Performance-based public management reforms: experience and emerging lessons from service delivery improvement in Indonesia

Abstract

From both a practical and a theoretical perspective, improved public sector performance has preoccupied policymakers, managers, and analysts around the world. There is broad enthusiasm for performance-based initiatives to remedy service delivery failures, but conceptual boundaries are often vague, and empirical evidence for their effectiveness is mixed. This article reviews current thinking regarding service delivery improvement, and assesses several pathways to improved performance. We examine the pathways pursued in Indonesia’s rich experience with service delivery improvement, which shed particular light on the political economic factors shaping performance-based initiatives, and draw implications for reforms in other settings.

Points for practitioners

Our review of pathways for performance-enhancing reforms in Indonesia suggests that decentralization strongly influences the prospects of other pathways, but service improvements often depend on the center utilizing its leverage to monitor performance and strengthen incentives for implementing reforms. In the long term, unless accountabilities between districts and both providers and communities are strengthened, it is unlikely that existing performance incentives will operate as intended. Indonesia’s experience suggests that addressing political economic factors implies recognizing the multi-actor nature of governance and service delivery systems, and in pursuing both central and local levers for changed incentives.