Indonesia: Local Government Finance and Governance Reform Sector Development Program

Date: December 2013
Type: Evaluation Reports
Evaluation; Governance and public sector management
Series: Validations of Project Completion Reports
Project Number: 36541-013; 36541-023


Indonesia embarked on a decentralization program in 1998, yet, despite the strong macroeconomic environment and the progress in political and fiscal devolution, regional disparities in poverty and access to resources persisted. During 2001–2005, the Government of Indonesia, the Asian Development Bank (ADB) and other development partners reviewed the effectiveness of the decentralization reform program. A key finding was that the speed and complexity of decentralization in Indonesia had resulted in gaps and inconsistencies in the policy, legal, and regulatory framework. Substantial strengthening and streamlining of the legal and regulatory foundation was needed to realize the benefits of decentralization. In addition, improving modalities for financing improvements was urgently needed to strengthen delivery of public services in the regions while ensuring that capacity was strengthened to enable this.

This report validates the completion report’s assessment of the project which aimed to enhance the effectiveness and efficiency of delivery of basic public services by strengthening the policy, legal, and regulatory framework for decentralization and developing capacities at the local government level in Indonesia. IED overall assessment: Successful (Program Loan); Less than Successful (Project Loan)


  • Project Basic Data
  • Project Description
  • Evaluation of Performance and Ratings
  • Other Performance Assessments
  • Overall Assessment, Lessons, and Recommendations
  • Other Considerations and Follow-up