UMD6 MUG1 | 338366 TEGUH SETIAWAN | Indonesia

Policy Reforms and Institutional Arrangements Required

for Inclusive and Participatory New City Management
Approach in Yogyakarta Municipality
Good Urban Governance & New City Management
Many local governments adopt the New Public Management (NPM) paradigm in order to reform
their public administration. To some extent, the implementation of NPM has brought positive
impacts, namely improvement of local government efficiency and productivity. Local governments
either at provincial or municipal level compete to meet the performance standards and
measurement. NPM can also be misinterpretedas already seen in some practicesif not carefully
and critically studied. Many local government 'managers' misinterpret the concept of reinventing
government as an opportunity to commercialize and privatize everything, so much that the
principle of 'public-oriented government' is forgotten. With low legal-based system, this also means
opportunity for corruptions and degradation of public service quality.
The concept of taking citizens as customers and focusing on efficiency based on the market
principles is being challenged since citizens are first of all "citizens" as individual human beings
who have rights to exit and voice, not just consumers or customers of public services provided by
the government. As the concept of governance is rising these days, the inclusion of all stakeholders
in the public policy making it prerequisite for a legitimate policy (Andersen and Kempen, 2003).
The concept of governance assuming the government, market, and public work together does not
seems good enough that a 'good governance' is needed. In Good Governance public life is managed
by both government and citizens, and a new relationship between government and civil society is
therefore established. In other words, it is "a social management process which could maximize the
public interest" (Yuangfang et al., 2009).
The aforementioned concepts of governance, good governance, urban governance are all tools for
the implementation of NPM in which the main goal is a better urban management which means
administrative and technical efficiency. Civic engagement in this matter is only conceived as its
narrow meaning mainly in term of public service delivery or provision.
The seek for a better governance at local/urban level brought about the term Urban Governance
which is defined by UNESCO "as the processes that steer and take into account the various links
between stakeholders, local authorities and citizens. It involves bottom-up and top-down strategies
to favor active participation of communities concerned, negotiation among actors, transparent
decision-making mechanisms, and innovation in strategies of urban management policies"
(Kaufmann et al., 2004). Scholars suggested various concepts either at theoretical or technical
arenas for what so called good urban governance. Another term commonly cited is the New Urban
Governance which means "the collective and institutionally anchored regulation of urban
development processes, from the micro-level of a project area to the whole urban and city-regional
levels, by different players such as decisionmakers who are involved in informal and formal, flexible
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and enduring networks with horizontal as well as hierarchical structures and specific power
balances" (Hohn and Neuer, 2006).
New City Management (hence NCM) emerges in response to the 'failure' of NPM in tackling urban
issues such as poverty, inequality and other urban problems. NPM seems to be effective in term of
extending the market and managerialist reform strategies, but fail to extend democracy which is
also part of the management task of modern local government (Hambleton, 2003). According to this
model, Hambleton suggested that city leaders and managers need to develop far more sophisticated
approaches to public involvement if decisions are to respond sensitively to the dynamic diversity
of the modern, multi-cultural city. Here it can be seen that "public involvement" is the keyword of
this concept, not only perceived in favor of public service delivery but more than that where other
actors also play along in the decision-making processes.
The NCM is characterised by the following principles:

Governmental (political) legitimacy

Citizen participation and empowerment
Vibrancy of civil society
City leadership

It is apparent now that the New City Management defines a good urban governance not only in
term of administrative and technical efficiency but also the enforcement of democracy as
indicated by the citizen participation (not only in delivery of public services but in the decision
making as well) and the vibrancy of civil society.

Experience of Yogyakarta Municipality

Yogyakarta Municipality covers 32.5 km with 511,744 population and the density of 601.2/km2
(2004). Yogyakarta Municipality is lead by a mayor elected through a direct election and a city
council (municipal house of representative) as the representative of the citizen. The electoral
participation is high (more than 75%) in every 5-year election to choose the mayor and the
members of representative. The first direct election for presidency was in 2004 after the 2002
amandment of the Constitution of Indonesia. This direct election system is then also applied in
provincial and local level to elect the governor or mayor and the members of the house of
representative. As the impact of national level policy on decentralisation after the reform (Pennink
et al., 2001), Yogyakarta Municipality now holds more authority to manage its own development.
According to the eight guiding principles of good urban governancenamely inclusiveness, equity,
efficiency, effectiveness, decentralization, empowerment, transparency and accountabilityit can be
said that Yogyakarta Municipality has made notable imrpovement in five of the principles namely
efficiency, effectiveness, decentralization, transparency and accountability; while the other three
namely inclusiveness, equity and empowerment still need much improving.

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Policy Reforms
Some examples of the policy reforms done by Yogyakarta Municipality can be mentioned as follows:

Creating more contract-based competitive provision, with internal markets and

term contracts.

This principle has been in practice since the issuance of the Presidential Decree No. 80/2003
on Technical Guidelines for Governmental Procurement. However, the implementation of the
contracting out provision is still very limited. Not so many local governments contract out
some of their assignments because of the weak legal-based system in practice. There is also
fear of too much privatization over government's responsibilities.

One-door Administrative Service

Yogyakarta Municipality has cut down the bureaucratic chains and improves its public
administrative services by integrating all administrative services through one door such as
for permit/license application, birth registration, and other civic administration services.
This policy has reduced the service time significantly which means higher efficiency.

Participatory Planning

Yogyakarta Municipality has also involve other stakeholders in planning process through
public hearing. However, this process still needs to be improved since the public
participation here is still in the form of consultancy (tokenism).

Direct Election and Social Contract

Since 2004, Yogyakarta Municipality apply direct elction system which enables citizens to
vote the candidates of mayor and the members of the municipal house of representative.
This process includes social/political contract as a binding agreement between the mayor
or representative members once elected.

Internal Auditing

Apart from the external auditing institution that monitor the accountability, Yogyakarta
Municipality also apply internal audition done by the auditing agency. This is to assure the
accountability within the government.

Participatory Budgeting

This participatory budgeting in Yogyakarta Municipality only apply for a small amount of
money called "block grant" distributed to citizens organization whereby they are free to
decide how to spend the money. However, this is actually the central government money
and is so small in amount which is actually meant as a stimulus for the community group to
develop their own fund.

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The above examples showed some policy reforms already done by Yogyakarta Municipality. It can
also be seen that some important measures have already been taken such as direct election and
managerial efficiency.
However, in practice, the public participation especially in the democratic decision-making process
is still considered as high as tokenism.
Institutional Arrangements
Yogyakarta Municipality has managed to re-structure its organization in order to improve its
efficiency by some arrangements, amongst others as follows:

1. Breaking down the organization into smaller sector-based units

This measure is taken in order to improve efficiency by cutting off some hierarchical chains
into more independent managerial units. The organization then becomes more horizontal
instead of vertical.

2. E-Governance: Role of ICT in Improving Public Services

The ICT plays more important role in Yogyakarta Municipality either to provide cheaper
and more transparent interaction between government and citizens (G2C), government and
business enterprises (G2B) and between governments (G2G, inter-agency relationship). The
e-government system in Yogyakarta Municipality comes in different forms, namely:

Municipality website (http://www.jogjakota.go.id) which provides information on

activities, events, legal documents, policies, plans, programs, etc. as well as
interactive means for citizens to post in feedbacks.
SMS hotline (0274) for citizens to give feedback, protests, or complains on public
services.
Local interactive radio and television program "Walikota Menjawab (Mayor
Responds)".
Online intranet system for inter-agency interaction.
Online procurement system through the city website as well as provincial and
national e-procurement websites.

3. Intergovernmental Secretariat for Environmental Management

The establishment of an intergovernmental secretariat for environmental management
amongst three disctricts in Yogyakarta Special Region (Province)namely Yogyakarta
Municipality, Kabupaten1 Sleman and Kabupaten Bantul (called KARTAMANTUL as an
acronym for Yogyakarta-Sleman-Bantul)makes a good example of institutional reform at
local government level. The collaboration of three neighbouring districts sharing the same
While municipality only consists of urban area, kabupaten is a district administration unit that consists of
both urban and rural areas.
1

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and interdependent environemental problems can overcome some cross-border issues
amongst the three administrative areas, such as identifying opportunities for improving the
delivery of environmental services, strengthening the joint secretariat, improving the solid
waste management system, and enhancing integrated water quality management since the
three districts share three rivers.

4. Municipal Electoral Watch

As a part of the direct election system, an electoral watch is set up. This is an independent
institution set up every five years to monitor the electoral processes, housing volunteers
from civil society.

5. Ombudsman
The Ombudsman is an independent institution as the mediator between the citizens and
the government when the interaction is no longer effective. However, in Yogyakarta
Municipality, this institution does not seem to play a significant role in society.
The examples of institutional arrangements above are still focusing on improving the
administrative and technical efficiency, while the democratic aspect of urban management still
needs improving. Although in the electoral processes, the Municipal Electoral Watch plays very vita
role in the democratic process of election, the other democratic process in decision-making for
instance in the development planning, public participation is still not well accomodated.

Concluding Remarks
Yogyakarta Municipality has implemented some policy reforms and institutional arrangements in
order to achieve a good urban governance. As the process of transition from centralized to
decentralized government is still incomplete, the process towards good urban governance using the
NCM approach still needs improving especially to extend the democracy by improving participation
of the citizens in governance as well as strenghtening civil society.

Recomended Measures

Policy reforms in order to assure that urban governance can balance the powers
amongst fair and competitive market institutions, the state (national, regional, municipal
government), and strong civil society. This can be achieved by re-orienting the
development policies from focusing only on economic growth to pro-poor policies to
empower the vulnerable groups of citizens, eleviate proverty, and assure the equity.
Institutional Arrangements in order to guarantee not only the efficiency of
administrative and technical processes but also the democracy. This can be achieved by
restructuring the organization to be closer to the community and strengthening civil
society organization.

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References
Andersen, H. T. & Kempen, R. V. (2003) New Trends in Urban Policies in Europe: Evidence from the
Netherlands and Denmark. Cities, 20, 77.
Hambleton, R. (2003) City Leadership and the New Public Management a Cross National Analysis.
National Public Management Research Conference. Georgetown Public Policy Institute,
Georgetown University, Washington DC.
Hohn, U. & Neuer, B. (2006) New Urban Governance: Institutional Change and Consequences for
Urban Development. European Planning Studies Vol. 14.
Kaufmann, D., Lautier, F. & Mastruzzi, M. (2004) Governance and the City: An Empirical
Exploration into Global Determinants of Urban Performance. World Bank Institute.
Pennink, C., Dauskardt, R. & Davidson, F. (2001) Urban Policies and Strategies in a Global Context:
Key Issues, Elements and Lessons. National Seminar on Urban/Municipal Capacity Building.
Addis Ababa, Ethiopia, Institute for Housing and Urban Development Studies.
Yuangfang, P., Lei, X. & Ka, W. (2009) The Conceptual Transformation from Government to
Governance and Its Representationsa Case Study on the Innovations in City Management
of Hangzhou. The 4th International Conference of the International Forum on Urbanism
(IFoU). Amsterdam/Delft.

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