional, however. Many
journalists and politicians regard decentralization as having gone too far by giving local
governments, especially local executives, too much independence. Local leaders have abused
their new powers by funding wasteful projects, cozying up to business contractors and
attempting to buy elections (Economist, 19 March 2011).
What can account for this variation? In particular, why have some local leaders
provided public goods, while others have not? This paper considers four possible
explanations linking decentralization to local government performance: technocratic success,
elite capture, patronage politics and mobilizing mass support. After comparing the
predictions of each hypothesis to detailed process tracing in two districts, it finds that the
evidence conforms to patronage politics and mobilizing mass support, but challenges
technocratic success and elite capture.
Tans 4 Existing Theoretical Approaches
The technocrats who designed the Indonesian reforms had optimistic expectations of
technocratic success for simultaneous decentralization and electoral reform. Their view
predicts that decentralization, especially when combined with local elections, will improve
government “service delivery” by bringing it “closer to the people” (Fjeldstad 2003). More
specifically, this expectation rests on the ostensible operation of three causal mechanisms.
First, decentralized government improves the quality of information available to political
leaders and citizens. Not only should local leaders know more clearly what their
constituencies need and desire, but citizens should perceive more clearly who is responsible
for good and bad policies when they know that decisions are being made at the local level.
When combined with elections, better information increases accountability by helping
citizens to distinguish between good and bad leaders at the polls. Second, decentralization
introduces competition among local jurisdictions by enabling residents and businesses to
“vote with their feet”. This hypothesis, known as the Tiebout Hypothesis, predicts that
decentralization will encourage local governments to provide attractive packages of public
goods in order to steal taxpayers away from other jurisdictions. Third, decentralization
increases competition within jurisdictions. Election campaigning is cheaper in smaller
jurisdictions, so there will be more viable candidates in decentralized elections. Not only will
this increase competition, but it should encourage more diversity among prospective
candidates because poor or marginalized groups will be better able to contest elections.
Reasoning from these mechanisms, a hypothesis of technocratic success thus expects
decentralization to make government more accountable, public goods more accessible and
elected officials more representative.
Tans 5 Whereas the technocratic approach assumes that institutional structure determines the
consequences of decentralization, a political economy approach emphasizes the preexisting
context of social interests and power structures within which institutions operate. According
to Vedi Hadiz, the influence of such social variables trumps the purported effects of
technocratic reform. Thus, he expects the consequences of decentralization to reflect the
“distribution of power in state and society” (Hadiz 2010: 26). More particularly, the political
economy approach insists that the social context alters each of the mechanisms posited by the
technocrats. Elections do not create accountability because in many democracies, especially
young ones, political candidates lack credibility on matters of policy (Keefer 2007). Voters
and candidates may be uncertain about what elected leaders might reasonably accomplish
under a new regime. Candidates and parties will need time to build up a policy reputation
after reforms take effect. In any case, if local bureaucracies lack capacity at the time of
decentralization, elected officials will not be able to implement promised policies. Thus,
information is less valuable when voters cannot distinguish between the promises of
incumbents and challengers. On the other hand, candidates can make more credible promises
of patronage. They can pass out handouts before elections and they can co-opt established
patron-client networks that facilitate personal trust. As a result, local jurisdictions are more
likely to compete to provide patronage than public goods. Decentralization further
exacerbates the problem of patronage by shrinking the size of “effective constituencies”
(Selway 2008). It is far less costly to satisfy a small constituency with patronage than a large
one. Finally, lower campaign costs may make local campaigns less, not more, competitive if
they facilitate elite capture of local office (Bardhan 2002). When local elites can cheaply and
easily win local office, they may use government policy to create rents for themselves that
impose costs on the majority of the population. In sum, the political economy approach
argues that the consequences of decentralization depend on the social context, and in a certain
Tans 6 subset of cases, decentralization will produce less government accountability, more
widespread patronage and narrowly representative elected officials.
When applied to Indonesia, the political economy approach yields three alternative
hypotheses, depending on the nature of the social context. In extreme cases, elite capture
might prevent local governments from conferring any benefits at all on their jurisdictions.
Hadiz has argued that this “appears to be the norm across the archipelago”. In his account,
“local predatory interests that were embedded in the broader New Order structure of power”
used bribery and intimidation to monopolize local office (2010: 27-28). In power, they
presided over local governments that “were unresponsive to local needs” and had a
“persistent interest in rent-seeking” (2010: 43-44).
However, if politicians feel their power is threatened, they might also resort to
patronage politics. By doing so, they can raise electoral support even when voters disbelieve
their promises on matters of policy. They will deliver targeted goods, such as school or road
construction projects, to strategic groups because it is less costly than pitching campaigns to
the entire electorate. Furthermore, if patron-client networks provide a cheap means of relating
to voters, candidates may rely on influential patrons to act as their intermediaries in exchange
for patronage. Whereas the elite capture hypothesis predicts that local government will
generate private goods for the benefit of a few, Philip Keefer and Razvan Vlaicu suggest that
patronage politics “may in fact enhance welfare in the short run” (2007: 373). It does so by
providing candidates an incentive to provide a portion of the electorate with beneficial public
or club goods that may also spillover to others.
Under the right social conditions, a political economy approach may predict improved
provision of public goods, but through a different mechanism than technocratic success.
Specifically, candidates facing a close election may choose to mobilize mass support if it is
more cost-effective than patronage politics. This may be so if they lack access to patronage
Tans 7 resources or if they can rely on pre-existing mass based social organizations. In such
circumstances, they attempt to build mass support by providing broadly accessible public
goods and informing voters of those goods through campaign networks or social
organizations. Dan Slater has suggested that these conditions—“competitive elections amid
robust mass politics” (2008: 254, italics in original)—can improve “effective delivery of
public services” by spurring the mobilization of new mass political parties at both the
national and sub-national level (2008: 258). Slater’s mass parties, and perhaps mass based
local social organizations as well, pressure governments to provide public goods but also
assist them in delivering them.
The rest of this paper assesses the plausibility of these four hypotheses by employing
within-case analysis in two districts in North Sumatra province (Eckstein 1973). The cases,
Serdang Bedagai and Labuhan Batu districts, are selected according to a “most similar,
different outcome” design. Importantly, they differ according to the quality of their local
governments. While the government of Serdang Bedagai is decorated for its effective service
delivery, Labuhan Batu’s government is better known for corruption scandals and white
elephant projects. These differences are unlikely to be due to institutional or economic
factors, because the cases are similar in these respects. Decentralization and electoral
institutions are constant in both districts, while they share economic similarities because both
are located in North Sumatra’s plantation belt and connected by highway and rail to the
provincial capital, Medan.
Within-case analysis in each district will examine the processes that produced the
quality of local government to assess which, if any, of the hypothesized mechanisms were at
work (Bennett 2011). Process-tracing evidence of information-sharing, competitive policymaking and diverse election slates would suggest technocratic success, while evidence of the
predominance of social forces would support the political economy hypotheses. Elite capture
Tans 8 is consistent with a finding that cronies lined their pockets with government spending.
Patronage politics is likely in a case where candidates campaign on their reputations for
parceling out public goods. And mobilizing mass support would generate evidence of mass
politics, popular organizing and public pressure for broadly targeted goods.
The conclusion briefly compares the two cases to suggest two additional variables that
may interact with the hypothesized mechanisms. According to the logic of Mill’s method of
difference, variables that assume different values from case to case are candidate causes when
the outcome also varies. The “most similar, different outcome” design facilitates this logic by
framing the question, “What was different in Serdang Bedagai than Labuhan Batu that may
have led to better local government (and vice versa)?” The design allows for greater
confidence that confounding factors are being held constant because the districts are similar
in important respects.
Serdang Bedagai District: Technocratic Success or Patronage Politics?
The district government in Serdang Bedagai is widely regarded as one of the best in
North Sumatra, if not Indonesia. The current executive’s first administration, from 20052010, won over 125 awards for excellence in local government and its integrated business
permits office became a model for districts throughout the country. In recognition of the
district government’s successful record of local development the Minister of Home Affairs
selected Serdang Bedagai to host the Department’s celebration of Regional Autonomy Day in
2009. In 2010, the incumbent executive, Erry Nuradi, was reelected in a landslide victory,
showing that his own constituents also appreciated his administration (Harian Sinar
Indonesia Baru, 24 April 2010; 14 June 2010).
What process led to this local government’s outstanding record? The technocratic
success hypothesis would credit Indonesia’s reforms for improving information, increasing
Tans 9 accountability and expanding representation at the local level. By contrast, the patronage
politics hypothesis raises the possibility that targeted goods may have led to public goods
spillovers, while the mobilizing mass support hypothesis argues that mass politics could have
improved service delivery. Only the elite capture hypothesis cannot explain the outcome.
Although Serdang Bedagai is a most-likely case for the technocratic success hypothesis
because of its very high performance, careful analysis of the policy-making process within
the case suggests that patronage politics played the predominant role in shaping the district
government.
Serdang Bedagai is adjacent to the metropolitan area of Medan and as a result the
district is relatively urban. At 311 persons per square kilometer, its population density is well
above the median among North Sumatran districts of 93 persons per square kilometer. Its
urban character and proximity to Medan have helped to make the economy more diversified
than average, too. Approximately one-half of its land area is devoted to palm oil and rubber
cultivation, while another one-quarter is rice paddy. As a result, in addition to its estates
production Serdang Bedagai is one North Sumatra’s leading producers of rice. Agriculture
accounts for 40% of district GDP and manufacturing contributes another 20% because of
local plants that process agricultural products, including palm oil, rubber and fish. Due to the
district’s semi-urban character, construction, trade, services and real estate are more
profitable sectors here than in the other two districts. Nevertheless, despite its economic
diversity, per capita GDP in Serdang Bedagai remains close to the provincial median (BPS
Sergai 2009; BPS Sumut 2009).
Early in its short history, Serdang Bedagai appeared vulnerable to elite capture. The
district was established in 2003, after a brief popular campaign to request the subdivision of
Deli Serdang, the district surrounding the municipality of Medan. The highest ranking civil
servant in Deli Serdang and a local leader of the youth organization Pancasila Youth worked
Tans 10 together to lead the campaign. Upon the creation of Serdang Bedagai, the civil servant,
Chairullah, was appointed interim executive (Penjabat Bupati), and one of his first decisions
was to award the contract to construct the new executive offices to his crony, the youth leader
David Purba. As leader of the local branch of Pancasila Youth, Purba directed a large
network of young men who could work on construction projects, but also could collect
protection payments and demonstrate in the streets. Approaching the district’s first election in
2005, these two local elites appeared poised to capture executive office and plunder the state
budget. Instead, Erry Nuradi defeated both David Purba and Chairullah in an extremely close
and controversial election (Hadiz 2010: 108).
Although not a newcomer to the politics of the district, Erry was still more of an
outsider than his opponents. He built his career in Medan as a businessman and as a member
of Golkar, which was the regime party during the New Order and is still one of the country’s
three largest parties. His local political career began only in 2004 when he ran for a
provincial assembly seat in North Sumatra’s third district, which includes Serdang Bedagai.
He received more votes from Serdang Bedagai’s voters than any of the other dozens of
candidates but he did not win a seat because his name was listed too low on Golkar’s party
list (KPU Deli Serdang 2004).1
As a candidate, Erry’s strengths were in his connections. Most importantly, his older
brother Rizal Nurdin was governor of North Sumatra from 1998 until his death in a plane
crash shortly after the 2005 local elections. Governor Rizal was instrumental in helping Erry
win the election. In addition, Erry’s running mate, Soekirman had long worked as an
advocate for farmer’s rights and agricultural development in a prominent North Sumatran
NGO called BITRA Indonesia (Bina Keterampilan Pedesaan Indonesia, Building Rural
Skills in Indonesia). BITRA had worked extensively in Deli Serdang and Serdang Bedagai
1
After the 2004 legislative elections, Indonesia switched from a party-list to candidate-centered voting system.
Tans 11 over the years and had developed a network of farmers, laborers and activists (Personal
interview, Perbaungan, 29 September 2010).
For their part, Chairullah and David Purba both decided to stand in the election. Their
failure to coordinate illustrates the collective action challenges that bedevil most efforts
toward elite capture. The tactical mistake allowed Erry to win in an upset because they
competed for similar voters. In sub-districts where David Purba polled well, Chairullah
polled poorly, and vice versa (KPU Sergai 2005).
Even so, Erry won the election by only 954 votes out of 247,265 cast. The tiny margin
was cause enough for controversy, but numerous problems also flawed the election and
prompted David Purba’s supporters to accuse Governor Rizal, the election commission and
Erry of election fraud. In fact, the Governor had interfered in several ways. He asked local
plantation directors to pressure their labor forces to vote for Erry (Personal interview, Medan,
25 March 2011). When Chairullah declared his candidacy, Governor Rizal removed him from
his position as interim executive. Chairullah’s replacement packed the election commission
so effectively that the commission secretary would ultimately be convicted of manipulating
election returns in Erry’s favor and sentenced to two months in prison (Suara Karya Online,
30 August 2005; 29 September 2005).
In consequence, Erry took office amid an atmosphere of protest and criticism. Then
Rizal Nurdin died in an airplane crash on 6 September 2005 (New York Times Online, 6
September 2005). The Governor’s death deprived Erry of his most important patron at a time
when he was embroiled in controversy. His credibility in question and his position tenuous,
Erry undertook an extensive campaign of patronage politics as predicted by the patronage
politics hypothesis. In particular, he directed special projects and public goods toward rural
farmers and businesses, with beneficial spillover effects that won him great acclaim.
Tans 12 Erry drew on his own reputation as a businessman to establish credibility as a
business friendly executive. His administration’s integrated business permits office provided
an important public good by streamlining the regulatory process in the district. The office
issued all business-related permits, collected local user fees, and acted as the administration’s
liaison with locally operating businesses. The program gained national attention for its
progress toward making business regulation easier for business, more transparent and more
accountable (Yayasan Inovasi Pemerintahan Daerah, 6 February 2009).
In addition to
providing this non-excludable good, Erry’s administration also distributed dozens of
excludable goods to local businesses in the form of construction tenders. In five years, the
local government funded the construction of 29 schools, including 11 high schools, and 76
health clinics of varying sizes. These “morsels” of pork were highly targetable in that local
government had discretion not only over who won the contract, but also over where the
projects would be located (Cox and McCubbins 2001). Erry expressly targeted rural
constituents with these projects: one of his administration’s stated goals was to build a high
school in every sub-district, even the most remote. While serving a political logic, these
projects also provided valuable public goods by making public education and public health
more accessible to everyone (Bulletin Serdang Bedagai, July – August 2010).
Erry equally assiduously built credibility among rural farmers and fisherfolk. In this
he relied heavily on Soekirman’s preexisting networks, which provided cheap channels of
communication to local peasants. While in office, Soekirman repeatedly met with farmers. In
2006, for example, he received a delegation of 1,000 farmers and agreed in principle with
their opposition to imported rice. In 2008, he delivered the opening address at the inaugural
congress of the Serdang Bedagai peasant farmers’ association (Serikat Petani Serdang
Bedagai) (Detik.com, 21 September 2006; Bitra Indonesia, 5 July 2009). In addition to these
symbolic measures, Erry’s administration liberally targeted farmers and fisherman with
Tans 13 special projects and assistance. In 2008, for example, the district procured provincial
earmarks to stabilize the price of corn and to establish a pilot program for green mussel
farming (Analisa Daily, 4 December 2008; Harian Sinar Indonesia Baru, 17 December
2008). The signature farming project of Erry’s first term, however, was expected to provide
benefits far more broadly. In 2003, the Indonesian Ministry of Public Works began
rehabilitating the Ular River irrigation system with funding provided by a loan from the
Japanese International Cooperation Agency. The project was nearing completion in 2010 and
the district administration boasted to voters that it would provide irrigation to 18,500 hectares
of rice paddy (Personal interview, Perbaungan, 29 September 2010).
Erry went to great lengths to promote these projects in order to build his reputation
among rural voters, regardless of whether local government was responsible for project
funding or not. The President of Indonesia greatly helped Erry in this effort when he named
Serdang Bedagai the winner of consecutive food production awards in 2008 and 2009, an
honor about which Erry’s administration tirelessly reminded voters (Bulletin Serdang
Bedagai, November – December 2009).
By the conclusion of his first term, Erry had transformed his reputation. He had taken
office despite bitter opposition; five years later was one of the most highly decorated district
executives in Indonesia. His judicious use of targeted goods won him support from local
business and rural constituencies and also spilled over to provide some widely accessible
public goods. The strategy proved its worth in 2010 when he was reelected by the largest
margin in North Sumatra. Despite his growing reputation, Erry took no chances with the
election. Well aware of the value of carefully targeted goods, before the election Erry
awarded every village chief in Serdang Bedagai an official motorbike to use for village
business (Bulletin Serdang Bedagai, July – August 2009).
Tans 14 The process behind Erry Nuradi’s growing national stature as a clean and capable
district executive is highly consistent with the patronage politics hypothesis, which predicts
that in order to win electoral support, politicians who lack credibility will turn to patronage as
the cheapest way to build a reputation. It fits much less comfortably with the hypothesis of
technocratic success. Although Erry’s local government did improve its provision of public
goods, information and elections did not play the roles specified in the hypothesis.
Decentralization did not automatically improve information-sharing. Instead, Erry’s
administration expended many resources promoting itself, falsely taking credit at times for
the projects of others. Neither did elections very effectively increase accountability and
representation. With the help of his brother, Governor Rizal, Erry won in 2005 by
undermining the integrity of the election. Five years later, an almost identical slate of
candidates participated, hardly a sign of an increasingly diverse political class.
The failure of technocratic success to account for Serdang Bedagai impugns the
hypothesis because Serdang Bedagai is a most-likely case where local government
performance is unusually high. If the process is not at work there, it is even more unlikely to
hold in districts with more dismal records of government performance, one of which the
paper turns to now.
Labuhan Batu District: Elite Capture and Mobilizing Mass Support
The district government in Labuhan Batu is best known for its shortcomings.
Government is corrupt, public expenditures are inefficient and politics have a harsh quality.
Three extravagant mega-projects, a sports complex, market facility and bus terminal, fell
years behind schedule and hugely outspent their budgets. The district executive’s wife was
implicated in a scandal for accepting bribes to arrange the appointments of school
headmasters. The executive himself, a former Army colonel named Milwan, is feared for his
Tans 15 willingness to resort to intimidation. He took office in 2000, just after reforms were passed,
and served the limit of two terms. In 2010, his wife Adlina lost her bid to replace him in a
highly negative campaign. The successful challengers were backed by a diverse coalition that
included local businessmen, youth organizations and NGOs.
In Labuhan Batu, what process produced very poor government performance and a
subsequent transfer of power? Elite capture is most-likely in this case, because the hypothesis
predicts precisely the outcomes of poor governance and rent-seeking. If elite capture is at
work, then examination of the process should uncover evidence of bribery, intimidation and
elite collusion. Further, process-tracing should reveal evidence that Milwan’s wife lost
because more powerful elites pushed the family out of power. The technocratic success
hypothesis, on the other hand, suggests that voters would have known of misgovernment and
voted to punish the incumbent in 2010. The patronage politics hypothesis appreciates that
Milwan may have lacked credibility and thus also lacked an incentive to provide public goods
and the ability to win an election. The mobilizing mass support hypothesis, finally, would
seek out evidence that competitive elections and mass politics prompted political organizing
that demanded better government.
Like Serdang Bedagai, Labuhan Batu is located within North Sumatra’s plantation
belt, but it is located much farther away from Medan. Nevertheless, rail and highway link its
urban center, Rantauprapat, to the capital. The district’s overall population density ranks in
the top half of the province and residents are further concentrated in Rantauprapat where over
one-third of registered voters live. In Labuhan Batu’s economy, palm oil is king. Together
with its sister districts, Labuhan Batu Utara and Labuhan Batu Selatan, Labuhan Batu
produces by far the most palm oil and rubber in North Sumatra. Steadily rising global palm
oil prices have made it one of the province’s wealthiest as measured both by district GDP and
by GDP per capita. To be sure, the estates industry is dominated by large private and state-
Tans 16 owned firms, but about one-quarter of the land devoted to palm oil and three-quarters of the
land devoted to rubber are smallholdings, suggesting that small farmers also benefit from the
current boom (BPS Sumut 2009; Disbun Sumut 2004a; 2004b).
After easily winning reelection in 2005, Milwan appears to have enjoyed a short-lived
period of elite capture before coordination problems splintered the clique living off the local
government budget. At least initially, Milwan’s political power was based on control of the
district budget, power over the local bureaucracy and collusive relationships with business
contractors and assembly members. He grew rich by accepting kickbacks, selling positions
and embezzling money. According to one report, project commissions during Milwan’s
administration exceeded ten percent. To pay the fee, contractors inflated procurement costs
by as much as 50% (Harian Medan Bisnis, 2 December 2008; Metro Rantau, 28 June 2010).
Milwan pursued several wasteful white elephant projects, including a sports complex in
Rantauprapat took 13 years to build and cost nearly Rp 15 billion (US$1.6 million). The
central audit board noted irregularities in district financial reporting during fiscal years 2004,
2005 and 2006, prompting one local newspaper to proclaim, “Audit findings: Millions of
rupiah of Labuhan Batu district funds evaporate” (Ekspos News, 19 November 2009;
Waspada Online, 28 May 2008).
Milwan’s corruption depended on the collusion of construction contractors, youth
group leaders, assembly members, bureaucrats and the political party Golkar. Fredy
Simangunsong, a business contractor and leader of the local chapter of the youth group
named IPK (Ikatan Pemuda Karya, Functional Youth Group), claims to have received
contracts worth Rp 11 billion (US$1.2 million) in 2006 and Rp 24 billion (US$2.6 million) in
2007, while paying kickbacks totaling Rp 1.6 billion (US$175,000). Fredy’s wife, Elya Rosa
Siregar, sat in the district assembly as a member of the Golkar delegation. She and her
assembly colleagues cooperated with Milwan to the extent that they approved each budget
Tans 17 and financial report. A member of the 1999-2004 assembly recently testified before the
central anti-corruption agency that he accepted bribes of Rp 30 million (US$3,000) to pass
those bills. Finally, the health, education and settlement and infrastructure agencies were
singled out in the central audit board’s reports of financial irregularities, suggesting that their
directors were also Milwan’s cronies (Harian Sinar Indonesia Baru, 4 November 2008; Ini
Medan Bung, 10 February 2011).
However, Milwan’s network of cronies eventually collapsed. Just as David Purba and
Chairullah failed to coordinate in Serdang Bedagai, Milwan and Fredy could not agree on
how to share the money they were extracting from the local government budget. Fredy owed
Milwan approximately Rp 1 billion in kickbacks (US$105,000) and complained that the graft
was becoming exorbitant. Meanwhile, it was rumored that Elya Rosa was at the time
considering a bid for district executive, and Milwan likely felt Fredy was becoming too
powerful a rival. In October 2008, Fredy took the details of his business dealings with
Milwan public in a press conference. He announced that he intended to press charges and
promised that he and his friends would join the opposition (Labuhanbatu News, 27 October
2008; Personal interview, Rantauprapat, 31 August 2010).
Two years later, Fredy stayed true to his word when he supported the challenger in the
local executive election. Fredy and the opposition mobilized a network of campaign
volunteers that brought thousands of new voters to the polls. The strategy built on existing
youth group and NGO networks and employed their activists in the organizational effort.
Fredy and his youth group allies capably deployed negative campaign tactics, as well. The
mobilization effort paid off, as the challengers won the election with 53% of the vote
compared to 38% for Adlina.
The opposition ticket was composed of a respected medical doctor named Tigor
Siregar and the former chair of the election commission and longtime NGO activist Suhari
Tans 18 Pane. Their campaign platform promised broad public goods (Metro Rantau, 2 September
2010). Tigor talked about improving health services and education, and his bread-and-butter
issue was identity cards. He insisted that the bureaucracy should process these free of charge
and promised that if elected he would see to it that they were. Tigor and Suhari attempted to
add credibility to these promises through face to face contact with campaign volunteers and
voters. Tigor and Suhari stumped, but the number of people they encountered touring was
naturally limited. To extend the message, the campaign team developed a large network of
volunteers. The goal was to recruit 20 volunteers in every village and ward in the entire
district. At the end of the campaign, Tigor boasted that 12,000 volunteers had registered with
his team and worked on the campaign. These volunteers became responsible for the campaign
in their respective villages. The plan to establish chapters of campaign volunteers in every
town and village followed the model of North Sumatra’s youth organizations, and Tigor’s
campaign team interpenetrated at least three of those organizations. It is very likely that the
members of youth organizations were the operatives recruiting village volunteers. However,
their work was easier because Tigor and Suhari were well-known in Labuhan Batu’s villages
because of their charitable work there, Tigor as a doctor and Suhari as a farmer’s advocate
(Personal interview, Rantauprapat, 17 June 2010).
Tigor’s backers, including Fredy, also waged an aggressively negative campaign. One
early attack against Adlina accused her of submitting a false high school diploma to the
district election commission. A rumor spread that Adlina married Milwan at a young age and
as a result failed to complete middle or high school. In addition, the opposition taunted
Adlina by hanging insulting banners around the district, some of which were “signed” with
Fredy’s name. Referring to vote-buying, one read: “Thank you Mrs. Adlina for the rice and
money, but we still prefer Tigor” (Harian Sinar Indonesia Baru, 13 April 2010; Metro
Rantau, 31 May 2010).
Tans 19 The election results proved that Tigor, Suhari, Fredy, the rest of the opposition
successfully mobilized voters to oppose Adlina and Milwan. In 2005, 83,000 people voted
against Milwan. In 2010, Tigor’s ticket received over 100,000 votes, meaning that his
campaign attracted almost 28,000 voters who had not previously opposed Milwan. Many of
them were first time voters, as 21,000 more people voted in 2010 than 2005. The remainder
was likely swing voters who abandoned Milwan. Adlina lost 16,000 votes compared to his
2005 total (KPU Labuhanbatu 2006; KPU Labuhanbatu 2010).
As successful as the mobilization effort was on election day, it placed great strain on
the opposition coalition afterwards. Campaign promises had raised hopes so high, and the
opposition encompassed so many diverse groups, that when Tigor and Suhari were
inaugurated disillusionment set in almost immediately. The criticism focused on the conflict
between Fredy and his friends, who anticipated elite capture, and the villagers, volunteers and
voters who hoped Tigor would follow through on his promises of public goods.
Having mobilized so many volunteers, it will be very difficult for Tigor to satisfy all
of his constituents. The first cracks in the coalition appeared on 1 October 2010, when a
scandal erupted because Tigor was accused of pressuring the oceans and fisheries agency
(Diskanla, Dinas Perikanan dan Kelautan) to award a project tender to one of his campaign
supporters. Two of his former admirers angrily compared Tigor to Milwan (Metro Rantau, 1
October 2010; 2 October 2010; 13 October 2010). In 2008, Milwan’s administration
collapsed when the state budget proved insufficient to satisfy both him and Fredy. While
budget restraints have remained constant, the pressure on Tigor is greater than ever because
the new administration must answer to 10,000 campaign volunteers who mobilized to defeat
Milwan. Although the pressure might encourage the local government to seek out the
efficiencies of public goods to satisfy the volunteers, it could just as easily overwhelm the
administration’s capacity, especially if Fredy extracts his pound of flesh.
Tans 20 The process that led from Milwan’s corruption to Tigor’s mobilization and electoral
victory is most consistent with the hypothesis of mobilizing broad support, although doubt
remains as to the outcome in the case. During a competitive 2010 election, the opposition
candidates drew on the organizational capacity of well-established youth groups to mobilize a
mass base of campaign volunteers that demanded the provision of broad public goods. Mass
politics was a more cost-effective strategy than patronage politics because the opposition did
not have access to state resources, but it did direct youth groups with the capacity to mobilize.
It is too early to tell whether their efforts will actually improve local government, but they
have at least introduced the possibility that it might. Once again, the technocratic success
hypothesis is consistent with the outcome of punishing an underperforming incumbent, but
does not sit easily with the processes of the case. Rather than freely sharing information, the
winning candidates expended great effort overcoming their credibility problems and even
spread disinformation. Finally, the process-tracing presents mixed evidence for the elite
capture hypothesis. Before 2008, Labuhan Batu undoubtedly experienced elite capture and
rent-seeking consumed local government. However, the collusive arrangements among
cronies were short-lived, suggesting that serious coordination problems plague the efforts of
elites to prey on local government.
Conclusion
The within-case analysis presented in this paper affirms the plausibility of patronage
politics and mobilizing mass support as mechanisms that shape the provision of public goods
by local governments in post-reform Indonesia, but it challenges the hypotheses of elite
capture and technocratic success.
The empirical analysis suggests that theories of elite capture and technocratic success
might fruitfully be revised. Elite capture appeared to be an ever-present threat, but very
Tans 21 difficult to achieve in practice because coordination problems routinely frustrated it. The
problem places a scope condition on elite capture: it can only occur when elites are able to
cooperate. This would perhaps be more likely when institutions like political parties or old
boy networks facilitate elite collective action.
Technocratic success was a very difficult hypothesis to disconfirm. Though both
outcomes were consistent with its expectations, the processes that it specified did not appear
to be occurring. Local elections did not take place in a context of costless information
sharing, nor did they encourage diverse slates of candidates. The contrast between
hypothesized processes and empirical findings was most troubling in Serdang Bedagai, which
should have been a most-likely case for technocratic success because of its impressive local
government performance. The fact that the outcomes are consistent with the hypothesis even
though the processes are not is also problematic, and suggests that it might benefit from more
detailed specification. For example, a statement that specified the kind of information voters
use and the policies that they sanction would be more falsifiable.
In combination, the hypotheses of patronage politics and mobilizing mass support
offer a possible response. Both hypotheses specify how information matters by addressing the
credibility problems that arise when voters are skeptical of the promises of local politicians.
They further suggest two kinds of policies that voters reward, patronage and public goods,
and begin to account for the reasons politicians provide one or another. In the two cases
examined, patronage politics and mobilizing mass support were activated in the presence of
different variables. Process-tracing showed that patronage politics occurred when an
incumbent candidate had access to state resources, while mass politics arose when
challengers without resources had access to strong social organizations capable of quickly
mobilizing a large number of people. The evidence is not as strong concerning how reliably
these mechanisms lead to better provision of public goods. Patronage demonstrably has the
Tans 22 potential to produce public goods through spillovers, as it did in Serdang Bedagai, but it can
also degenerate into rent-seeking. Mobilizing mass support certainly raised expectations for
local government performance, but the evidence was inconclusive as to whether higher
expectations would translate into better outcomes.
Comparing across cases suggests two variables that might interact with patronage and
mass politics and affect their impact on public goods. First, elections must be competitive
enough to threaten incumbent executives; otherwise they will not feel compelled to deliver
patronage or to mobilize mass support. Second, the quality of the social organizations upon
which politicians rely to pursue these strategies may influence the outcomes in important
ways. For example, if patronage is delivered through a youth organization, it will reach a
different, more urban, more male constituency than if it is delivered through a religious
association. Similarly, if a farmer’s union mobilizes its membership, it will make different,
potentially even opposing, demands on the government than if a labor union does the same.
Finally, what do the case studies imply about post-reform Indonesia? Above all, they
suggest variation. Decentralization has had very uneven consequences. Even in two similar
districts in a single province, local politicians have pursued strategies of elite capture,
patronage politics and mass politics. The findings contrast with Hadiz’ assertion that elite
capture is the current norm (2010). Further, the cases suggest that improving the provision of
public goods at the local level is at least possible, although they cannot provide an estimate of
its likelihood. Consistent with Keefer and Vlaicu’s surprising finding, patronage politics can
provide beneficial spillovers that lead to public goods and improved welfare, at least in the
short term (2007). Mass politics has the potential to dramatically change local government as
well, either by overwhelming capacity or by demanding, and assisting, better provision of
public goods.
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Tans 25 List of Press Sources
Analisa Daily, 4 December 2008.
Bitra Indonesia, 5 July 2009.
Detik.com, 21 September 2006.
Economist, 19 March 2011.
Ekspos News, 19 November 2009.
Harian Medan Bisnis, 2 December 2008.
Harian Sinar Indonesia Baru, 4 November 2008.
Harian Sinar Indonesia Baru, 17 December 2008.
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Tans 26 List of Personal Interviews
Personal interview, District Executive Elect, Rantauprapat, 17 June 2010.
Personal interview, Journalist, Rantauprapat, 31 August 2010.
Personal interview, Deputy Executive, Perbaungan, 29 September 2010.
Personal interview, Budget Advocacy NGO, Medan, 25 March 2011.