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Fiscal Reform and Capacity
Building in Indonesia
 The Indonesian economy is in
a period of transition and experiencing a fundamental reorganization of
the responsibilities of the different levels of government. While Indonesia
has traditionally been a highly centralized state, the Government of Indonesia
is currently in the early stages of implementing a major decentralization
program, in which a significant share of total government spending is
being devolved to the regional and local government level. As a result
of the increased local autonomy, local government officials will become
more accountable downward to their constituents rather than upward to
officials at higher levels of government.
The Andrew Young School has been supporting policy
reforms in Indonesia in a variety of ways.
First, with support from USAID and the World Bank, Professor
Roy Bahl, James Alm and Jorge Martinez-Vazquez have advised the Government
of Indonesia since 1999 on its tax administration and tax policies, public
expenditures and expenditure reviews, priorities, levels of efficiency
and the budget process.
Second, the significant increase in responsibilities that are
being assigned to the local government level requires a major upgrading
in the skills of those many individuals who will administer these programs.As
such, USAID has been funding GSU's Indonesian
Masters Program in Applied Economics since 2001.
Third, a substantial number of Indonesian government officials
at all levels of government, researchers in think tanks, parliamentary
staff, NGO leaders, and university professors have attended the Andrew
Young School's fiscal policy
training courses to strengthen their capacity to engage in policy
analysis.
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