Doctor of Philosophy
School of Accounting and Finance
Hudaya, Muhammad, Understanding the practice of accountability reporting: a case of Indonesian local government, Doctor of Philosophy thesis, School of Accounting and Finance, University of Wollongong, 2014. https://ro.uow.edu.au/theses/4114
This study, a case study conducted within an Indonesian local government, seeks to explore the practice of accountability reporting of Indonesian local government following the decentralisation reform that occurred in 1999. The reform was intended to be an antithesis of the practices of the Soeharto regime, under which the accountability system of local governments had been dominated by the New Order regime. This was possible due to pressure put on public officials: being submissive to the regime was their only choice, if they wanted to remain in public office. As a result, public officials, including governors, mayors and regents were more accountable to the regime (the central government) than to the public. The accountability reports of local governments, for instance, were not made available to the public.
The study particularly investigates the practice of local-government accountability reporting and the role played by local parliament in assessing these reports in the post- Soeharto era, during which the socio-political landscape has changed: from an authoritarian and centralised to a democratic and decentralised country; and from a limited political party system to a multi-party system. Ontologically, this study argues that accountability reporting is a socially-constructed reality, as individuals involved in the preparation of accountability reports bring their respective habits, and over time the process becomes an organisational routine. This study draws on institutional theory as a main theoretical lens, and power and leadership theories as complementary ones. The study argues that to secure legitimacy, the local government employs a two-pronged approach that extends to the organisational and societal field.
This study found that the local government is now required to submit their accountability reports to three parties: the central government, the provincial parliament and the public (the reports are the LPPD, LKPj and ILPPD respectively); previously only the central government and the local parliament had been regarded as the audiences for the reports. However, while the public now receives a report (the ILPPD), it contains only a summary of the report submitted to the central government (LPPD). In addition, the ILPPD is also not made available in a timely way (it can be as late as a full month after the latest time allowed by the provision).
Furthermore, it is apparent that the practice of accountability reporting as conducted by local government is socially constructed, because interaction among the members of the government is shaped by the key actor (the governor, along with his circle), mainly through social relationships rather than formal ones, and by the key actor’s interests of bolstering legitimacy and maintaining power. In addition, there is decoupling between what the relevant regulations set forth and what the local government actually does. Among the three institutional isomorphisms practised by the local government—coercive, mimetic and normative— it is evident that the local government is more susceptible to coercive isomorphism, although it is also influenced to a lesser degree by mimetic and normative isomorphism.
The study also found that the accountability forum— the forum in which the key actor (the governor) is supposed to be held accountable by local parliament— is at present a largely ceremonial and symbolic arrangement held annually to meet the letter (rather than the intention) of the relevant provisions. It is evident that the accountability forums do not fully meet the accountability-discharge function that might have been hoped for. This is in part because the local parliament currently lacks a reliable framework with which to assess the local government’s accountability report.
In the societal field, this study found that the governor is closely engaged with the prevailing institutions to obtain public legitimacy. There are at least three such institutions to which the governor has conformed and through which he has sought legitimacy: paying attention to religious symbols such as mosques and langgars; attending religious rites; and being respectful towards and maintaining good relationships with gurus. This is confirmed by the way the local government is run by the governor: by aligning the local government's work programs with the prevailing institutions embraced by the society. Discharging public accountability through being open to scrutiny on the performance of local government has been less important as a means to achieve legitimacy, and has thus been somewhat neglected.
This study’s empirical findings suggest: first, that the accountability report for the public (ILPPD) should be available as a full account not a summarised report, as suggested by some theorists; second, that the ILPPD should be available in a timely basis, as the failure to make accountability reports available timely will impair the practice of democracy (Boyne & Law, 1991); and third, that an accountability forum for the public should be incorporated into the local-government accountability system along with the accountability forum in the local parliament, since the absence of such a public forum undermines Indonesia’s claim to be a democratic country.
This study offers a unique contribution considering its setting, Indonesia, which is a multi-ethnic, diverse culture with numerous local languages, and the third-largest democratic country in the world after India and the US. This study also contributes to knowledge by investigating the practice of accountability reporting in the changing organisational environment following the fall of the Soeharto regime (1967-1998).