Australia Awards in Indonesia

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14 Apr 2016

The Relationship between Political and Business Actors: Comparative Studies of Decentralised, Post-Authoritarian Indonesia and Russia

Rosa Evaquarta, April 2011
The University of Sydney

This thesis aims to explain the effect of decentralisation on local politics, particularly its effect on the relationship between political and business elites at the local level. Decentralisation initiatives often bring the promise of the establishment of transparent, efficient ‘clean’ governance and the deepening of democratisation at the local government level. Such high-minded hopes, however, frequently fail to take account of countervailing forces: different characteristics of local politics such as low oversight capacity and low levels of political participation inherited from previous governance, ambiguities in decentralisation policies, the authoritarian tendencies of local elites and central government’s desire to recentralise. Decentralisation not only broadens the scope of local governments’ political authority but also provides opportunities for the reconfiguration and perseverance of established relationships between entrepreneurs and political elites.

While this initiative has proven successful in some states, others have experienced significant problems as local governments became exceptionally vulnerable to deviations such as: ‘localised patrimonialism’, ‘sub-national authoritarianism’, conflicts of jurisdictions and mounting power abuse and corruption at the local level. This thesis examines what makes for a successful model for decentralisation by engaging in a comparative study of decentralisation and its impact on business and political actors’ relations in several regions of post-authoritarian Indonesia and Russia, which has deep-rooted experiences with rent-seeking activities and clientelism. This thesis deliberately provides greater focus on Indonesia where the role of Russian cases, while not as elaborately analysed, can be justified in their role to pinpoint key issues for closer and more elaborate examination in the Indonesian case studies.

This thesis concludes that the intended path of decentralisation may easily overlook the established, if reconfigured, patrimonial and corrupt rent-seeking networks at the local level involving business and political actors. The existence of a system of patrimonial networks as vestiges of centralised, authoritarian rule concomitant with the radical and hasty implementation of decentralisation policy has often served as the foundation for a reinvention of rent-seeking activities by political and business actors. The success of such reinvention is dependent upon several factors: not only is the level of oversight from above and the presence of exogenous political power influencing local politics important, but insufficient ‘sousveillance’ – or monitoring from below – together with local political idiosyncrasies can also enable old patrimonial frameworks to persist. The greatest opportunity for success in decentralisation policy is thus a product both of the political nature of each region but also on the level of scrutiny from the central government and from the people that decentralisation policies provide for.

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