The decentralisation of government functions initiated by Law No. 22/1999 constitutes one of the most radical changes to Indonesian public administration since independence in 1945. Local administrations are now delivering a far greater range of public services, and are fully responsible for the planning, managing and budgeting of such services. They have been forced to reorganise their organisational structures to accommodate new staff and new functions. Untied central government grants allow the regions discretion in allocating revenue, requiring local governments to justify their priorities for public policies. The previously strong position of the bureaucracy, which in the past used to determine local public policies unilaterally, is being challenged by the much stronger role of regional representative bodies (DPRDs) in local policy-making, in the budgeting process and in electing the local leadership. Add to this the decentralisation law's emphasis on community participation and transparency of public sector activities (including finance), and the ‘new world’ in which the regional administrations find themselves becomes apparent.

Yet despite these fundamental systemic reforms to the Indonesian bureaucracy, surprisingly little seems to have changed in the way in which civil servants go about their activities and public institutions deliver (or fail to deliver) their services. Individual cases of reform and change do occur (Kusumaatmadja 2002), but there is an alarming lack of concerted and coordinated reform initiatives targeting public administrative structures and working procedures. At the national level, civil service reform has barely received any attention from the political leadership, meaning that recruitment, career systems and the remuneration system remain virtually unchanged from the Soeharto area. Neither has decentralisation been complemented by a systematic effort to overhaul the often unwieldy and byzantine central government administration, where departments continue to be ‘poor in functions but rich in structures’. Corruption, collusion and nepotism (commonly known by the acronym KKN) have not decreased, and Law No. 28/1999 on clean public sector administration remains a political statement with little practical implementation.

In the following, I will discuss the effects of decentralisation on the structure of the Indonesian bureaucracy at the local and central levels, as well as the continuing need for administrative reform, to which decentralisation has added a new layer of complexity. I will argue that the reform of the bureaucracy is one of the forgotten elements of reformasi and that there is a lack of political will to address core administrative problems.