Performance Budgeting in Indonesia: Brief History, Progress, and Lessons Learned
Published in Performance Budgeting Reforms: Theories and International Practices, 2019
Abstract: This chapter begins with a brief discussion on the history and political backdrop of performance budgeting reform in Indonesia. The annual budgetary process in the Indonesian government is laid out afterward. The section that follows looks into the three Indonesian performance budgeting principles as well as instances in which these principles are found in government practices. The Indonesian approach of performance budgeting has three distinct principles, namely “output and outcome- orientation,” “letting the managers manage,” and “money following functions.” Along with the term “performance budgeting,” the three principles are often mentioned in government regulations. However, the study finds that the Indonesian government has not been able to fully internalize performance budgeting in its budgetary process. Not all stakeholders within the administration comprehend performance budgeting concepts, nor are they able to correctly derive and draw linkages between performance information such as program input, output, and outcome. Lastly, lessons learned are presented, with the hope that future efforts to carry out similar budgetary system reforms, especially in developing countries comparable to Indonesia, could learn from the Indonesian experience.
Recommended citation: Suryo Prabowo, A. (2019), “Performance Budgeting in Indonesia: Brief History, Progress, and Lessons Learned.” In Ho, Alfred T., Maarten de Jong, and Zaozao Zhao (Eds.), Performance Budgeting Reforms: Theories and International Practices. New York: Routledge. https://doi.org/10.4324/9781351055307-11