State Asset Management Reform in Indonesia: A Wicked...
Transcript of State Asset Management Reform in Indonesia: A Wicked...
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SubmittedFor
DoctorofPhilosophy(IF49)
June2012
StateAssetManagementReforminIndonesia:AWickedProblem
DiaswatiMardiasmo(N4815904)
JusticeandLawResearchCentre
FacultyofLaw
QueenslandUniversityofTechnology
Brisbane,Australia
SupervisoryTeam:
Prof.CharlesSampford
Director,TheInstituteofEthics,Governance,andLaw(UNUniversity)
ProfessorofLawandResearchProfessorofEthics(GriffithUniverity)
(PrincipalSupervisor)
Dr.PaulBarnes
SeniorLecturer,SchoolofPublicHealth
Coordinator:Risk&CrisisManagementResearchDomain,InformationSecurityInstitute(QUT)
(AssociateSupervisor)
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ABSTRACT
Efficientstateassetmanagement iscrucialforgovernmentdepartmentsthatrelyontheoperationsoftheirstateassetsinordertofulfiltheirpublicfunctions,whichincludepublicserviceprovisionandothers.Theseassetsmaybeexpensive,extensiveandor,complex,andcanhaveamajor impacton theabilityofgovernments toperform its functionoverextended periods. Various governments around theworld have increasingly recognisedthe importance of an efficient state asset management laws, policies, and practices;exemplifiedbythesurgeinstateassetmanagementreform.
Thisphenomenon isevident in Indonesia, inparticular through theestablishmentof theDirectorateGeneralofStateAssetsin2006,whowasappointedastheultimatestateassetmanager(ofRepublicofIndonesia)andtheproprietorofstateassetmanagementreform.TheDirectorateGeneralofStateAssetstoohaspledgeditsadherencetogoodgovernanceprinciples within its state asset management laws and policies reform. However thedegree that good governance principles are conceptualised is unknown, resulting inquestions of how and to what extent is good governance principles evident withinIndonesiasreformedstateassetmanagementlawsandpolicies.
This study seeks to understand the level of which good governance principles areconceptualised and understood within reformed state asset management policies inIndonesia (as a case study), and identify the variables that play a role in theimplementation of said reform. Although good governance improvements has been acentraltenet inIndonesiangovernmentagenda,andstateassetmanagementreformhaspropelled in priority due to found neglect and unfavourable audit results; there isambiguity in regards to the extent that good governance is conceptualisedwithin thereform, how andwhether this relationship is understood by state assetmanagers (i.egovernment officials), and what (and how) other variables play a supporting and/orimpedingroleinthereform.
Usingempiricaldata involvingasampleof four Indonesianregionalgovernmentsand70interviews;discrepancyinwhichgoodgovernanceprinciplesareconceptualised,thelevelit is conceptualised, at which stage of state asset management practice it isconceptualised, and the level it isunderstoodby state assetmanagers (i.e governmentofficials)wasfound.Humanresourcecapacityandcapability,thenotionofneedingmoretime,lowlegality,infancyofreform,anddysfunctionalsenseofstewardshipareidentifiedasspecific impedingvariablestostateassetmanagementreform;whilstdecentralisationand regional autonomy regime, political history, and culture play a consistentundercurrentkeyroleingoodgovernancerelatedreformswithinIndonesia.
This study offers insights to Indonesian policy makers interested in ensuring theconceptualisationand full implementationofgoodgovernance inallareasofgoverning,particularly within state asset management practices. Most importantly, this studyidentifiesanasymmetryingoodgovernanceunderstanding,perspective,andassumptionsbetweenpolicymaker(i.ehighlevelgovernmentofficials)andpolicyimplementers(i.elowlevelgovernmentofficials);tobetakenintoaccountforfuturepolicyevolvementsand/orwriting.Assuch,thisstudysuggeststheneedforamodifiedperspectiveandapproachtogood governance conceptualisation and implementation strategies, one thatacknowledgesandincorporatesanationsuniquecharacteristicsandnolongerdeniesthedoubleedgedswordofsimplifiedassumptionsofgovernance.
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StatementofOriginalAuthorship
Iherebydeclaretheworkcontainedinthisthesishasnotbeenpreviouslysubmittedto
meetrequirementsforanawardatthisoranyotherhighereducationinstitution.Tothe
bestofmyknowledgeandbelief,thethesiscontainsnomaterialpreviouslypublishedor
writtenbyanotherpersonexceptwhereduereferenceismade.
DiaswatiMardiasmo
15/06/2012
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Acknowledgement
PujisyukurAllahSwt,whohasblessedmyPhDjourneybothduringthegoodandbadtimes.
Myparentsandsisters,whogavemeendlesssupportandprayersthroughoutmyjourney
withoutyouIwouldnotfindthestrengthtocontinueonwritingandfinallyfinishingthis
PhD.
MysupervisorsProfessorCharlesSampfordandDrPaulBarnes,whoallowedmetobe
me throughoutmyPhD journeyandwhobelieved inmenomatterwhat.Thankyou for
your guidance, for your confidence, and for tellingme that this PhD is the start of a
conversation,ofmycareer,andnottheendoftheworld. IwisheachPhDstudentwere
giventhisadvice,asitallowedmetothinkofmyPhDasajourneyandmadeitpartofmy
life.
MyfianceLukeusPovis,whostoodbymeandcomfortedmewhenIalmostlosthopeand
couldnotwritewithoutyouandyourendlesscupsoffreakyteasandtellingmethat I
candoit,thisthesiswouldnotbewritten.Thankyouforcomingwithmeonthisjourney,
formakingmyPhDapartofourlives,andforeverything.
AlloftheQUTresearchsupportstaffbothatQUTBusinessSchoolandFacultyofLaw,
thankyou formaking this journeyeasier.CIEAM, JaneMalady,BillDuncan,andMaxine
BrownIamluckytohaveyouasmysupportteam.
To my thesis cheerleading team fellow PhD students Alicia, Marissa, Tim, Cookie
monster, Cameron, Damien, Charles, and Michael; I thank you for your support, for
pushingmetodobetter,and forkeepingmecompanyvia facebookwhile Iwriteto the
middle of the night. My girlfriends Katie Cooling, Katie Joy, Roheema, Lucy, Marissa,
Gillian, Danielle,Marie, Nancy, andmore (there are toomany of you!) thank you for
wavingyourpompomsandgettingmethroughthefinish line.EveryoneatdancingLe
Step,LatinEnergy,TammiatMadDancehouse;thankyouforallowingmedancethrough
my PhD. Grant Luck and Eric Pearson thank you for beingmy rock throughout this
journey,couldnthavedoneitwithoutyou.TotherestofmybigfamilytanteFenti,my
godmotherBubuandfamily,Povisfamily(Linda,Basil,Jamie,Beck,MattandAmy),andall
Indonesianfriends;thankyou.Hereitiseveryonethefruitsofourhardwork.Enjoy
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ToMyMother,mymother,mymother,andmyFather,
WithoutwhomthisPhDthesiswouldnotexist.
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TableofContentsABSTRACT................................................................................................................................1
Acknowledgement..................................................................................................................3
TableofFigures.....................................................................................................................12
TableofTables......................................................................................................................13
TableofBoxes.......................................................................................................................14
ListofAcronymsandAbbreviations.....................................................................................18
1.Introduction......................................................................................................................20
1.1 ResearchObjectives..................................................................................................23
1.2 MainContributionofStudy......................................................................................23
1.3 ThesisStructure........................................................................................................25
1.4LimitationsoftheStudy..................................................................................................27
2.LiteratureReview..............................................................................................................29
2.0Introduction....................................................................................................................29
2.1.StateAssetManagementandGovernancePrinciples...................................................31
2.1.1DefinitionandAssumptionsofStateAssetManagement.......................................31
2.1.2DefinitionandAssumptionsofGoodGovernance..................................................35
2.1.3GoodGovernanceandAssetManagement.............................................................45
2.2CommonChallengesandComplexitiesinStateAssetManagementPractices..............57
2.2.1StateAssetManagement:VariousPractices...........................................................57
2.2.2CommonChallengesandComplexitiesinStateAssetManagement......................63
2.2.3TheRoleofUniqueCountryConditionsinStateAssetManagementPractice.......66
2.2.4BestPracticeinStateAssetManagement...............................................................68
2.3History(19692006)ofStateAssetManagementPracticesinIndonesia......................71
2.3.1FiveYearDevelopmentPlan(REPELITA)..................................................................71
2.3.2IndonesiasStateAssetManagementPractice:DefinitionsandAssumptions.......72
2.3.3CommonChallengesand/orComplexitiesinPreReformStateAssetManagementPractices............................................................................................................................74
2.3.4IndonesianPoliticalHistoryandCulture:PotentialImpactonStateAssetManagementPractice.......................................................................................................75
2.4Reform(2006Current)ofStateAssetManagementPracticesinIndonesia..................77
2.4.1TheReformProcess:Law6/2006andLaw38/2008...............................................77
2.4.2TheDirectorateGeneralofStateAssets:RoleandRoadmaptoStrategicAssetManagement.....................................................................................................................78
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2.4.3ReformedStateAssetManagementPractices........................................................83
2.4.4Challengesand/orComplexitiesinReformedStateAssetManagement................85
2.5GoodGovernancePrincipleswithinReformedStateAssetManagementPoliciesandPractice.................................................................................................................................87
2.5.1GoodGovernanceinIndonesia................................................................................87
2.5.2GoodGovernancePrincipleswithinReformedStateAssetManagementPoliciesandPractice......................................................................................................................88
2.6ComplexitiesofDecentralisationandRegionalAutonomyinReformedStateAssetManagement.........................................................................................................................90
2.6.1DecentralisationandRegionalAutonomyinIndonesia...........................................90
2.6.2ImpactofDecentralisationandRegionalAutonomy...............................................92
2.6.3PotentialComplexitiestotheImplementationofReformedStateAssetManagementPolicies........................................................................................................94
2.7Conclusion:ContributionofStudy..................................................................................96
2.7.1.IntegratedGovernanceandAssetManagementKnowledge.................................96
2.7.2SpecificIndonesiaStateAssetManagementReformKnowledge.........................101
3.ResearchQuestionsandConceptualFramework...........................................................103
3.1.ResearchQuestions.....................................................................................................103
3.2.ConceptualFramework................................................................................................106
4.Methodology...................................................................................................................108
4.1EpistemologyandMethodologicalApproach...............................................................108
4.1.1Epistemology..........................................................................................................109
4.1.2MethodologicalApproach.....................................................................................110
4.1.3PastResearchMethodologiesinRelevantStudies................................................110
4.2MethodologyDesign.....................................................................................................113
4.2.1RationalebehindaCrossCaseMethodologyDesign............................................113
4.2.2ATwoPhaseCrossCaseMethodologyDesign......................................................114
4.2.3NumberofCaseStudiesandIssuesofGeneralisability.........................................116
4.3DataCollection..............................................................................................................118
4.3.1SamplingMethod...................................................................................................118
4.3.2DocumentAnalysis.................................................................................................120
4.3.3SemiStructuredInterviews...................................................................................123
4.3.4OnSiteObservation...............................................................................................127
4.4DataAnalysis.................................................................................................................128
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4.4.1RecordingandManagementofData.....................................................................129
4.4.2AnalyticalApproach...............................................................................................130
4.4.3CrosscaseAnalysis................................................................................................131
5.CaseStudy1:StateAssetManagementinSpecialCapitalRegionDKIJakarta..............133
5.1Background:PastandPresentConditionofSpecialCapitalRegionDKIJakarta..........133
5.2DataCollection..............................................................................................................137
5.2.1DocumentAnalysis.................................................................................................138
5.2.2SemiStructuredInterviews...................................................................................138
5.2.3OnsiteObservation...............................................................................................141
5.3StateAssetManagementinSpecialCapitalRegionDKIJakarta:Laws,Policies,andExperiences.........................................................................................................................141
5.3.1ContentsofDKIJakartasRegionalDecreeno17/2004onRegionalStateAssetManagement...................................................................................................................145
5.3.2DKIJakartainStateAssetManagement:ExperienceandImplementation..........155
5.4GoodGovernancewithintheConceptualisationandImplementationofStateAssetManagementReform..........................................................................................................158
5.4.1AccountabilityandTransparency..........................................................................158
5.4.2StakeholderParticipation......................................................................................160
5.4.3RegulatoryCompliance..........................................................................................163
5.4.4Efficiency................................................................................................................166
5.5ChallengesinStateAssetManagementreforminDKIJakarta.....................................168
5.5.1AbsenceofStandardisedInformationSysteminSAMReporting.........................168
5.5.2DisconnectinUnderstandingofSAMPracticesbetweenSAMActorsandSAMLaw........................................................................................................................................169
6.CaseStudy2:StateAssetManagementinGorontaloRegionalGovernment................172
6.1Background:PastandPresentConditionofGorontaloRegionalGovernment............172
6.2DataCollectionProcess.................................................................................................175
6.2.1DocumentAnalysis.................................................................................................176
6.2.2SemiStructuredInterviews...................................................................................177
6.2.3OnsiteObservation...............................................................................................179
6.3StateAssetManagementinGorontaloProvince:Laws,Policies,andExperiences.....180
6.3.1NorthGorontaloRegency......................................................................................181
6.3.2GorontaloRegency................................................................................................184
6.3.3GorontaloProvincialGovernment.........................................................................186
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6.3.4SimilaritiesandContrastingExperiencesinStateAssetManagementbetweenGoverningBodiesinGorontaloProvince........................................................................193
6.4GoodGovernancewithintheConceptualisationandImplementationofStateAssetManagementReform..........................................................................................................197
6.5ChallengesinStateAssetManagementreforminGorontaloProvince.......................200
6.5.1ReportingandOwnershipCertificates...................................................................200
6.5.2Financialarrangements/fundingofstateassets....................................................202
6.5.3HumanResourceChallenges.................................................................................204
7.CaseStudy3:SpecialRegionYogyakartaGovernment,CentralJava.............................211
7.1Background:PastandPresentConditionofSpecialRegionYogyakartaGovernment.211
7.2DataCollectionProcess.................................................................................................213
7.2.1DocumentAnalysis.................................................................................................214
7.2.2SemiStructuredInterviews...................................................................................215
7.2.3OnsiteObservation...............................................................................................217
7.3StateAssetManagementinSpecialRegionYogyakartaGovernment:Laws,Rules,andRegulations.........................................................................................................................218
7.3.1YogyakartaProvincialGovernment.......................................................................220
7.3.2SlemanRegency.....................................................................................................230
7.3.3SimilaritiesandContrastingExperiencesinStateAssetManagementbetweenGoverningBodiesinDIYYogyakarta...............................................................................233
7.4GoodGovernancewithintheImplementationofStateAssetManagementinSpecialRegionYogyakartaGovernment.........................................................................................235
7.5ChallengesinStateAssetManagementreforminSpecialRegionDIYYogyakartaGovernment........................................................................................................................237
7.5.1RoleofPoliticalHistory..........................................................................................237
7.5.2IncompleteStateAssetReportingSystem.............................................................238
7.5.3RoleofTraditionalSocietalCultureWayofdoingthings....................................240
8.TheGoodGovernanceConceptualisationEvaluativeTool.............................................242
8.1TheGoodGovernanceConceptualisationEvaluativeTool...........................................242
8.1.1StateAssetManagementLaw,Policies,andTechnicalGuidelinesEvaluated......243
8.1.2CodingRulesoftheGoodGovernanceEvaluatorTool..........................................244
8.1.3JustificationfortheGoodGovernanceEvaluatorMatrix......................................246
8.2.GoodgovernanceEvaluationMatrixforCaseStudies................................................248
8.3ObservationsBasedontheGoodGovernanceEvaluatorTool/Matrix........................274
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8.3.1FirstObservation:DifferenceinStateAssetManagementLawsandPoliciesStructure.........................................................................................................................274
8.3.2SecondObservation:TheChoicetoEstablishSpecific/TailoredStateAssetManagementLawsandPolicies......................................................................................276
8.3.3ThirdObservation:VaryingDepthsofExplanationinDetailingStateAssetManagementrelatedActors...........................................................................................279
8.3.4FourthObservation:VaryinglevelsinGoodGovernanceconceptualisationwithinSAMlawsandpolicies,anditsunderstanding................................................................282
8.4AnalysisandConcludingComments.............................................................................288
8.4.1AnalysisofObservations........................................................................................289
8.4.2ConcludingComments...........................................................................................291
9.Findings...........................................................................................................................294
9.1ResearchQuestionOne................................................................................................294
9.1.1ExplicitandImplicitConceptualisationofGoodGovernanceinSAMLawsandpolicies............................................................................................................................299
9.1.2ContradictingViewsinIntervieweesPerceptionofRegionalStateAssetManagement...................................................................................................................300
9.1.3Concludingcomments...........................................................................................303
9.2ResearchQuestionTwo................................................................................................303
9.1RoleofStateAssetManagers...............................................................................303
9.2StateAssetManagementActorsLevelofUnderstandinginanIntegratedGoodGovernanceandStateAssetManagementReform...........................................................309
9.2.1VaryinglevelsofUnderstanding............................................................................309
9.2.2VaryinglevelofStateAssetManagementCycleKnowledge.................................317
9.3ResearchQuestionThree..............................................................................................322
9.3.1FourInfluencesofDecentralisationandRegionalAutonomy...............................323
9.3.2DoubleEdgedSwordofDecentralisationandRegionalAutonomy......................330
9.3.3ConcludingComment.............................................................................................331
9.4ResearchQuestionFour................................................................................................332
9.4.1PoliticalHistoryandBureaucraticCulturePlayaStrongRoleinStateAssetManagementReform......................................................................................................332
9.4.2PoliticalHistoryandBureaucraticCultureDoesNotPlayaStrongRoleinStateAssetManagementReform............................................................................................333
9.4.3PoliticalHistoryandBureaucraticCultureMayPlayaStrongRoleinStateAssetManagementReform......................................................................................................335
9.4.4ConcludingComment.............................................................................................336
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10.AnalysisofInfluencing/contributingfactorsandtheNotionofExcuseRhetoric.......337
10.1ImpedingVariable1:PrematurityofStateAssetManagementReform....................339
10.2ThepeopleStateAssetManagementrelatedactors............................................342
10.3ThenotionofTimeandIneedmoretime.............................................................344
10.4InconsistencyandInformationUncertainty...............................................................348
10.5Incomplete(computerised/automatic)SysteminStateAssetManagementPractice............................................................................................................................................351
10.6IncentiveandSanctions..............................................................................................352
10.7ThirdPartiesandtheSociety......................................................................................354
10.8LegalitiesIncompleteLegalPaperwork...................................................................357
10.9LowStewardship/DysfunctionperceptionofCustodianship....................................359
10.10LowMonitoringandControl.....................................................................................360
10.11InconsistenciesandContradictionssurroundingImpedimentFactors....................362
10.11.1FirstInconsistency..............................................................................................362
10.11.2SecondInconsistency.........................................................................................363
10.11.3ThirdInconsistency............................................................................................365
11.Discussion......................................................................................................................368
11.0Introduction................................................................................................................368
11.1GovernmentOrganisationalStructure.......................................................................369
11.1.1AssumptionbehindGovernanceanditsImpactonSAMreform........................372
11.2UncertaintyAvoidanceandTraditionalCultureasVoiceofReason........................374
11.3MismatchbetweenWestandEastIdeologiesinSAMPractices............................381
11.3.1Argument1:IncompleteCapacityandCapability...............................................383
11.3.1Argument2:SuitabilityofWesternIdeologies..................................................386
11.3.2Argument3:MixedResultsinPastReformsAspiredbyWesternIdeologies...388
11.4Concludingcomment..................................................................................................390
11.2.1StagnantStateAssetManagementReform:ExcuseRhetoric?...........................394
11.2.2MainLearning......................................................................................................395
12.ConclusionandRecommendations..............................................................................399
12.1AnswerstoResearchQuestions.................................................................................400
12.1.1ResearchQuestion1:LawandPoliciesofStateAssetManagement..................400
12.1.2ResearchQuestion2:IntegrationbetweenGoodGovernancePrinciplesandStateAssetManagement.........................................................................................................402
12.1.3ResearchQuestion3:ImplementationofSAMPolicies......................................405
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12.1.4ResearchQuestion4:PoliticalHistoryandBureaucraticCulture........................407
12.2StateAssetManagementReforminIndonesia:AWickedProblem..........................410
12.3MainLearningofStudy...............................................................................................417
12.4FutureResearch..........................................................................................................418
12.5ImportanceandContributionofStudy.......................................................................420
12.5.1ResearchGap.......................................................................................................420
12.5.2Stateassetmanagementliterature.....................................................................421
12.5.3PublicPolicyReform............................................................................................421
12.5.4GoodGovernanceLiterature...............................................................................422
12.5.5LocalGovernmentResearch................................................................................422
13.Bibliography..................................................................................................................424
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TableofFigures
Figure3.1TheoreticalFrameworkofthisStudy.................................................................107Figure4.1MethodologyDesign..........................................................................................116Figure4.2TheJohariWindowasaSamplingMethod........................................................119Figure4.3InterviewDesign................................................................................................125Figure5.1DKIJakartaGovernmentStructure....................................................................134Figure5.2SpecialRegionJakarta(DKIJakarta)StateAssetManagementRoadmap.......157Figure6.1GorontaloProvinceGovernmentStructure.......................................................173Figure7.1GovernmentStructureofDIYYogyakarta..........................................................213Figure7.2ProcessesofLawand/orLegalProductEstablishmentin.................................226YogyakartaProvincialGovernment....................................................................................226Figure8.1OrganisationalChartoftheRegionalStateAssetBodyinYogyakartaCity.......280Figure9.1BPKPs(GovernmentFinanceandDevelopmentSupervisoryAgency)FrameworkforImplementationofStateAssetManagementLawsandPolicies..................................295Figure9.2RoleofGoodGovernanceinPublicPolicyandBestPracticeinensuringitimplementationindaytodaygoverning............................................................................296Figure9.3StateAssetManagementStructuralChartasIdentifiedbytheHomeAffairsMinistryDecree7/2007onRegionalStateAssetManagement........................................305Figure10.1LevelofSupportforImpedingVariableinPercentageValue;forIndonesianRegionalGovernment.........................................................................................................339Figure11.1DiagramRepresentationofVarianceinGovernmentStructureandStateAssetManagementLawsandPoliciesAdopted...........................................................................369Figure11.2JohariWindowofCaseStudiesandVoicesofReasonInfluence...................382Figure11.3FactorsatPlayinIndonesianStateAssetManagementReformImplementation............................................................................................................................................390Figure12.1BreakdownofGoodGovernancePrinciplesConceptualisedinIndonesiaStateAssetManagementLawsandPolicies................................................................................402Figure12.2LevelofGoodGovernanceandStateAssetManagementUnderstandingatIndonesiaCentralGovernment...........................................................................................403Figure12.3LevelofGoodGovernanceandStateAssetManagementUnderstandingatIndonesiaRegionalGovernment........................................................................................403Figure12.4SpreadofGoodGovernanceandStateAssetManagementUnderstandinginCentralGovernmentbasedonEchelonlevel.....................................................................404Figure12.5SupportforInfluencing/contributingfactorsasIdentifiedbyInterviewees...411Figure12.6TheIntricateRelationshipofInfluencing/contributingfactorsasaWickedProbleminIndonesiasStateAssetManagementReform.................................................413Figure12.7FactorsinanIntegratedGoodGovernanceandStateAssetManagementineachlevelofGovernment...................................................................................................415
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TableofTables
TABLE2.1COMPARATIVEANALYSISOFGOODGOVERNANCEPRINCIPLES,CORNISHANDMORTON(2001)ASSETGOVERNANCEMODEL,ANDTHEPAS55
5355
TABLE2.2DIRECTORATEGENERALOFSTATEASSETROADMAPTOSTRATEGICASSETMANAGEMENT
81
TABLE2.3METAANALYSISOFCURRENTLITERATUREGOVERNANCEANDSTATEASSETMANAGEMENT
98100
TABLE4.1PROPOSEDINTERVIEWQUESTIONS 124TABLE5.1CATEGORISATIONOFGOVERNMENTOFFICIALS 139TABLE5.2DKIJAKARTAGOVERNMENTINTERVIEWDISTRIBUTION 139TABLE6.1DOCUMENTSCOLLECTED(FORANALYSIS)FROMGORONTALOREGIONALGOVERNMENT
177
TABLE6.2GORONTALOREGIONALGOVERNMENTINTERVIEWDISTRIBUTION 178TABLE7.1YOGYAKARTASPECIALREGIONALGOVERNMENTINTERVIEWDISTRIBUTION 217TABLE8.1KEYFORGOODGOVERNANCEEVALUATIONMATRIX 248TABLE8.2GOODGOVERNANCEEVALUATIONMATRIXFORGORONTALOPROVINCIALGOVERNMENT
249251
TABLE8.3GOODGOVERNANCEEVALUATIONMATRIXFORGORONTALOREGENCY 252254
TABLE8.4GOODGOVERNANCEEVALUATIONMATRIXFORGORONTALOCITY 255257
TABLE8.5GOODGOVERNANCEEVALUATIONMATRIXFORDKIJAKARTA 258260
TABLE8.6GOODGOVERNANCEEVALUATIONMATRIXFORYOGYAKARTAPROVINCIALGOVERNMENT
261
TABLE8.7GOODGOVERNANCEEVALUATIONMATRIXFORYOGYAKARTAPROVINCIALGOVERNMENT
262266
TABLE8.8GOODGOVERNANCEEVALUATIONMATRIXFORSLEMANREGENCY 267272
TABLE8.9GOODGOVERNANCEEVALUATIONMATRIXFORYOGYAKARTACITY 273TABLE8.10GOODGOVERNANCE(GG)CONCEPTUALISATIONANDUNDERSTANDINGCATEGORY
282
TABLE9.1TASKANDFUNCTIONOFSTATEASSETMANAGEMENT(SAM)RELATEDACTORSATREGIONALGOVERNMENT,ASPERHOMEAFFAIRSMINISTRYDECREE17/2007ONREGIONALSTATEASSETMANAGEMENT
306307
TABLE10.1LEVELOFSUPPORTFOREACHIMPEDINGVARIABLE,INNUMERICALANDPERCENTAGEVALUE;ININDONESIANREGIONALGOVERNMENT
338
TABLE11.1.JOHARIWINDOWOFCASESTUDIESANDVOICESOFREASONINFLUENCE. 376
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TableofBoxesBox5.1PositiveViewsonDKIJakartaGovernmentStructure 135Box5.2NegativeViewsonDKIJakartaGovernmentStructure 136Box5.3ReluctancetoChangeDKIJakartaGovernmentStructure 137Box5.4CommoncommentsfoundinDKIJakartasmiddleandlowlevelgovernmentinterviews
140
Box5.5SpecificStateAssetManagementLawsaccordingtoDKIJakartaGovernmentOfficials
143144
Box5.6GoodGovernancePrinciplesinDraftingofDKIJakartaSAMLawsandPolicies
144
Box5.7SourceofSAMComplexityinDKIJakarta 155Box5.8UncertaintyinAccountabilityandTransparencyGoodGovernancePrincipleswithinDKIJakartaSAM
159
Box5.9CertaintyinAccountabilityandTransparencyGoodGovernancePrincipleswithinDKIJakartaSAM
159160
Box5.10StakeholderParticipationinDKIJakartaStateAssetManagementLawandPractice
162
Box5.11RegulatoryComplianceinDKIJakartaSAMLawandPracticeHighLevelOfficials
163164
Box5.12RegulatoryComplianceinDKIJakartaSAMLawandPracticeMiddle/LowLevelOfficials
164
Box5.13ExamplesoftheExpressionRegulatedbyRegionalHeadDecreeinDKIJakartaSAMLaw
165
Box5.14ConceptualisationofEfficiencyinDKIJakartaSAMLawandPractice 166Box5.15ExamplesofExplicitMentionofEfficiencyinDKIJakartaSAMLaw 167Box5.16AbsenceofStandardisedInformationSysteminSAMReporting 168Box5.17ResponsiblePartyPostAcquirementofStateAssetaccordingtoDKIJakartaOfficials
170
Box6.1GorontaloProvinceGoverningObjectives 175Box6.2StateAssetDevelopmentinGorontaloProvince 180Box6.3NorthGorontaloRegencyGovernmentonSpecificSAMLawsandPolicies 183Box6.4GorontaloRegencyOpiniononSpecificSAMLawsandPolicies 184Box6.5PositiveImpactofGorontaloProvincialStateAssetManagementApproach 190Box6.6NegativeAspectsofGorontaloProvincialGovernmentsSAMApproach 192Box6.7GorontaloCityGovernmentApproachtoSAMLawsandPolicies 196Box6.8IncompleteGuidancetoGoodGovernanceConceptualisationinStateAssetManagementLawsandPolicies
199
Box6.9ReportingandOwnershipCertificatesasaChallengeinGorontaloProvincesSAM
201
Box6.10FundingofStateAssetManagementasaChallengeinGorontaloProvinceSAM
202
Box6.11HumanResourceChallengesinNorthGorontalo 205Box6.12HumanResourceChallengesinGorontaloProvincialGovernment 207Box6.13HumanResourcesatGorontaloCityandGorontaloRegency 209Box7.1StateAssetManagementReformasanOpportunityandCautionaryMeasure
221
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Box7.2SilentstruggleofStateassetownershipbetweenCivilgovernmentandSultanate
223
Box7.3PositiveOpinionsregardingSpecificYogyakartaProvincialGovernmentSAMLaws
225
Box7.4NegativeOpinionsregardingSpecificYogyakartaProvincialGovernmentSAMLaws
227
Box7.5YogyakartaProvincialGovernmentcommentsonTaskandFunctionStructureofSAMLaws
229
Box7.6.SlemanRegencygovernmentofficialopiniononSpecificSAMLaws 230Box7.7YogyakartaCityJustificationforTaskandFunctionSAMLawStructure 234Box8.1LimitedHumanResourcesforStateAssetManagementPositionsinYogyakartaCity
281
Box9.1BPKPsRoleinAssistingRegionalGovernmentImplementStateAssetManagementReform
297
Box9.2SupportingArgumentsforIncompleterulesofthegameinRegionalStateAssetManagement
301
Box9.3 IntervieweesOpinionon LevelofGoodGovernanceConceptualisation inStateAssetManagementLaws
302
Box9.4ImbalanceRelationshipbetweenCentralGovernmentAssetGovernorandRegionalGovernmentAssetGovernor
308309
Box9.5InformalStateAssetManagementRelatedEducation 313Box9.6MismatchinExpectationofHighLevelOfficialsandAbilityofMiddleLowerLevelOfficials
316
Box9.7IncompetencyofGovernmentOfficialsinConceptualisingGoodGovernancewithinPublicPolicy
317
Box9.8GoodGovernanceConceptualisationwithinStateAssetManagementLifeCycle
319
Box9.9ImpactofaDisconnectbetweenCentralandRegionalGovernmentinStateAssetManagementReform
320321
Box9.10AssistanceAdvisoryRelationshipbetweenBPKPandRegionalGovernment 321Box9.11ImpactofDecentralisationandRegionalAutonomyintheQualityofStateAssetManagementLawsandPoliciesestablishedbyRegionalGovernment
323
Box9.12ImpactofDecentralisationandRegionalAutonomyonRegionalStateAssetGovernmentHierarchyStructure
324
Box9.13ImpactofDecentralisationandRegionalAutonomyonStateAssetOwnership
325
Box9.14ImpactofDKIJakartaRegionalGovernmentStructureonStateAssetManagement
326
Box9.15ImpactofRegionalGovernmentAgeinStateAssetManagement 327Box9.16ImpactofDualityinGovernmentonStateAssetManagement 329Box9.17SimplifiedStateAssetManagementChallengesinNewRegionalGovernment
330
Box9.18ChallengesinStateAssetManagementforNewRegionalGovernment 331Box9.19StrongAgreementforImpactofIndonesianPoliticalHistoryandBureaucraticCultureinStateAssetManagementReform
333
Box9.20ImbalanceofHardandSoftControlasanImpedimenttoStateAssetManagementReform
334
Box9.21IndividualCharacteristicsasImpedimentVariabletoStateAssetManagementReform
335336
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Box10.1SupportforPrematurityofStateAssetManagementReformasanImpedingVariable
341
Box10.2SupportforThePeopleasanImpedingVariable 343344
Box10.3ComplicationofStateAssetsProcuredPriortoStateAssetManagementReform
345
Box10.4RegionalGovernmentAgeandStateAssetManagementComplication 346Box10.5OpposingstatementtoIneedmoretimeasanImpedingVariable 347Box10.6SupportforInconsistencyinStateAssetManagementPracticesandInformationUncertaintyasanImpedingVariable
349
Box10.7OpposingArgumentsforInconsistencyandInformationUncertaintyasImpedingVariable
350
Box10.8SupportforanIncompleteAutomatedSystemasanImpedimentVariable 351Box10.9SupportofLackofIncentive/SanctionasanImpedimentVariable 353Box10.10SupportforThirdPartiesasanImpedimentVariable 354Box10.11TheCrucialRoleofSocietyinStateAssetManagementReform 355Box10.12SocietyasanimpedimentvariabletoStateAssetManagementReform 356Box10.13SupportforIncompleteLegalPaperworkasImpedimentVariable 358Box10.14SupportforLowStewardship/DysfunctionCustodianshipasImpedingVariable
359360
Box10.15SupportforLowStewardship/DysfunctionCustodianshipasImpedingVariable
361
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ListofAcronymsandAbbreviations
ADB:AsianDevelopmentBank
APEC:AsiaPacificEconomicCooperation
ASEAN:AssociationofSouthEastAsianNations
BAPPENAS: Badan Perencanaan dan Pembangunan Nasional (National Development
PlanningAgency)
BCBC:BritishColumbiaBuildingCorporation
BPKP: Badan Pengawasan Keuangan dan Pembangunan (Finance and Development
SupervisoryAgency)
BSI:BritishStandardsInstitute
DKIJakarta:DaerahKhususIbukotaJakarta(SpecialCapitalRegionDKIJakarta)
DIYYogyakarta:DaerahIstimewaYogyakarta(SpecialRegionYogyakarta)
DJKN:DirektoratJenderalKekayaanNegara(DirectorateGeneralofStateAssets)
GAAP:GenerallyAcceptedAccountingPractice
IAM:InstituteofAssetManagement
ILGR:InitiativesforLocalGovernanceReform
IPC:InferentialPatternCoding
KNKG:KomiteNasionalKebijakanGovernance(NationalCommitteeonGovernance)
MPRRI:Majelis PermusyawaratanRakyatRepublik Indonesia (The People'sConsultative
AssemblyoftheRepublicofIndonesia)
PAS55:PubliclyAvailableSpecification55
OECD:TheOrganisationforEconomicCooperationandDevelopment
ORC:OntarioRealtyCorporation
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19
PPP:PrivatePublicPartnership
REPELITA:RencanaPembangunanLimaTahun(FiveYearDevelopmentPlan)
UNDP:UnitedNationsDevelopmentProgramme
UNESCAP:UnitedNationsEconomicandSocialCommissionforAsiaandthePacific
UU:UndangUndang(IndonesianConstitution,usuallyaccompaniedbyan identification
numberandyearintroducedi.eUU32/2004)
WERF:WaterEnvironmentResearchFoundation
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1.Introduction
The practice of state assetmanagement is gaining amomentum in importance across
governmentsworldwide (Conway,2006;Dow,Gillies,Nichols,&Polen,2006;Kaganova,
McKellar, & Peterson, 2006; McKellar, 2006b), where governments are realising their
reliance on the maximum performance of state assets in order to perform its main
function of public service provision, and are enthusiastic to reform its state asset
management policies. There is also an increasing realisation thatwithout efficient and
effective state asset management policies and practices the governments initial
investmentwould turn into a liability (or a loss). Jabiri, Jaafari, Platfoot,&Gunaratram
(2005)and Lin,Gao,Koronios,&Chanana (2007)agreewith thisnotionas theybelieve
that the operations and management of infrastructure assets are considered to be
expensive, extensive and or complex, and have amajor impact on performance over
extendedperiods.
Thepracticeofstateassetmanagementdiffersbetweencountries, inareassuchas; the
definitionofstateassetmanagementandwhat isconsideredtobestateassets,the level
of private (or corporate sector) involvement (i.e public private partnerships), the
accounting system used, the information system in place, and the level of state asset
managementpolicysegregationbetweencentral levelandregional levelofgovernment.
Interestingly,despitethevarianceinstateassetmanagementpolicies,commonchallenges
such as incomplete information system, accountability, and governance
adherence/conceptualisation are identified (Kaganova,McKellar and Peterson 2006).
Such common challenges has resulted in a surge of reform in state assetmanagement
practices, aiming for a best practicewhereby good governance principles are a central
consideration in the conceptualising (or drafting) of reformed state assetmanagement
policies and practices (Cornish & Morton, 2001; Kaganova & NayyarStone, 2000;
McSweeney,1999;Woodhouse,2004)
Althoughtheconceptualisationofgoodgovernanceprincipleswithinreformedstateasset
management policies is suggested, there is still ambiguity on the meaning of good
governanceconceptualisationwithinstateassetmanagementparticularly inregardsto
what is meant by good governance principles, which good governance principles are
conceptualised,andhowthesegoodgovernanceprinciplesareconceptualised.Therefore
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there isaneedforastudythatfocusesonunderstandingtherelationshipbetweengood
governanceandstateassetmanagementlawsandpolicies.
Countries suchasCanada,Australia,andNewZealandare considered tobepioneers in
stateassetmanagementreform,whereuponpractices introducedby thesecountriesare
consideredtobewelldevelopedandadvanced(Kaganova,McKellar,andPeterson2006).
Other countries such as Indonesia, China, Kuwait, Kyrgyztan, etc are identified to be
embarking on the journey of state assetmanagement reform, considered to be at the
earlystagesandareeagertolearnfrom(otherconsidered)advancedcountries(Kaganova,
Speakman, & AlSultan, 2003; O. Kaganova, Tian, & Undeland, 2001). Indonesia
exemplified its enthusiasm in reforming state assetmanagement policies and practices
through the establishment of the Directorate General of State Assets in 2006. The
DirectorateGeneralofStateAssetshavestressedthenewdirectionthat it istakingstate
assetmanagement laws and policies through the introduction of Republic of Indonesia
Law Number 38 Year 2008, which is an amended regulation overruling Republic of
Indonesia Law Number 6 Year 2006 on Central/Regional Government State Asset
Management (Hadiyanto, 2009c). Law number 38/2008 aims to further exemplify good
governanceprinciplesandputsforwardathehighestandbestuseofassetsprinciple in
stateassetmanagement(Hadiyanto,2009a).
This study will focus on analysing state asset management policies in Indonesia, in
particular reformed state asset management policies that were introduced with the
establishmentoftheDirectorateGeneralofStateAssets.Indonesiaischosenasacountry
casestudyforseveralreasons.
FirstlythereintroductionofgoodgovernanceprinciplesaftertheAsianFinancialCrisesin
1997 isanongoingprocesswithin thecountry,where improving theunderstandingand
implementationofgoodgovernanceprinciplesremainsaconstantthemeofallpresidency
regimes after Soeharto and is amain objective of the current presidency regime. Thus
there isapushforconceptualisinggoodgovernanceprinciples inallareasofgovernment
responsibilities, including state asset management. The Indonesian government and
society however acknowledges their tendency to remember the entrenched ways of
Soehartos regime,whichwas, toa certainextent, contradictory fromgoodgovernance
principles.Itisidentifiedthatthechangeinmindsetfromthefamiliaroldregimetonew
good governance principle abiding regime is incomplete. Therefore the intricacy of
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conflictingsetsofminds,entrenchedwaysofdoing things,and theoptimistobjectiveof
conceptualising and implementing good governance principles within public policies
providean interestingplatformforunderstandingthecomplexities in implementingstate
assetmanagementreform.
Secondly a review of state assetmanagement practices (of various countries) and the
literature on an integrated governance and asset management approach show that
althoughIndonesiaisacknowledgedtohaveinterestingcomplexitieswithinitsapplication
of reformed state asset management practices (Kaganova, 2006; MacAndrews, 1998;
MacAndrews&Saunders,1997),thereisanabsenceofstudiesonIndonesiasstateasset
management practices both prior to and after the introduction of state asset
managementreformin2006.Thisshowsthatthereismuchtodiscover,andwillhavethe
potentialtoaddtostateassetmanagementliteratureintermsoflearningcurvesforother
countries.
Thirdly Indonesia isunique inthesensethat it ismadeupof33provinceswithdifferent
regional cultures, level of resources (human, capital, physical), and government policy
objectives. Keeping this in mind, Indonesia introduced decentralisation and regional
autonomy regime in 2001, which transfers the authority of governing many sectors
(forestry, internationaltrade,etc)fromcentralgovernmenttoregionalgovernment.This
suggests there are potential complexities in the equal implementation of state asset
management policies across 33 provinces. A study that focuses on analysing these
potential complexitieswillnotonlyhave theoretical contributions that iswithin state
assetmanagement literaturebutalsopracticalcontributionsfor Indonesianstateasset
managementpolicymakers.
Theshortdiscussionabovehighlightstheheightened importanceofreformedstateasset
management practices that incorporate good governance principles and the current
untappedstateassetmanagementexperienceofIndonesia.Thisleadstotheformulation
ofastudythatfocusesonincreasingtheunderstandingofhowgoodgovernanceprinciples
interact and influence state assetmanagement laws and policies and create/establish
constructs of intricate relationships between various factors that play a role in the
conceptualisation,understanding,andimplementationofsaidlawsandpolicies.
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1.1 ResearchObjectives
The purpose of this study is to further understand the relationship between good
governanceprinciplesandpublicpolicy,within the contextof stateassetsmanagement
lawsandpolicieswithinIndonesia.Thismainobjectiveisbrokendownaslistedbelow:
1.Understandtheextentthatgoodgovernanceisconceptualisedandimplementedwithin
stateassetmanagementlawsandpolicies.
2. Identify and consider the risks of not understanding the relationship between good
governance principles and state asset management laws and policies, leading to the
identificationoffactorscontributingtocurrentstagnantstateassetmanagementreform.
3. Identify the level of state asset management actor understanding, in regards to
conceptualisingandimplementinganintegratedgovernanceandstateassetmanagement
approach.
4.Understandhow (and towhatextent)decentralisationandregionalautonomyregime
potentiallyaddscomplexitytotheimplementationofanintegratedgovernanceandstate
assetmanagementapproach.
5. Understand how political history and bureaucratic culture play a role in the
conceptualisationandimplementationofstateassetmanagementpoliciesandpracticesin
Indonesia.
1.2 MainContributionofStudy
Oneofthemainmotivationsofthisstudy istheabsenceofresearchonIndonesiasstate
asset management practices, in particular after the introduction of its reform and
establishmentoftheDirectorateGeneralofStateAssetin2006.
The importanceof this study is signifiedby its theoretical andpractical contribution. In
practicalterms,thediscussionandfindingsofthisstudycontributestotheknowledgeof
Indonesianstateassetmanagementactor.Asthere isnoexistingresearch inthisfield in
Indonesia,andthefactthatstateassetmanagementreformisIndonesiasfirstexperience
within the fieldofstateassetmanagementbestpractice, it is important to informstate
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24
asset management laws and policies makers and implementers of the intricate
relationshipsexistinginconceptualisingandimplementinganintegratedgoodgovernance
andstateassetmanagementapproach.
Inparticularthisstudywillthrowlightatrecurringquestionsfromstateassetmanagement
policymakers,regardingthestagnantimplementationofstateassetmanagementreform.
This informationcanbeconsideredasa learningcurveby Indonesianstatemanagement
actors in their path to state assetmanagement best practice, and has the potential of
beingincorporatedinfuturestateassetmanagementlawsandpolicies.
Intermsoftheory,thisstudycontributesinfourstreamsofliterature/areaofstudy.
Firstly, state asset management literature. This study contributes to state asset
management literature (andassetmanagementat large)byconsideringpoliticalhistory,
bureaucratic culture,and traditional societal cultureas independent factors thatplaysa
roleintheassetmanagerorassetuser(i.epolicyimplementers)perspectiveandapproach
toimplementationofassetmanagementrelatedlaws,policies,andtechnicalguidelines.
Secondly, public policy reform literature. This study identifies wicked problems and
themes for consideration by the Indonesian government in their drafting, establishing,
introducing,andenforcingofpublicpolicyreform.Onawiderscaleofpublicpolicyreform
literature, this study further emphasise the impact of country uniqueness in the
conceptualisationandimplementationofpublicpolicyreform.
Thirdly, good governance literature.A focusof this study is an indepth explorationof
howgoodgovernancecanbeconceptualisedwithinapublicpolicy(takingasanexample
state assetmanagement laws and policies), and how well such a conceptualisation is
understood and implemented by public policy makers and implementers. This study
highlights the potential mismatch in good governance perception and understanding
between public policymakers and implementers. This study also highlights the crucial
factors that contribute to the divergence of good governance understanding and
conceptualisation,andquestionwhetherconvergencetoonegoodgovernancestandardis
an ideal expectation of public policy makers, in consideration of unique country
characteristics.
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Fourthly,localgovernmentresearch.Thisstudycontributestolocalgovernmentresearch
byquestioning themeritsofadecentralisationand regionalautonomy in implementing
nationalpublicpolicyreformandprovisionofpublicservice.
Basedontheidentificationoftheoreticalandpracticalcontributionsofthisstudyabove,it
isconcludedthatthisstudyisofhighsignificanceandjustified.
1.3 ThesisStructure
Thisstudywillbestructuredasfollows.
Chapter 2 provide a literature review of available integrated governance and asset
managementliteratureandstateassetmanagementliterature,highlightingtheneedfora
study that focuses on the conceptualisation of good governance principleswithin state
asset management practices and the need for a study that focuses on Indonesias
reformedstateassetmanagement.Chapter2isdividedinto7sectionsinordertoprovide
acomprehensiveillustrationofthegapsinacademicresearchandpotentialcontributions
ofthestudy.
Chapter3 identifiestheoverarchingresearchquestionsandresearchquestionswithin it,
inparticularproviding the rationalebehindeachquestion.Chapter threealsoprovidea
conceptualframeworkthatillustratesthepurposeofthisstudy.
Chapter 4 is themethodology chapter outlining the epistemology that underpins this
research, the qualitative nature of the research, the research design, data collection
methods, and analyticalmethods.Chapter 4 alsoprovides an accountof thepilot case
study, inparticularconcentratingon lessons learnt inregardstotheconceptualisationof
governance principles within an asset management practice and in regards to data
collectionmethods.
Chapter 5 to Chapter 7 arewhat Yin (1994) describe to bewriteup of case studies, a
qualitativestudytechniquerecommendedbyMilesandHubermann(1994)asafirststep
incrosscaseanalyticalapproach.Thuschapter5to7arerichwriteupofcasestudiesof
the Directorate General of State Assets, DKI Jakarta, Gorontalo, and DIY Yogyakarta
consecutively.
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The structure of each chapter highlights the government structure of the regional
government, political history and accepted traditional culture/norms, experience with
state assetmanagement prior to the reform, detailed explanation of the case studys
interpretation and/or approach to state assetmanagement reform, and any identified
challenges in the conceptualisation and implementation process of state asset
managementreform.
A crucial objective of each case studywrite up (chapter) is not only to highlight their
experiencewith the stateassetmanagement reform,butalso tohighlighteach regional
governments unique characteristics such as traditional culture, political history,
governments objectives and current socioeconomic and political conditions, etc and
howitplaysaroleintheirversionofstateassetmanagementreformandanychallenges
identified.
Asthestrengthofthisstudyisinitsqualitativenature,anyconclusionmadeoremergent
issues/themesidentifiedwillbesupportedbystatementsfromintervieweesnotonlyto
asa justificationtoolbutalsotoprovidethereaderwithaclearerpictureofthetrainof
thoughtthatleadtosaidconclusionand/oremergentissue.
Chapter8providesa tabled illustrationofgoodgovernanceprinciplesconceptualisation
withinstateassetmanagementlawsandpolicies,aswellasthelevelthatitisunderstood
andimplemented.Thisisdonethroughthegoodgovernanceevaluatortable,whichallows
aconclusionregardingthelevelthatagoodgovernanceprincipleisconceptualisedwithin
a stateassetmanagement lawand/orpolicy. Italsoprovides information regarding the
structureofvariousstateassetmanagementlawsandpoliciesaseachlawisevaluatedon
aclausebyclausebasis.
Chapter9,titledpreliminaryanswerstotheresearchquestion,isbasedonanalysisofthe
good governance evaluator tool and coding of interviewees opinions (based on the
researchquestionsandotheremerging issues).Thenatureofresearchquestionanswers
providedinthischapterispreliminary,utilisedasaplatformtoidentifyemergingthemes
orcrucialissues(andperhapsinterestingissues)inneedoffurtherdiscussion.
Chapter10discussesallinfluencing/contributingfactorstoanintegratedgoodgovernance
approach as identifiedby interviewees throughout thedata collectionprocess.Hintsof
influencing/contributingfactorsdiscussedinthischapterareevidentinchapter5onwards,
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howeveranalysisofthevalidityandrelevanceof influencing/contributingfactorsarenot
yet performed. The discussion of influencing/contributing factors in Chapter 10 is
focussed on positive and negative comments regarding each impeding variable, in an
attempttoprovevalidityandrelevancetostagnantintegratedgoodgovernanceandasset
managementapproach in Indonesia.Thischapteralsotouchedonthesubjectof excuse
rhetoric,aconceptsupportedbyBessant(2010) inherstudyof influencing/contributing
factorsinimplementingpublicpolicyreformindevelopingcountries.
Theanalysisanddiscussions inChapters8,9,and10have resulted in theemergenceof
crucialthemes,interestingwickedproblems,challenges,andotherissues.Howeverthese
aremerelyidentifiedinthepreviouschapters,butnotyetdiscussedindepth.Chapter11
fills this gap by providing an indepth discussion of each crucial theme or interesting
wickedproblems,discussingtheirviability,potentialrelationshipbetweeneachother,and
its role in the conceptualisation of good governance principles within state asset
managementlawsandpolicies,andtheimplementationofsaidlawsandpolicies.
Chapter12concludesthethesis.
1.4LimitationsoftheStudy
Limitationsofthisstudyexist,howevermoreoftenthannotitismitigatedbythenatureof
thestudyand/orformulatingsaidlimitationintoanareaforfutureresearch.
Thefirstlimitationofthisstudyisthespecificitynatureofthestudy,wherebyfindingsof
the study are tailoredwithin the contextof Indonesia. That said, a literature reviewof
available state asset management research that is focused on the experience of a
particular country (see Chapter 2) reveals that Indonesia is a neglected country in the
research field,be itpreorpost stateassetmanagement reform.Aswithmany country
specific studies, it is themethodology and analytical frameworkof this study thathold
transferabilitypotential.Indonesiasexperiencecanbedrawnuponbyothers,inparticular
thoseofsimilargovernmentstructure,politicalhistory,andbureaucraticculture.Although
specific in nature, the depth of this study and observationsmade contributes to the
dialogue of how governance principles are conceptualised in state assetmanagement
public policywithin the intricacy of political history and culture, thus asmentioned in
section1.3contributestoawidearrayofacademicliterature.
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Thesecondlimitationofthisstudyisthesamplenumber(n),ifcontrastedwiththesizeof
Indonesiascentralandregionalgovernmentcohort.Thenumberofcasestudiesinvolved
in this study is the central government itself and three provinces, encompassing
approximatelytenregionalgovernments.Thismaybeconsideredsmall,considering that
there are 33 provinces in Indonesia and approximately 154 regional governments.
However the purpose and scope of this research is not that of quantified generalised
findings; rather the purpose of this study is to enable indepth understanding and the
ability to construct relationships of relevant factors that depicts the complexity of
integratedgoodgovernanceand stateassetmanagement reform,and itsunderstanding
and implementation, in Indonesia. Tomitigate this limitation, intervieweesof thisstudy
aresourcedfromdifferentlevelsofregionalgovernmentwithinaprovince(i.eprovincial,
regency,andcity levelgovernment),aswellasensuring that the threeechelon levelsof
Indonesias government structure (high,middle, low) are represented in each regional
government.Not only does this allows a triangulation in the interviewing and analysis
process, it also allows direct links to be made to illustrate the relationship (and any
challengeswithinit)betweenthepublicpolicymakerandimplementer.
The third limitation of this study is the snapshot nature of the study. The studywas
performedbetween20092011,withdatacollectionperformedbetweenJanuaryandJuly
2010.Itisrecognisedthatmanyofthefactorsdiscussedinthisstudyiscorrectatthetime
ofthestudy,however it isalsoacknowledgedthatthesefactorsareofevolvingnature
forexample theestablishmentand/orabolishmentof lawsandpolicies, levelofhuman
capacityandcapability,etc.Aconcreteexample isthe levelofauditopinionprovidedby
the external audit body, which by the Indonesian government is acknowledged as a
quantifiablemeasure of the quality of state assetmanagement practices. The external
auditbodyperformsitsauditonaquarterlybasis,whichsuggestsapotentialforevolving
level of opinion rewarded to regional governments. The external audit bodys opinions
drawnupon from thisstudy is thatofQuarter1of2010,andQuarter2of2010 (during
datacollectionperiod),hencecorrectat the timeofwritingonly.Thatsaid, thisstudy is
the firstwithin the context of Indonesias integrated good governance and state asset
management approach, and a longitudinal study isnot themainpurposeof this study.
Rather this study isofanexploratorynature,attempting tounderstand the intricacyof
conceptualising and implementing an integrated good governance and state asset
managementapproachinIndonesia.
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2.LiteratureReview2.0IntroductionThemainpurposeof thisstudy is to identify theextent thatgoodgovernanceprinciples
are conceptualisedwithin reformed state assetmanagement policies in Indonesia, and
understandthecomplexitiesthatimpactimplementationofsaidstateassetmanagement
policies.
A review of assetmanagement literature show a common theme ofmeasuring asset
performance,howeverthis isnotwithinthecontextofthestudy.Areviewofnewpublic
management (NPM) literature, and to a certain degree public asset management
literature,hashighlighted the importanceofaccounting reformsandperspectivewithin
thegovernmentinsupportofreformedstateassetmanagementpolicies.Althoughthisis
acknowledgedtobeacrucialstep in increasingefficiencywithingovernmentprocedures
and isofhigh importancetopublicassetmanagement, it isalsonotamainfocusofthis
study.Thereforealthoughaccountingresearchmaybe identified/discussedbrieflywithin
thestudyfromtimetotime,duetothepurposeofthisthesiswhereaccountingresearchis
identifiedthethesiswillnotbetakingthisperspective. Thisstudyfocuseson identifying
andunderstandingtheconceptualisationofgoodgovernanceprincipleswithinstateasset
management,thelevelthatsuchaconceptualisationisunderstood,andthevariablesthat
impacttheimplementationofreformedstateassetmanagement.Hencethisstudyfocuses
on the background or the underpinnings of the phenomena. To do so this literature
reviewwillbedividedintosevensectionsasdetailedbelow.
Section1aims tounderstandandanalyse thedefinitionsandassumptionsofbothstate
assetmanagementpracticesandgoodgovernanceprinciples.Thissectionwilldetail the
variousdefinitionsof state assetmanagement and identify common characteristics and
assumptions. Itwill then explore the definition of good governance and its principles,
paying particular attention to assumptions that are found within governance theory.
Furthermore this section will explain the known role of governance within asset
management practices, exemplifying it through the introduction of the term asset
governance;which is found in other contexts of assetmanagement (i.e physical asset
management). This will allow further understanding of the relationship between
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30
governance and asset management, as well as highlight any issues and complexities
evidentwithinassetgovernance.
Section 2highlights current state assetmanagementpractices indifferent countries, in
particular drawing out the common challenges and/or complexities. According to
Kaganova and McKellar (2006) unique conditions of each country needs to be taken
account despite drawing common conclusions, therefore this sectionwill highlight the
extent that unique country conditions impact state assetmanagement practices. This
sectionalsoaddressesthenotionofgoodbestpracticeinstateassetmanagement.
Section 3 outlines the history (prereform 1969 2006) of state assetmanagement in
Indonesia,reflectingontheroleofpoliticalandculturalhistory.Thissectiondiscussesthe
FiveYearDevelopmentPlans(REPELITA)ofIndonesiasince1969to2009,whichhasbeena
fundamentalguidefornationaldevelopmentrelatedpolicies inIndonesia.Thediscussion
of theseplanswillallow identificationofcommonchallengesand/orcomplexities found
overanumberof years (since the introductionofREPELITA)up to the reform (of state
assetmanagementpractices)in2006.Thissectionwillalsohighlightanyuniqueconditions
within Indonesia thatmay impede the implementation of a fully efficient and effective
stateowned asset management policies, and needs to be taken into account when
comparing common challenges and/or complexities (in state assetmanagement) with
othercountries.
Section 4 focuses on understanding the reform in state assetmanagement policies in
Indonesia from theyear2006onwards (topresent).Thissectionwilloutline theaimsof
thereformand itsprocess, inparticularexplainingtheroleoftheDirectorateGeneralof
State Asset Management. As a reform is expected to address problems or identified
challengesand/orcomplexitiesofpreviouspractices,thissectionevaluatestheextentthat
currentreformaddressespaststateassetmanagementchallengesand/orcomplexities(as
identifiedinsection3).
Section 5 The purpose of this study if to understand the extent that good governance
principles are conceptualised and understood within Indonesias reformed state asset
management policies. Section 5 analyses reformed state assetmanagement from the
perspectiveofgoodgovernance, inparticular the conceptualisationof itsprinciplesand
theextentthatgovernanceassumptions(asperidentifiedinsection1)areaddressed.
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31
Section 6 draws upon the findings of Kaganova and McKellar (2006), discussing the
possibilityforacountrytosabotageimplementationofstateassetmanagementthrough
the introduction of other types of reforms (in other sectors of the economy), a new
regime, or new constitutions and rules and regulations. One of the main changes in
Indonesias governing system is the implementation of decentralisation and regional
autonomy policies in 2001. This section focuses on explaining the definitions and
assumptionswithindecentralisationandregionalautonomy,andtheeffect ithashadon
regional governments within Indonesia. This section continues on to exploring the
potentialcomplexitiesthatdecentralisationandregionalautonomymayimposeinregards
toimplementationofreformedstateassetmanagementpractices.
Section7concludes the literature reviewbyhighlighting thecontribution to theoryand
practiceandthemainargumentsofthisstudy.
2.1.StateAssetManagementandGovernancePrinciples
Thissectionwilldiscussthevaryingdefinitionsofbothstateassetmanagementandgood
governance,inparticularidentifyingthedefinitionsthatwillbeusedinthisstudy.Known
assumptionswithineachconceptinparticularwithincyclesoftheassetmanagementlife
cycle and within each governance principle will also be discussed. This section also
explorestheknownrelationshipbetweenassetmanagementandgovernanceknownas
assetgovernance found inadifferentasset typesand context;highlighting the roleof
governanceprinciples,implementationexperiences,andcomplexitiesfound.
2.1.1DefinitionandAssumptionsofStateAssetManagement
2.1.1.1DefinitionofAssetManagement
Priortothediscussionofwhatisconsideredtobestateassetmanagement,itisimportant
tounderstand itsunderpinning:assetmanagement.Understandingofassetmanagement
willcreateknowledgeonwhatisconsideredtobeassetmanagement,processesinvolved
withintheconceptandpractice,consideration(s)forimplementation,assumptionswithin
assetmanagement,andothertheoriesinvolvedwithinassetmanagement.
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32
Assetmanagement isdefinedasa strategic, integrated setof comprehensiveprocesses
(financial,management,engineering,operatingandmaintenance)togaingreatestlifetime
effectiveness,utilisation,andreturnfromassets(Mitchell,2002;Mitchell&Carlson,2001).
Wittwer,Bittner,&Switzer (2002)believes thatassetmanagement isadecisionmaking
toolthatcreatesaframeworkforbothlongandshorttermplanning,whichencompasses
a systematic process ofmaintaining, upgrading, and operating assets.Wenzler (2005)
providesariskbaseddefinitiontoassetmanagement,inparticularutilisingtheknowledge
of identifying, designing, constructing, operating, and maintaining assets in order to
optimisetradeoffsamongfinancialandoperationalperformancerisks.Woodhouse(2006)
seconded taking the riskbased approach to asset management whilst ensuring the
achievementoforganisationgoalsbydefiningassetmanagementas the systematicand
coordinatedactivitiesandpracticesthroughwhichanorganisationoptimallymanages its
assetsand theirassociatedperformance,risksandexpendituresover their lifecycles for
thepurposeofachievingitsorganisationalstrategicplan.
Fromthesnippetofvariousassetmanagementdefinitionsaboveitcanbeconcludedthat
common characteristics of assetmanagement are keywords such as the importance of
strategy, systematic processes, optimising efficiency, and consideration of various risk.
Asset management involves activities where there is integration between strategic
planningandoperations,maintenance,andcapitalinvestmentdecisionmaking.Themain
aimofassetmanagementistoincreasetheefficiencyofassetswhichcomprisesenhancing
the productivity, maximising the asset lifecycle and minimising the total cost of
ownership. Cornish andMorton (2001) suggested that such a goal can be achieved by
understanding business costs and performance drivers, determining investments to
optimiseperformanceandoperationcosts,managingthedeliveryofnetworkperformance
and investment programs, monitoring asset conditions, and devising appropriate
maintenancepolicies.
2.1.1.2DefinitionofStateAssetManagement
The concept of state assetmanagement itself is not particularly new, however it is a
concept that has continually changed in phrase aswell as in its overall definition. Jim
(2007) provides a simple definition to state assetmanagement: A continuous process
improvement strategy for improving the availability, safety, reliability, and longevity of
assets i.e systems, facilities, equipment, and processes. Cagle (2003) argues that a
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33
practicalworkingdefinitionofstateassetmanagement isembodied intheknowledgeof
threecrucialaspects:a)whatassetsareavailable,b)theconditionofassetsavailable,and
c)thefinancialburden itwillcosttomaintaintheavailableassetatatargetedcondition.
Cagle (2003) further stated that stateassetmanagement refers toa setofprocessesor
activities addressing the proactivemanagement of capital assets and/or infrastructure.
Thisincludes:
1.Maintaining a systematic record of individual assets as an inventory,with regard to
acquisitioncosts,originalandremainingusefullife,physicalcondition,andcosthistoryfor
repairandmaintenance.
2. A defined program for sustaining the aggregate body of assets through planned
maintenance,repair,and/orreplacement.
3. Implementing and managing information system in support of asset management
practices.
Itisimportanttonotethatdifferentcountrieshaveadifferenttermforstateassetssuch
as property assets, public assets, public infrastructure assets, and state infrastructure
assets. Although there is a slight difference as towhat is considered to bewithin the
differentscopeofeachterm,thereisacommonthemeinthesensethattheseareassets
that areownedby the government, its function is to allow the government toprovide
public services, and in most cases are utilised or occupied by either a government
institutionorisavailableforpublic/societyuse(Kaganovaetal2006).Hencethisliterature
reviewwillalsolookatdefinitionsofstateassetmanagementwheredifferentassetterms
(i.epropertyassets,publicassets,stateinfrastructureassets,etc)areused.
Kaganova&McKellar (2006) describe public property assets as state asset that do not
directly address the ownership ormanagement of public housing, basic infrastructure
facilities,orparkland.Notbecausetheyarenotimportantassuch,butbecausetheyraise
particular issues that deserve targeted attention of their own (Kaganova andMcKellar
2006).Whatisexaminedismainlyurbannonresidentialrealestate,includingvacantland,
ownedbygovernmentsand theirvariousauthoritiesorentities.However it is identified
thatpublichousingandbasic infrastructurefacilities(intheformofbuildings)areassets
thatallowthegovernmenttoprovidebasicpublicservice(Schulte&Ecke,2006).
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Hencetypicalrealestateorstateownedportfoliosincludeschools,kindergartens,public
offices, recreation facilities, hospitals,museums, parklands, and vacant lands;whereas
properties such as prisons, military facilities, universities, and federal offices are not
typicallyconsidered in themanystudies thatanalysesstateassetmanagementpractices
withinaparticularcountrycontext(SchulteandEcke2006).
Aunifiedacademicdefinitionofstateassetmanagement isatpresentabsent whereby
existing definitions are industry based or within a country context (i.e various
governments).AccordingtoKaganovaandMcKellar(2006)themainreasonforthisisthat
despite the importance of topic, the topic has not attracted sufficient attention from
researchers. Gruis, Nieboer, & Thomas (2004) offer a generic asset management
definition that seems to be popular in state assetmanagement practices (for example
withintheworksof(Kaganova,2006;Peterson,2006).Gruis,Nieboes,andThomas(2004)
definestateassetmanagementasthemanagementprocessthat involvesanalysisofthe
performanceofanorganisationsassetsinsupportofdecisionsaboutholding,selling,and
repositioning.Theflexibilityofthisdefinitionisthatanalysiscanbeconductedatthelevel
of individualproperties,aparticularclassofproperties,ortheorganisationsentireasset
portfolio;contributingtothepopularityofthedefinition.
Agovernmenttypicallyownsavastarrayofassetsthatsupportsthedailydeliveryofbasic
servicesthatisdeemedtobeagovernmentspurpose.Itisnotedthatthemostcommon
management government (or state) assets are is highly fragmented with different
categoriesofassettypesfallingwithindifferentjurisdictionorbureaucracy,orevenwithin
differentpoliciesandprocedures.Kaganova,McKellar,andPeterson(2006)observedthat
in almost all countries different classes of property, or different types of stateowned
assets,aremanagedaccordingtotheirownrules;oftenadheringtotraditionalpractices
rather than anyassessmentas towhat typeofassetmanagement ismostappropriate.
However Kaganova,McKellar, and Peterson (2006) also noted that there has been an
increasing interest in thearea,whereuponanewdiscipline thatcriticallyconsidersstate
assets as a component of public wealth and seeks to apply standards of economic
efficiencyandeffectiveorganisationalmanagementisemerging.
Fromabroadperspective,thetaskofapublicpropertyassetmanagercanbe likenedto
thatofacorporationholdingamixedportfolioofrealproperties,ortoamixedusereal
estateinvestmenttrust(Kaganovaetal2006;CornishandMorton2001).Atonelevelitis
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decidedhowtomanageindividualpropertyholdingsthismeanshowtooperate,market,
andmaintain them. At a higher level there needs to be common rules to guide and
motivateitspropertymanagerssothatthesameguidelinesregardingeconomicefficiency
andothervaluesareappliedthroughouttheorganisation.
2.1.1.3KeyDimensionsofStateAssetManagementandAssumptions
Shenhav(2003)providesaviewofsystemisersthosewhoapplymechanicalengineering
methods to the administrative restructuring of firms within the context of asset
management.Theconceptofasystemassumescoherenceandautonomy,wherecarefor
the smallest and most important details of a particular work aspect is treated
systematicallyandgivenhighpriority.Thereforethereisarelianceonemployeesfollowing
asetofstandardprocedures,inordertoensurepeakconditionoftheirassetsinorderto
maximiseperformance.Thissuggeststhatoneofthekeydimensionsofassetmanagement
is regulatory compliance,where it is crucial for employees to adhere to standardised
proceduresandspecificationsinordertoensureoptimumassetperformance.Thisleadsto
the need of accountability as a monitoring function where decision makers are held
accountableforanyassetrelateddecisions.
2.1.2DefinitionandAssumptionsofGoodGovernance
2.1.2.1DefinitionofGoodGovernance
Governance is defined as a process that supports regulations, policies, and procedures
whichensureorganisationsrunintheinterestofstakeholdersandresourcesareallocated,
managed, and redeployed in amanner thatmaximises productivity and value (Alles,
Datar,& Friedland,2005;Bhner,2000;Considine& Lewis,2003;Narracott&Bristow,
2001;Schmidt&Brauer,2006)Thedefinitionofgoodgovernanceandidentificationofits
principlesisattimesconfusedordeemedtobeinterchangeablewiththedefinitionsand
principlesofcorporategovernance.Admittedly,whenonelooksatthedifferencebetween
definitions andprinciplesof good governance and corporate governance,onemay find
onlyveryslightdifferences.Accordingto(Ouchi,1979,1980)thisismostlyduetothefact
that the fundamental governance theory of both concepts is similar,whereupon both
conceptsadheretofiduciaryduty,agencytheory(seeworksof(Jensen&Meckling,1976),
and to a certain extent transaction economics theory (see works of (Coase, 1936;
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Williamson,1984;Williamson,1979,1988,1999).Itistheapplicationofeachconcepti.e
goodgovernancewithin thecontextofgovernment institutionsandpublicservants,and
corporate governance within the context of the corporate sector that provide the
contextofitsdifferingassumptionsandcomplexities.
Todefinegoodgovernance requires theacknowledgementof corporategovernance,as
corporategovernance (or lackof) isconsidered tobe the trigger to the resurfacingof
governance theory, and also the questioning of how governments govern their nations
(Mardiasmo,2007).Corporategovernance isrecognisedasanessential instrumentwhich
evolves rapidly,where there is a constantevolvementof its keydimensions (Mathur&
Melvin, 2004; Narracott & Bristow, 2001). This suggests a potential implication for
organisationaloutcomes rapid evolvementof keydimensions require theneedof re
alignment on a periodical basis which may prevent full implementation of corporate
governancewithin theorganisationandpreventoptimumperformanceofemployees in
delivering organisational outcomes.Despite this corporate governance remains to be a
popular framework,particularlyafter themanycorporatecollapses (suchasEnron,HIH,
OneTel,etc)wherelackofcorporategovernanceispinpointedasthecausebehindthese
collapses. As a result corporate governance requirements grew in significance (Abdel
Khalik, 2002; Benston & Hartgraves, 2002; Ronen, 2002), where various corporate
governance standards, codes, and policy reforms emerged. This suggests there are
different definitions of corporate governance, varying depending onwho introduced a
particularcorporategovernancestandard.
Goodgovernancehasbeenamain literarydiscussion inmany countries,with literature
heavily concentrated on African countries (Bardill, 2000; Carroll, 2001; Harris, 2001;
Hintjens,2000;Hope,2002;Matanga,2005;McMahon,2005;Mensah,2005;Philander&
Rogerson,2001;Pillay,2004) EuropeanUnion (Crawford,2002;Kranenborg,2003), and
Asia Pacific countries (Bryant, 2001;Guess, 2005; Li, 2003;Ray, 1999; Sparke, Sidaway,
Bunnell,&GrundyWarr,2004;Velayutham,2003).Goodgovernanceisfocusedonaclean
governmentthatprovidesqualityservicetowardsitssociety/community,transparentand
participative in itsdecisionmakingprocess,and isaccountablefor itsactionsatalltimes;
bothunder legaland society scrutiny (Alter,2002;Bardill,2000;Beeson,2001;Berman,
2006; Caddy, 2001; Doig, 1995; Doornbos, 2003; Gilbert, 2006; Gorontalo, 2004;
Kranenborg, 2003; Lindsey, 2004;Morrison, 2004;Northover, 2005; Ray, 1999; Rogers,
2003;Simpson,2006;Subramaniam,2001;Tisdell,1997;Weiss,2000).
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Itisacknowledgedthatgoodgovernanceisthebasicconditionforstabilityandprosperity
inallcountries,wherenationswhoareabletosustainhighstandardsofgovernancewill
succeedwhileotherswillstruggle(Elsner,2004;Roy&Tisdell,1998).TheADB(2004)has
identified thatgoodgovernancecomprises the followingelements:participation, ruleof
law,accountability,transparency,equity,effectivenessandefficiency,professionalismand
effectivemanagement serviceorientation,andmonitoringofperformance.According to
theUnitedNationsEconomicandSocialCommission forAsiaand thePacific (UNESCAP),
the true testof goodgovernance is thedegree towhich itdeliverson thepromiseof
humanrights:civil,cultural,economic,politicalandsocialrights(UNESCAP,2007).
The main emphasis and key dimensions incorporated within the different codes of
governancecanberelatedto(Eisenhardt,1989)opinionofwhatgovernanceisitisan
informationsystemthatisdesignedasameansofmonitoringmanagerialperformanceto
detectdysfunctionaldecisionmaking,where itsmechanismscanbeemployedtomonitor,
controlandobservetheactionsofmanagersinordertoidentifythosewhofailtomaximise
firmvalue.
Fivecommonkeydimensions ingoodgovernancecanbeextracted from thevarianceof
governance literature discussed above: accountability, stakeholder participation,
regulatory compliance, transparency,andefficiency. Lampel (2004) suggests thathard
governance, one that is based on rules, formal mechanisms, and stringent legal
enforcementiscrucialatatimeofcrisisortorecoverfromcrisis.HoweverGrandori(2001)
andLampel (2004)alsopointedouttheneedtobalancethiswithsoftgovernanceone
that isbasedon loyalty, trust,and informalobligation inorder toachieveabalanced
workforcethatdeliversorganisationaloutcome.
2.1.2.2GoodGovernancePrinciples
A.Accountability
Accountability has a prominent place in the discussion of politics, regulation, and
governanceprinciples (O'Brien&Dubnick,2009),whereby itsdefinitiongoesbeyondthe
prescribed text of financial reports. Accountability is recognised in many fields as a
keywordand thushasa varianceofmeaningdependentupon its context;however the
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process of reinterpretation of different interestsmay in fact result in a secure narrow
conceptionofwhataccountabilityis.
Borrowingthetableofaccountabilitysdiscursiverolesandmeaningsthat isOBrienand
Dubnicks(2009),accountabilitycanbecategorisedbasedontwofactors:focuswhether
it isacauseoracure,andperspectivewhetheraccountability servesasamechanism
controlorasasetting (normative infrastructure).Asacausal factor, it is theabsenceor
failureofeffectiveaccountabilitythatprovidedthefocusofdiscourse.Asasolution/cure
however,accountabilityhaslandeditselfcentralstagetomanydiscussionsonhowtodeal
with specific failures, such as:manifestations ofmalfeasance andmisfeasance such as
deceptiveormisleadingconduct,unethicalconductlinkedtodefectiveinternalcorporate
codes of conduct or governance arrangement, and/or the operation of the external
regulatoryarchitecture.Asamechanisticfeaturebeingaccountablesuggestsbeingsubject
tothosemechanismsthataredesignedtoimposesomeformorcontrolorguidance.Asa
manifestation of the normative condition however, being accountable is thought of
something an agent is or ought to be. Friedrich (1940) regarded accountability as a
conditioninstilledinpublicofficialsastheybecomemoreprofessional.Thusinthecontext
of government officials accountability is associated with concepts such as integrity,
trustworthiness,blameworthiness,etc.
Accountabilityalsoreferstothelevelthatgovernmentofficialsarebeingheldaccountable
fortheiractions,decisions,andispreparedfortheconsequences.Howevertheambiguity
of theword allows for rhetorical commitment to particular courses of action,which at
time lacksempiricalevidence inapplication. Ithasbeenobserved thatdespite repeated
assurances of commitment to greater transparency and accountability,many industry
pra