Chapter 9 Making Indonesia's budget decentralization work: The challenge of linking planning and budgeting at the local level

Indonesia is an ethnically diverse nation with large interregional poverty differences and variations in regional population density.¹ However, under Suharto's highly centralized “New Order” regime, local service delivery agencies were administrative instruments of remote national ministries and unresponsive to the individual priorities and problems of varied local communities. The abrupt nature of the 2001 decentralization has been interpreted by some as an insurance policy against fragmentation following the disturbances at the close of the highly centralized Suharto era.²