Continuity or change?: Indonesia's intergovernmental fiscal transfer system under Jokowi

Abstract

This paper provides a systematic overview of the intergovernmental fiscal transfer system in Indonesia. It describes the size, allocation mechanism, and economic rationale (if any) of the different transfer schemes. Furthermore, the study points out major changes in the institutional set-up and in the relative magnitudes of the transfers effected by the Joko "Jokowi" Widodo administration. This allows us to assess the extent to which the current administration has shifted the policy stance on (fiscal) decentralization in the country. We critically evaluate the effectiveness and efficiency of the existing system, including the newly implemented reforms. Show more