AMSD – Legal and Regulatory Assessment
2.7
2. Clarify Roles, Goals and Standards
Summary of Conclusions and Suggestions
This chapter has identified a large number of “normative” rules that should make clear the relationship between central and regional governments, by, among various means, distributing functions and setting standards. Unfortunately this is not happening very well. If it is not happening in the framework governing central-regional relations, it is unlikely to be happening at the local level between core administrative units and SDOs. Overall, there appears to be a need for more effort to make rules that clearly: •
define what performance consists of and how it is measured
•
create an “arms-length” relationship between the “owners” and the service delivery agencies; and
•
state who has the authority to change it.
If the maze of core administrative regulations being produced under Law 32/2004 and other laws are to be relied on, it may be a long time before clarity of roles, objectives, authority and accountability emerge. One impact of such a maze is that “none are effective”, ultimately returning the relationship between the core and line to one of “master-servant”. Regulatory reform/simplification is needed, as hinted at by Figure 2.1 and Box 2.2. The relationship between central government and regional government obviously needs improving, with the regulatory framework being the means. Better (and probably less) rules focused on performance determined by achievement of output and outcome standards, along with sufficient resources and autonomy in implementation should be aspired to. It is suggested that a similar situation often exists in regional government between core administrative agencies (basically the Head of Region, DPRD, SETDA and BAPPEDA) and each SDO (or SKPD) – if not for volume of rules, then because of culture. Functions must clearly be delineated and standards set. PP 65/2005, PP 38/2007 (and PP 41/2007) could help guide this local effort, but do not yet do so very well (see later assessment related to PP41/2007 on organizational structure). From discussions in the three pilot projects, there appears to be no local laws at PEMDA level equivalent to the first two PPs that clarifies roles and sets service standards. It is suggested the introduction of a Flexible Performance Agreement (FPA) is one way of improving clarity in this relationship between core administrators and each of their SDOs. It should cut through the maze of rules, provide a mechanism for dialogue, clarify who makes policy and who implements it, set objectives and standards and make budgets more certain. The FPA can be authorized by a generic “local law” or set of rules that focuses on improving the relationship between owner and operator – one that creates an arms-length relationship, provides sufficient authority balanced with accountability and in general sets out as explicitly as possible the roles and objectives of each party – and that enables (in fact requires) an FPA to be concluded between each SDO and the core of government. This local law, which basically describes local government management arrangements, should of course be enabled by provisions in national laws, such as Law 17/2003 and Law 32/2004. Appendix C.3 provides an example of such rules. It contains an extract of a law describing the structure for administration and management of a public sector in a particular (Australian) provincial government. Although it is intended to cover the case where Ministers have ultimate responsibility for public affairs, the principle of “arms-length” management are 00 - main text-amsd-legal and regulatory framework-eng.v3
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