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Indonesia’s bureaucratic reform initiatives: How to be an agile government


What is an agile government, and how can it be achieved? 

Agile is a well-known approach in the IT industry, where teams create deliverables in small incremental value within an iteration to achieve one big final goal or a product. This approach supports continuous development and allows teams to shift quickly when necessary because clients may ask for drastic changes. 

Given the kind of results produced by the agile approach, it has attracted not only the IT industry but also the public sector and governmental institutions. To better understand the agile principles, let’s take a look at how Indonesia is reforming its bureaucratic system and implementing new strategies.

Bureaucracy in Indonesia

Indonesia is one of the countries in ASEAN that already put some effort into being agile by reforming its bureaucracy. President Joko Widodo expressed this intention in his speech at the Sentul International Convention Center on July 14, 2019. He recommended structural reform “so that institutions are simpler, more agile.”

Indonesia has a total of 217 government agencies, 31 ministries, and 98 statutory agencies as of 2014, based on the data of the Institute of Public Administration Australia. In the World Bank’s Mapping Indonesia’s Civil Service report, Indonesia’s civil service has increased by 25 percent from around 3.6 million in 2006 to over 4.5 million in 2018. 

Bureaucracy bleeds several problems, ranging from corruption to low performance. The study “A Structural and Mindset Bureaucratic Reform Agenda for Jokowi’s Second Term.” published in May 2020, cited data from the Commission of Corruption Eradication (KPK) showing that in 2018, out of 2,357 civil servants who had committed corruption, only 891 were dishonorably discharged and 62 percent have not been fired and are still receiving salaries.

Indonesia’s six strategic steps

The bureaucracy culture of the Indonesian government can be traced back to its history of colonialism. But the country continues to aspire for reforms to give the public quality service. Its bureaucratic reform initiatives will be implemented according to the Grand Design of Bureaucratic Reform 2010-2025.

Bureaucratic reform, according to Indonesia’s “Regulation of Minister of State Apparatus and Bureaucratic Reform Number: PER/15/M/PAN/7/2008 concerning General Guidelines for Bureaucratic Reform,” refers to a systematic process and carefully planned fundamental changes in government organizations that aim to achieve high performance in carrying out duties and efficiently implementing services, development, and governance.

Widodo instructed his cabinet to implement bureaucratic reforms based on the “Regulation of the Minister of State Apparatus Utilization and Bureaucratic Reform number 25 year 2021 regarding Simplification of Organizational Structure in Governmental Institution.” 

It consists of instructions in the form of a Circular Letter, which presents six strategic steps for every government institution as they reform their bureaucratic system.

  1. Identifying which echelon can be simplified according to each organizational structure;
  2. Mapping which structural role for echelon III, IV, and V in each unit that can be converted into functional roles;
  3. Mapping the functional roles needed by each institution to replace the structural roles;
  4. Adjusting the budget according to the new organization’s structure;
  5. Communicating the results to internals;
  6. Submitting the results to the Minister of State Apparatus Utilization and Bureaucratic Reform.

Indonesia’s bureaucratic system is loosening up to give way to an agile environment. An organization that is flattening its organizational structure is aiming for a more agile, adaptive , according to the paper “Cultivating Agile Organizational Culture: Addressing Resistance to Change in Bureaucratic Government Organizations.” 

The study states that in organizational flattening, “leaders allow subordinate units to operate with minimal higher level control, and prefer more collaborative interactions.”

Going agile: analysis and recommendations

Bureaucratic reform, when done right, could transform organizations and public services. For instance, the One Stop Service at the Investment and Integrated Licensing Service Agency (IILSA) in Puruan City is a result of reforms made in the administrative services licensing process.

For a country to exhibit agile governance, it has to listen to its constituents in an efficient manner. According to the article “Agile: A New Way of Governing” written by Ines Mergel, Sukumar Ganapati, and Andrew B. Whitford, agile administrations must welcome reforms and adapt to the changing environment, public values, and public needs. 

The authors stressed that agile governments must choose adaptive structure over hierarchies and silos and individual discretion over bureaucratic procedures. They also emphasized that consensual decision-making and trial-and-error approaches must take place for a government to be agile. 

To be adaptive, governments must introduce an approach where their decision-making structure is decentralized and bottom-up, according to the paper “Adaptive governance: Towards a stable, accountable and responsive government.”

Indonesia launched its decentralization process in 1999, encouraging participation in community and regional planning and involving citizens in local governance. However, Indonesia has yet to experience the full effects of decentralization. 

For example, in the area of public finance, decentralization is not being carried out properly due to two concerns, as stated in the report “Government Decentralization Program in Indonesia” released by the Asian Development Bank.” The first issue refers to “the capacity of subnational governments to produce public and private goods, increase productivity and employment, and promote economic growth in their jurisdictions, was not increased.”

The second concern is about the lack of training of financial managers, as required by the new laws of public treasury and auditing. 

To address those issues, the government must demonstrate flexibility. Mergel, Ganapati, and Whitford suggest that flexibility is crucial because agile is not confined to one finished product, service, or process and prioritizes continuous improvement instead. 

This is applicable in contracting processes. Traditional governments apply the waterfall model, but agile “requires a contract management approach that is flexible and stretches beyond a fixed-price, one-time project.”

Lastly, these public management reforms can only happen under a new style of leadership. In the IT industry, developers in an agile environment are expected to collaborate with business users. The same is true for agile governments, where leaders must serve and empower people. 

To learn more about how governments can measure and improve performance at all levels, visit The KPI Institute’s Center for Government Performance.

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