Understanding the Practice of Accountability Reporting: a Case of Indonesian Local Government Muhammad Hudaya University of Wollongong

University of Wollongong Research Online

University of Wollongong Thesis Collection University of Wollongong Thesis Collections

2014 Understanding the practice of accountability reporting: a case of Indonesian local government Muhammad Hudaya University of Wollongong

Recommended Citation Hudaya, Muhammad, Understanding the practice of accountability reporting: a case of Indonesian local government, Doctor of Philosophy thesis, School of Accounting and Finance, University of Wollongong, 2014. http://ro.uow.edu.au/theses/4114

Research Online is the open access institutional repository for the University of Wollongong. For further information contact the UOW Library: [email protected]

School of Accounting and Finance Faculty of Business

Understanding the Practice of Accountability Reporting: A Case of Indonesian Local Government

Muhammad Hudaya

This thesis is presented as part of the requirements for the award of the Degree of Doctor of Philosophy

The University of Wollongong

May 2014

Certification

I, Muhammad Hudaya, declare that this thesis, submitted in partial fulfilment of the requirements for the award of Doctor Philosophy, in the School of Accounting and Finance, University of Wollongong, is wholly my own work unless otherwise referenced or acknowledged. The document has not been submitted for qualifications at any other academic institution.

Muhammad Hudaya May 2014

Table of Contents

Certification...... ii Table of Contents ...... iii List of Figures ...... vii List of Tables...... viii List of Abbreviations...... ix Abstract ...... x Acknowledgments ...... xiii Chapter 1: Introduction ...... 1 1.1. Statement of the Problem ...... 1 1.2. Significance of the Study ...... 3 1.3. The Aims and Scope of the Research ...... 5 1.4. Contributions of the Thesis ...... 8 1.5. A Brief Research Methodology ...... 11 1.6. Organisation of the Thesis ...... 13 Chapter 2: Literature Review ...... 15 2.1. Introduction ...... 15 2.2. The Concept of Accountability ...... 15 2.3. Definitions of Accountability ...... 18 2.4. Accountability Framework in the Public Sector ...... 23 2.4.1. Public-Organisation Characteristics ...... 23 2.4.2. Accounting and Myth in the Public Organisations ...... 25 2.4.3. Accountability Framework ...... 27 2.5. Accountability: Some Critiques ...... 29 2.6. Annual Report as Medium of Accountability ...... 32 2.7. The Local-Government Accountability System in the Indonesian Context ...... 36 2.7.1. Pre-Reform Era ...... 37

iii

2.7.2. Reform Era ...... 39 2.7.3. Accountability Forum as Part of Accountability Mechanism ...... 44 2.8. Conclusion ...... 45 Chapter 3: The History of Indonesia and Legacies of the Soeharto Regime ...... 47 3.1. Introduction ...... 47 3.2. The History of Indonesia ...... 47 3.3. The Legacies of the Soeharto Regime ...... 50 3.3.1. Golkar: The Soeharto Regime-Sponsored Political Party ...... 50 3.3.2. Self-Interested Behaviour of Members of Parliaments...... 52 3.3.3. Symbolic Display of Audit Bodies ...... 53 3.3.4. Keenness to Build “Good Impressions" ...... 54 3.3.5. Politicised Bureaucracy ...... 55 3.3.6. Corruption ...... 56 3.4. Conclusion ...... 57 Chapter 4: The South Kalimantan Provincial Government ...... 58 4.1. Introduction ...... 58 4.2. Indonesian Government Organisation in Brief ...... 58 4.3. South Kalimantan Province ...... 59 4.4. Banjarese Institutions ...... 62 4.4.1. Current Governor of South Kalimantan Province ...... 65 4.5. The Practice of Accounting in the Socio-religious Context ...... 68 4.6. The Accountability System and Reporting under the Yudhoyono Administration .. 71 4.7. South Kalimantan Provincial Government ...... 74 4.7.1. History of the SKPG ...... 74 4.7.2. Organisational Culture of the SKPG ...... 75 4.7.3. Structure of the SKPG ...... 78 4.8. Conclusion ...... 79 Chapter 5: Theoretical Framework ...... 81 5.1. Introduction ...... 81

5.2. Institutional Theory ...... 81 5.3. Legitimacy as an Essential Concept ...... 84 5.4. Institutions and the Mechanism of Institutionalisation ...... 85 5.5. Strategic Responses to Institutional Processes ...... 90 5.6. Institutional Theory: Some Shortcomings ...... 94 5.7. The Problematic but Useful Concept of Decoupling ...... 97 5.8. Theory of Power as a Complementary Theory ...... 99 5.9. Research Framework ...... 103 5.10. Conclusion ...... 110 Chapter 6: Research Methodology ...... 111 6.1. Introduction ...... 111 6.2. Philosophical Basis ...... 111 6.3. Case Study Research ...... 113 6.4. The Case Study Research Design ...... 116 6.5. Research Questions ...... 117 6.6. Data Collection ...... 119 6.6.1. Interviews...... 122 6.6.2. Direct Observations ...... 127 6.6.3. Documentation and Archival Records ...... 128 6.7. Data Analysis ...... 130 6.8. Conclusion ...... 133 Chapter 7: The Practice of Accountability Reports: Some Lessons Learned from the South Kalimantan Provincial Government ...... 134 7.1. Introduction ...... 134 7.2. The Organisational Culture of the SKPG ...... 135 7.3. Accountability Reports: a Routine and Socially-Constructed Practice ...... 143 7.4. Power and Patronage ...... 154 7.5. Decoupling: A Note from the Site ...... 160 7.6. The Contents of Accountability Reports ...... 163 7.7. A Note on Performance Measurement ...... 169 v

7.8. The Dynamic of Institutional Isomorphism ...... 174 7.8.1. Coercive Isomorphism ...... 174 7.8.2. Mimetic Isomorphism ...... 177 7.8.3. Normative Isomorphism ...... 179 7.9. Conclusion ...... 184 Chapter 8: The Accountability Forum and the Importance of Institutions ...... 186 8.1. Introduction ...... 186 8.2. The Submission of Accountability Reports ...... 186 8.3. The New Configuration of the South Kalimantan Provincial Parliament ...... 188 8.4. The Accountability Forum ...... 190 8.5. The Response of the Provincial Parliament and Possible Consequences ...... 195 8.6. Some Lessons Learned From the Accountability Forum ...... 198 8.7. Some Lessons Learned from Prevailing Institutions ...... 207 8.7.1. The Role of Education ...... 207 8.7.2. The Importance of Being an "Institutional Conformist" ...... 210 8.8. Conclusion ...... 213 Chapter 9: Conclusions ...... 214 9.1. Introduction ...... 214 9.2. The Findings of the Study ...... 215 9.3. Limitations of the Study ...... 221 9.4. Potential Further Research ...... 222 References ...... 223 Appendices ...... 254 Appendix 1: Ethics Clearance ...... 254 Appendix 2: Development of Modern Organisational Institutionalism ...... 255 Appendix 3: Data Collection Process ...... 256

List of Figures

Figure 4.1. Map of Indonesia ...... 60

Figure 4.2. Symbol of the SKPG ...... 77

Figure. 4.3. Structure of the SKPG ...... 79

Figure 5.1. Research Framework of the Study ...... 109

Figure 6.1. The Process of Preparing Local-Government Accountability Reports ...... 123

Figure 7.1. The Organisation of the Task Force ...... 143

vii

List of Tables

Table 1.1. The multi-dimensions of an accountability system...... 6

Table 2.1. Distinctions between Public and Private Organisations ...... 24

Table 5.1. Strategic Reponses to Institutional Processes ...... 91

Table 6.1. Six Sources of Evidence: Strengths and Weaknesses ...... 121

Table 6.2. List of the Referenced Documents ...... 129

Table 6.3. Application of the six phases of Marshall and Rossman (1999) ...... 132

Table 7.1. SKPG Officials Previously from Banjar District ...... 155

Table 7.2. Further Appointment of the SKPG officials Previously from Banjar District . 155

Table 7.3. Audit Opinions Granted by the Supreme Audit Agency to Indonesian Provincial

Governments ...... 181

Table 8.1. South Kalimantan Provincial Parliament: Party Representation ...... 189

Table 8.2.Human Development Index (HDI) of the SKPG in the Last Five Years...... 201

Table 8.3. South Kalimantan Population by Level of Education ...... 208

viii

List of Abbreviations

BPK The Supreme Audit Agency BPKP The Financial and Development Supervisory Agency BPS The Indonesian Bureau of Statistics DAU Generally Allocated Fund or Dana Alokasi Umum DPR The National Parliament DPRD Local Parliament or Dewan Perwakilan Rakyat Daerah GR Government Regulation Golkar Functional Group Party or Partai Golongan Karya ILPPD Local-government accountability report made available to the public KemenPAN The State Ministry of Administrative Reform LKPj Local-government accountability report submitted to local parliament LPPD Local-government accountability report submitted to the central government MPR The People’s Consultative Assembly MPRS The People’s Consultative Assembly Perda Provincial Regulation or Peraturan Daerah SKPD Work Units under Local Government or Satuan Kerja Pemerintah Daerah

Abstract

This study, a case study conducted within an Indonesian local government, seeks to explore the practice of accountability reporting of Indonesian local government following the decentralisation reform that occurred in 1999. The reform was intended to be an antithesis of the practices of the Soeharto regime, under which the accountability system of local governments had been dominated by the New Order regime. This was possible due to pressure put on public officials: being submissive to the regime was their only choice, if they wanted to remain in public office. As a result, public officials, including governors, mayors and regents were more accountable to the regime (the central government) than to the public. The accountability reports of local governments, for instance, were not made available to the public. The study particularly investigates the practice of local-government accountability reporting and the role played by local parliament in assessing these reports in the post- Soeharto era, during which the socio-political landscape has changed: from an authoritarian and centralised to a democratic and decentralised country; and from a limited political party system to a multi-party system. Ontologically, this study argues that accountability reporting is a socially-constructed reality, as individuals involved in the preparation of accountability reports bring their respective habits, and over time the process becomes an organisational routine. This study draws on institutional theory as a main theoretical lens, and power and leadership theories as complementary ones. The study argues that to secure legitimacy, the local government employs a two-pronged approach that extends to the organisational and societal field. This study found that the local government is now required to submit their accountability reports to three parties: the central government, the provincial parliament and the public (the reports are the LPPD, LKPj and ILPPD respectively); previously only the central government and the local parliament had been regarded as the audiences for the reports. However, while the public now receives a report (the ILPPD), it contains only a summary of the report submitted to the central government (LPPD). In addition, the ILPPD

is also not made available in a timely way (it can be as late as a full month after the latest time allowed by the provision). Furthermore, it is apparent that the practice of accountability reporting as conducted by local government is socially constructed, because interaction among the members of the government is shaped by the key actor (the governor, along with his circle), mainly through social relationships rather than formal ones, and by the key actor’s interests of bolstering legitimacy and maintaining power. In addition, there is decoupling between what the relevant regulations set forth and what the local government actually does. Among the three institutional isomorphisms practised by the local government—coercive, mimetic and normative— it is evident that the local government is more susceptible to coercive isomorphism, although it is also influenced to a lesser degree by mimetic and normative isomorphism. The study also found that the accountability forum— the forum in which the key actor (the governor) is supposed to be held accountable by local parliament— is at present a largely ceremonial and symbolic arrangement held annually to meet the letter (rather than the intention) of the relevant provisions. It is evident that the accountability forums do not fully meet the accountability-discharge function that might have been hoped for. This is in part because the local parliament currently lacks a reliable framework with which to assess the local government’s accountability report. In the societal field, this study found that the governor is closely engaged with the prevailing institutions to obtain public legitimacy. There are at least three such institutions to which the governor has conformed and through which he has sought legitimacy: paying attention to religious symbols such as mosques and langgars; attending religious rites; and being respectful towards and maintaining good relationships with gurus. This is confirmed by the way the local government is run by the governor: by aligning the local government's work programs with the prevailing institutions embraced by the society. Discharging public accountability through being open to scrutiny on the performance of local government has been less important as a means to achieve legitimacy, and has thus been somewhat neglected.

This study’s empirical findings suggest: first, that the accountability report for the public (ILPPD) should be available as a full account not a summarised report, as suggested by some theorists; second, that the ILPPD should be available in a timely basis, as the failure to make accountability reports available timely will impair the practice of democracy (Boyne & Law, 1991); and third, that an accountability forum for the public should be incorporated into the local-government accountability system along with the accountability forum in the local parliament, since the absence of such a public forum undermines Indonesia’s claim to be a democratic country. This study offers a unique contribution considering its setting, Indonesia, which is a multi-ethnic, diverse culture with numerous local languages, and the third-largest democratic country in the world after India and the US. This study also contributes to knowledge by investigating the practice of accountability reporting in the changing organisational environment following the fall of the Soeharto regime (1967-1998).

xii

Acknowledgments

First of all, I would like to say thank you to the almighty Allah SWT for granting me strength and guidance throughout my life, so I can reach the “finish line” of my thesis completion.

Many people have contributed directly or indirectly in the completion of this thesis and for this reason, they deserve credit and appreciation.

I would like to express my considerable gratitude to my supervisors Dr. Ted Watts for his valuable guidance and support during my PhD study; and Dr. Parulian Silaen, who contributed a great deal during the first year of my candidature. My special thanks go to Dr. Ciorstan Smark, who has supported me by reinvigorating and motivating me, and by showing me ample patience when I got trapped in the stagnant phase, through which I started to build up my conviction and then find my returning point.

My heartfelt thanks also go to Dr. Kathy Rudkin, the Head of the School of Accounting and Finance, for providing me with a concrete solution when I experienced with financial hardship and her suggestions for my research-methodology chapter. My grateful acknowledgment is also extended to Prof. Ed Arrington, as he has taken his valuable time to read my thesis draft and provide me with constructive feedback. Nevertheless, all possible mistakes that this thesis may contain are solely my responsibility. I should extend my special thanks to Mr. Aizirman Djusan who is in charge in the MCIT’s scholarship programme, as he has supported my doctoral degree through scholarship scheme. I would also like to acknowledge the editorial support of Laura E. Goodin.

Finally, I thank and dedicate this thesis to my three special people: my late father, H.M.D. Bulya; my late mother, Hj. Robihatun Arif; and my wife, Basyirah Ainun. My father passed

xiii

away during the first year of my Ph.D course and my mother died in the last stage of my thesis completion. These two occasions really shocked me for several months, as I had previously promised to not leave them anymore once I complete my study. I cannot repay the remarkable mercy and kindness that they have offered throughout my life. Hopefully, the completion of this thesis can be a token of my deepest gratitude to them. And last but not least, my beloved wife has provided me with a truly unconditional love. I feel very fortunate having her as my wife, considering her struggle, sacrifice and wonderful patience for being at my side when I faced difficult times and unfavourable circumstances.

xiv

Chapter 1: Introduction

1.1. Statement of the Problem

Indonesia is a newly democratic country after more than three decades under the centralised and authoritarian Soeharto regime (1967-1998) (Ricklefs, 2001; Vickers, 2005).

Indonesia is now the third-largest democratic country in the world after India and the US

(Anwar, 2010; Eliraz, 2007; Buehler, 2009; MacIntyre & Ramage, 2008).

The shift from an authoritarian and centralised regime to a democratic and decentralised government system in 1999 may have affected the practice of accountability, including the accountability system of local governments. During the Soeharto regime

(1967-1998), local-government accountability had been controlled by the regime. This was possible due to public officials of local governments becoming loyalists of the regime, instead of serving the public. Not surprisingly, the accountability system of local government at that time was designed to be more accountable to the regime (the central government) than to the public. The Soeharto regime’s Law No. 5 (1974) on Local

Government did not consider the public as a party to whom the government should be accountable, even to the extent of merely keeping them well-informed. For example, the accountability reports of local governments were not made available to the public.

The change of government system from centralised to decentralised, however, did not automatically improve the local-government accountability system, including its accountability reporting. This can be seen from the regulations enacted in the reform era

(post-Soeharto regime). Government Regulation (GR) No. 3 (2007) on Accountability 1

Chapter One

Reporting of Local Government, for instance, required local governments to submit separate accountability reports to the central government and local parliament (the LPPD and the LKPj, respectively), and to make a summarised accountability report (the ILPPD) available to the public. Thus, the public received limited information, because the ILPPD was only a summary of the accountability report submitted to the central government

(LPPD). It should be noted that the reports rendered to the central government and made available to the public were not accompanied by an accountability forum, in which the actor (governor) would discharge his/her administration’s accountability before relevant parties, such as citizens. Instead, the accountability forum is only available within the local parliament.

These phenomena are consistent with the study carried out by Goetz and Jenkins

(2001), and support the notion that there is a lack of public trust in political and administrative forms of accountability in most developing countries. Specifically, Smoke

(2005) found that even though various forms of public reporting were required, the transparency of Indonesian local governments was still weak. Studies conducted by DRSP

(2009) and Harun and Kamase (2012) found that Indonesian local governments lack institutional capacity in preparing their accountability reports. On the legislative side, two studies conducted by DRSP (2009) and ADB (2004b) revealed that Indonesian local parliaments had an inadequate capacity in evaluating local-government accountability reports. Specifically, Green (2005) noted that Indonesian local parliaments do not possess proper criteria in assessing local-government accountability reports.

The two research questions emerging from this are:

Chapter One

1. How does local government prepare its annual accountability reports?

2. How does local parliament use the accountability forum to evaluate the annual

accountability report submitted by local government?

This study seeks to explore the practice of accountability reporting in Indonesian local government following the decentralisation reform that occurred in 1999. It also investigates the role played by local parliament in assessing the report since the dramatic changes in the socio-political landscape in the post-Soeharto era: from authoritarian and centralised to democratic and decentralised; and from a limited political party system to a multi-party system.

1.2. Significance of the Study

This study is worth investigating for three reasons:

First, accountability is a salient feature of democracy, as demonstrated by Romzek and Dubnick (1987), Boyne and Law (1991), Aucoin and Heintzman (2000), and

Castiglione (2007). In Indonesian context, although the country has been embracing the democratic system for more than one decade since the fall of Soeharto regime in 1998, the practice of accountability reporting is still far from ideal. In terms of local-government accountability reporting, for instance, the public has not yet been regarded as an important and appropriate audience. This is demonstrated by the public only being able to access a summarised accountability report (ILLPD) of the accountability report submitting to the central government (LPPD). This was possible due to Government Regulation No. 3 (2007)

Chapter One tending to “protect” government’s interests, instead of the peoples’ rights to information.

The practice contradicts the principle of democracy that enshrines the public’s right to information (Castiglione, 2007).

Second, accountability reports play a major role as a medium of accountability discharge in the public sector (Boyne & Law 1991; Sinclair, 1995; Coy & Pratt, 1998;

Taylor & Rosair, 2000). In the case of Indonesian local governments, this role has not yet developed, as the transparency of Indonesian local government is still embryonic (see

Harun et al., 2012; DRSP, 2009; Smoke, 2005). This happens as the ruling elites seem reluctant to implement a wholehearted reform, as transparency can potentially ‘disrupt’ the

“games” (transactional politics) they usually play (Harun, 2007). The practice further brings an unintended consequence, in which the absence of administrative transparency has led to accountability not serving as a control mechanism to prevent public officials’ abuse of power as suggested by Aucoin and Heintzman (2000).

Third, accountability reporting also serves as an input for parliamentary scrutiny

(Milazzo, 1992; Mulgan, 2001; Hughes, 2003; Bovens, 2007a; Rahman, 2008). Studies carried out by Harun et al. (2012), DRSP (2009) Harun (2007) and Green (2005) found that

Indonesian local parliaments suffered institutional incapacity in evaluating local- government accountability reports. DRSP (2009) noted that even if a procedure about how to assess the reports existed, the parliaments do not possess it; let alone any sophisticated evaluation tools. This phenomenon has undermined the function of parliament in overseeing the executive; as a result the checks and balances mechanism cannot run properly as suggested by Bovens (2007a) and Mulgan (2000a).

Chapter One

Therefore, it is important to conduct research into accountability reporting. This study will fill a gap in the body of knowledge, in which there are still limited studies concerning the practice of the accountability reporting of local governments within developing countries, particularly in Indonesia.

1.3. The Aims and Scope of the Research

This study has two objectives: first, to understand the practice of accountability reporting as exercised by the Indonesian local governments following the decentralisation reform; and second, to understand the practice of the accountability forum, through which the power holders discharge their administrative accountability. Hence, the end product of this study will provide evaluation and feedback for the central government, local government, local parliament, non-governmental organisation, the press and other stakeholders so that the practice of local-government accountability reporting can be enhanced.

The scope of the research needs to be set explicitly to help me remain focused on the objectives of this study. In addition, accountability is a complex and multi-faceted concept (Romzek & Dubnick, 1987; Stone, 1995; Sinclair, 1995; Bovens, 2007a; Erkkilä,

2007). Table 1.1 demonstrates the various dimensions of an accountability system.

Chapter One

Table 1.1. The multi-dimensions of an accountability system

Dimensions of Romzek and Stone (1995) Sinclair Bovens Erkkilä Accountability Dubnick (1995) (2007a) (2007) System (1987) 1. Bureaucratic √ – – – √ 2. Legal √ √ – √ – 3. Professional √ – √ √ √ 4. Political √ √ √ √ √ 5. Market – √ – – – 6. Personal – – √ – √ 7. Public – √ √ √ √ 8. Managerial – √ √ – – 9. Performance – – – – √ 10. Administrative – – – √ –

Table 1.1 indicates that the scholars above agree to include political accountability as being one dimension constituting an accountability system. This is not the case for other dimensions; it could mean that political accountability is one of the most important dimensions of an accountability system. One of the features of political accountability is to require the public office holder to be accountable to elected representatives (Stone, 1995;

Mulgan, 2000a; Bovens, 2007a;). In the Indonesian context, during the Soeharto regime

(1967-1998), local parliaments suffered institutional capacity limitations in holding the executives to being accountable, as the parliaments were under the shadow of the regime.

However, in the post-Soeharto era this situation persists; because of self-interest behaviour of the members of parliaments—one of the legacies left by the Soeharto regime— drives them to be busy with their own personal wishes instead of boosting parliaments’ institutional capacity (Bünte & Ufen, 2009; DRSP, 2009).

This study will look at the practice of the political accountability system of

Indonesian local government. Specifically, the study will investigate the practice of local- 6

Chapter One government accountability reporting from its preparation to the rendering of the report before members of local parliament. By focusing on such issues, this study can provide insights with regard to the practice of local governments’ accountability reporting in the post-Soeharto (reform) era; not only on the side of executive, but also on the legislative side.

The accountability reporting of Indonesian local governments is somewhat complex because there are various forms of accountability reports (Solikin, 2006). At the time of data collection, there were five types of accountability reports required by the provision to the local governments:

• financial reports (LKPD);

• performance reports (LAKIP); and

• three accountability reports under Law No. 32 (2004) and Government Regulation

No. 3 (2007): the LPPD (submitted to the central government); the LKPj (rendered

to local parliament) and the ILPPD (available to the public).

This study will focus on these last three accountability reports (LPPD, LKPj and

ILPPD), as little or no research has been conducted in this area. Research on financial reports (LKPD) was conducted by Harun and Kamase (2012) and Martani and Liestiani

(2010), while Akbar et al. (2012) investigated local governments’ performance reports

(LAKIP). Furthermore, according to Government Regulation No. 3 (2007) the LPPD, LKPj and ILPPD should report on several local-governments aspects such as finances, procedures and products. This is line with the work of Coy et al. (2001), which suggests those aspects should be included in the accountability reports.

Chapter One

In conclusion, the scope of this study is to look at the practice of a political- accountability system in Indonesian local government. Specifically, this study will investigate the practice of local-government accountability reporting from preparation to submission to local parliament.

1.4. Contributions of the Thesis

Contributions of this study encompass several perspectives: research method, research-setting, accountability theory and theoretical lens.

From a research-method standpoint , this study uses a case-study research strategy to contribute to the body of literature on accountability in the public sector, particularly on the practice of accountability reporting in a developing country. The majority of studies relating to accountability reporting in the public sector have been conducted in developed countries using surveys. Likewise, developed countries have been the context for research on accountability using the case-study approach. There is quite limited research relating to accountability reporting in developing countries, particularly in Indonesia. Although case- study research has inherent limitations, as it cannot offer generalisable conclusions as suggested by Tellis (1997a) and Dul and Hak (2008), the contribution of this study gain benefits from employing this strategy. In terms of organisational culture of local government, for instance, this can be well-comprehended through this research strategy.

This was possible because case-study research strategy drives researchers to enhance their

“understanding of both the day-to-day organizational complexities of such practices and the interrelated influence of wider social and political contexts” (Humphrey & Scapens, 1996,

Chapter One p.94). Thus, the use of this research strategy for future research conducted in institutionalised environment can be recommended.

This study offers a unique contribution, considering its setting, Indonesia, which is a multi-ethnic, diverse culture with numerous local languages, and the third-largest democratic country in the world after India and the United States. Concerning language proficiency, for instance, this study corroborates the work of Scapens (2004) that highlighted the importance of a highly-proficient language skill in the researchers conducting case-study research, including local language skills where the research is conducted. On-site experience has yielded an insight into context that required excellent local language skill in order to access the object being studied, interview and capture the nuances expressed by the informants. By delivering a case-study from an emerging and newly democratic country, this study responds to the call made by Hoopwod (1976; 1983) that accounting should be investigated where it operates and through which the uniqueness of this study can contribute to the body of knowledge.

This study also contributes to accountability theory, particularly public sector accountability theory, particularly in developing country, by investigating the practice of accountability reporting in the changing organisational environment following the fall of the Soeharto regime (1967-1998). The findings of this study revealed that the change of government system from centralised to decentralised, however, did not automatically improve the local-government accountability system. The local-government accountability forum held by the provincial parliament, for instance, was not a stark contrast with that of the forum in the Soeharto era. Theoretically, the accountability forum is a forum in which

Chapter One the power-holder is obliged to explain and justify his or her conduct, a question-and-answer session is scheduled, and recommendations resulting from the forum have the potential to trigger the imposition of sanctions on the power-holder, as suggested by theorists such as

Bovens (2007a, 2007b, 2010) and Mulgan (2000a). Regrettably, those elements of accountability did not exist in the post-Soeharto forum. The insight that can be drawn from this finding is that superficial adoption of the accountability concept taken by the government of Indonesia merely results in a formal procedure and ceremonial arrangement.

From a theoretical-lens viewpoint, the findings of this study offer an insight that institutional theory can guide me, as a social researcher, in identifying the key actors involved in the practice of local-government accountability reporting. The theory not only can “detect” the key actors within organisation under study, but also the influential actors in the societal field. In the case of South Kalimantan province, it has been a long-standing institution that the people pay great respect to the local gurus (religious leaders), because they are commonly perceived as having a special relationship with God. Given this institution, the ruling elites in the province also pay great respect to, and foster good and close relationship with, gurus, particularly those having large followings. Further, the elites also support traditional religious rites or events conducted by gurus and the society by allocating funds from the provincial budget for religious events. In doing so, the elites can be perceived by the public as sharing similar values with the larger society, and thereby are much more likely to obtain organisational legitimacy, one of the essential concepts of institutional theory (Meyer & Rowan, 1977; Eisenhardt, 1988; DiMaggio & Powell, 1983).

In this sense, institutional theory as a theoretical lens is potent in mapping, linking,

Chapter One capturing the key and influential actors involved in the practice of local-government accountability reporting. Thus, the use of institutional theory can convey a holistic and rich understanding of issues within this socio-cultural setting.

1.5. A Brief Research Methodology

It is advisable to determine a research methodology before further stage of research is conducted, as suggested by Bisman (2010). The choice of a consistent ontological and epistemological assumption can guide the researcher in choosing a paradigm and theory for the study (Gaffikin 2008, Bisman, 2010).

Gaffikin (2008) classified ontological assumptions into two categories: realist and non-realist ontology. Realist ontology perceives that the world exists independently from its human observers, while non-realist ontology believes that objects around us are socially constructed. In examining non-realist ontology, Creswell (1998) stated that reality is constructed by individuals engaged in the social environment of the community. This study perceives that accountability reports are socially constructed by the actors to obtain legitimacy and maintain power. According to Guba and Lincoln (1988, cited in Creswell,

1998, p. 76), an epistemological assumption of qualitative research requires the researcher to lessen the distance of the researcher from the object being studied. Therefore, the researcher is required to choose an appropriate research strategy. Consistent with its ontological and epistemological assumptions, this study employs an interpretive paradigm.

Neuman (2006, p. 88) defined the interpretive paradigm as “systematic analysis of socially meaningful action through the direct detailed observation of people in natural setting in

Chapter One order to arrive at understanding and interpretation of how people create and maintain their social worlds”.

Yin (2003) stated that there are some conditions to be met in choosing a research strategy, such as the type of research questions, the researcher’s control over the situation or object being studied, and whether or not the study focuses on contemporary events.

Furthermore, Yin (2003) explained that the case study is an appropriate strategy if it meets three factors: (a) “how” or “why” questions are being proposed, (b) the researcher has insignificant control over events, and (c) the focus of the study is contemporary events.

Based on these arguments, this study uses a case-study approach as the most appropriate research strategy. A single-case study will be conducted to investigate the practice of local government’s accountability reporting in Indonesia.

This study was conducted in the South Kalimantan Provincial Government (SKPG),

Indonesia . The reasons for choosing the SKPG as the object of this study were based on the following arguments (a) I was given permission to conduct research on the practice of accountability reporting within the SKPG; and (b) I am a native of South Kalimantan and therefore have an advantage that allows me to explore more of the socio-cultural life of

South Kalimantan society by using the local language. As noted earlier, Scapens (2004) emphasized the high proficiency of language skill needed in researchers who undertake case-study research, including knowledge of the local language where research is conducted; through which I can sense, distinguish and interpret the perception, expression, behaviour and emotions of my Informants, as suggested by Mason (2002) and then extract meanings from these with some proficiency.

Chapter One

In collecting data, the study used direct observation, interviews and documentation.

Data was collected by observing the site for six months. To get a better understanding, open-ended interviews were carried out with key persons or informants within the SKPG office. This study also involved attendance at a provincial parliament meeting in which the governor of the South Kalimantan Provincial Government rendered his administration’s accountability report to the members of the South Kalimantan Provincial Parliament.

1.6. Organisation of the Thesis

This study is organised into nine chapters. Chapter 1 offers an overall introduction to the thesis, including the statement of the problem and research questions, the significance of the study, the aims and scope of the research and the contribution to research. Chapter 2 provides a critical review of accountability in the public sector and its reporting system. Chapter 3 presents a brief history of Indonesia and the legacies of the

Soeharto regime. These legacies might have shaped the practice of accountability of local governments, as the Soeharto regime was the longest-ruling of the post-colonial era.

Chapter 4 describes the environmental setting, organisational culture and structure of the

South Kalimantan Provincial Government, the local government selected by this study.

Chapter 5 provides a discussion of the theoretical framework of this study. Institutional theory is adopted as the main theoretical lens to analyse the research findings. Chapter 6 discusses the philosophical foundations of the research (ontology, epistemology, methodology and method) and the research approach employed by this study. Chapter 7 presents on-site accounts and empirical findings, and discusses them using institutional

Chapter One theory combined with power theory. Chapter 8 describes and discusses the accountability forums held by the local parliament, in which the key actor, the governor, discharges his administration's accountability before the members of the provincial parliament. Chapter 9 presents the concluding remarks of this study and potential further research.

Chapter 2: Literature Review

2.1. Introduction

This chapter presents a literature review of accountability in the public sector and its reporting system; this literature review informs a discussion of the meaning of accountability and the studies done in this area, and establishes the need for this study on accountability reporting in Indonesian local government. The rest of the chapter is organised into 7 sections: the concept of accountability (section 2.2); definitions of accountability (section 2.3); the accountability framework in the public sector (section 2.4); accountability: some critiques (section 2.5); the annual report as medium of accountability

(section 2.6); the local-government accountability system in Indonesian context (section

2.7); and a conclusion (section 2.8).

2.2. The Concept of Accountability

Accountability is a longstanding concept, dating back to around 2000 BC, when

King Hammurabi of the Babylonian Kingdom promulgated a legal code for the empire

(Bird, 1973, cited in Velayutham & Perera, 2004). According to Dubnick (2002), King

William I of England applied the concept of accountability starting from the Norman invasion in 1066, as indicated by the obligation to report on all properties in the territory; these reports were recorded in the Domesday Book. Dubnick (2002) believed William I’s regime was the pioneer in founding the concept of accountability for governance, arguing

Chapter Two

that William I was known to have a good administration in which all assets under his sovereignty were recorded using simple accounting records.

Harlow (2002) shared view raised by Dubnick (2002) and noted that in the beginning accountability had mainly focused on financial accounting, until a change in the early 1980s shifted the focus from financial accounting-based accountability to a broader concept of overall responsibility to the public (cited in Bovens 2005a).

Following the spread of democracy worldwide, accountability is a popular word in countries embracing democratic systems, but it is also a somewhat ambiguous notion

(Levaggi, 1995; Sinclair, 1995; Blagescu et al, 2005; Bovens, 2007a). This situation has led to the scholars developing their own conception of accountability (see Williams, 1987;

O’Connell, 2005; Koppell, 2005; Mulgan, 2000a; Bovens, 2010).

Williams (1987) notes that accountability is closely associated with fairness and ethics: in evaluating the submitted account, the account holder may treat it as being either fair or unfair. Williams also suggests that the account holder should take an impartial position in assessing the account. Williams thus relates accountability to the good conduct of the actors involved in the accountability process and this idea is also concurred by

Messner (2009).

O’Connell (2005) extended the attributes of accountability from just the quality of the actor’s behaviour to encompass technical issues, asserting that accountability in public agencies has to do with high-quality services and cost-efficiency delivered with good behaviour. In order to control the behaviour of the public-office holders keep accountable,

Koppell (2005) suggested that controllability should be included in accountability system. 16

Chapter Two

On the other hand, Mulgan (2000a) stated that the central notion of accountability is

“being called to account for one’s actions.” This means that there is an external party scrutinising one’s compliance with the mandate that has been given. In a similar vein,

Patton (1992) highlighted the role of the account-holder (external party) in assessing the account submitted by the accountor, as the account-holder has the legitimate right to do so, like parliaments (Stone, 1995; Aucoin & Heintzman, 2000). This assessment allows the checks and balances mechanism can function properly (Rahman, 2008).

Why do scholars propose different concepts of accountability? Mulgan (2001) argued that accountability is a situational concept, in that its arrangement depends on the particular context where the accountability operates. Sinclair (1995) added that these differences take place because accountability has a multi-discipline meaning. Sinclair then provided some instances: auditors view accountability from financial and numerical perspectives, while political researchers look at accountability from a political-science perspective. Legal experts approach accountability from a legal viewpoint, while philosophers stress the ethics of actors’ behaviour. Thus, the concept of accountability is contested and contestable among scholars (Sinclair, 1995; Mulgan, 2000a).

Bovens (2010) mapped the discourse of the accountability concept into two schools.

The first school, embraced by most American scholars, perceives accountability as a set of standards used in assessing the conduct or behaviour of public officials, based on the righteousness or virtue of the actors (Bovens, 2010). In other words, “being accountable is seen as a virtue, as a positive quality of organizations or officials” (Bovens, 2010). The second school, to which many European, Australian and Canadian scholars belong, views 17

Chapter Two

“accountability as a societal arrangement and institutional relationship through which the mandate-recipient can be held accountable by the mandate-giver” (Bovens, 2010).

Scholars have proposed various concepts of accountability, can be grouped into two schools: accountability as a virtue (that is, as a result of the good behaviour of the actors), and accountability as a mechanism through which the holders of public office can be held accountable for their official actions.

2.3. Definitions of Accountability

This section presents some definitions of accountability that exist in the body of literature and selects a definition appropriate for the purpose of this study.

Some scholars, such as Roberts (1991), Williams (1987), O’Connell (2005) and

Messner (2009), viewed accountability as a virtue. Roberts (1991, p. 356), for instance, defined accountability as:

A form of social relation which reflects symbolically upon the practical interdependence of action: an interdependence that always has both a moral and strategic dimension.

Messner (2009, p. 920) defined accountability as:

a morally significant practice, since to demand an account from someone is to ask this person to enact discursively the responsibility of her behavior.

These definitions offer a reflection that accountability serves as a moral compass in which the public-office holders can behave in an ethical way in running their administrations. This is in line with the claim made by Friedrich (1940 cited in Romzek,

Chapter Two

1996) that modern bureaucracy is able to refrain from doing unacceptable behaviour, as it has a self-control mechanism. Sinclair (1995, p. 231), however, found that accountability as a virtue (personal accountability) such as honesty is somewhat difficult; as it is “more

‘idiosyncratic’, the product of an upbringing or personal voyage of discovery…”

Others scholars have constructed the definition from the perspective of accountability as a mechanism. Jones (1992), Jackson (1982), Thynne and Goldring (1987),

Kluvers (2003), Gray and Jenkins (1986), Mulgan (2000a) and Bovens (2007a) are some major proponents of this school.

Jones (1992) defined accountability as “the process of being called to account to some authority for one’s actions” (cited in Mulgan 2000a, p. 555). This definition emphasises that accountability is a process within certain arrangements for giving account.

Jackson (1982, cited in Levaggi, 1995, p.287) defined accountability by saying:

Basically, accountability involves explaining or justifying what has been done, what is currently being done and what has been planned. Accountability arises from a set of established procedures, and relationship of varying formality. Thus, one part is upon the other to give an account of his activities. Accountability therefore involves the giving of information.

This definition implies that what has been done by the accountor should be presented in a comparable form. This allows the account holder to make a comparison between what had been targeted beforehand and what has been achieved by the accountor.

In similar vein, Thynne and Goldring (1987) defined accountability as follows:

…in the context of a relationship with an institution or person which or who is in a position to enforce their responsibility by calling them to account for what they (and or their subordinate) have and have not done…subject to an institution’s or a person’s oversight direction or request that they provide information on their action or justify it before a review authority (cited in Sinclair, 1995, p. 221). 19

Chapter Two

Thynne and Goldring’s definition suggests that the accountor not only reports what has been done but also reveals what has not been done. Kluvers (2003) noted that government agencies sometimes, if not often, hide what has not been done, to protect their image. As a result, asymmetric information transfer inevitably takes place, and the public, far from the process of decision-making, hardly knows what is happening.

Mulgan (2000a) defined accountability by saying that “the core of accountability is the obligation to answer to a superior for one’s actions and to accept appropriate remedies including sanctions.” This view is also shared by Gray and Jenkins (1986) who defined accountability as a compulsory action to render an account of the conduct of the steward to the principal.

Mulgan (2000a) explained that his definition implied a number of characteristics.

First, there is the presence of external control, in which the account is submitted to other parties outside the entity. Bovens (2007a, 2010) and Rahman (2008) concurred this idea, as it will generate checks and balances in the accountability system. Second, there is a social interaction and the availability of dialogue in which the account-holder has the right to pose the questions, on the one hand, and the accountor has the obligation to respond by giving answers, explanations and justification, on the other hand. Pollitt (2003, p. 84) wrote:

A strong system of democratic accountability allows citizens to see how far the political leadership has responded to their interests – what they have done with the authority and resources with which they have been entrusted.

Third, there is the right of authority, in which the account-holder can suggest improvements and even sanctions, and those being called to account have to accept them.

Chapter Two

Patton (1992) noted sanction or reward is the feature of accountability; accountability can be said does not exist, if this feature is absence in the accountability system.

Bovens (2007a, p.450) defined accountability based on the origin of the word itself and its historical perspective:

Accountability is a relationship between an actor and a forum, in which the actor has an obligation to explain and justify his or her conduct, the forum can pose questions and pass judgement and the actor may face consequences.

Bovens (2007a, p. 452) then identified seven elements constituting accountability:

a. There is a relationship between an actor and forum b. In which the actor is obliged c. To explain and justify d. His [or her] conduct e. The forum can pose questions f. Pass judgment g. And the actor may face consequences

Bovens (2010) maintained that defining accountability as a virtue is very difficult, since “there is no general consensus about the standards for accountable behaviour, and because these standards differ, depending on role, institutional context, era, and political perspective” (Bovens, 2010, p. 949).

Bovens (2010) further explained that the standard for accountable conduct or behaviour of elected politicians, for instance, is significantly different to the standards for government employees in nearly all European parliaments. Elected politicians have to be responsible to the legislative body, citizens, press and other stakeholders, while public servants should be loyal to the elected politicians who appointed them. The various definitions of accountability exist because they are influenced and shaped by social, cultural and political contexts (Cochrane, 1993; Ogden, 1995, Ezzamel et al., 2007). 21

Chapter Two

Considering Indonesia’s social, cultural and political contexts (discussed in Chapter

Three), this study employs the definition of accountability as a mechanism. This does not mean that accountability as a virtue is less important or less valuable. Rather, this study focuses more on the mechanism of accountability systems of local government in the reform era. During the Soeharto regime (1967-1998), the mechanism of local-government accountability was silenced by the regime. For instance, local parliaments did not perform their control and oversight tasks properly. This was possible because most of the members of local parliaments across the country were controlled by the regime. As a result, they served as the representatives of the regime rather than of the people. Employing the definition of accountability as a mechanism can shed light on the practice of political accountability in the post-Soeharto (reform) era, as this definition provides tangible elements of accountability as noted by Bovens (2007a). Specifically, following the fall of the Soeharto regime, the socio-political setting has substantially changed: the public has been acknowledged as a party to whom accountability reports should be rendered along with the central government and local parliaments; legislatures are no longer dominated by a single political party (the Soeharto regime-sponsored Golkar); and the freedom of the press is protected by law.

Having reviewed various definitions, this study employs a definition of accountability established by Bovens (2007a, p. 450):

A relationship between an actor and a forum, in which the actor has an obligation to explain and justify his or her conduct, the forum can pose questions and pass judgement and the actor may face consequences.

Chapter Two

2.4. Accountability Framework in the Public Sector

This section describes the accountability framework in the public sector in three sub- sections: public-organisation characteristics; accounting and myth in the public sector; and accountability framework.

2.4.1. Public-Organisation Characteristics

An organisation can be defined as a group of people who work together in a systematic way to pursue a common objective (Rainey, 2009; Schermerhorn, Jr. et al.,

2010). Generally, organisations can be categorised into three sectors: public (usually government), private (business entities) and the third sector— not-for-profit organisations such as charities (Nutt, 2000). The next sub-section describes the characteristics of the public-sector organisation.

Much attention has been paid to the debate on similarities and differences between public and private organisations (see Galbraith, 1973; Murray, 1975; Rainey et al., 1976;

Bozeman, 1987; Bozeman & Bretschneider, 1994; Nutt & Backoff, 1993; Rainey &

Bozeman, 2000; Martin & Parker, 1997; Nutt, 2000; Boyne, 2002; Christensen et al.,

2007). Galbraith (1973), for instance, noted that many private organisations strongly controlled markets in the public sphere, giving them a power similar to that of public organisations (cited in Rainey et al., 1976). Furthermore, Bozeman (1987, p. xi) asserted that “all organizations are public”, since each organisation, both public and private, has an attribute of “publicness”— “the degree to which organisation is affected by political authority”. However, Nutt and Backoff (1993) contended that the extent to which political aspects influence both types of organisations is different: political authority affects private 23

Chapter Two

organisations indirectly, while public organisations are directly overseen by political forces

(parliaments). This view is also shared by Martin and Parker (1997). Table (2.1) summarises the distinctions between public and private organisation based on the works of

Martin and Parker (1997), Nutt and Backoff (1993) and Nutt (2000).

Table 2.1. Distinctions between Public and Private Organisations

Features Public Organisation Private Organisation Goals Multiple and sometimes vague Uni -dimensional (profit), focus and conflicting (public on outputs/outcomes, market interests), focus on input, non- prices market prices Labour High security of employment Less security of employment Accounting and management Under -developed Strong accounting and MIS information system Nature of the business Politically a nd geographically Commercially determined, constrained diversification, investment and disinvestment/merger/overseas ventures Data availability Data often limited Data typically available Constraints Mandates and obligations limit Autonomy and flexibility limited autonomy and flexibility only by law and the need for internal consensus Ownership Citizens often act as owners and Ownership vested in sto ckholders impose their expectations about whose interests are interpreted organizations’ activities and the using financial indicators conduct of these activities Adapted from Nutt & Backoff (1993, p. 211), Martin & Parker (1997, p. 178) and Nutt (2000, p.80) Apart from these features, there are other characteristics of public organisations in developing countries, particularly Indonesia, such as inefficiency, low institutional capacity and high levels of informality. Some studies noted that Indonesian local governments suffer administrative efficiencies (DRSP, 2006; DRSP, 2009; ADB, 2004a; White & Smoke,

2005; Buehler, 2012). Further, the phenomenon of low institutional capacity is common in developing countries (Graham, 2002; Smoke, 2005). Some studies found that Indonesian local governments had limited institutional capacity in carrying out their duties 24

Chapter Two

(Imbarrudin, 2004; DRSP, 2009; Harun & Kamase, 2012). Informality has been the norm in many public organisations (Rainey, 2009; Ongaro, 2009), particularly in developing countries (World Bank, 1997; Shah & Shah, 2006). According to Giddens (2009), informality does not always bring a negative impact, as informal tie to some extent can provide a breakthrough to members of organisation in conducting formal procedures.

However, the practice of informality in developing countries is different, as suggested by

Giddens (2009): it not only breaches formal procedures, but also overlaps their authority

(World Bank, 1997).

2.4.2. Accounting and Myth in the Public Organisations

The seminal work of Meyer and Rowan (1977) revealed that organisations employ their organisational structures (including institutionalised products, policies, programs and techniques) merely as myth and as ceremony that are intended to portray the organisation as conforming to prevailing institutions to gain legitimacy. This is supported by a study by

Tolbert and Zucker (1983) which found that many local governments had adopted a merit- based system for their civil-service reform because the merit system had been widely- acknowledged for improving civil services; in other words, organisations tend to copy the other organisations’ success. Modell (2004, p.40) offers a definition of myth as “more and less institutionalised, or taken-for-granted images of organizations and thus serve an important role as sense-making device”. Christensen et al. (2007, p.57) defined myth as

“socially-created norms in institutional environments”. Leaders of public organisations, for instance, have claimed that their organisation adopted organisational reforms for the sake of

Chapter Two

the people’s interests in return for boosting their legitimacy; while in reality the changes they implemented were only superficial reforms (Christensen et al., 2007).

In relation to accounting practice, Martin and Parker (1997) notes that the development of accounting and management information systems within public organisations lags behind that in private organisations. This factor might have prompted public organisations to adopt private sector-inspired accounting technology such as accrual- based accounting, as a manifestation of the myth perspective intended to help them to be perceived as “modern” organisations (Christensen et al., 2007). As a result, the practice of accounting within organisation serves as a rationalised myth as suggested by several authors (Meyer & Rowan, 1977; Weber, 1978; Meyer, 1986 ; Carruthers & Espeland,

1991). Meyer and Rowan (1977, p. 344), for instance, write that:

…technologies are institutionalized and become myths binding on organizations. Technical procedures of production, accounting, personnel selection, or data processing become taken-for-granted means to accomplish organizational ends. Quite apart from their possible efficiency, such institutionalized techniques establish an organization as appropriate, rational, and modern. Their use displays responsibility and avoids claims of negligence.

In this sense, accounting practice in public sector organisations serve as “window dressing” (Mouritsen, 1994; Christensen et al., 2007) or “legitimating myth” (Carruthers &

Espeland, 1991), for signalling to their environment that organisations have operated in accordance with prevailing institutions. Some scholars have criticised this practice, in which accounting has served as a symbol of rational measures rather as a genuine achievement of efficiency and effective purposes (see Scapens, 1994; Carruthers, 1995; and

Covaleski et al., 1996).

Chapter Two

2.4.3. Accountability Framework

Accountability in the public sector closely relates to three basic questions: (1) who is accountable? (2) for what are they accountable? and (3) to whom are they accountable?

(Patton, 1992; Mulgan, 2001; Hughes, 2003; Bovens, 2007a, Castiglione, 2007). Bovens

(2007a) extends the questions by asking: why does the actor feel obliged to submit an account?

Who is accountable ? The actor could be an organisation or officials within an organisation (Mulgan, 2001; Bovens, 2007a; Castiglione, 2007; Hughes, 2003). However,

Bovens (2007a) then asks, due to accountability practices involving many hands, who will deliver the account in the accountability forum? Mulgan (2001) notes that at the top organisational level, the leader, on behalf of the organisation, should attend the forum to deliver the account, while at the individual level, each public servant, company employee or volunteer should render an account to their superior. However, public organisations usually consist of many people, at different echelons (Bovens, 2007a; Hughes, 2003). In policy-making, for instance, certain procedures and layers should be passed through, involving a number of individual staff as well as task forces or committees reviewing policy before its implementation (Bovens, 2007a). The question becomes “Who, then, should be singled out for accountability, blame and punishment?” (Bovens, 2007a, p. 458).

In the case of public-sector accountability, “one for all” arrangement (hierarchical accountability)–the process of accountability starts with the greatest responsibility at the highest level, and continues with decreasing degrees of responsibility to the lowest level

(Bovens, 2007a) – seems to be appropriate to apply in this sector. Top-ranking officials are 27

Chapter Two

held accountable to external parties, while lower ones are accountable to their superiors

(Castiglione, 2007; Bovens, 2007a)

What are they accountable for ? Mulgan (2001) maintained that there are three areas for which organisations or individuals are held accountable: legal compliance and financial reporting, general direction and performance (particularly in response to public expectations when the organisation is a public-sector enterprise), and particular clients and members. In the case public-sector accountability, Castiglione (2007) suggested that it should look, for instance, the relationship between the actions taken by the public-office holders and what has been outlined or decisions made by the parliament. Bovens (2007a) shared the idea proposed by Castiglione (2007) that the precise nature of each actor’s accountability depends on the kind of forum. From the perspective of legal accountability, for example, actors should be accountable for their conduct relative to existing laws and other regulations in the forum of the court. With regard to financial accountability, actors should be accountable before the forum of an audit by complying with established financial standards.

To whom are they accountable ? Mulgan (2001) claimed that the account has to encompass three kinds of stakeholders. First, public organisations and their officials can be held accountable in their legal conformity and financial reporting to the court, to the

Auditor-General’s office and to the public. Second, they can be held accountable in their general direction and performance to the public, the Auditor-General’s office and the

Ombudsman. Bovens (2007a, pp. 455-456) maintained that because of the various stakeholders who need to be informed in a democratic country, there are at least five types 28

Chapter Two

of accountability forums: political accountability to citizens, elected representatives, ministers and public officials; legal accountability to the courts; administrative accountability to auditors, inspectors and controllers; professional accountability to professional peers; social accountability to interest groups, charities and other stakeholders.

The idea to extend the number of account-holders as proposed by Bovens (2007a) allows a greater coverage of the public-office holders’ accounts to reach various stakeholders as suggested by Pollitt (2003) and Castiglione (2007).

Why does the actor feel obliged to submit an account ? Bovens (2007a) stated that there are three sorts of accountability: vertical, horizontal and diagonal. Vertical accountability, for instance, relates to the forum having significant authority to impose sanctions on an actor. In this kind of accountability, the relationship between the accountor and accountee is based on a principal-agent relationship, in which the agent feels compelled to render his or her account. Castiglione (2007) noted in case there is not accountability forum exerting its external control, the public-office holders should possess the quality of being responsible to mandate entrusted by citizens. This can drive them to be more determinant in running their administration Castiglione (2007) and does not feel forced to report what they have been done to the public.

2.5. Accountability: Some Critiques

Accountability is not a concept without criticism: according to some scholars it has shortcomings. Bovens (2010) asserted that some politicians have used accountability term merely as a political jargon. Former US President George Bush, for instance, used the word 29

Chapter Two

“accountability” as a political mantra in condemning the executives of Enron and

WorldCom for their financial crimes (Dubnick, 2002). This was possible because the term of accountability has “a power” and symbolism that can bolster the image of its user

(Dubnick, 2002).

Koppell (2005) found that accountability has various meanings: some scholars equated it with transparency, others with control. Koppell (2005) further stated that in some academic articles, accountability was defined as having to do with adherence to the law, in others as responsiveness. Koppell (2005) then opined that the absence of specific definition of accountability could weaken an organisation’s performance if different actors had different conceptions of its meaning, or if the organisation confusingly attempted to satisfy every definition at once. However, arriving to general consensus on a single or more specific definition of accountability seems to be impossible, as the definition is subject to ideologies, motifs and languages (Sinclair, 1995) and particular context (Mulgan, 2001).

Kelly (2007) argued that accountability for performance can constitute a trap in which the [public] employee is more likely to adhere to organisation’s standards rather than to serve the [citizens or] clients. In pursuing effectiveness, for instance, the organisation establishes certain standards for the amount of time spent dealing with each client. If a given employee can serve the client in that time (or faster), it means that the employee is accountable. In other words, the employee becomes accountable for his or her performance

“by working for the measures and not for his or her client” (Kelly, 2007). However, Bovens

(2005b, 2007a) argued the public-office holders should serve citizenries well, as they have mandated the executives to do so. To make sure the executives can meet the expectation of 30

Chapter Two

the citizens, Bovens (2007a) proposed that agencies or individual public managers are held accountable in a social accountability forum.

In Indonesian context, during the Soeharto regime of more than three decades

(1960s-1990s), the term “good governance” was extensively used to strengthen the regime’s legitimacy. Bovens (2010) noted aaccountability is used interchangeably used with good governance, transparency, equity, responsibility and integrity. However, the term concealed an unpleasant level of collusions, corruption and nepotism (Tambunan, 2000).

The term accountability was so easy to abuse because it was defined so loosely (Bovens,

2010)

Despite some shortcomings inherent in the accountability concept, its existence matters in the public sphere, particularly in governance practices. Principally, accountability is the essential element of democracy (Kluvers, 2003; Skogstad, 2003;

Bovens, 2005b; Markoff, 2005; Hodge, 2009), through which public officials are monitored and held accountable in order to keep them on the right track in running their administrations (Aucoin and Heintzman, 2000; Bovens, 2007a).

Aucoin and Heintzman (2000) noted that accountability serves three functions: accountability as control; accountability as assurance; and accountability as continous improvement. However, in Indonesian context, the absence of accountability as a control made the authoritarian Soeharto regime persisted its power for more than three decades

(1967-1998) (Liddle, 1978; 1985). In relation to the second function, laws and regulations passed by the regime was not intended to protect people interests, instead the regime’ wishes (Bünte & Ufen, 2009), thus this function did not exist during this era. As a result, 31

Chapter Two

accountability could not manifest as ‘lifeblood’ in protecting the people’s interests as noted by Hodge (2009, p. 1).

In terms of accountability as continuous improvement, during the regime was in power, Indonesia did not take any benefit from this function, as the regime disregarded critical voices raised by the regime’s opponents and even put the opponents in jail

(Ricklefs, 2001). Indonesia is a resources-rich country including coal, gold, copper and forest. However this huge advantages did not bring people welfare; forest, for instance, had been exploited in an unsustainable way (Ricklefs, 2001), leaving deforestation rampant in the country. Therefore, Indonesia did not take a lesson learned from successful countries in dealing with public-resources management as suggested by Aucoin and Heintzman (2000) and Bovens (2007a).

2.6. Annual Report as Medium of Accountability

A large and growing body of literature has investigated the practice of accountability reporting in local government. Some researchers have conducted their research in the developed countries such as the US (Simon & Ridley, 1938); the UK

(Butterworth et al., 1989; Boyne & Law, 1991); Spain (Benito et al., 2003); Italy

(Steccolini, 2004); and Australia (Kloot & Martin, 2001, 2007; Ryan et al., 2002; Kluvers;

2003; Mack & Ryan, 2007). Other researchers have carried out their studies in developing countries such as Bangladesh (Samaratunge et al., 2008); Fiji (Rika et al., 2008); Malaysia

(Khalid, 2008); and Indonesia (Harun, 2007; Martani & Liestiani, 2010; Akbar et al., 2012;

Harun & Kamase, 2012). 32

Chapter Two

The above studies resulted in mixed results worthy of attention. Simon and Ridley

(1938) and Butterworth et al. (1989) found that local-government reports were less readable, as statistical data were left without interpretation (Simon and Ridley, 1938).

Butterworth et al. (1989, p.84) even concluded that the local-governments that “local authorities do not intend their report to be read.” Steccolini (2004) noticed that accounting reforms were conducted through a bureaucratic approach. This in turn led to the accounting reform and reporting system merely serving as an administrative procedure rather than an innovation to address citizens’ expectations.

Dubnick (2005) argued that basically, reporting plays two important roles in an organisation, particularly in the era of modern management: as an essential element of scientific management evolution and as a key connector in the process of planning, organising, staffing, directing, coordinating, reporting and budgeting. But it seems this was not the case for the above studies.

A study conducted Ryan et al. (2002) showed a better picture than previous studies.

Conducting a survey of 36 Queensland local governments, the study revealed that the quality of local governments’ annual accountability reporting showed continuous improvement during 1997-1999 in general. However, some areas had not been disclosed, such as corporate governance, remuneration of executive staff, personnel, occupational health and safety, equal-opportunity policies and performance information.

Rika et al. (2008) found the provincial government under study seem to be less accountable, as the transparency of the using of public money was questioned. The

Chapter Two

provincial government’s financial statement, for instance, was not rendered in a regular and well-timed basis (Rika et al., 2008).

Likewise, Harun (2007) noted Indonesia’s public sector reform seems to be undermined by central government officials, as the implementation of accountability demands more transparency over what has been done by them. This led them being reluctant in implementing such a reform. This is consistent with claim made by Christensen et al. (2007) public organisations’ leaders used political rhetoric to win people’s heart that they had adopted public-sector reform; in fact they implemented the reform in a ‘cosmetic’ way, just for symbolic display.

In relation to the contents of the accountability reports, Bovens (2007a) asserted that accountability incorporates several aspects rendered to different stakeholders: financial, procedural and product. Aucoin and Heintzman (2000) and Kluvers (2003) added it should also consist of a performance aspect. Coy et al. (2001) shared similar view:

The value of the annual report rests in the provision of a wide range of summarized, relevant information in a single document, which enable all stakeholders to obtain a comprehensive understanding of [an organization's] objectives and performance in financial and non-financial terms. No other single source of such information is available to all stakeholders on a routine basis.

Therefore, annual reporting should contain financial, procedural, product and performance aspects. Boyne and Law (1991), asserted that an annual report is a set of comprehensive information prepared in pursuing accountability to the principal. Similarly,

Ryan et al. (2002) argued that an annual report is a crucial medium of accountability for governmental organisations.

Chapter Two

Similarly, Wishart (1995, cited in Coy & Pratt, 1998) shared the view that an annual report is an essential element of accountability, which makes it possible (by providing a set of information for members of parliament) to pose questions to public officials, and demand answers from them. Thus, the term “annual report” is commonly equated to the term “accountability report”

However, Jones (1992) contended that there was a large gap in the development of a conceptual framework of public-sector reporting, due to the predominance of the accounting profession and oversight agencies in developing the framework, while other stakeholders were essentially ignored (Jones, 1992). This might have led to the contents of the report being complex for laymen which in turn would lower the public’s interest in the accountability report as suggested by Coy and Pratt (1998).

Some factors such as complexity, timeframe, distribution and accessibility of the report that could cause a low level of interest from the public. Accountability reports, for instance, usually employ certain financial and performance standards established by professional associations such as accountancy, which require specialised knowledge to understand Coy and Pratt (1998).

Additionally, Boyne and Law (1991) argued that failure to render accountability reports in a timely way weakens the practice of democracy. Dixon et al. (1991) concurred asserting that timelines are one important factor determining the quality of the accountability reports.

Public interest in an annual report can also be affected by its distribution and accessibility. Priest et al. (1999), having conducted a survey on prospective and real users 35

Chapter Two

of local governments’ annual reports in Western Australia, found that only 50% of respondents had read the reports; the rest had not, due to the reports’ inaccessibility.

Although annual reporting has some shortcomings, its advantages outweigh its drawbacks. Likewise, Dubnick (2005), maintained that annual reports not only provide input for control mechanisms but also deliver transparency at every level of an organisation. Similarly, Milazzo (1992) claimed that annual reports are important in supporting a legislative body’s function in controlling government agencies.

As Jones (1992) noted, historically the accounting discipline has significantly shaped accountability frameworks. However, over time there has been a transformation.

Current accountability frameworks are shaped by inter-disciplinary input, not solely that of the accounting profession: it is now widely agreed that they should encompass general direction, legal compliance, financial reporting, products and performance information relating to the organisation (see Coy et al., 2001; Mulgan, 2001; Bovens, 2007a; Steccolini,

2004; Ryan et al., 2002).

2.7. The Local-Government Accountability System in the Indonesian Context

The local-government accountability system is an umbrella system within which the accountability reporting system is embedded. Thus, a brief description of the local- government accountability system is important in understanding how the system is practised within the Indonesian context.

This section describes the local-government accountability systems during the pre- reform and reform eras, and gives an overview of how the system has been exercised by 36

Chapter Two

several regimes in recent Indonesian history. This section is organised into three sub- sections: the first presents the practice of local-government accountability systems during the pre-reform era; the second depicts the practice of the system within the reform era; and the last describes the accountability forum in its Indonesian context.

2.7.1. Pre-Reform Era

There is limited information concerning accountability systems implemented during the Dutch colonial era (1596 -1942), but it is known that the colonial ruler exercised an accounting system called ICW (Indische Compatabiliteitswet). The system was established in 1864 (Ghozali & Ratmono, 2008) and used a single-entry system (Nasution, 2007).

According to Sugianto et al. (1995), the ICW had at least four shortcomings (cited in Robinson & Harun, 2004). First, the standard of recording was not well set up, leading to difficulty in comparing the planned budget with the realised budget. Second, the chart of accounts was not properly established. Third, the capital and operational expenditures were not clearly distinguished. Fourth, the ICW was intended to provide financial information solely for an internal audience: the Dutch colonial government (Sugianto et al., 1995, cited in Robinson & Harun, 2004).Therefore, it makes sense to say that there was no strong accountability system in place during the Dutch colonial era, as the ICW was designed to support the Dutch, instead of being accountable to the people of its colony (Indonesia).

During the Soekarno regime (1945-1967), the local-government accountability system was set out under Law No. 18 (1965) on Local Government. The law required the head of the provincial (governor) and district governments ( bupati/ mayor) to be accountable to the president only via the minister of home affairs. 37

Chapter Two

The law did not regard the local parliament (DPRD) and the public as the parties to whom the heads of local governments should be accountable. This was particularly limiting to local accountability because the governor and bupati/ mayor were appointed by the president as stipulated by Law No. 18 (1965), instead of being elected by local parliament or the public. The law was very centralistic; the promotion system for local-government civil servants, for instance, was also determined by the central government (article 60).

Soeharto then came to power to succeed Soekarno in 1967. Soeharto labelled his regime as the Orde Baru (the New Order) and called Soekarno regime as Orde Lama (the

Old Order) . Soeharto replaced Law No. 18 (1965) on Local Government with Law No. 5

(1974) on Local Government.

However, the new law did not give greater authority to local governments; rather, it functioned to preserve Soeharto’s (New Order) power. Article 15 of the law, for instance, stipulated that provincial parliament could only nominate two candidates for governor, with the president choosing between them.

The Soeharto regime also shrewdly used the term ‘decentralisation’ (desentralisasi) in Law No. 5 (1974) as a symbolic display to demonstrate to the public that the regime had devolved some authority local governments without actually doing so. In fact, the Soeharto regime was not much different from the Soekarno reign in terms of its preference for centralistic power. The Soeharto rule, for instance, only transferred “the tasks” (or mechanics) of the central government, while “the discretions” (or policy and decision- making) of the tasks still rested on the central government (Abidin, 2001). Law No. 5

(1974) also stated that the governor was accountable to two parties only: the president and 38

Chapter Two

the provincial parliament (article 22); this left the public disregarded as a proper party to whom the head of local government should be accountable.

In addition, although the accountability forum— the forum in which the executive was held accountable— was conducted in the local parliament as stipulated by law No. 5

(1974), it functioned merely as a symbolic display. This was because most of members of parliaments (nationally and locally) were the regime’s representative instead of the people’s

(Suryadinata, 2007). Thus no penetrating questions or significant disclosures were made there.

In short, it is apparent that the local-government accountability system did not exist in a strong form during the Dutch colonial era (1596 -1942). During the Soekarno (1945-

1967) and Soeharto (1967-1998) regimes, these systems were in place, but they were of limited use as the two regimes had the legal means to preserve their centralised power and did not allow meaningful local scrutiny.

2.7.2. Reform Era

Following the fall of the Soeharto regime in 1998, Habibie succeeded Soeharto as the third Indonesian president. The Habibie administration passed a number of laws, including Law No. 22 (1999) on Local Government and Law No. 25 (1999) on Fiscal

Decentralisation and Revenues Sharing.

According to Anwar (2010) the emergence of these two laws was the cornerstone for decentralisation reforms after more than three decades of Indonesia being socially, politically and economically controlled by the Soeharto regime. Law No. 25 (1999)

Chapter Two

granted a greater power to local governments to manage their locally-generated revenues, alongside money transferred in by the central government.

The important feature of Law No. 22 (1999) was to grant a greater authority to local governments in managing their respective regions, except in five key areas: defence and security, foreign affairs, fiscal and monetary policy, law enforcement and religious affairs which were still under the central government's authority.

Law No. 22 (1999) required the head of local governments to submit their accountability reports to two parties: the president and the local parliament. This law strengthened the role of the accountability forum by granting authority to local parliament to impose sanction to heads of local parliament, if the latter’s accountability report was rejected by the parliament.

Following the end of Habibie’s term in office, Indonesia held a presidential election in the plenary session of the MPR on October 20, 1999. Abdurrahman Wahid was elected as the fourth Indonesian president (Liddle, 2000). The Wahid administration endorsed

Government Regulation (GR 1) No. 108 (2000) on the local-government accountability system. However, the regulation still did not regard the public as the party to whom the governors, mayors or regents should be accountable. The regulation only required the head of local governments to submit their administration accountability reports to two parties: local parliament and the president (Article 2).

1 Government Regulation (GR), in Indonesian administrative context, will be issued following the passing of the new law. GR serves as operational guidelines of the law endorsed. 40

Chapter Two

Megawati Soekarnoputri, the previous vice-president, was appointed by the MPR as the fifth Indonesian president in 2001. The Megawati administration enacted a number of laws including Law No. 17 (2003) on State Finance, Law No. 1 (2004) on the State

Treasury and Law No. 33 (2004) on the Fiscal Balance between the Central and Local

Government. One of the key features of Law No. 17 (2003) was a decision to adopt an accrual-based accounting system in place of a long-practised cash-based accounting system.

The important feature of Law No. 1 (2004) was to require governmental agencies to implement accrual-based accounting no later than the year 2008. Law No. 33 (2004) regulated the formula of sharing between the central and local governments concerning the revenues obtained by the state.

In addition, the Megawati administration also endorsed Law No. 32 (2004) on Local

Government to replace Law No. 22 (1999) on Local Government. This law marked a new chapter in the history of local-government accountability system, in which the law regards the public, as well as the central government (president) and local parliament, as the audience of local-government accountability reports. The law requires local government to submit accountability reports to the central government and local parliament (the LPPD and

LKPj, respectively), and to make an accountability report (the ILPPD) available to the public.

This law also stipulated that the heads of provincial and district government were to be directly elected by people; thus they were no longer appointed by local parliament as regulated in Law No. 22 (1999). However, Law No. 32 (2004) abolished the authority of 41

Chapter Two

local parliament in the accountability forum to impose sanctions on the head of local government, as stipulated in Law No. 22 (1999). This has constituted a drawback for the local-government accountability forum, since the forum has now lost its capacity to possibly impose sanctions as suggested by Bovens (2007a) and Mulgan (2000a).

Susilo Bambang Yudhoyono served as the sixth Indonesian president between 2004 and 2009, after defeating the incumbent president, Megawati Soekarnoputri, in the first direct presidential election in 2004.

The Yudhoyono administration endorsed Government Regulation No. 3 (2007) on

Accountability Reporting of Local Government which regulates the mechanism of local- government accountability reporting in more detail. However, among the three entities to whom the local government reports, the public receives the most limited information, as the accountability report they receive (ILPPD) is only a summary of that submitted to the central government (LPPD).

A study conducted by the DRSP (2009) revealed that Indonesian local governments’ accountability reports contained poor-quality data. Smoke (2005) noted that although Indonesian local governments are required to comply with various forms of public reporting, they lacked transparency in managing their administrations.

In a similar vein, Goetz and Jenkins (2001) wrote that the public distrusted the political and administrative forms of accountability in most developing countries. In the

Indonesian context, these phenomena are partly caused by the lack of institutional capacity of Indonesian local governments (DRSP, 2009; Harun & Kamase, 2012). Mountfield and

Wong (2005, p. 89) disclosed another cause for distrust: Indonesian local governments’ 42

Chapter Two

“monitoring and accounting systems often produce data that are neither timely nor accurate”.

On the side of local parliaments (DPRD), Green (2005) maintained that Indonesian local parliaments do not have proper criteria with which to assess local government accountability reports; even worse, they employ “arbitrary standards” (p.138). A study conducted by SMERU (2001) in 10 provinces within Indonesia, including South

Kalimantan province, found that the public perceived that members of local parliaments preferred to pursue their own interests instead of the public interest.

Sarman (2007) asserted that the South Kalimantan Provincial Parliament demonstrates poor performance in formulating and producing by-laws that push the executive to promote people’s welfare. Natural-resources management, for instance, is not regulated with an integrated regulatory framework. As a result, the exploitation of natural resources within the province leaves widespread environmental damage (JATAM, 2010).

Likewise, ADB (2004b) found that Indonesian local parliaments were still not able to conduct oversight tasks properly due to the members’ low capabilities for doing such tasks.

In a similar vein, DRSP (2009) concurred this view that Indonesian local governments lack the capacity to discharge their main tasks: legislation, budgeting and control. As result, they have not yet played significant roles in monitoring local governments.

To conclude, both executive and legislative branch of power lack institutional capacity in conducting their respective roles. As a result, the checks and balances mechanism has not yet existed properly in Indonesia. 43

Chapter Two

The next sub-section presents information about the accountability forum—the forum through which the power-holders are held accountable by the relevant entities.

2.7.3. Accountability Forum as Part of Accountability Mechanism

As stated previously, this study employs a definition of accountability proposed by

Bovens (2007a). According to Bovens (2007a), an accountability forum is one of the elements of accountability through which the power-holders are held accountable by the account-holders for what they have done (Bovens, 2007a, 2007b, 2010; Mulgan, 2000a,

2003; Rahman, 2008; Hodge, 2009).

Having an accountability forum has at least two possible consequences for the power-holders: boosting their legitimacy or receiving sanctions (Bovens, 2007a; Mulgan,

2003). The sanctions imposed on the power-holders are intended to endorse the executive being on the right track in exercising their power (Bovens, 2007a; Mulgan, 2003; Rahman,

2008; Mezey, 2008).

In the public sector, the role of parliaments is essential, as they have mandates to hold the executives accountable (Rahman, 2008). Legislation usually requires the executives to submit their accountability reports to the parliaments, as the accountability reports are considered as a medium of accountability discharge as suggested by Boyne and

Law (1991), Coy and Pratt (1998), Taylor and Rosair (2000), and Ryan et al. (2002). On the legislature side, the accountability report is important, because the report is an input for legislative oversight (Mulgan, 2001; Hughes, 2003; Rahman, 2008).

In the Indonesian context, as stated previously, during the Soeharto regime (1967-

1998), local parliaments did not serve properly as oversight bodies, as almost all members 44

Chapter Two

of parliaments across the country were the regime’s representatives instead of the people’s delegates. The fall of the Soeharto regime has changed the Indonesian political landscape.

Legislation now protects the right of citizens to establish new political parties and put an end to the limited party system. This political reform has affected Indonesian parliaments across the country, in that they are no longer dominated by an authoritarian regime’s political party (Golkar). Rather, the seats in the parliaments have been distributed to several political parties.

According to DRSP (2009) and ADB (2004b), Indonesian local parliaments lack capacity in evaluating local-government accountability reports. Mulgan (2003) maintained that the power-holders have a tendency to report their account in overly positive tones. To cope with this issue, parliaments should have a reliable mechanism for assessing their executives’ accountability report, as suggested by Rahman (2008) and Mezey (2008), to keep the power-holders reporting honestly.

Given this fact, it is relevant to see how local parliament evaluates the local- government accountability report in the accountability forum, in which the political landscape has dramatically changed following the collapse of the authoritarian Soeharto regime.

2.8. Conclusion

Accountability is a long-standing concept, dating back to around 2000 BC and the

Code of Hammurabi. In its development, accountability can be divided into two schools of thought: accountability as a virtue, and accountability as a mechanism. 45

Chapter Two

Most American scholars have perceived accountability as a set of standards in assessing the conduct or behaviour of public officials based on righteousness or virtue.

They emphasise the personal values of the actors. In contrast, European, Australian and

Canadian scholars have tended to view accountability as a societal arrangement and institutional relationship through which the principal can hold the agent to account. In this respect, the focal point of this study is on the existence and role of the institutional mechanism, instead of the personal behaviour of the actors.

Considering Indonesia’s social, cultural and political contexts, this study employs the definition of accountability as a mechanism. This does not mean that accountability as a virtue is less important or less valuable. Rather, this study focuses more on the mechanism of accountability systems of local government in the reform era, in which the political environment has completely changed. During the Soeharto regime (1967-1998), the mechanism of the local-government accountability system was suppressed by the regime, since most of the members of local parliaments across the country were controlled. As a result, legislative bodies throughout the country did not serve as oversight councils that monitored the executives. Therefore, an investigation into the practice of accountability as a mechanism in the post-Soeharto regime is needed.

The next chapter describes the history and legacy of the Soeharto regime so that the current local-government reporting can be understood in its context.

Chapter 3: The History of Indonesia and Legacies of the Soeharto Regime

3.1. Introduction

This chapter presents a brief history of Indonesia; this is necessary to understand the historical context in which local-government accountability reporting currently takes place.

Within Indonesian history, the Soeharto regime is the longest-ruling regime (1967-1998) in the post-colonial era; thus it is likely that the legacies of his administration have influenced today’s Indonesian governmental agencies at all levels, including the practice of local- government accountability reporting. This chapter’s three sections examine the history of

Indonesia (section 3.2) and the legacies of the Soeharto regime (section 3.3), and offer some conclusions (section 3.4).

3.2. The History of Indonesia

This section provides a brief history of Indonesia that will be beneficial in understanding the context within which this study is conducted.

Indonesia was colonised from the early 16th to the mid-20th century by Portugal,

England and the Netherlands. Indonesia was also briefly occupied by Japan during World

War II (Drakeley, 2005). Among the colonial rulers, the Dutch colonised the country for the longest period, almost three and a half centuries (1596-1942) (Ricklefs, 2001). During this era, people at the lowest socioeconomic level suffered the most, while some royal families and bureaucratic elites by cooperating with the colonial regimes. This situation 47

Chapter Three

aroused the people to liberate the nation from colonisation by armed and diplomatic struggles (Vickers, 2005).

Indonesia achieved its independence in 1945, following the defeat of Japan by the

Allied troops in World War II (Ricklefs, 2001). On behalf of the Indonesian people,

Soekarno and Hatta declared Indonesian independence on 17 August, 1945. The

Preparatory Committee of the Independence of Indonesia (PPKI) then appointed Soekarno and Hatta as the first Indonesian president and vice-president, and endorsed the 1945 constitution on 18 August, 1945. The 1945 constitution divides administrative power into three branches: executive, legislative and judiciary as suggested by the French philosopher

Montesquieu (1689-1755) (see Pirie, 2009).

Soekarno faced constant political and social upheavals during his administration. At the peak, the coup exercised by Indonesian Communist Party (PKI) on September 30, 1965 made the situation getting worse. Soekarno assigned Soeharto to restore public order by signing a letter of instruction, called “Supersemar” ( surat perintah sebelas maret ), on

March 11, 1966. Soeharto successfully restored public order and tackled the political and social unrests. The MPRS (upper house) then withdrew Soekarno’s presidential mandate and appointed Soeharto as acting president on March 12, 1967 (Ricklefs, 2001).

Following his appointment, Soeharto took important measures, including merging and establishing direct control over the four military forces (army, navy, air force and police) in August 1967. Soeharto was formally appointed as Indonesian president by the

MPRS in March 1968. To silence potentially critical groups, the Soeharto regime limited

Chapter Three

the freedom of the press (Ricklefs, 2001). The Soeharto regime had become a centralised government that powerfully controlled local governments across Indonesia.

During 1967-1998, the Soeharto regime encountered both military and civilian opposition, but he was still too strong to be ousted. It remained so until the Asian economic crisis in mid-1997, which shook the Indonesian economy and led to the inflation in the price of basic needs and a plummeting Indonesian currency exchanges.

The Soeharto regime’s failure to manage the crisis, combined with its corruption, led to growing public dissatisfaction with the regime. As the situation worsened, four students were killed by military officers in a demonstration on May 12, 1998 (Ricklefs,

2001). This incident sparked the anger of the people and the situation became uncontrollable. On 21 May, 1998, Soeharto resigned as the president of the Republic of

Indonesia, and the vice-president, B.J. Habibie, was appointed as the president by the

People’s Consultative Assembly (MPR).

The rise of B.J. Habibie as the third Indonesian president in 1998 marked the beginning of the reform era in Indonesian history and transformed into a newly democratic state. The Habibie administration, for instance, endorsed decentralisation reform through

Law No. 22 (1999) on Local Government (Anwar, 2010). It also granted and protected the freedom of the press through Law No. 40 (1999) on the Press (Anwar, 2010).

The next section will describe the legacies of the Soeharto regime and their effects on Indonesia’s political system as they relate to this study.

Chapter Three

3.3. The Legacies of the Soeharto Regime

This section identifies the Soeharto regime’s persistent legacies and how they may affect the practice of local-government accountability reporting.

3.3.1. Golkar: The Soeharto Regime-Sponsored Political Party

Soeharto reinforced the role of Golkar, the political party established by the armed forces in 1964, to be the majority party in the legislative bodies across Indonesia, to back up his regime (Ricklefs, 2001). For example, the “dual-function” doctrine, or dwi-fungsi

ABRI 2, stipulated the two main roles of the armed forces as defence and the maintenance of social and political order (Liddle, 1996). This gave rise to Indonesia’s peculiar political system, in which active and retired military personnel appointed by the armed-forces commander occupied 20% of parliamentary seats 3 across the country without being elected by the people (Liddle, 1999; Chalmers, 2006). The regime also designated a number of army officers to hold strategic positions in Golkar.

Limits on the public’s freedom to participate in the political sphere resulted in a decline in the number of parties participating in elections; this was particularly apparent in the 1971 election (the second election in Indonesian history), in which only 10 parties participated (Liddle, 1978), compared with 48 in the first election in 1955. Golkar then won

2 Dwi-fungsi ABRI , in which the Indonesian Armed Forces served both security and political roles, was designed by General Abdul Haris Nasution in 1958. However, his idea was that the military would play a political role only temporarily, to address political instability at that time (Vatikiostis, 2004). 3 “Parliament” here refers to the houses of representatives in which the members were chosen through election. There were three types of parliament: national (DPR-lower house), provincial (DPRD Provinsi) and district (DPRD Kabupaten/Kota). The upper houses (MPR) of each of these types included all members of the respective DPRs (lower houses), along with representatives of various societal groups (utusan golongan) as determined by the regime. 50

Chapter Three

the election by securing 62.80% of the vote, while the NU and PNI followed, with 18.67% and 6.94% respectively (Liddle, 1978).

The regime then simplified the party system by merging nine parties into two in

1973 (Liddle, 1978). The PNI (the biggest party in the 1955 election), Parkindo, Partai

Murba, IPKI and Partai Katolik were forced to merge into a new party, the PDI (Indonesian

Democratic Party) (Liddle, 1978). Similarly, four Muslim parties the NU, Parmusi, PSII and Perti were compelled to fuse into the PPP (United Development Party) (Liddle, 1978).

However, Golkar, the regime’s party, was not restructured at all. Since then, only the three parties resulting from the amalgamations (PPP, PDI and Golkar) have ever taken part in the elections. As a result, all six elections held during the Soeharto regime (1971, 1977, 1982,

1987, 1992 and 1997) were won by Golkar (Golongan Karya, Functional Group).

With a simple majority in the parliament, Golkar played a key role in shaping

Indonesian parliaments at all levels throughout the country. Programs and works were aligned with the regime’s wishes, and were not criticised. Parliaments across the country served merely to rubber-stamp the regime’s initiatives (Ledergerber & Susanti, 2007).

The collapse of Soeharto regime in 1998 did not necessarily have a negative effect on Golkar status; it not only survived but quickly consolidated its position by winning the

2004 legislative election (Bünte & Ufen, 2009; Tomsa, 2009).

Golkar, the Soeharto regime's party, dominated the Indonesian political sphere, including its legislative bodies, for more than three decades. Golkar has thus had a crucial role in shaping the way legislative bodies control and criticise the executives or do not. This

Chapter Three

reluctance to act as a check on the executive persists, even in the reform era (Ziegenhain,

2009).

3.3.2. Self-Interested Behaviour of Members of Parliaments

As stated previously, during the Soeharto regime the armed forces occupied 20% of the total seats in parliaments nationwide without being elected by the people. Meanwhile,

Golkar secured the majority of seats in all parliamentary elections held by the regime. In these elections, Golkar managed around 67.5% of the vote on average for the national parliament (DPR) (Suryadinata, 2007).

Provincial and district parliaments nationwide more or less followed the same pattern as the national parliament. Parliaments became, in effect, representatives of the

Soeharto regime rather than of the people. Meanwhile, the two remaining political parties, the PPP and PDI, merely served as complementary participants in a political process controlled by the regime (Liddle, 1996). As a consequence, parliaments across the country lost their function as oversight bodies (Ledergerber & Susanti, 2007; Anwar, 2010)

According to the 1945 constitution, parliaments have three main tasks: legislation, budgeting and control. However, the members of parliament did not act to keep the government on the right track. State funds, for instance, were administered as part of the private accounts of government officials (Hart, 2001). As a result, corruption was rampant and pervasive (Hart, 2001). Moreover, members of parliament sought to retain their positions by being submissive to the regime.

In short, members of parliaments did not behave as true representatives of the people; rather they were the regime’s representatives, in return for personal benefit. 52

Chapter Three

3.3.3. Symbolic Display of Audit Bodies

The BPK (Supreme Audit Agency), established in 1947, was originally intended as the only independent and external audit agency, as suggested by the 1945 Constitution

(BPK, 2009e). However, this intended role was undermined by limitations placed by the

Soeharto regime on its objects, scope and method of audit, as well as the contents of audit reports as regulated in Law No. 5 (1973) (BPK, 2009e). To make matters worse, in 1983 the role of the BPK was to a large extent taken over by the new BPKP (Financial and

Development Supervisory Agency) (BPK, 2009e; ADB, 2004b), an audit agency established in 1983 through Presidential Decree No. 31 (1983). This marked the end of an independent and external audit agency. For instance, the BPK could not audit lucrative government agencies or state-owned enterprises such as the Indonesian Tax Office,

Department of Forestry and Pertamina (Nasution, 2006). Moreover, to reinforce national stability, BPK’s audit results were presented to align with the regime’s wishes (Nasution,

2006).

The regime also created "a multiple-layer of audit bodies" that controlled governmental organisations (BPK, 2009e; ADB, 2004b). At the national level, the

Inspectorate General (Irjen) operated in each department/ministry, and the BPKP (Financial and Development Supervisory Agency) had the authority to audit any governmental bodies

(BPK, 2009e; ADB, 2004b). At the provincial and district level, there were the provincial internal control agency (inspektorat provinsi ) and the district internal control agency

(inspektorat kabupaten/kota ), respectively (BPK, 2009e; ADB, 2004b).

Chapter Three

However, instead of controlling governmental organisations, these audit bodies merely served as a symbolic display to show to the public that multiple-layers of controls were in place. The audit bodies acted as camouflage for the regime’s financial irregularities.

3.3.4. Keenness to Build “Good Impressions"

Building "good impressions" within a relatively a less-educated society, like

Indonesia, might be effective in winning public support. Taking advantage of traditions in the Javanese culture, Soeharto projected himself as a “benevolent ruler”, and the Indonesian people as an “obedient populace” (Liddle, 1996): in other words, he projected the impression that the power he held was for the good of the people, and whatever his policies and measures, the people should not voice any criticism; rather, they should actively support him.

For example, Soeharto established a number of charitable foundations ( yayasan ), including Amal Bhakti Muslim Pancasila (YAMP), Supersemar and Dharmais. YAMP is widely regarded as a generous foundation due to its initiatives in building mosques not only in big cities but in smaller towns as well. Supersemar granted scholarships to students nationwide at all level of education, from primary school to university. Dharmais distributed social aid and health services to disadvantaged people. The activities of these foundations contributed to Soeharto’s successful management of his public image as benevolent ruler. Liddle (1996) asserts that the charitable foundations established by

Soeharto were designated to amass, and then disguise, the bribes given by some business executives as a token of gratitude for concessions and privileges. 54

Chapter Three

To conclude, in order to maintain and preserve his power, Soeharto created a good image for his administration in the public sphere by establishing a number of foundations.

Through such foundations, Soeharto promoted himself as a good leader who always did good deeds for the sake of his people. Soeharto thus successfully distracted people from questioning his authoritarian administration.

3.3.5. Politicised Bureaucracy

In addition to making use of the armed forces and Golkar, the Soeharto regime also forced the bureaucracy to support his regime (Liddle, 1985). In February 1970, the regime declared that all civil servants (PNS) across the country had to vote only for Golkar, not the

PPP or PDI (Ricklef, 2001). The civil servants’ union was organised into a single organisation, the Indonesian Civil Servants Association (Korpri), controlled by Golkar

(Vatikiotis, 2003).

Even village administrations 4, the lowest level of Indonesian bureaucracy, were controlled by the Soeharto regime. According to Law No. 5 (1979) on Village

Administration, for instance, village communities could merely nominate candidates for village head; the actual appointment was made by the head of the sub-district (camat)

(Ricklefs, 2001). Not surprisingly, development programs run by the village administrations represented the regime's wishes, rather than the people's.

In conclusion, realising the potential of Indonesian civil servants across the country, the Soeharto regime had coerced and politicised the civil servants to become one of its

4 Indonesian government system at that time could be divided into five levels: central, provincial, district, sub- district (kecamatan), and village (kelurahan/desa). 55

Chapter Three

main political proponents. These measures helped the Soeharto regime to persist for more than three decades.

3.3.6. Corruption

As discussed earlier, the parliament has three main tasks: legislation, budgeting and control, as mandated by the 1945 constitution. In relation to the control task, the members of parliament have not kept the regime going in the right direction. The parliament has also not been productive in terms of the number of laws issued (Anwar, 2010), particularly regarding the eradication of corruption. During the Soeharto regime, Law No. 3 (1971) on the Suppression of Criminal Corruption and Law No. 11 (1980) on Bribery were the only two measures passed that attempted to control it (Hornick, 2001).

Although the regulatory framework on corruption was in place, enforcement was very weak. Even judges and prosecutors were involved in corruption (Hornick, 2001).

Moreover, the control function granted to the parliament by the constitution was not carried out appropriately. Consequently, corruption was rampant, including in the legislature itself

(Ziegenhain, 2009; Makarim, 2001; Hart, 2001; Ledergerber & Susanti, 2007).

Furthermore, Bünte and Ufen (2009, p. 18) noted the collusive practice between legislative and executive officials in committing corruption:

With the absence of a strong rule of law, the legal framework was often abused by alliances of politicians, bureaucrats and private interests for rent-seeking activities. Moreover, he illustrates that decentralization had a number of side effects, such as the rise of corruption and money politics, the consolidation of local oligarchies and the revival of primordialism.

Chapter Three

Thus, corruption in Indonesia became systemic, involving actors in the circle of decision-making in both the executive and legislative branches (Cole, 2001).

3.4. Conclusion

Although the New Order regime collapsed more than a decade ago, its legacies persist. This might be because obedient behaviours (acquiescent and compromising responses are discussed in Chapter 5) were perpetuated for more than three decades, and thus entrenched in Indonesian public-sector organisations, including not only legislative bodies, but executive and judicial organisations as well.

This chapter has discussed the broad Indonesian political background within which the study takes place. The next chapter looks at the more specific South Kalimantan local government region, in which this study is set.

Chapter 4: The South Kalimantan Provincial Government

4.1. Introduction

This chapter presents the context in which the South Kalimantan Provincial

Government’s accountability reporting takes place can be understood: specifically, the history, environmental setting and organisational culture and structure of the South

Kalimantan Provincial Government (SKPG).

The chapter’s sections cover the Indonesian government organisation in brief

(section 4.2), South Kalimantan Province (section 4.3), Banjarese institutions (section 4.4), the practice of accounting in the socio-religious context (section 4.5), the accountability system and reporting under the Yudhoyono administration (section 4.6), the South

Kalimantan Provincial Government (section 4.7), and offer conclusions (section 4.8).

4.2. Indonesian Government Organisation in Brief

There are three levels of government units in Indonesia relevant to this study: the central, provincial and district governments (GR No. 3 (2007)). The central government is led by a president; the provincial governments by a governor; and district governments by a regent or mayor. The central government’s administration is run by ministry and non- ministry units. Ministry units are led by ministers; non-ministry units are headed by chairpersons; both are directly responsible to the president.

Chapter Four

Administratively, Indonesia has 33 provinces and 497 cities/regencies across

Indonesia. 5 The ministry of home affairs (Kementerian Dalam Negeri) is given authority by the president to manage provincial and district governments. Thus, governors and mayors/regents are ultimately responsible to the president, through the minister of home affairs. Apart from this, provincial and district governments have to be accountable to their respective local parliaments annually through accountability forums held by local parliaments.

4.3. South Kalimantan Province

South Kalimantan Province has a geographical context made complicated by both its history of deep religious traditions and its rich mineral resources; the former explains how the religious traditions exist in the society and the latter presents how the province manages its natural resources.

Under the provincial government, there are 13 district administrations: Banjarmasin,

Barito Kuala, Banjarbaru, Banjar, Tapin, Hulu Sungai Selatan, Hulu Sungai Tengah, Hulu

Sungai Utara, Balangan, Tabalong, Tanah Bumbu, Kotabaru and Tanah Laut.

5 Home Affairs Ministry website, http://www.depdagri.go.id/basisdata/2010/01/28/daftar-provinsi , accessed 29 July 2010. 59

Chapter Four

Figure 4.1. Map of Indonesia

According to the Indonesian Bureau of Statistics, the population of South

Kalimantan province is about 3.4 million (BPS, Kalimantan Selatan, 2009). The Banjarese ethnic group accounts for 75% of the total population (Chalmers, 2007), with the remainder made up of other ethnic groups such as Javanese, Dayak and Buginese. Banjarese is the most-spoken local language.

According to Geertz (1971), South Kalimantan is one of the gateways of early

Islamic propagation in Indonesia, along with Northern Sumatera, Southwest Malaya, North

Java and South Celebes by Indian traders. Not surprisingly, about 90% of the South

Kalimantan people practise Islam, with the rest practising other religions such as

Christianity, Buddhism and Hinduism. Given this situation, South Kalimantan is known as

Chapter Four

an Islamic religious society. It is quite easy, for instance, to find Islamic places of worship such as mosques and langgars (little mosques). According to Chalmers (2007), Banjarese society is keen to establish mosques and langgars . My observations on site suggest that these serve not only as places of worship but also as religious symbols of the society (see also Karni & Hidayat, 2006).

Religious rites, such as tasmiyah (naming ceremony for newborn babies), sembahyang hajat (prayers for special wishes), nisfu sya'ban (religious observances ahead of the month of fasting or Ramadhan ) and haulan (the observance of a loved one's death), are preserved from generation to generation and intertwined with the local culture (Daud,

1997). The pervasiveness of these rites brings gurus (religious leaders) to the centre of the society. They serve not only as religious leaders, but also as informal leaders whose opinions the people seek regarding the issues they face in their daily lives. Gurus are widely perceived as wise and paternal; thus their views (including their political stances) are worthy of attention.

Agriculture forms the main livelihood of the South Kalimantan population, employing about 46% of working people (BPS Kalimantan Selatan, 2009). The combined sectors of mining, manufacturing, electricity and civil works employ 14% (BPS Kalimantan

Selatan, 2009), although mining itself employs just 2% (Fatah, 2008). The remainder work in sectors such as trading, retail, restaurant, hotel, transportation, warehouse, communication, insurance and finance and other business services (BPS Kalimantan

Selatan, 2009).

Chapter Four

The province also has been endowed with quite rich natural resources, such as forests, iron, manganites, nickel, chromites and coal. However, during the Soeharto regime, forest resources had been severely depleted. The main beneficiary of this depletion was

Soeharto’s family, his cronies and bureaucrats in both the central and local governments

(provincial and district) (Ricklefs, 2001). The deforestation left environmental damage and uneven economic benefits for the general population (Ricklefs, 2001).

South Kalimantan is also rich in coal resources. Indonesia is estimated to have 57 trillion tons of coal, which is mainly scattered in three provinces: East Kalimantan (35%),

South Sumatera (33%) and South Kalimantan (16%) (PSE UI, 2002, cited in Fatah, 2008).

South Kalimantan province is the second-biggest producer of coal nationally, with more than 70 million tons in each of the years from 2008 to 2010). 6 Coal-mining sites are located in seven districts: Banjar, Tapin, Balangan, Tabalong, Kotabaru, Tanah Bumbu and Tanah

Laut.

The next section depicts the South Kalimantan Provincial Government as the context for this case study into Indonesia’s local-government accountability.

4.4. Banjarese Institutions

This section describes the prevailing institutions in South Kalimantan Province that might affect the practice of accountability as well as the political landscape the province.

6 Source: Indonesian Coal Mining Association (APBI-Asosiasi Pertambangan Batubara Indonesia) http://www.apbi-icma.com/chart.php?act=prodregion, accessed 28 March 2012. 62

Chapter Four

South Kalimantan Province is the home of the Banjarese ethnic group; this group constitutes 75% of the total population (Chalmers, 2007), along with other ethnic groups such as Javanese, Dayak and Buginese, comprising a total population of 3,250,100 (BPS

Kalimantan Selatan, 2007). Banjarese people are considered enthusiastic in their religious observances, such as building mosques and langgar (little mosques) as religious symbols

(Chalmers, 2007). Not surprisingly, mosques and langgars, as well as religious rites such as haulan (commemorating the death of family members or gurus), are easily found within the province. Most particularly, Banjar District has been called the serambi mekkah (the veranda of Mecca) of South Kalimantan (Karni & Hidayat, 2006) due to its pervasive

Islamic observances as well as the presence of several Islamic boarding schools

(pesantren ).

The renowned Islamic scholar, teacher and author, Syeikh Muhammad Arsyad Al

Banjari, lived in the Banjar District between 1710 and 1812 (Azra, 2004). One of his outstanding books, Sabilal Muhtadin (“the way of those who are guided by God”), is memorialised in the name of one of the largest mosques in Banjarmasin (the capital city of

South Kalimantan Province). Syeikh Muhammad Arsyad Al Banjari advised the Banjarese

Sultan regarding Islamic jurisprudence. These attributes have led him to be greatly honoured by South Kalimantan society (and even Muslims from neighbouring countries such as Malaysia and Singapore). These days the descendants of Syeikh Muhammad

Arsyad Al Banjariare, including some renowned gurus, are scattered everywhere particularly on Kalimantan Island.

Chapter Four

One of these gurus was K.H. Zaini Ghani, popularly known as Guru Ijai or Guru

Sekumpul , who lived between 1942 and 2005. Originally, gurus in South Kalimantan served mainly as religious leaders. Over time, due to their extensive engagement with people in daily religious activities, they also served as informal societal leaders with whom people consulted, not only on religious matters but also on the affairs of daily life. Guru

Sekumpul was widely perceived to have multiple-roles as a religious, informal and charismatic leader. Due to his charisma, Guru Sekumpul was greatly respected by the majority of South Kalimantan people and other gurus within Kalimantan and the Java

Island. Thousands—on Sunday afternoon, this figure could rise to more than 10,000— attended his religious services. Because of his great influence, public officials, business executives, ministers and even some Indonesian presidents (including Abdurrahman

Wahid, Megawati, and Susilo Bambang Yudhoyono) visited him (Rosyadi, 2006). Some, presumably to show the people that they shared their values (in this case, respect for gurus as religious and informal leader), sought his blessing. This would make their legitimacy easier to secure. A sociologist from University of Lambung Mangkurat, Mr. C1 said:

In order to win a gubernatorial or regent election, the candidates should embrace prevailing institutions and customs in South Kalimantan. One of these is paying great respect toward gurus. 7

Photos of Guru Sekumpul are easily found in most houses in South Kalimantan

Province, particularly among traditional Muslims (nahdhiyin ).8 By hanging his photo in

7 Thought sharing with Mr. C1 made during the site visit of this study. 64

Chapter Four

their homes or/and shops, his followers believe they will obtain blessings from God, because Guru Sekumpul was a Waliy Qutb (a person having a high level of piety and a close relationship with God). His followers transcend South Kalimantan provincial borders, being found in Central Kalimantan, East Kalimantan, East Java and Jakarta; they mostly come from traditional Muslims groups, who revere gurus much more strongly than modern

Muslims. It should be noted that there are many more traditional Muslims in South

Kalimantan Province than modern Muslims.

It has been a longstanding cultural institution for anyone who wishes to hold a public office such as governor, regent or mayor in the South Kalimantan region to secure gurus' blessing, before standing for office. Mr. C3, a political observer from Lambung

Mangkurat University said that:

The (current)governor was a cunning politician, because he could shrewdly play the prevailing institutions in the society in return for boosting his legitimacy. 9

4.4.1. Current Governor of South Kalimantan Province

Long before being elected as the governor of South Kalimantan in 2005, Rudy

Ariffin (the current governor) frequently attended religious services held by Guru

Sekumpul (Rosyadi, 2006). His rise as the secretary of the Banjar district in 1997-2000, the second-highest post in the district administration, made him accustomed to cultivating a good relationship with Guru Sekumpul. By fostering such good relationships, he eventually

8 Muslim society in South Kalimantan can be divided into two groups: traditional and modern. Traditional Muslims highly respect gurus and perceive them as omniscient figures; some gurus, like Guru Sekumpul, are even acknowledged as saint-like leaders. In contrast, modern Muslims perceive gurus as ordinary humans, as prone as any other human to making mistakes. 9 Thought sharing with Mr. C3 made during the site visit of this study. 65

Chapter Four

secured the guru’s blessing to compete in the 2000 Banjar district regent election. The blessing of Guru Sekumpul served as "political capital" and he was popularly predicted to be the winner of the election. Guru Sekumpul’s charisma and influence in South

Kalimantan society gave him significant influence over the members of the district parliament 10 . Ignoring his opinion would cause the parliamentary members to lose credibility and legitimacy with the people. As predicted, Ariffin was elected as the regent of Banjar District. Two months later, in an announcement covered widely in the press,

Guru Sekumpul made a public statement: “I adopt you (Rudy Ariffin) as my son in the world and the hereafter” (Rosyadi, p. 107, 2006). Securing such a blessing as the adopted son of Guru Sekumpul could mean Ariffin was gaining electoral support endorsed by informal and charismatic leader for next gubernatorial election.

It is important to note that during his administration as the regent of Banjar district

2000-2005, he had very few outstanding achievements. In relation to the accountability reports, for instance, there was no administrative breakthrough that marked him out as an exceptional head of district. The public did not know exactly what he had already done, because there was no accountability report available to them. In addition, in terms of financial accountability, for instance, which is audited by the Supreme Audit Agency, his administration never obtained an unqualified pass during 2000-2005.

Interestingly, five years later, in the 2005 South Kalimantan gubernatorial election,

Rudy Ariffin successfully defeated the incumbent governor. The blessing given by Guru

10 At the time the governor and regent were still elected by local parliament rather than directly by the people. 66

Chapter Four

Sekumpul was believed to have been an important factor in his victory (Karni & Hidayat,

2006). Similarly, many candidates for the post of governor, regent, mayor, and member of parliament sought his blessing before competing in elections.

Apart from his strategy of cultivating a good relationship with Guru Sekumpul and other gurus, Ariffin also paid close attention to religious institutions across the district.

Specifically, he had an "institutional initiative" to preserve the existence of religious symbols and the heritage of the Banjar District. Ahead of the end of his term as the regent in 2004, for instance, using his authority as a regent, he allocated US$ 2.7 million (IDR 25 billion) from the district's budget to renovate the beautiful and majestic Al Karomah mosque (Masjid Agung Al Karomah ) in downtown Martapura (the capital city of Banjar

District). He thus positioned himself as the leader who not only respected but preserved important cultural and religious institutions.

Ariffin then governed South Kalimantan Province for the 2005-2010 period. It should be noted that under the Ariffin administration, the province's economy grew at 5 to

6% during 2005-2008 (BPS Kalimantan Selatan, 2009). The SKPG also was granted an investment award by the central government in 2008 because the province was the third- most-favoured investment destination out of Indonesia’s 33 provinces. However, it was apparent that the Ariffin administration lacked transparency (as discussed in Chapter 7 of this study). The SKPG’s financial statements never secured an unqualified pass from the

Supreme Audit Agency (BPK, 2006; 2012). Moreover, the province was ranked 26th of 33 provinces across the nation during 2005-2009 in terms of human development index, despite its being the second-largest-coal-producing province in Indonesia. 67

Chapter Four

The governor succeeded in retaining his power by winning the 2010 South

Kalimantan gubernatorial election in a landslide. He employed the same strategy as when he had secured the posts of regent of Banjar District in 2000 and governor of South

Kalimantan Province in 2005: embracing and conforming to the prevailing institutions in

South Kalimantan, such as being respectful to and maintaining good relationships with gurus, paying attention to religious symbols such as mosques and langgar and attending religious rites (Karni & Hidayat, 2006; Rosyadi, 2006).

4.5. The Practice of Accounting in the Socio-religious Context

Gambling (1974, p. 107, cited in Maurer, 2002) noted that “accounting theory and culture are not readily separable”. Carruthers & Espeland (1991) went further, saying that culture shapes accounting practices. This might be possible because the accounting practices are cultural phenomena (Carruthers & Espeland, 1991) that are linked to historical context and tradition (Lewis, 2001; Napier, 2009).

Christopher Napier (2009), an accounting history researcher wrote the early development of Islamic accounting may have been emerging in Indonesia around 1800, particularly in Jawa or Sumatra region. However, Napier (2009) further noted that this claim was not supported by adequate evidence. A closer investigation shows the early development of accounting, particularly Islamic accounting has been taking place in South

Kalimantan in the nineteenth century.

It is difficult to disentangle accounting from religious values as claimed by

Carruthers and Espeland (1991). They asserted that the early development of accounting in 68

Chapter Four

Italy was influenced by divine values, as accounting was developed by a Franciscan monk,

Frater Lucas Pacioli (Carruthers & Espeland, 1991). Thus, it is quite plausible to link the contribution of Islamic values to the development of accounting in South Kalimantan, as

Islam was official religion of the Banjarmasin Sultanate at that time (Azra, 2004).

This is evidenced by the work of Syeikh Muhamad Arsyad Al-Banjari entitled

Sabilal Muhtadin ([1882], 2005). The book contained a detailed procedure and calculation on how a Muslim (an Islamic adherent) should pay his/her zakat (compulsory alms) to charity based on Muslim’s wealth.

To support this religious obligation was conducted properly by the people as required by shariah (Islamic jurisprudence), Al-Banjari ([1882], 2005) explained this issue in a quite great detailed (pp. 745-831), based on sort of business run by Muslims such as agriculture, trading and mining. The crops harvested from fields that used waterwheel

(kincir air) in watering the plants, for instance, are charged with lower percentage of zakat

(5 % from the total harvest); while the crops gained from the fields that rely on rain are imposed with higher percentage of zakat (10%) (Al-Banjari, 2005). The rationality of these two different percentages of zakat was because in the first case, farmers invested more money to build and maintain the waterwheel, while in the latter case required much less cost, if not at all (Al-Banjari, 2005).

According to Gambling and Karim (1986), Zakat or compulsory alms is part of

Islamic accounting that should be recorded in a proper way, and in the hereafter each

Muslim will be held accountable by God about what has been done in world, including the obligation to pay zakat. Lewis (200, p. 103) maintained that “accounting in the broad sense 69

Chapter Four

is central to Islam, since accountability to God and the community for all activities is paramount to Muslim’s faith”. Thus, the practice of accounting that complied with such religious tenets not only does bring technical and symbolic power, but also divine legitimation as suggested by Carruthers and Espeland (1991).

The appointment of Syeikh Muhammad Arsyad Al-Banjari as a mufti11 of the

Banjarmasin Sultanate around 1773 boosted the practice of Islamic accounting more institutionalised in the society, as Al-Banjari has the authority to issue Islamic legal opinion to the people of South Kalimantan (Azra, 2004). While at the same time, this move espoused symbolic power to the Sultan of Banjarmasin, because his administration was backed by a highly respected guru who had extensive Islamic knowledge.

During his life (1710-1812), Syeikh Muhammad Arsyad Al-Banjari wrote 14 books including Sabilal Muhtadin that contained 1143 pages in length (Syukur, 2009; Al-Banjari,

2005). Al-Banjari also fostered the society with a scholarly tradition in studying the knowledge, by lecturing and discussing the subject equipped with written material (Syukur,

2005); instead of transmitting the knowledge through an oral method with one-way communication as practiced by many gurus at that time. The using of written material that come along with his lectures might have been influenced by his experience in studying various Islamic books from many ulamas (Islamic scholars) for thirty-five year in Saudi

Arabia.

11 A mufti is an Islamic scholar who has the authority to issue Islamic legal opinions or fatawa. 70

Chapter Four

The passing of Syeikh Muhammad Arsyad Al-Banjari in 1812 made the development of Islamic accounting in South Kalimantan getting standstill. Later generations of gurus appear to be more interested on Islam as a ritual-rich religion. As a result, Islamic public lectures tend to be dominated by the subject of religious ritual, instead of Islam as a religion that offers solutions for the issues faced by the humankind. This backdrop may have driven South Kalimantan society being less critical to local government

(discussed in Chapter Eight), as the society was not nurtured with a scholarly tradition that encouraged people being critical and active in overseeing what had been done by government as suggested by Qur’an 12

The next section will describe accountability system including its reporting during the Yudhoyono government.

4.6. The Accountability System and Reporting under the Yudhoyono Administration

In 2004, Yudhoyono became the first Indonesian president to be directly elected by the people. Therefore, it is interesting to know what his government has contributed, particularly in the context of long-time disregard of the public as an audience for local- government accountability reports.

Following the passing of Law No. 17 (2003) under the Megawati administration, the Yudhoyono government endorsed Government Regulation (GR) No. 24 (2005) on

Governmental Accounting Standards (Standar Akuntansi Pemerintahan). The important

12 Qur’an is Muslims’ holy book. 71

Chapter Four

feature of GR No. 24 (2005) is the provision of detailed procedures for recording government agencies’ transactions in a new system called cash towards accrual basis accounting. The system does not yet fully embrace full accrual basis in which revenues, expenditures and expenses are recorded on a cash basis while assets, liabilities and equities are recorded on an accrual basis (hence the term cash towards accrual basis). The transition to a full accrual basis was a gradual process, with full implementation planned by 2008.

In addition, as mentioned in Chapter Two, in 2004 the Megawati administration also issued Law No. 32 on Local Government. According to this law, local government must submit three kinds of accountability reports annually: Laporan Penyelenggaran

Pemerintah Daerah (LPPD) or the Implementation of Governance of Local Government

Report, the Laporan Keterangan Pertanggungjawaban Kepala Daerah (LKPj) or the

Explanatory Report on Accountability) and the Informasi Laporan Penyelenggaran

Pemerintah Daerah (ILPPD) or Information on the Implementation of Governance of Local

Government Report. The LPPD is rendered to the central government, while the LKPj is submitted to the local parliament. The local governments should make the ILPPD available in the public sphere.

In 2007, the Yudhoyono administration issued Government Regulation (GR) No. 3 on Accountability Reporting of Local Governments. This regulation provided guidance on the mechanism and contents of local-government accountability reporting. It should be noted that GR No. 3 provides for an accountability forum in which the power-holder is held accountable by another party. However, this accountability forum is only implemented at the level of the local parliament. 72

Chapter Four

As mentioned earlier, local governments’ accountability reports are classified into three types: the LPPD, LKPj and ILPPD. The LPPD (rendered to the central government) has three notable aspects: decentralised functions, consisting of obligatory functions

(urusan wajib)13 and optional functions (urusan pilihan)14; assistance tasks (tugas pembantuan); and general administration tasks (tugas umum pemerintahan).

Assistance tasks are assigned by the central government to provincial or other lower government units. General administration tasks cover areas such as inter-local government cooperation, cooperation with third parties, coordinating with central government offices in provinces or districts, disaster prevention and mitigation and public order.

The LKPj (submitted to the local parliament) consists of the same contents as the

LPPD, with the addition of two other aspects: the general direction of the local government’s policies and a general explanation of the local government’s financial management (article 18).

The ILPPD (made available to the public) essentially summarises the LPPD (article

27). However, GR No. 3 (2007) does not clearly specify which key information or data the report should contain. It is true that GR No. 3 asserts that citizens are the party to whom local governments should be accountable. However, the fact that the ILLPD report is only a

13 Obligatory functions include: education, healthcare, environmental sustainability, civil works, spatial planning, development planning, housing, youth and sport nurturing, cooperatives and small and medium enterprises, population and civil registration, labour affairs, food self-sufficiency, women’s empowerment and child protection, family planning and family prosperity, transportation, communication and information, land administration, nationalism and home political affairs, local autonomy, general administration, local- government financial management, local administration, village community empowerment, social and cultural affairs, local archives system and library. 14 Optional functions encompass maritime and fisheries affairs, agriculture, forestry, energy and mineral resources, tourism, manufacturing, trading, and transmigration.

Chapter Four

summary of the LPPD could suggest that among the three parties— the central government, local parliament and citizens— the last could be considered the least important. This is paradoxical, because people directly elect the heads of local governments, yet when it comes to the local governments’ accountability reports the public or citizen can only access limited information.

To recap, the two main provisions governing the accountability reports of local government, Law No. 32 (2004) and GR No. 3 (2007), have marked a new milestone in explicitly considering citizens as the new audience of the reports. As a consequence, local governments’ accountability reports must be submitted to the central government (LPPD) and the provincial parliament (LKPj), and made available to citizens (ILLPD). However, among the three parties, citizens only receive limited information, since the accountability report that can be accessed by the public is only a summary of that submitted to the central government.

4.7. South Kalimantan Provincial Government

This section describes the history and organisational culture and structure of the

South Kalimantan Provincial Government (SKPG).

4.7.1. History of the SKPG

The history of the SKPG dates back to about the fifth century A.D., when Tanjung

Puri Kingdom (also called the Kingdom of Kahuripan) established itself at the base of the

Meratus Mountains. Following the migration of a number of Javanese people to Tanjung

Chapter Four

Puri Kingdom, a mixed society was formed incorporating both natives and immigrants. The descendants of this mixed society were then renamed the Negara Dipa Kingdom.

In the 16th century, the Negara Dipa Kingdom was conquered by the Banjarmasin

Sultanate (Hawkins, 2000); this made the Banjarmasin Sultanate the sole ruling power in the South Kalimantan region. The sultanate’s base on the banks of Kuwin River, a gateway for inter-island shipping through the Java Sea, led to its becoming a major maritime kingdom; this pre-eminence lasted until the late 17th century, when the Dutch colonial government conquered the Banjarmasin Sultanate. The South Kalimantan people gained independence from the Dutch colonial government after about 200 years.

An example of the importance that cultural symbols hold for the people of this region is the esteem given to Pangeran Antasari (died 1862), an independence fighter and the leader of the struggle against the Dutch. He and other independence heroes exhibited a spirit of independence locally known as " Waja Sampai Kaputing " (struggling for the sake of the people with all our might). When Indonesia proclaimed its independence on 17

August, 1945, Ir. Pangeran Muhammad Noor was appointed as the first governor of

Kalimantan (Borneo) on 2 September, 1945. Furthermore, emergency Law No. 25 (1956) and Law No. 21 (1957) divided Kalimantan into four provincial administrations: the South

Kalimantan, West Kalimantan, East Kalimantan and Central Kalimantan.

4.7.2. Organisational Culture of the SKPG

According to Oxford advanced learner's dictionary (2010), the term culture originates from French and is defined as "the belief and attitudes of about something that people in a particular group or organisation share". In a similar vein, Sparrow (2001, p.83) 75

Chapter Four

defined culture as "a force that guides the actions of its members during both regular and irregular situations. Kendall (2011,p.72) offers a clearer definition that "Culture is the knowledge, language, values, customs, and material objects that are passed from person to person and from one generation to the next in a human group or society". According to

Kendall (2011), culture is constituted by three elements: ideas, behaviour, and material possessions, while society is constituted by people. Both society and culture are mutually dependent (Kendall, 2011); meaning that people is the key actor that shape or be shaped by culture.

Lundberg (2001, p. 330) offers a definition of organisational cultures as “an organized set of ideas that draws attention to the phenomenon of observable patterned behavior (activities and events) and gives them meaning” . Schermerhorn, Jr. et al. (2010, p.12) defined organisational culture as “a shared set of beliefs and values within an organization” . Instead of defining organisational culture, Schein (2004) highlights the concept of culture, because one person's definition might be different to another's due to the pluralism of beliefs and values embraced by each person or society. Schein (2004) divides culture into three different levels based on to what extent culture could be visibly observed: artefacts; espoused beliefs and values; and basic assumptions. Artefacts are the tangible and visible products production of society or organisation, and can include symbols, logos, banners, organisational charters and organisational structure (Schein, 2004, pp. 25-26).

Moving into a less tangible level, espoused beliefs and values deal with "what ought to be"; they guide the members of the organisation, articulating "what is right or wrong, what will

Chapter Four

work or not work" (Schein, 2004, p. 28). Basic assumptions form when "a solution to a problem works repeatedly, it comes to be taken for granted" (Schein, 2004, p. 30).

Inspired by the South Kalimantan heroes of the struggles against Dutch colonial rule, the SKPG adopted their slogan " Waja Sampai Kaputing " (struggling for the sake of the people with all our might), as its motto. The basic assumptions implied by adopting their slogan includes the idea that while struggle can last hundreds of years it can still bear fruit; and that whatever the outcome, the struggle itself is noble. Over time, these basic assumptions were repeatedly institutionalised in the society.

For example, the slogan " Waja Sampai Kaputing " appears in the symbol of the

SKPG (Figure 4.2); this symbol is incorporated in the uniforms of the SKPG’s staff and officials as a way of linking them with their heritage and motivating them to perpetuate the legacy of the heroes’ struggle, even in their day-to-day activities. This could take the specific form of providing services to the people of South Kalimantan, and thus bringing about a more just and prosperous society.

Figure 4.2. Symbol of the SKPG

Chapter Four

For its espoused beliefs and values, the SKPG has adopted five elements: nationalism, honesty, fairness, discipline and professionalism. As part to institutionalise these espoused beliefs and values, all SKPG offices display banners that spell them out in each work unit. It is aimed at reminding the members of organisation how they should behave with both the people and their colleagues.

Thus, there is evidence that the SKPG has, in fact, instituted the three elements of organisational culture: artefacts; espoused beliefs and values; and basic assumptions. To what level or degree these elements have been practiced, rather than just publicly espoused, is elaborated in the Chapter Seven.

4.7.3. Structure of the SKPG

The provincial government is led by a governor, who is assisted by a vice-governor.

Both the governor and vice-governor are directly elected as regulated by Law No. 32

(2004). There are 74 work units, called Satuan Kerja Pemerintah Daerah (SKPD). Each work unit is led by a head, who is responsible to the governor. According to South

Kalimantan Province Gubernatorial Decree No. 042 (2009), the main tasks of the provincial secretary are to assist the governor in formulating policies and to coordinate the work units.

The provincial secretary is assisted by three deputies and nine works units (Bureaus).

Figure 4.3 shows the structure of the SKPG.

Chapter Four

Figure. 4.3. Structure of the SKPG

Governor Provincial Bureau of Governance Secretary Bureau of Law Affairs Deputy Governance Affairs Provincial Bureau of Organisation Secretary Bureau of Economy Deputy Bureau of People Welfare Development Affairs Bureau of Public Relation 65 Work Units Bureau of Finance Deputy General Administrative Bureau of General Affairs

Bureau of Equipment

Two bureaus under the provincial secretary, the Bureau of Governance and Bureau of Finance, are involved in preparing accountability reports. Reports on non-financial matters are prepared by the Monitoring and Governance Evaluation Division under the

Bureau of Governance. Financial reporting is managed by the Accounting Division under the Bureau of Finance. To prepare accountability reports, the SKPG has formed a task force. The secretariat of the task force is based within the Monitoring and Governance

Evaluation Division. (Chapter Seven describes the preparation of accountability reports in more detail.)

4.8. Conclusion

The Government of South Kalimantan Province, one of the 33 provinces under the

Republic of Indonesia, has historical roots in the long-running war for Indonesian 79

Chapter Four

independence. The SKPG aims to institutionalise assumptions based on this struggle, particularly " Waja Sampai Kaputing " (struggling for the sake of the people with all our might) as its organisational culture. This is supposed to foster a strong belief that highly- motivated and ceaseless efforts will bear fruit, and that whatever challenge the SKPG faces, its members can cope with it and bring the people they serve into a just and prosperous society.

This study also has been contextualised in terms of the socio-political legacies of the Soeharto regime (Chapter Three) and South Kalimantan history; this includes relevant cultural observations such as the important role played by religious leaders and the cultural value placed on the idea of noble and valiant struggle to achieve independence. The details of South Kalimantan Provincial Government structures have also been presented. The next chapter discusses the theoretical framework used in this study.

Chapter 5: Theoretical Framework

5.1. Introduction

This chapter presents the theoretical framework for this study, drawing on institutional theory. In a study investigating a governmental organisation, Fogarty (1996) maintained that institutional theory can shed light on this area. Institutional theory emphasises how an organisation secures institutional legitimacy through conformity to the prevailing institutions (Fogarty, 1996). Similarly, Scapens (1994) noted that institutional theory can be employed to understand accounting practices since the theory can provide insights concerning the interplay between accounting and the institutions, in which it operates.

This chaper is organised into ten sections: institutional theory (section 5.2); legitimacy as an essential concept (section 5.3); institutions and the mechanism of institutionalisation (section 5.4); strategic responses to institutional processes (section 5.5); some shortcomings of institutional theory (section 5.6); the problematic but useful decoupling concept (section 5.7); theory of power as a complementary theory (section 5.8); the research framework (section 5.9); and conclusion (section 5.10).

5.2. Institutional Theory

According to Scott (2001), the existence of institutional theory can be traced back to the late 19 th to mid-20 th century. Economists, political scientists and sociologists have actively contributed to developing this theory. Recent developments have introduced 81

Chapter Five

various approaches among institutional theorists (Scott, 2005a). Economists, for example, use regulative-element approaches; political scientists and a small number of sociologists stress normative approaches; while sociologists and cultural-anthropologists favour cultural-cognitive approaches (Scott, 2005a).

Institutional theory started to draw academics’ attention when Meyer and Rowan

(1977) and Zucker (1977) published their works. According to Meyer and Rowan (1977), the existence of formal organisational structures is a manifestation of rationalised institutional rules. They explained that institutional rules such as myths and symbols are important, as it is through them that organisations obtain resources and legitimacy as well as maintain their existence (Meyer & Rowan, 1977). Zucker (1987) asserted that organisational structures come not only from external pressures but also from internal interactions within organisation itself. Meyer and Rowan (1977) and Zucker (1977; 1987) agreed that formal organisational structures and behaviour are the outcomes of values and beliefs prevalent in the society. Their works paved the way for the emergence of the new institutional theorists such as W. Richard Scott, Paul J. DiMaggio, Walter W. Powell and

Timothy J Fogarty. Scott and Meyer (1992) argued that “organizations are embedded in larger systems of relation” (p.150). These systems lie in the societal level that encompasses non-local, vertical chains of command and horizontal and public-level systems (Scott &

Meyer, 1992).

This is congruent with the nature of governmental organisations, which commonly exercise their coercive power by imposing regulations (Scott, 2008). Christensen et al.

(2007, p. 69) note that “public organisations as “arenas for exercising power, negotiating 82

Chapter Five

alliances and coping with conflict”. Accounting, for instance, is employed by organisations in part to secure legitimacy. This practice then brings accounting closer with politics: “the language of politics is seen written largely in a language of accounting” (Watkins &

Arrington, 2007, p. 55). Covalesky and Dirsmith (1990, p. 546) had a similar standpoint saying that “…accounting appears to serve several technical, political and symbolic roles, and within the symbolic role, at multiple levels (for example, internal-external representation, intentional political advocacy...)…” Therefore, the new institutional theory can be instrumental compass in addressing research questions raised by this study.

In relation to the first research question: How does local government prepare its annual accountability reports? the theory highlights the role of socio-political context in affecting and shaping the practice of accounting (including accountability). While in the second research question: How does local parliament use the accountability forum to evaluate the annual accountability report submitted by local government? the new institutional theory can shed light on how accounting is employed in political arena, does accounting merely serve as symbolic role in overseeing executives or accounting has been used as a rational and technical device in assessing local-government accountability reports.

Hopwoood (1976) who maintained the importance of conducting research in which accounting is viewed as both an organisational and a social phenomenon. Hopwood (1983) also stressed that accounting should be studied in the context where it exists: because organisations are embedded in a particular environment, the interaction between organisations and their environment is evident. Weber (1978), for instance, noted that accounting is a product of profit-seeking rationality driven by the spirit of capitalism, and 83

Chapter Five

deeply rooted in shared cultural and religious beliefs and norms. This view was also shared by Meyer (1986, p.345) who wrote, “Accounting work is seen related to the expansion of cultural rationalization”. Mouritsen (1994, p. 196) had a similar standpoint regarding the interplay between organisations and their environment, writing that "accounting operates in complex institutional settings where the location and context of social interaction is important for explaining and understanding it". Therefore, it is apparent that organisations do not exist in a vacuum; rather they operate and interact with environments characterised by particular political, cultural and religious values as well as shared beliefs.

5.3. Legitimacy as an Essential Concept

The work of Meyer and Rowan (1977) reflected that legitimacy is the essential concept in new institutional theory. This view is also shared by DiMaggio and Powell

(1983), Fogarty (1996), Deephouse and Suchman (2008) and Clegg (2010). According to

Meyer and Rowan (1977), organisations pay close attention to legitimating external institutions upon which they depend, rather than pursuing organisational effectiveness in achieving their objectives. Embracing the prevailing institutions can give an organisation legitimacy, through which it can enhance its own survival (Meyer & Rowan, 1977) and gain resources and social approval (Oliver, 1991).

Scott (1995, p.45) noted that "legitimacy is not a commodity to be possessed or exchanged but a condition reflecting cultural alignment, normative support, or consonance with relevant rules or laws". While the work of Meyer and Rowan (1977) paved the way for the development of new institutional theory, it did not clearly define legitimacy. Thornton 84

Chapter Five

and Ocasio (2008, p.100) noted that as part of the notion of legitimacy, "parts of organizations had to be loosely coupled from their technical core". The practice of loose coupling happens because organisations should align themselves with the external environment's expectations through which legitimacy is obtained. Suchman (1995, p.574) offered a more holistic definition :

"Legitimacy is a generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions".

Two notable features are embodied in Suchman's (1995) definition: first, it conveys a clear message that organisations should conform their formal structures to prevailing beliefs and values. Second, it assumes that legitimacy is a socially constructed reality, a view shared by

Deephouse and Suchman (2008). This means that actors play an important role in creating the desired reality through collective actions as suggested by Selznick (1949, 1996) and

Scott (1987). The actors can then direct the course of organisational activities and programs in a way that meets social expectations (Fogarty, 1992). Charities, for instance, may be part of organisational programs intended to enhance their organisational legitimacy in the eyes of the public, as suggested by Meyer and Rowan (1977) and Galaskiewicz (1985).

5.4. Institutions and the Mechanism of Institutionalisation

There is not one single definition of the concept “institution”; institutional theorists have proposed several. Veblen (1899), for instance, wrote:

Institutions are products of the past process, are adapted to past circumstances and are therefore never in full accord with the requirements of the present (cited in Chavance, 2009, p.11)

Chapter Five

Hamilton (1932) proposed this definition:

A way of thought or action of some prevalence and permanence, which is embedded in the habits of a group or the customs of a people (cited in Burns, 2000, p. 571).

In a similar vein, North (2003, p.23) maintained that institutions are:

[t]he rules of the games of the society, or, more formally, are the humanly devised constraints that structure human interaction.

Scott (2001, p. 48) went further, noting that:

Institutions are social structures that have attained a high degree of resilience and are composed of cultural-cognitive, normative and regulative elements that, together with associated activities and resources, provide stability and meaning to social life (p.48)

Furthermore, Scott (2001) argued that institutions are instilled into members of a society by a variety of transmitters such as symbolic systems, relational systems, routines and artefacts. This idea is line with some scholars, such as Meyer and Rowan (1977),

Weber (1978), Meyer (1986), Carruthers and Espeland (1991) and DiMaggio and Powell

(1983), who viewed accounting as being more than merely a rational tool, as its practices are influenced by and embedded in the social-relations context (Meyer and Rowan, 1977); accounting in this context functions not only as a rational tool but also as symbol and myth

(Weber, 1978; Meyer, 1986, Carruthers & Espeland, 1991). These broader functions of accounting are intended to secure social legitimacy by embracing institutionalised norms, rules and values (Meyer & Rowan 1977; DiMaggio & Powell 1983). Organisations, for instance, have a tendency to imitate their society’s prevailing institutionalised norms, rules and values.

Chapter Five

The ways in which organisations have a tendency toward homogeneity, so that there is no contradiction between the exterior and interior of the organisation and its values

(Carruthers, 1995), is called isomorphism (DiMaggio & Powell, 1983). DiMaggio and

Powell (1983) divided this into two types: competitive and institutional. Competitive isomorphism closely relates to efficiency, in which competition will lead organisations to achieve their best performance. In contrast, institutional isomorphism has to do with how rationalised (that is, successful) procedures spread from one (successful) organisation to another. DiMaggio and Powell (1983) put more emphasis on institutional isomorphism, for which they specified three mechanisms: coercive isomorphism, mimetic and normative isomorphism.

Coercive isomorphism stems from external pressures that result when organisations depend on other organisations or parties (DiMaggio & Powell, 1983). Government mandates, state-sponsored legitimacy and more-subtle and less-explicit political mechanisms could be considered to be at the boundaries of coercive isomorphism

(DiMaggio & Powell, 1983). The degree to which an organisation has to conform to the dictates of a superior organisation range from collaboration through encouragement and, ultimately, force. Similarly, Scott (2001) noted that coercive isomorphism consists of force, fear and expedience. Local governments, for instance, are subject to the national government’s regulations as well as prevailing social norms and cultural expectations

(Scott, 2001). Carruthers (1995) likewise argued that the isomorphism process not only involves political mechanisms, but also has to do with cultural conformity. Meyer and

Rowan (1977), DiMaggio and Powell (1983) and Carruthers (1995), however, admitted that 87

Chapter Five

conformity to this pressure appears to be a ceremonial or ritual process rather than organisations’ pursuit of efficiency and performance.

Mimetic isomorphism takes place when organisations encounter uncertain conditions and seek a good model by following in the footsteps of successful organisations

(DiMaggio & Powell 1983). An example is Japan’s modernisation of its governance based on other successful governments in the late 19th century, when it sent officers to study

France’s judicial and security system; the UK’s defence and postal system; and art and banking in the US (DiMaggio & Powell, 1983). DiMaggio and Powell (1983) posited two factors that might prompt an organisation to emulate the successful ones: the organisation’s goals seem to be uncertain; and symbolic uncertainty prevails in the organisation’s environment. In a similar vein, Scott (2001) asserted that the measures taken by an organisation to mimic other, efficacious organisations are done to be perceived as a successful, and thus to secure legitimacy in the public eye. This situation leads to the process where mimetic isomorphism tends to be more symbolic than actual. Mouritsen

(1994) called this situation “window-dressing”. In a similar vein, Carruthers (1995) noted that actual organisational decision-making is decoupled from real practices because the organisation chooses those measures that will make it look good, rather than pursuing organisational performance and efficiency.

Normative isomorphism is built upon the notion that organisational change is achieved through the professionalism process. There are two main contributors to normative isomorphism: formal education and research-based products from by

Chapter Five

authoritative experts; and professional networks that share the latest developments of science and technology (DiMaggio & Powell 1983).

After accomplishing a certain degree of training, members of an organisation attempt to implement the best practices in dealing with issues their organisation faces. In the accounting context, accounting professionals not only apply a number of techniques and methods in their own organisations, but contribute to an international accounting body, such as the International Accounting Standards Board. Some countries inclusion in their reporting of particular economic and social indicators such as gross domestic product, life expectancy, school enrolment, endangered species and welfare expenditures, for instance, are examples of the accounting and related professional associations’ contributions to accountability reporting (Jang, 2005).

Carpenter and Feroz (1992) shared a similar view after investigating four state governments in the US. They noted that accounting associations such as the American

Institute of Certified Public Accountants and the Government Finance Officers Association played key roles in adopting the Generally Accepted Accounting Principles.

Neu (1991) pointed out that Western societies regard the public-accountant profession positively, as shown by putting their trust in the accountants' work. Therefore, the diffusion of institutional isomorphism through normative isomorphism could be considered better than other isomorphism, as normative isomorphism is built upon professional values.

The next section depicts the strategic responses that organisations may employ in responding to institutional processes. 89

Chapter Five

5.5. Strategic Responses to Institutional Processes

Institutional theory is perceived to have drawbacks regarding its assumptions: specifically, organisational passivity and the absence of a strategic response in dealing with institutional pressures (Covaleski & Dirsmith, 1988; Perrow, 1985). The assumptions are deeply rooted on the work of Berger and Luckmann (1967) which stressed the importance of an organisation’s embracing prevailing norms and taken-for-granted institutional rules in return for legitimacy from the wider society.

However, the development of institutional theory has led to the notion of viewing organisations as active, not passive, actors. Theorists such as Child (1972), Scott (1991),

Oliver (1991) and Carruthers (1995) are the proponents of this notion. Child (1972) argued that an active response in an organisation could be observed by analysing the strategic choice through which the organisation deals with environmental pressures. Child (1972) even asserted that strategic choice is an essential element for an organisation. Scott (1991, p. 170) shared this view, saying: “organizations are not passive actors being imprinted by cultural templates”. Scott (1991) argued that the fact that cultures are not homogenous leads to an organisation being more active in exercising the appropriate measures of its organisational structure.

Furthermore, Scott (1991) maintained that the existence of multiple cultural systems inspires organisations to generate cultural autonomy by establishing a culturally legitimated template. In the accounting context, Carruthers (1995) argued that the active roles of organisations can be recognised by their strenuous involvement in shaping rationalised myths for achieving their purposes. 90

Chapter Five

Oliver (1991) published her seminal work regarding various strategic responses that organisations exhibit in dealing with institutional pressures for conformity. By bringing together the insights of institutional and resource-dependency theory, she (1991) revealed how organisational behaviour might show a variety of responses from passive conformity to active refusal, subject to the organisational characteristics and prevailing pressures. She puts forward five strategic responses to institutional processes: acquiescence, compromise, avoidance, defiance and manipulation (Table 5.1).

Table 5.1. Strategic Reponses to Institutional Processes

Strategies Tactics Examples Habit Following invisible, taken -for -granted norms Acquiescence Imitate Mimicking institutional models Comply Obeying rules and accepting norms

Balance Balancing the expectations of multiple constituents Compromise Pacify Placating and accommodating institutional elements Bargain Negotiating with institutional stakeholders

Conceal Disguising conformity Avoid Buffer Loosening institutional attachments Escape Changing goals, activities or domains Dismiss Ignoring explicit norms and values Defy Challenge Contesting rules and requirements Attack Assaulting the sources of institutional press

Co -opt Importing influential constituents Manipulate Influence Shaping values and criteria Control Dominating institutional constituents and process

Chapter Five

Source: Oliver (1991), p. 152.

Acquiescence, the most passive response among the five, consists of three forms: habit, imitate and comply (Oliver, 1991). Examples of habit, which is generally formed in the context of long-standing and repeated tradition preserved by society, include unconscious or blind adherence and the persistence of taken-for-granted rules or values.

Imitation has to do with mimetic isomorphism, and is manifest when, for example, organisations demand legitimacy in the public eye by following other successful organisations, or by hiring consulting firms to help them cope with their issues (Oliver,

1991). Compliance is defined as the deliberate adherence to the prevailing norms, values or prescribed institutions in an attempt to deal with environmental complexities (Oliver,

1991).

The second strategic response, compromise, may take place within situations in which institutional demands collide with the organisations' objectives, particularly their efficiency policies (Oliver, 1991). Compromise may appear in the form of balancing, pacifying or bargaining. Balancing relates to taking into account various institutional demands in response to institutional pressures to achieve equality among existing stakeholders. Pacifying refers to the tendency to adapt to most of the institutional pressures on the one hand, while refusing to adapt to the rest on the other hand. Bargaining, a more active tactic than balancing and pacifying, is used by organisations when they demand concessions in exchange for their adhering to external organisations’ expectations.

Government agencies, for instance, require commercial enterprises to fulfil minimum

Chapter Five

services standards. These enterprises make agreements among involved parties such as government agencies, constituent unions and consumer-advocate associations regarding acceptable services, accountability and output.

Avoidance is a strategy to prevent the need for adherence by employing three forms of tactics: concealment, buffering and escape (Oliver, 1991). Concealment refers to hiding non-conformity behind a façade of acquiescence. Buffering reduces the degree to which inspection, scrutiny and evaluation are internally conducted and partially separates the organisation’s technical activities from outside. Escape takes a more active response than either concealment or buffering. It may appear in two forms: organisations can stand outside the realm in which institutional pressures for conformity are exercised; or modify their own goals, activities or domain to keep away from the compulsion to comprehensively conform (Oliver, 1991).

Defiance is considered a more active strategy than the previous three, and may involve three forms of tactics: dismissal, challenge and attack (Oliver, 1991). Dismissal is a tactic in which organisations do not pay attention to institutional rules. It is most likely to take place when organisations consider institutional rules to have a low degree of importance or when organisational objectives are considered incompatible with institutional rules. Challenge, a more aggressive tactic than dismissal, is when organisations question the institutional pressures imposed on them by showing their rational consideration.

Moving on to a still more active tactic, attack may take the form of striking against and disparaging the institutional pressures prevalent in the society.

Chapter Five

Lastly, manipulation, the most active strategy, involves actively changing or exercising force over the demands imposed on them (Oliver, 1991). Organisations seeking to manipulate external pressure may decide to co-opt, influence or control. Co-option could occur, for example, by persuading institutional constituents to get involved in the organisations’ activities or to become a member of its executive. Influence might be displayed by an organisation in directing values and beliefs prevalent in society to align with the organisation’s preferences. Control is a tactic in which organisations employ particular measures to exercise power over the institutional constituents that are imposing demands or expectations on them. The following section presents some shortcomings of institutional theory.

5.6. Institutional Theory: Some Shortcomings

Institutional theory is not free from criticism. As presented previously, institutional theory can be divided into two streams: old and new. New institutional theory underpins its assumptions on culture being more important than power. Brint and Karabel (1991) and

Clegg (2010) criticised this assumption and argued that it has led to the role of power in institutional processes being neglected in favour of cultural domination (Brint & Karabel,

1991). Furthermore, some commentators such as Perrow (1985), Powell (1985), and

Covaleski and Dirsmith (1988) have offered the critique that institutional theory has paid little attention to the role of organisational self-interest and active agency in dealing with the institutional pressures and expectations they face.

Chapter Five

Lawrence (2008) acknowledges the critique that in the early development of institutional theory (the 1970s and 1980s), institutional scholars did not pay much attention to the role of power, and focused more on institutions as embodiment of myth and ceremony. Lawrence (2008) further notes that more recent developments in institutional theory have addressed such criticism, taking power and political issues into account (see

Oliver, 1991; Carpenter & Feroz, 1992; Amenta & Halfmann, 2000; Bartley & Schneiberg,

2002). Researchers realised that institutions and institutional changes could be better comprehended by incorporating power and political aspects into consideration of institutional aspects. This is congruent with Clegg (2010, p. 11), who asserted that "the concept of power is absolutely central to any understanding of society". In a similar vein,

DiMaggio (1988) wrote that institutionalisation is a political process through which organisational actors play the key roles in achieving particular results (cited in Powell,

2007) and preserving prevailing rules, norms and meaning (Sewell, 1992). Coercive isomorphism, for instance, could be conducted only if three elements exist: political pressures, the force of state and a number of regulations (DiMaggio & Powel, 1983). Thus, without actors, the institutionalisation process will not occur. Furthermore, DiMaggio and

Powell (1983) asserted that influential professional elites play an important role in diffusing certain standards to members of organisations. However, Mizruchi and Fein (1999) contended that DiMaggio and Powell (1983) put aside power by placing coercive isomorphism and normative isomorphism behind mimetic isomorphism in importance. This discourse emerged as a response to new institutional theory’s emphasising the macro level

(as part of a wider environmental context) as suggested by Meyer and Rowan (1977), rather 95

Chapter Five

than the micro level (a within organisation context). To deal with this shortcoming, institutional research can be directed to capture both the macro and micro levels, as institutionalisation should be perceived as a process rather than a condition, as suggested by

Zucker (1991).

With regard to the criticism raised by Perrow (1985), Powell (1985) and Covaleski and Dirsmith (1988), Oliver (1991) argued that institutional theory can shed light on how organisations strategically respond to the institutional pressures and expectations they face.

Organisations can adapt and manage their organisational response from passive to active behaviour that ranges from acquiescence through compromise, avoidance, defiance and manipulation (the most active response) (Oliver 1991), depending on the choices of organisational actors engaging, modifying and selecting the appropriate response in dealing with their organisation’s institutional pressures (Amenta & Halfmann, 2000; Bartley &

Schneiberg, 2002; Clegg, 2010).

Another issue concerning new institutional theory is the fact that it is built upon the concepts of stability and order (Meyer & Rowan, 1977; DiMaggio & Powell, 1983). This in turn leads to the notion that new institutional theory denies change since it may bring organisations into instability and disorder. Scott (2008), however, argued that institutional change could take place within organisations, for either external or internal reasons.

Political, economic and social factors at the macro (external) level can prompt institutional changes. Moreover, institutional change such as initiatives to improve poor performance in dealing with constituents’ expectations can happen from within an organisation.

Chapter Five

Although institutional theory has some shortcomings, the relatively recent development of institutional theory has paid attention to such issues and addressed them.

The next section describes the concept of decoupling that happens in an institutionalised environment.

5.7. The Problematic but Useful Concept of Decoupling

Meyer and Rowan (1977) asserted that in modern societies, formal organisational structures came into existence in a highly institutionalised context. In this context, accounting is one of the parts of formal organisational structures. This leads to the notion that the interplay between accounting and its organisational and social context is important, as noted by several authors (see Hopwood, 1976; Burchell et al., 1980; Hopwood, 1983).

This interplay leads to a positive impact for organisations by providing a source of legitimacy for them to continue their activities (Fogarty, 1992).

Meyer and Rowan (1977) maintain that organisations have been pressured to integrate prevailing rationalised frameworks of organisational work and institutionalised beliefs, norms and practices prevalent in the society in which they operate. In a similar vein, Carruthers (1995) states that to obtain more legitimacy, organisations have to operate within their cultural context. Operating within these constraints generally constitutes an attempt to be “seen” as being able to convey social expectation (Fogarty, 1992) by ceremonially adopting institutionalised services, products, techniques, policies and programs that function as powerful myths (Meyer & Rowan, 1977).

Chapter Five

Organisations shape their “good” image by exercising institutionalised programs to attract and impress people within the society. Loans, donations and investment programs, for instance, are offered to the society in return for legitimacy (Meyer & Rowan, 1977).

However, this adoption brings consequences, in that organisations experience decoupling or loose coupling (Meyer & Rowan, 1977; Orton & Weick, 1990): a deviation between what organisations actually do and what given the formal organisational structure, they should do (Fogarty, 1992). In other words, what organisations do tends to bear only a loose resemblance to their official role. As a result, they neglect the principles of efficiency and effectiveness (Meyer & Rowan, 1977; Zucker, 1987; Mouritsen, 1994).

Meyer and Rowan (1977, p. 357) described the decoupling process:

Activities are performed beyond the purview of managers. In particular, organizations actively encourage professionalism, and activities are delegated to professionals. Goals are made ambiguous or vacuous, and categorical ends are substituted for technical ends. Hospitals treat, not cure, patients. Schools produce students, not learning. In fact, data on technical performance are eliminated or rendered invisible. Hospitals try to ignore information on cure rates, public services avoid data about effectiveness, and schools deemphasize measures of achievement. Integration is avoided, program implementation is neglected, and inspection and evaluation are ceremonialized.

Decoupling also causes accounting to become less associated with the operational aspects of an organisation, even though it is widely perceived as a source of rational models to support decision-making (Carruthers, 1995). Mouritsen (1994) similarly asserted that managers abuse accounting to obscure what organisations actually do, and to distract the public from irregularities and dissonance. Decoupling or loose coupling takes place because formal organisational structures serve merely as symbols (Scott, 1987, p. 507) and, more

Chapter Five

particularly, because accounting has come to be a symbolic and ritual display (Meyer &

Rowan, 1977; Meyer, 1986; Carruthers and Espelands, 1991).

However, Meyer and Rowan (1977) argued that decoupling can also have advantages. When prevailing rationalised frameworks of organisational work and institutionalised beliefs, norms and practices are incorporated into an organisation, this, in turn, leads to harmony between the organisation and its environment, through which friction and conflict can be reduced (Meyer & Rowan, 1977). Fogarty (1996) added that loose coupling could help organisations survive despite the constraints of institutional pressures. Decoupling also allows organisation to live up to various expectations from diverse constituents (Meyer et al., 1981, cited in Coburn, 2004). Likewise, decoupling has prompted organisations to be more dynamic in responding to, and selecting the appropriate strategies in dealing with institutional pressures and environmental uncertainty (Oliver,

1991). The following section describes the nature and interplay of institutional theory with other theories.

5.8. Theory of Power as a Complementary Theory

Arendt (1958) noted that society could achieve its desired goals by collectively building a societal capacity among various parties collectively, as individually this may not be possible. Hardy (1985, p. 385) defined power as “the ability to affect the behaviour of others in a conscious and deliberate way.” Baum (1989, p. 195) elaborated on this concept:

This power governs a politics concerned with creating new possibilities in a world where resources may be scarce but some interests may be joined and new

Chapter Five

resources created. This is win-win politics: victory is only collective and one party’s loss defeats all.

Hardy (1996) wrote that power has a determinant role in organisations by providing energy for strategic change. The absence of power, and thus the lack of mechanism for making changes, could paralyse organisations. However, some people loathe and avoid politics due to the stigma that politics tends to spark conflicts among members of organisations, while others get involved in the political arena specifically to improve the organisational situation (Baum, 1989).

According to Baum (1989), organisations have a politics around decisions. Without politics, desired changes and goals could not be achieved, as politics is a course of action or behaviour through which power is constructed and employed in an organisational environment, while power is an authority through which events can be materialised

(Pfeffer, 1981, p. 7)

However, Hardy (1996) critiqued the traditional notions of power that mainly stress on the mobilisations of resources such as financial support, information and public goods.

In an attempt to redress this traditional notion, Hardy (1996) illustrated the multi- dimensionality of power, outlining four dimensions: the power of resources, the power of decision-making, the power of meaning and the power of the system.

For the first, Hardy (1996) suggests that at its early stage, research concerning power was focused on decision-making and control over limited resources. Hardy (1996) argued that the behaviour of others should be controlled and directed toward desired goals by distributing and limiting essential resources on which people rely, such as information, 100

Chapter Five

skill development, employee promotion, financial control and the reward and punishment system.

When considering decision-making , Hardy (1996) maintained that one should pay attention to not only formal decision-making occasions but also the processes behind the scenes that relate to how decisions are made. By following such processes, one would know the actors behind the formal and procedural mechanisms, who are usually driven by political motives. Hardy (1996) further wrote that this dimension could exist within conformity to the prevailing norms and values.

Hardy's (1996) third dimension, the power of meaning, is closely associated with symbols, prevailing norms and values to build the society’s perception and cognition towards the organisation (Hardy, 1996). Through this dimension, organisations create an image communicating that they conform to the prevailing institutions embraced by society at large, which in turn gives them legitimacy (Hardy, 1985). Meyer and Rowan (1977) wrote that institutional rules such as myths and symbols are pivotal, as it is through them that organisations secure resources and legitimacy.

Finally, according to Hardy (1996), the power of the system is deeply rooted within the formal structure of organisations. This is the most elusive dimension because every member of every organisation takes it for granted in the form of unwritten rules and norms that have existed over time. However, Hardy (1996) opined that managers could adjust this system to some extent to bring transformational change within organisations. In a similar vein, Amenta and Halfmann (2000), and Bartley and Schneiberg (2002) maintained that

101

Chapter Five

organisational actors can modify and select the appropriate response in dealing with their organisation’s institutional pressures.

Does power theory provide a suitable combination with institutional theory as main theoretical lens of this study? According to Scott (2005a, p. 408), institutional theory is underpinned by some core assumptions. Among these is “institution are governance structures, embodying rules for social conduct”. Arendt (1958) stated that societal capacity needs to be managed to achieve desired goals; meaning that it requires power to electrify and mobilise potential elements in the society or organisations to reach their objectives as suggested by Hardy (1985). The views above display that the two theories seem to be possible to blend, as the two show no contentious ideas.

Furthermore, Scott (2005a) maintained that institutional theory is not by nature an individual theory, as the theory can be combined with other theories such as economy, politics and sociology. Lawrence (2008) noted that combining institutional theory with power theory is crucial, as it allows researchers to understand how institutions work in the societal field and their effects to organisations.

Christensen et al. (2007) asserted that public organisations are arenas for exercising power. Thus, investigating the practice of accountability in the public organisation like the

SKPG through theory of power– as a complementary theory– is essential, as it provides insights how power exercised by the actors can affect the practice of local-government accountability reporting.

102

Chapter Five

5.9. Research Framework

This section describes the research framework that this study employs in analysing and understanding the practice of the accountability reporting in Indonesian local governments, particularly in the South Kalimantan Provincial Government (SKPG).

As discussed in Chapter Three, the Soeharto regime ruled Indonesia for more than three decades (1967-1998). Under this regime, which was highly centralistic, almost all aspects of the country and its people’s lives were tightly controlled by the regime. Liddle

(1985, p. 71) illustrated this situation as a follows:

The president commands the military which is primus inter pares within the bureaucracy, which in turn holds sway over the society. The Indonesian bureaucracy is powerful in two senses. First, the bureaucracy pervades society. In every city, town, and village it is the largest employer. Its schools unlock the door to the modern, supra-village world. Its health centers, banks, agricultural extension services and marketing agencies, religious affairs offices, and requirement of personal identity cards make it for better and worse a daily reality which most Indonesians cannot escape. The scope and weight of this presence are comparable to Communist countries…

The Soeharto regime also exercised powerful control over the practice and formal procedures of state organisations. The practice of accounting and auditing, for instance, was merely a symbol of rational behaviour and accountability, rather than a series of substantive efforts to improve and support public organisations in pursuing their tasks and functions.

Under these circumstances, accounting and auditing practices became merely a symbolic display or legitimising device rather than a set of tools to allow public organisations to be accountable and transparent. This is consistent with claims made by Covaleski et al. (1996) that accounting practices in organisations might serve a ceremonial function and

103

Chapter Five

symbolically show the organisations' commitment to the public, rather than constituting a real commitment.

The Soeharto regime was replaced after public discontent in 1998. Although the regime collapsed more than a decade ago, its legacies persist, as discussed in Chapter

Three, and influence local governments across Indonesia, including the practice of local- government accountability reporting (discussed in Chapters Seven and Eight).

Indonesia then entered a new era, popularly known as the "reform era" (era reformasi) (Ricklefs, 2001). The Habibie administration, for instance, took significant measures by devolving more authority onto local governments under the umbrella of Law

No. 22 (1999) on Local Government and Law No. 25 (1999) on Fiscal Decentralisation and

Revenue Sharing. This change from an authoritarian and centralised regime to a democratic and decentralised government system in 1999 may have affected the practice of accountability, including the accountability system of local government.

As discussed in Chapter 1, during the Soeharto regime, the accountability system of local government including its reporting system was designed to be more accountable to the regime (the central government) than to the public; the role of local parliaments as oversight bodies were also undermined by the regime. In addressing this issue, Law No. 22

(1999) gave greater authority to local parliaments in exercising their supervisory role through an accountability forum. However, the law still did not recognise the public as the audience of the local-government accountability reports. It was not until the emergence of

Law No. 32 (2004) and Government Regulation (GR) No. 3 (2007) that the public was regarded as one of the audience of accountability reports. 104

Chapter Five

According to GR No. 3 (2007), after submitting the accountability report to the central government and making it available to the public, an actor (governor) has to deliver the administration's accountability report before an accountability forum held by the provincial parliament. The members of the provincial parliament will then assess the accountability report. The arrangement to discharge accountability through a forum is part of gaining legitimacy through formal procedures, as regulated by the relevant provisions.

This is consistent with the claims made by some scholars that an accountability forum is an important part of the accountability process through which key actors (Bovens, 2007a,

2007b, 2010; Mulgan, 2000a) can gain legitimacy (Bovens, 2007a, 2007b, 2010).

The local governments, including the SKPG, must comply with the central government’s changes to the local-government accountability system. Viewed from an institutional-theory perspective, the SKPG, in acquiescing to the changes made by the central government, is driven by institutional isomorphism, particularly coercive isomorphism (DiMaggio & Powell, 1983). This backdrop may affect the practice of accountability reporting of local governments across Indonesia, including the SKPG, after the Soeharto regime, during which the practice of accountability was framed to allow collusive practices.

This study argues that to secure legitimacy, the SKPG employed a two-pronged approach that operated simultaneously in the organisational and societal fields. In the organisational field, the SKPG started to implement and institutionalise the new local- government accountability system into its organisational practice, as stipulated by the relevant laws and regulations, thus securing legitimacy from the central government. This is 105

Chapter Five

consistent with the claim made by Scott (2001) that local government is subject to the central government's regulation as well as to certain social norms and expectations. To quote the work of DiMaggio and Powell (1983), "the position of dependence" leads the

SKPG to comply with change demanded by the central government. This is confirmed by a study conducted by Martani and Liestiani (2010), which found that 66.21% of Indonesian local governments' budget was funded and determined by the central government through the general allocation fund (DAU, dana alokasi umum ). Therefore, in order to get more resources (including financial support), local governments need to seek greater legitimacy by acquiescing to the central government’s laws and regulations.

On the societal field, the South Kalimantan society is a relatively religious community (Daud, 1997; Karni & Hidayat, 2006; Chalmers, 2007). Given this social setting, the role of religious leaders or gurus is highly important. Moreover, due to their extensive engagement with the people, their role is even broader, extending not just to leading religious activities, but to serving as the figures from whom people seek advice concerning non-religious matters such as how to start up a new business or what to do before building a new house. Thus, gurus also serve as informal leaders and can influence and shape the society through their extensive engagement with the people who comprise it.

Informal leaders emerge when a figure without formal power is able to influence the behaviour of others (Pielstick, 2000; West, 2008; Schermerhorn, Jr. et al., 2010). Some religious gurus also function as charismatic leaders in the society. According to Bass

(2008), the charisma concept is developed from Weber’s concept, in which charisma is embedded in theology. Weber (1947) noted that the attribute of extraordinary charisma is 106

Chapter Five

not granted to a leader by God, but by the leader’s followers. Although Banjarese society

(the majority ethnic group in South Kalimantan) does not recognise "class", gurus

(particularly those who have great numbers of followers) are commonly perceived as having a special relationship with God, and have been granted high status through a tradition that goes back many generations. Therefore, it is common in the society that people pay great respect to and put a high level of trust in gurus.

This is consistent with the claim made by Berger and Luckmann (1991) that social order is built upon shared social reality through which human society is constructed.

Therefore, the tradition that pays great honour to gurus is a socially-constructed reality, because this practice has been preserved (Covaleski et al, 1996). Given this prevailing institution, the actors/elites in the SKPG also pay great respect to, and foster good and close relationship with, gurus, particularly those having large followings. The SKPG actors also support traditional religious rites or events conducted by gurus and the society by allocating funds from the provincial budget for such events. In this way, the elites can be perceived by the public as sharing similar values with the larger society, and thereby are much more likely to obtain organisational legitimacy, one of the essential concepts of institutional theory (Meyer & Rowan, 1977; Eisenhardt, 1988; DiMaggio & Powell, 1983; Fogarty,

1996; Deephouse & Suchman, 2008; Clegg, 2010). This is consistent with the claim made by Fogarty (1992, p.333) that “the way organizations are organized and operate, to the extent they are visible to the public, are purposely designed to accommodate social expectations”. Carruthers (1995) supported this idea that organisations secure their organisational legitimacy by running their programs within the cultural boundaries in which 107

Chapter Five

they operate. Meyer and Rowan (1977) also maintain that in an attempt to obtain organisational legitimacy, organisations should be directed to integrate the concept of their organisational work and rules with the institutionalised beliefs, norms and values in the society.

Based on the discussion of the relevant theories of this study, Figure 5.1. shows the research framework of this study.

108

Chapter Five

Figure 5.1. Research Framework of the Study

The influence of the Soeharto The Decentralisation Institutional regime’s legacies over Indonesian Reform isomorphism local governments

The South Kalimantan Provincial Government (SKPG)

Power mobilisation over resources, decision-making, meaning and system

In the societal In the organisational field field Build a good and close relationship with

The new local -government Gurus/informal leaders accountability system who have great

influence in the society

The practice of Accountability Society accountability Forum reporting

Accounting as Or ganisational rationalised legitimacy myth

(Own diagram)

109

Chapter Five

5.10. Conclusion

This chapter discusses the theoretical framework of this study, which draws on institutional theory as a main theoretical lens, and power and leadership theories as complementary ones. This study argues that to secure legitimacy, the South Kalimantan

Provincial Government (SKPG) employs a two-pronged approach that extends to the organisational and societal fields. In the organisational field, the SKPG has begun to implement and institutionalise the new local-government accountability system into its organisational practice, as stipulated by the relevant laws and regulations issued by the central government, and securing legitimacy.

In the societal field, the SKPG employs a different strategy. South Kalimantan is perceived as a religious society. Given this social setting, the role of religious leaders or gurus becomes important, because they are actively involved not only in religious services and events, but as sources of advice for people concerning their daily life issues. Gurus’ importance in the society gives them power to influence the society, including in political matters. Given this prevailing institution, the actors/elites in the SKPG also pay great respect to, and foster good and close relationships with, gurus to boost the SKPG’s legitimacy in the public’s eyes.

110

Chapter 6: Research Methodology

6.1. Introduction

This chapter presents the research methodology employed in this study. As mentioned in the introduction chapter, the objective of this study is twofold: (a) to understand the practice of accountability reports exercised by Indonesian local government following the decentralisation reforms; and (b) to understand how local parliament evaluates the accountability reports submitted by local government. To gain this understanding and obtain valid knowledge, the philosophical foundations of the research

(ontology, epistemology, methodology, and method) should be well-comprehended and determined beforehand (Gaffikin, 2008; Bisman, 2010), as consistency among the four foundation elements is necessary for effective research (Gaffikin, 2008; Bisman, 2010).

The philosophical foundations employed in this study also influence the way data is gathered and interpreted. The epistemological assumption of qualitative research, for instance, demands that the researcher is to close to the object being researched.

This chapter is organised into eight sections: the philosophical basis of the study

(section 6.2); case-study research (section 6.3); case-study research design (section 6.4); the research question (6.5); data collection (6.6); data analysis (6.7) and the conclusion (6.8).

6.2. Philosophical Basis

As stated previously in the Chapter 1, this study has established its ontological and epistemological assumptions. According to Gaffikin (2008) and Bisman (2010), to obtain 111

Chapter Six knowledge, four philosophical foundations should be determined and well understood, should be consistent with one another, before conducting research: ontology, epistemology, methodology, and method.

Methodology and method (the third and fourth elements of the philosophical foundation of research) are frequently misunderstood (Gaffikin, 2008), and often erroneously considered synonymous (Gaffikin, 2008). Methodology is defined as the framework of tools employed in securing the knowledge (Denzin & Lincoln, 1998;

Neuman, 2006; Gaffikin, 2008; Silverman, 2001). Gaffikin (2008, p. 7), for instance, said that "methodology investigates and evaluates methods of inquiry and thus sets the limits of knowledge", while he defined method as "the technique used to gather the data and information". Therefore, the method employed depends on, and should be in line with, its methodology.

In general, there are two research approaches: quantitative and qualitative research.

Quantitative approaches focus on collecting and analysing numeric data of variables being studied through statistical testing (Collis & Hussey, 2003; Denzin & Lincoln, 2005); while qualitative approaches deal with examining and reflecting on perceptions of socially- constructed reality, as well as ensuring closeness between the researcher and the object being studied (Collis & Hussey, 2003; Denzin & Lincoln, 2005). Qualitative approaches encompass some research strategies such as phenomenological study, ethnography and the case study. As such, quantitative research demands that researchers pay attention to the reliability and validity of the evidence collected (Neuman, 2006; Scapens, 2004). Scapens

(2004, p.268) defined reliability as "the extent to which evidence is independent of the

112

Chapter Six person using it", and validity as “the extent to which the data are in some sense a 'true' reflection of the real world". In other words, validity and reliability demand that the researcher is both independent and impartial (Scapens, 2004). However, in qualitative research, particularly case-study research, perfect reliability and validity are essentially impossible (Scapens, 2004), as they contradict the ontological and epistemological stance that stresses the importance of researcher’s reflective interpretation over the object being studied (Scapens, 2004). Thus, this study does not need to employ reliability and validity of evidence collected as suggested by Scapens (2004).

The research strategy employed in this study is case-study research, for a number of reasons. Yin (2003) stated that particular conditions determine whether the case study is appropriate research strategy: (a) the study poses “how” and “why” questions; (b) the investigator has minor authority over the event; and (c) the focus is on the contemporary phenomenon within some real-life context (p. 1). As this study meets these criteria, the case-study approach can be adopted. The next section describes case-study research in more detail.

6.3. Case Study Research

Creswell (1998) held that the case study is one of five qualitative traditions of inquiry, the others being biography, phenomenological study, grounded-theory study, and ethnography. The use of the case study as a research strategy has been employed in a wide range of disciplines including law, psychology, medicine, politics, history, sociology and accounting (Hancock & Algozzine, 2006; Scapens, 2004; Neuman, 2006, Paslawski, 2010).

113

Chapter Six

In addition to various disciplines, case-study research as a strategy can also be employed to investigate organisations, events, programs, activities, and societies (Creswell, 1998;

Neuman, 2006).

Theorists seem to largely agree on the definitions of the case study (see Creswell,

1998; Neuman, 2006; Yin, 2003). Creswell (1998, p.61) defined a case study as "an exploration of a ‘bounded system’ or a case (or multiple-cases) over time through detailed, in-depth data collection involving multiple sources of information rich in context". In a similar vein, Neuman (2006, p.40) defined it as "an in-depth examination of an extensive amount of information about very few units or cases for one period or across multiple periods of time". Both these definitions share similar characteristics that require a researcher to perform a thorough examination and use various sources of information.

Yin (2003, p.13) defined the case-study research strategy as "an empirical enquiry that investigates a contemporary phenomenon within its real-life context, especially when the boundaries between phenomenon and context are not clearly evident". Yin (2003) extended the definition of case study by adding and highlighting one attribute, that the object being studied is a contemporary phenomenon. Thus, Yin's definition seems to provide more complete attributes in understanding the material being examined.

Furthermore, Humphrey and Scapens (1996, p.94) supported the use of the case study in accounting research:

We believe that case studies of accounting practice are a vital, albeit not the only, way of informing such debate and enhancing understanding of both the day-to-day organizational complexities of such practices and the interrelated influence of wider social and political contexts. However, knowledge developed through case studies will be dependent on the way the cases are constructed and their findings communicated.

114

Chapter Six

The advantage of a case study is that it can provide a clearer picture of accounting practice in relation to its larger social context, as it can connect individual activities at the micro level to their environmental setting at the macro level (Vaughan, 1992).

Apart from these strengths, a case study as a research strategy also has its limitations. There is a common criticism that case-study research does not provide a generalisable conclusion (Hägg & Hedlund, 1979; Tellis, 1997a; Dul & Hak, 2008) because, unlike a survey, it usually does not employ a larger set of data, instead using one more cases of the particular phenomena. Case-study research is also criticised because it cannot test hypotheses (explanatory); rather, it can only generate hypotheses (descriptive)

(Hägg & Hedlund, 1979). Aaltio and Heilmann (2010) argue that the case study is idiographic in nature and this aids researchers in understanding the object researched within its particular context. For instance, there is no single worldwide government system; examples range from autocratic to democratic. Even countries that embrace democratic system differ significantly in many of their attributes. This is because a single country does not operate in a vacuum, but exists within particular or distinct social, cultural, political and economic systems. To force case-study research to produce a generalisable conclusion could be considered futile, as it goes against the particular nature of qualitative research itself (Neuman, 2006).

In conclusion, the adoption of the case study as the research strategy of this study is considered to be appropriate, due to its strength in conveying a holistic and rich understanding of issues within their environmental setting. It is consistent with the

115

Chapter Six objectives of this study, which are to understand and analyse the practice of accountability reports exercised by Indonesian local governments following decentralisation reform.

The next section will describe the research design of this study

6.4. The Case Study Research Design

Trochim (2006) noted that research design generally serves as guidance that allows researchers to focus on elements and procedures of research so that they keep focused on addressing their research questions. According to Yin (2003, p.21), the research design of a case study involves “five components: (a) a study’s questions, (b) its propositions, if any,

(c) its unit(s) of analysis, (d) the logic linking the data to the prepositions, and (e) the criteria for interpreting the findings”.

McDonald (2010) asserted that ‘how and why’ are typical questions of case study research and have been worthwhile to facilitate researchers in achieving their research’s objectives. Yin (2003) pointed out that propositions, defined by Neuman (2006, p. 58) as "a theoretical statement about relationship between two or more concepts", are not compulsory for a case study.

The unit of analysis is “the major entity being analyzed in the study” (Fletcher &

Plakoyiannaki, 2010, p. 838). It can be an individual, a group of individuals (for example a family or professional association), a social category (such as social class or gender) or an organisation or individuals within an organisation (Neuman. 2006).

Yin (2003) noted that both the logic linking the data to the propositions, and the criteria for interpreting the findings components are useful in determining the stage of data

116

Chapter Six analysis in case-study research. Pattern matching is one of analytical tools used in interpreting and analysing data (Das, 2010). Pattern matching contains “matching an observed pattern (a pattern of measured values) with an expected pattern (a hypothesis) and deciding whether these patterns match (resulting in a confirmation of the hypothesis) or do not match (resulting in a disconfirmation)” (Hak & Dul, 2010, p. 663).

Considering this study does not test hypotheses and the objectives of this study (as mentioned in Chapter 1), this study does not employ pattern-matching; instead, it uses an iteratively circular method based on three elements— notice things, collect things, and think about things— to link data and to interpret findings (Seidel, 1998, p.2). Aaltio and

Heilmann (2010, p. 66) shared that view by saying that:

A researcher and a research object interact constantly with each other in a case study, and maintaining mutual trust is, therefore, a part of the research process. In the results, the objective is to understand and interpret thoroughly the individual cases in their own special context, and to find information concerning the dynamics and the processes.

The method adopted to interpret the findings will be described in more detail in the section on data analysis.

In short, the role of research design is vital in guiding and directing the researcher to address the study’s objective. The next section describes this study’s research questions.

6.5. Research Questions

This study has two research questions as stated in the Chapter 1. According to Yin

(2003, p.22), "the case study strategy is most likely to be appropriate for ‘how’ and ‘why’

117

Chapter Six questions”. Thus, research questions posed in this study meet the criterion for using a case- study strategy.

Considering the nature of qualitative research which relies on interpretive or critical social science (Neuman, 2006), this study is not intended to examine hypotheses, rather it is directed to understand the practice of accountability reports as applied by Indonesian local government as well as the role of local parliament in assessing such report. By doing so, this study can capture and discover the meaning of such practices within their unique contexts (Aaltio & Heilmann, 2010).

According to Mills et al. (2010) there are three categories of case-study research: exploratory, descriptive, and explanatory. Woiceshyn, (2010) noted that exploratory and descriptive case studies only provide a story and do not offer more explanation related to substantial factors influencing the object being studied. In a similar vein, Aaltio and

Heilmann (2010) argued that case-study research is not only a description of data, but a plausible method that employs interpretation and analysis. This study, therefore, attempted not to stop at exploratory and descriptive case studies, but rather wished to cover the explanatory area of research as well.

Initially, to carry this study into this explanatory case study category was very challenging for me. Interpreting and analysing qualitative data, dealing with (typically abstract) description was not an easy task. The difficulties started to be manageable, when I wrote the theoretical framework of this study. The framework allowed me to connect the data collected with relevant theories and everything looked clearer than before. This is

118

Chapter Six consistent with the view expressed by Scapens (2004) that a sound theoretical framework could facilitate researchers in interpreting data collected in a case-study research.

The unit of analysis of this study is the South Kalimantan Provincial Government

(SKPG), while each person within the SKPG being interviewed is treated as a key informant in the context of the organisation being studied. This approach is supported by previous case-study research, including Selznick’s (1949) research investigating the

Tennessee Valley Authority, in which the unit of analysis was the organisation itself, and

Rains’s (1984) study of the Boys’ Farm.

6.6. Data Collection

Before data collection could begin, I had to obtain permission to access the South

Kalimantan Provincial Government (SKPG) office. Six months before the site visit, I contacted an official within the SKPG via e-mail and telephone. I assumed that permission would be granted relatively easily, as this process was facilitated by an insider. However, relying solely on this official was not enough, as the official encountered difficulty in explaining the nature of this study using an interpretive paradigm (that is, that it depended on lessening the distance between the researcher and the object of study) to the relevant authority. The relevant authority within the SKPG could not make a decision whether to grant permission or not. This occasion confirmed the view articulated by Irvine and

Gaffikin (2006, p. 122) that “negotiating an access agreement is crucial to the success of the project.”

119

Chapter Six

Considering this issue, I made a decision to seek permission in person from the relevant official. Before leaving, I equipped myself with a letter of introduction from my supervisor. I then conducted a meeting with relevant officials in early September 2008. In the meeting, I explained the nature of my study to the official so that he could understand and thereby give permission to access the SKPG office. He then issued a formal letter that certified me as a student conducting research on the practice of accountability reporting in the SKPG office from December 2008 to June 2009. From the meeting, I also obtained quite worthwhile information concerning previous research conducted within the SKPG.

The official told me that the way I proposed to conduct research was very different from that of previous researchers. The official further explained that these prior researchers had simply interviewed some relevant informants and collected the data they needed. In contrast, my study required prolonged engagement in the field to permit direct observations over time of the phenomena being studied.

In collecting data, researchers can use several possible sources of evidence such as documentation, archival records, interviews, direct observation, participant observation, and physical artefacts (Yin, 2003; Dul & Hak, 2008; Gillham, 2000; Woodside, 2010). Yin

(2003, p. 86) pointed out that each of these sources has its own strengths and weakness, as summarised in Table 6.1.

120

Chapter Six

Table 6.1. Six Sources of Evidence: Strengths and Weaknesses

Source of Evidence Strengths Weaknesses Documentation* Stable—can be reviewed Retrievability— can be low repeatedly Biased selectivity, if collection Unobtrusive—not created as a is incomplete result of the case study Reporting bias—reflects Exact—contains exact names, (unknown) bias of author references, and details of an Access—may be deliberately event blocked Broad coverage—long span of time, many events, and many settings The actions taken at the site: Collecting internal data from the South Kalimantan Provincial Government office such as: accountability reports, accounting policy, organisational structure, provincial parliament's recommendations. Data from external sources was also gathered, such as audited financial statements from the Supreme Audit Agency (BPK), South Kalimantan's statistics from the Indonesian Bureau of Statistics (BPS) and some clippings of news from national and local newspapers.

Archival Records* [Same as for documentation] [Same as e for documentation] Precise and quantitative Accessibility due to privacy reasons Interview* Targeted—focuses directly on Bias due to poorly constructed case study topic questions Insightful—provides perceived Response bias causal inferences Inaccuracies due to poor recall Reflexivity—interviewee gives what interviewer wants to hear The actions taken at the site: Interviewing relevant individuals in order to seek their opinion or views concerning the practice of accountability reports, as well as to understand the social context of the research setting. The individuals come from various positions ranging from high- ranking to low-ranking officials as well as relevant staff.

121

Chapter Six

Direct Observations* Reality—covers events in real Time-consuming time Selectivity—unless broad Contextual—covers context of coverage event Reflexivity—event may proceed differently because it is being observed Cost—hours needed by human observers The actions taken at the site: Being immersed in the site for six months by observing the day- to-day activities of accountability reports preparation, to understand how accountability reports are prepared and who are the real actors. Participant-Observation [Same as for direct [Same as for direct observations] observations ] Insightful into interpersonal Bias due to investigator's behaviour and motives manipulation of events. Physical Artefacts Insightful into cultural features Selectivity Insightful into technical Availability operations Source: Yin (2003, p.86) * Sources of evidence adopted by this study.

In collecting data, this study uses four sources of evidence: interviews, direct

observations, documentation and archival records. The next sub-sections describe these

sources of evidence in more detail.

6.6.1. Interviews

This study mainly collected data from interviews. Open-ended interviews were

employed during the field research, as suggested by Yin (2003). The open-ended interview

is “a type of survey research question in which respondents are free to offer any answer

they wish to the question” (Neuman, 2006, p. 286). The open-ended interview was chosen

to allow a “free-flowing discussion” during the interview as suggested by Mir and Sutiyono

(2013, p. 107) and Harun and Kamase (2012).

122

Chapter Six

In recruiting the potential respondents, I began by understanding the process of preparing local-government accountability report practiced by the SKPG. Under the SKPG, there are 74 work units (including nine bureaus) called Satuan Kerja Pemerintah Daerah

(SKPD). A task force was formed by the SKPG to collect accountability reports from work units, which are then compiled into the SKPG accountability reports.

The task force sends a formal request to work units to submit their accountability reports. Each work unit sends the LPPD and LKPj to the task-force secretariat at the SKPG

Bureau of Governance. The reports are compiled and summarised, and the ILPPD is generated. The accountability reports are then handed over to the governor as the head of the South Kalimantan Provincial Government. The reports, subsequently, are submitted to the three entities: the central government, the provincial parliament and the public, as shown in the following figure.

Figure 6.1. The Process of Preparing Local-Government Accountability Reports

Requests work units to submit their respective accountability report (1) The SKPG Task Work units Force for under accountability the SKPG Submit the reports requested reports (2) (3)

Filing, compiling The SKPG’s and summarising accountability accountability reports reports collected (4) (5) The Governor

Submits the reports to (6) the three parties

The Central The 123 Government Provincial The Public Parliament

Chapter Six

This figure generated two questions. Which work units under the SKPG were engaged in preparing the reports? and more specifically, who were individuals knowledgeable about the reports?. The figure also guided me to locate which units under the SKPG were involved in preparing accountability reports, as well as finding the potential respondents within the relevant work units such as the Bureau of: Governance,

Organisation, the Provincial Internal Control Agency. 15

The number of respondents are interviewed in this study are 15 including a member of the provincial parliament (DPRD). Criteria employed in selecting the potential respondents were (a) they were knowledgeable about local-government accountability reporting; (b) they were willing to involve in this study voluntarily. The specific protocol and guideline referred in conducting open-ended research question were (a) the actual stream in case study interview is likely to be fluid rather than rigid, therefore risks, discomforts, and inconveniences can be minimised; (b) the use of audiotape to record the interview was subject to consent from the respondents.

In recruiting the potential respondents, I relied on my good rapport with them. I had fostered good relationship with some potential respondents long before I did this study through the sharing of thoughts and constructive discussion.

I commenced to select my potential respondents from an official in the Bureau of

Governance. I obtained much information from this contact (Mr. P1) about the practice of local-government accountability reporting in the SKPG. Mr. P1 generously introduced me

15 In the interests of confidentiality, I will not publish names or detailed position descriptions of those people who participated in interviews for this study. 124

Chapter Six with some officials within the bureau such as Mr. P2, Mr. P3, Mr. P4 and Mr. P5, through which I had an opportunity to approach them as my participants of this study. Afterwards, they voluntarily provided me with valuable information that allowed me to map and extend participants of this study in the Accounting Division. Mr. P6, an official in this division did not mind to participate in this study.

Thanks to my daily activities within the SKPG office, it allowed to socialize with officials there 16 . This situation allowed me to engage and discuss with more officials, including Mr. P7, Mr. P8 and Mr. P12, information that I had obtained from these three participants corroborate the findings gained from other participants.

From this bureau, I furthered my study in the Provincial Internal Control Agency to understand some issues concerning the practice of public sector accounting and its control mechanism. One official and two auditors (Mr. P13, Mr. P14 and Mr. P15) were willing to provide me with some information needed.

Information gathered from the Provincial Internal Control Agency and the Bureau of Governance led me to collect some information in the Bureau of Organisation concerning the usefulness of local-government accountability reports and performance measurement of local government practiced by the SKPG. On the basis of their work experience, Mr. P9 and Mr. P10 were selected to be my respondents. When I asked them to participate, they kindly agreed.

16 To support my activity in conducting research within the SKPG office, the relevant authority in the SKPG provided me with a table and chair 125

Chapter Six

To enhance my understanding of the practice of local-government accountability reporting in the SKPG, I also interviewed a member of the provincial parliament, Mr. P11.

A good relationship with this participant was gradually fostered. The process of participant recruitment was subject to the ethical and information sheet approved by Human Research

Ethics Committee regarding: (a) that their involvement in this study was voluntary (b) that they may withdraw their participation from this study at any time (c) refusal to participate in the study will not affect your relationship with the University of Wollongong; and that

(d) confidentiality is assured, you will not be identified in any part of the research.

The interviews ranged from 10 to 30 minutes, subject to the consent and availability of the respondents. Initially, I wished to use a digital recorder to record the interviews; however, having learned that respondents in the SKPG office were reluctant to speak openly if the interviews were recorded, I took notes instead. The decision not to record the interviews is justified by the work of Hayes and Mattimoe (2004) and Moeran (2009).

Hayes and Mattimoe (2004, p.371), for instance, stated that:

At the start of a study, you may plan to tape all interviews. However, this pre- determined strategy might have to be modified if tape-shy respondents appear in your study cohort. As they are the providers of the information you seek, you must be prepared to play the game their way, adapting your initial strategy accordingly.

Although most of the participants did not openly express their objection, I could sense the reluctance and perceived it from their gestures. For instance, I once encountered difficulty in getting data from Mr. C2, an official within the Bureau of Organisation since the official had not known me previously. Mr. C2 said, "Each official here is subject to a certain code of conduct to keep the secrecy of the organisation, including data given to outsiders, unless it is used for good purposes".

126

Chapter Six

I dealt with this situation based on my knowledge of the local culture. Using, our native language, Banjarese, I explained to the official that my research activities in the

SKPG office would be conducted in an ethical and responsible manner, and that his involvement as respondent in this study was voluntary. Thus, he could decline to be involved. Finally, our conversation flowed more cordially. This experience suggests that having a shared culture with the respondents provides advantages, particularly in gaining further information. This is in line with the work of Scapens (2004) who recommended that the case-study researcher should have excellent language skills (including knowledge of the local language) in communicating with both the subject of and the audience for the research.

6.6.2. Direct Observations

Direct observations play an important role in providing additional information, as well as shedding more light on the topic being studied (Yin, 2003; Tellis, 1997a). Direct observations allowed me to have a deeper understanding of the practice of accountability reporting in the SKPG.

Direct observation conducted should meet some criteria: (a) providing inputs that allowed me to carry out a process of triangulation; and (b) offering insights about what really happened during the course of local-government accountability reports preparation and evaluation of the local-government accountability report held by the Provincial

Parliament.

The specific protocols employed during direct observation were: (a) securing consent from the relevant authority of the event or meeting being observed; (b) acting to

127

Chapter Six minimise the discomfort and inconvenience of my presence; (c) the use of audiotape to record the interview was subject to consent from the relevant authorities and/or respondents. The notes taken during the day were re-written in the evening in order to look neat and organised so that I could reflect on them. The notes taken during site visit were stored in my personal computer and my account at an off-site (cloud) computing provider.

This kind of source data allowed me to identify who were the real actors involved in the preparation of accountability reports. For instance, according to a gubernatorial decree

(no. 188/44/36/KUM/2009), 21 people were assigned to prepare the accountability reports.

However, my direct observation in the field found that only four actors were engaged in their preparation.

Thus, direct observations allowed me to compare what was written in the gubernatorial decree and what was the reality. As another example, I attended the forum in which the governor discharged accountability of his administration before the members of the South Kalimantan Provincial Parliament; my direct observation allowed me to get the

“feel” of what was going on.

6.6.3. Documentation and Archival Records

Documentation and archival records strengthen research and provide information that may not be available from other sources (Yin, 2003; Tellis, 1997a: McDonald, 2010;

Raptis, 2010). Yin (2003, p.87), for instance, noted that "the most important use of documents is to corroborate and augment evidence from other sources". Yin (2003, p.86) further explains that documentation includes "administrative documents, formal studies or evaluation, and newspaper clippings".

128

Chapter Six

In the field, I collected all these types of documentation, such as accountability reports, accounting policies and some clippings from the leading newspapers (the

Banjarmasin Post and Radar Banjarmasin ). To compare data obtained from the SKPG office, I also gathered data from external sources such as the Audited Financial Statement of the SKPG, the Supreme Audit Agency and the statistics of South Kalimantan Province from the South Kalimantan chapter of the Indonesian Bureau of Statistics (BPS Kalimantan

Selatan). The following table details the referenced documents.

Table 6.2. List of the Referenced Documents

No. Documents Year Source 1. Hasil Pemeriksaan atas Laporan Keuangan Daerah Provinsi 2006 BPK Kalimantan Selatan Tahun Anggaran 2005 2. Hasil Pemeriksaan Semester II Tahun Anggaran (TA) 2007 atas 2008a BPK Pengendalian Kerusakan Pertambangan Umum Tahun 2003- 2007 3. Laporan Hasil Pemeriksaan Atas Laporan Keuangan Pemerintah 2009a BPK Provinsi Kalimantan Tahun Anggaran 2008 4. Laporan Hasil Pemeriksaan Atas Sistem Pengendalian Intern 2009b BPK Dalam Kerangka Pemeriksaaan Laporan Keuangan Pemerintah Provinsi Kalimantan Selatan Tahun Anggaran 2008 5. Laporan Hasil Pemeriksaan Atas Kepatuhan Terhadap 2009c BPK Perundang-Undangan Dalam Kerangka Pemeriksaan Laporan Keuangan Pemerintah Provinsi Kalimantan Selatan Tahun Anggaran 2008 6. Ikhtisar Hasil Pemeriksaan Semester II Tahun 2008 2009d BPK 7. BPK RI Menunaikan Amanat Konstitusi 2009e BPK 8. Ikhtisar Hasil Pemeriksaan Semester II Tahun 2009 2010 BPK 9. Ikhtisar Hasil Pemeriksaan Semester II Tahun 2010 2011 BPK 10. Ikhtisar Hasi Pemeriksaan Semester II Tahun 2011 2012 BPK 11. Kalimantan Selatan Dalam Angka 2007 2007 BPS 12. Kalimantan Selatan Dalam Angka 2009 2009 BPS 13. LPPD Kalimantan Selatan 2008 2009a SKPG 14. LKPj Kalimantan Selatan 2008 2009b SKPG 15. ILPPD Kalimantan Selatan 2008 2009c SKPG 16. Rekomendasi DPRD Provinsi Kalimantan Selatan Terhadap 2009 SKPP Laporan Peranggungjawaban (LKPj) Gubernur Kalimantan Selatan 129

Chapter Six

6.7. Data Analysis

The process of analysing data is a huge task because the data takes various forms,

such as observational notes, narratives, organisational reports and external reports

(Creswell, 1998). Marshall and Rossman (1999, p.50) portray this process as "messy, ambiguous, time-consuming, creative, and fascinating". Further, there is no single approach to analysing data in qualitative research (Creswell, 1998; Dey, 2005; Lewis, 2007; Namey et. al, 2007). This is because the method adopted is subject to influence form philosophical stances (Abdul-Khalid, 2009), traditions, disciplines, methodologies, school of thought

(Lewis, 2007) and, the objective of research (Dey, 2005).

In the first stage, I found that the model proposed by Seidel (1998) provided insights on how to engage with qualitative data analysis. Seidel (1998, p.1) described the process of qualitative data analysis as a cyclic pattern of "noticing, collecting, and thinking of interesting things". Seidel (1998, p.2) further highlighted that "[researchers] do not simply notice, collect, and then think, and then write a report"; the process is iterative, progressive, recursive (that is, allowing the researchers to identify requirements for evidence as they are thinking) and holographic (that is, at each step the researcher is simultaneously engaging in the others). The others, such as Leighton (2010), McLaren

(2010), Wiebe (2010), Bassett (2010) and Abdul-Khalid (2009), agree with Seidel (1988).

Furthermore, the process of iteration allows researchers to uncover further evidence

(Seidel, 1998; Bassett, 2010); this, in turn, allows the study to rely on multiple sources of evidence, or triangulation (Tellis, 1997b). Neuman (2006, p.149) defined triangulation as

"the idea that looking at something from multiple point of view improves accuracy". Aaltio

130

Chapter Six and Heilmann (2010) noted that the use of triangulation allows the researcher to compare data collected from various sources, this increasing accuracy (Neuman, 2006, p.149), reliability (Aaltio & Heilmann, 2010, p.71), and offering more comprehensive knowledge

(Miller & Fox, 2004, p.36).

Further along, I considered the work of Marshall and Rossman (1999) to enrich and complement the model suggested by Seidel (1998). Marshall and Rossman (1999, p.152) put forward six general phases of data analysis: "(a) organising the data; (b) generating categories, themes, and pattern; (c) coding the data; (d) testing the emergent understanding;

(e) searching for alternative explanations; and (f) writing the report". They further explained that data reduction and interpretation occurs in each phase of this process. The process demands that the researcher be dynamic and reflective in dealing with data reduction and interpretive activities as well as directing the next step in the research. This is in line with Lloyd-Jones (2003) and Frost et al. (2010), who argued that the role of a qualitative researcher is significant in shaping and directing the research, and requires the researcher to think reflectively to make sense of the object being studied. In this study, the data was manually analysed using the model and procedures developed by Seidel (1998) and Marshall and Rossman (1999). In the first stage, Seidel’s (1998) model guided me in understanding how to gather data in qualitative research. In the further stages, analytic procedures developed by Marshall and Rossman (1999) gave useful guidance in how to reduce and interpret data.

Data reduction, as suggested by Marshall and Rossman (1999) encompasses three procedures: organising the data; generating categories, themes and patterns; and coding the

131

Chapter Six data, while the others three are employed for interpretation and writing activities (see Table

6.3)

Table 6.3. Application of the six phases of Marshall and Rossman (1999)

Activities Phases Actions taken

• The detailed interviews were transcribed and translated into English, and systematically organised, together with observational notes and relevant documents and archival records. • The organisation was based on the themes relevant to this study’s objectives: 1) the process of accountability-report preparation; 2) the organisational culture of the SKPG; 3) 1. Organising the data accountability reports as a socially-constructed Data reduction 2. Generating practice; 4) power and patronage; 5) decoupling; 6) categories, themes the contents of accountability reports; 7) and patterns performance measurement; 8) institutional 3. Coding the data isomorphism; 9) accountability forums; and 10) provincial parliament's response to the report submitted. • Interviews of respondents were coded by letter to allow readers of this study easier in understanding the flow of its discussion.

• The data collected was analysed using a method appropriate to the interpretive paradigm adopted for this study. Lloyd-Jones (2003) and Lodico et al. (2010) asserted that qualitative research is closely related to inductive reasoning: "qualitative researchers believe that full understanding of phenomena is dependent on the context; they use theories primarily after data collection to help them interpret the patterns" (Lodico et al., 2011, p.11). This view was also shared by Frankel and Devers (2000) who noted that what the researcher has understood from the previous stage of the research 1. Testing the significantly influences further stages of the emergent research process. Therefore, this study draws on Interpretation & understanding inductive reasoning in analysing the data collected. writing of the report 2. Searching for • In this study, emergent understanding was not alternative tested, as this study did not test hypothesis. Rather, explanations it was re-seen from other viewpoints (triangulation) 3. Writing the report for gaining comprehensive knowledge as suggested by Miller and Fox (2004). • Following the previous step, it allowed me for searching alternative explanation for this study. For instance, this study found that accountability forums

132

Chapter Six

held by the Provincial Parliament were largely ritualistic, as they simply fulfilled the provisions without having significant impact on performance of the SKPG in delivering public services. Why did it happen? A historical perspective was able to provide me with more explanations as discussed in Chapter 8. • There are four types of case-study writing formats, to whom the reports are intended: (a) academic colleagues; (b) policymakers; (c) special groups such as dissertation or thesis committee; and (d) funders of research (Yin, 2003). In writing the report of this study, I followed regulations set by the ethics committee of University of Wollongong.

6.8. Conclusion

The main objective of this study is to understand the practice of accountability reporting within the SKPG. To accomplish this, the study’s philosophical foundations— ontology, epistemology, methodology and method— should be well-comprehended and established. This study is underpinned by a non-realist ontology that makes the assumption that everything in the world is socially-constructed; thus the epistemological assumptions of qualitative research are considered compatible with the study. These assumptions require that the researcher should be as close as possible to the object to be studied. In this study, such closeness enabled me to understand the practice of accountability reporting in South

Kalimantan Province; the true actors involved; and how relations among the actors construct the practice of accountability reporting. Therefore, the interpretive paradigm is applicable, since it allows me as the researcher to sense the richness of meaning as well as the social context of the research setting.

133

Chapter 9: Conclusions

9.1. Introduction

This chapter presents the concluding remarks for this study investigating the practice of accountability reporting in Indonesian local government in 2008. During 1967-

1998, Indonesia was ruled by the Soeharto regime. Within this era, the practice of accountability reporting in local governments focused on being more accountable to the regime (central government) than to the public. By this means, the regime controlled local governments throughout the country.

The fall of the Soeharto regime in a people-power movement in 1998 has changed the form of Indonesian government from a centralised to a decentralised government system. At the macro level, the change from centralised to de-centralised government systems affects the accountability system of local government; this, in turn, affects the practice of local governments’ accountability reporting at the micro level. Within the

Soeharto regime, for instance, accountability reports were only submitted to the central government and the local parliament. In contrast, in the post-Soeharto regime, the public is now considered as one of the parties to whom accountability reports should be rendered, along with the central government and the local parliament, as stipulated in Law No. 32

(2004) on Local Government.

The South Kalimantan Provincial Government (SKPG) was selected as the site for this study. Given that the object of this study is a governmental organisation, Fogarty

(1996) suggests that institutional theory is a good lens for analysis, as it relates to inter- 214

Chapter Nine organisational activity characterised by the attempt to secure social legitimacy through conformity to the prevailing values for appropriate behaviour, in which governmental agencies are usually charecterised as "highly regulated organisations" that rely on public financing (Fogarty, 1996, p.246).

This rest of this chapter is organised into three sections: the findings of the study

(section 9.2); limitations of the study (section 9.3); and potential further research (section

9.4).

9.2. The Findings of the Study

In an attempt to meet the objectives set forth in Chapter 1, this study poses two research questions. First, how and why does local government prepare its annual accountability reports?; and second, how does the local parliament evaluate the annual accountability report submitted by the local executive? It is apparent that both research questions posed in this study use “how” and “why” questions. According to Yin (2003, p.21), "the case study strategy is most likely to be appropriate for ‘how’ and ‘why’ questions”. Thus, this study has employed a case-study strategy.

Concerning the first question, How and why does local government prepare its annual accountability reports?, this study presents some empirical findings.

The issuance of two provisions— Law No. 32 (2004) on Local Government and

Government Regulation (GR) No. 3 (2007) on Accountability Reporting of Local

Government— has started to regard citizens as a new and appropriate audience for the report; this had not been the case during the Soeharto regime (1967-1998). Thus, local

215

Chapter Nine governments’ accountability reports are submitted to three parties: the central government, the relevant provincial parliament and the public. However, among these three parties, the public receives the least information, as the accountability report promulgated to the citizens is only a summary of that submitted to the central government as stipulated in article 27 (3) of GR No. 3 (2007). It is apparent that the SKPG complies with such provisions. It could be said, therefore, that GR No. 3 (2007) contains a flawed conception because it does not compel local government to be more transparent to citizens or to guarantee the right of citizens to be well-informed by their local government.

This study found that the SKPG cannot seem to free itself from "classic" bad practices usually attributed to Indonesian public-sector workers, such as unpunctuality, inefficient and ineffective work practices and recklessness in managing data, as discussed in Chapter Seven. The persistence of these poor practices appears to cause the SKPG to experience low institutional capacity in performing its task. This is consistent with studies conducted by Imbarrudin (2004) and the Democratic Reform Support Program (DRSP,

2009) that assert that Indonesian local governments have had limited institutional capacity in carrying out their duties. The phenomenon of low institutional capacity is often found in developing countries, as reported Graham (2002) and Smoke (2005).

The low institutional capacity suffered by the SKPG might be only a reflection of the dysfunctional organisational culture adopted. Although the three elements of organisational culture— artefacts, espoused values and basic assumptions— exist, they are not practised integrally. As a result, each element runs separately without clear direction.

Schein’s (2004) model offers an explanation concerning the level of culture practised by an

216

Chapter Nine organisation. Given this model, it is apparent that the culture practised by the SKPG is still in the level of artefact, such as slogans, jargon or motto embedded in the emblem of the

SKPG. Likewise, the SKPG’s espoused values and basic assumptions are not practised in day-to-day operations. As a result, the actual behaviour of SKPG members has not reflected the organisation’s core beliefs (basic assumptions) and espoused values.

It is evident from this study that the SKPG's accountability reports are prepared through routine activities. Routine, referring to the work of Scapens (1994, p. 306), are made possible by “social coherence upon human activity, partly through the continuing production and reproduction of habits of thought and action”. It could be said, therefore, that accountability reporting as practised by the SKPG is a socially-constructed reality.

Because individuals involved in the preparation of accountability reports bring their respective habits to their work (Hallet, 2003), over time these individual habits transform into organisational routine (Scapens, 1994) through interaction— largely constructed via social relationships rather than formal processes— among the organisation’s members

(Fine, 1984).

The practice of decoupling exists within the SKPG. This means that there is a deviation between what organisations actually do compared to what their own organisational structure suggests they should do (Fogarty, 1992). As a result, the SKPG neglects the principles of efficiency and effectiveness, as suggested by Meyer and Rowan

(1977) Zucker (1987) and Mouritsen, (1994). The SKPG operates within a relatively highly institutionalised environment, in which good leaders are perceived to be those who presents themselves as what Irvine (2011) calls “the institutional conformist”, participating

217

Chapter Nine in and preserving the prevailing institutions, such as religious and traditional rites, and becoming involved in charity programs.

It is apparent that the accountability reports prepared by the SKPG are relatively descriptive and do not disclose some key information such as internal control, risk management, remuneration of executives and members of the provincial parliament, spatial planning and sustainable environmental development (discussed in Chapter Seven). This then affects the usefulness of the reports , as they lack important information that could support the work units within the SKPG in their duties and tasks.

The inclusion of performance measurement as part of local governments’ accountability reports as stipulated in GR No. 6 (2008) has not enhanced the function of the reports as a medium of discharging accountability to its stakeholders, as the performance measurement information is only available in the accountability report for central government (LPPD), not in the accountability reports for the provincial parliament (LKPj) or the public (ILLPPD).

Among the three possible versions of institutional isomorphism practised by

SKPG— coercive, mimetic and normative— it is evident that the SKPG is most susceptible to coercive isomorphism. In preparing accountability reports, for instance, SKPG fully complied with the provisions set by the central government, because the source of the

SKPG’s budget is primarily the central government. This is consistent with the work of

DiMaggio and Powell (1983), who noted that dependent organisations tend to conform to superior ones to get resources. At the same time, mimetic and particularly normative isomorphism are also present, but in a symbolic way.

218

Chapter Nine

With regard to the second research question, How does local parliament evaluate the annual accountability report submitted by local government in the accountability forum?, this study found some interesting developments.

Law No. 32 (2004) and GR No. 3 (2007) require local parliaments to hold an annual accountability forum. Theoretically, the accountability forum is a forum in which the power-holder is obliged to explain and justify his or her conduct, a question-and-answer session is scheduled, and recommendations resulting from the forum have the potential to trigger the imposition of sanctions on the power-holder, as suggested by theorists such as

Bovens (2007a, 2007b, 2010) and Mulgan (2000a). In fact, in 2008 the SKPG’s governor merely delivered his speech on that year’s accountability report, then handed the report over to the chairperson of the parliament, after which the accountability forum was officially closed. There was no question-and-answer session.

A month after the first forum, the South Kalimantan Provincial Parliament held a second accountability forum, wherein a response to the accountability report submitted by the SKPG was to be given. However, the South Kalimantan Provincial Parliament simply complied with GR No. 3 (2007), which stipulates only one agenda item for the forum: delivering its recommendations on the SKPG’s accountability report. The provincial parliament’s six-page set of recommendations was delivered by one of the members of parliament, after which the second forum was officially closed, completing all accountability arrangements for the 2008 SKPG accountability report. Again, there was no question-and-answer session, let alone “a rational and encouraging sanction” by the parliament on the SKPG to encourage better performance.

219

Chapter Nine

The provincial parliament raised no critical assessment in its recommendation. The lack of capacity to perform was acknowledged by the parliament, as stated in page 2 of its recommendations, where it blamed the insufficient time available (one month) to assess the report properly and the limited data the report presented. The provincial parliament’s lack of capacity to assess the accountability report might be caused by the reluctance of the members of parliament to engage in something so "complicated"; this is evidenced by the absence of any assessment standard or benchmarks for the accountability report; in other words, there was no clear framework on how to assess it.

Apart from the absence of a framework for assessing or controlling the executive, the provincial parliament, regrettably, also does not have a standard of assessment for its own annual programs. It seems from the results of this study, therefore, that the provincial parliament takes neither its role of controlling the executive (SKPG) nor its responsibility to assess its own programs seriously. As a result, the parliament tends to perpetuate

“archaic" programs such as the comparative-study visit program (studi banding) , which have been common since the Soeharto era and, seem to place limited values on raising the quality of reporting.

The absence of a question-and-answer session within the accountability forums and the provincial parliament’s lack of authority to impose sanctions on the executive could be contextualised from a regulatory perspective. Following the collapse of the Soeharto regime, the Habibie administration attempted to address popular demand by endorsing reform-spirited provisions, including Law No. 22 (1999) on Local Government. One of the key features of this law was to give local parliament the authority to impose sanctions on

220

Chapter Nine local government in the accountability forum. However, the issuance of Law No. 32 (2004) on Local Government, passed by the Megawati administration, annulled the previous legislation. This annulment was most likely driven by members of local parliaments’ use of their authority to pressure local government with the prospect of impeachment for the sake of their own interests, as happened in some regions during 2001-2002 (Chapter Eight).

9.3. Limitations of the Study

Apart from the significance and contribution of this study, I should acknowledge several limitations contained by it.

This study took place in the context of one province out of 33 provinces in

Indonesia. This means that the results and findings cannot necessarily be generalised as representative of the condition of local governments in Indonesia as a whole, because each province has its own characteristics, culture and environmental setting.

The provisions referred to by this study may have changed or become obsolete following the issuance of new provisions by the Indonesian government after the data- collection period was conducted.

There are linguistic/translation issues with any cross-language study. This may affect the way meaning is translated from the local language (Banjarese) into English.

Thus, some inaccuracies might be reflected in my interviews.

As a budding researcher, my own beliefs and background affect the way I interpret the interview data. To cope with this issue, I used the triangulation method to minimise the potential for misinterpretation where possible. Specifically, I used some sources from

221

Chapter Nine external and independent agencies such as the Supreme Audit Agency (BPK), the

Indonesian Bureau of Statistics (BPS), non-governmental organisation and mass media.

9.4. Potential Further Research

This study identifies at least two potential areas for further research. First, there is a tendency for some businesspeople in South Kalimantan Province to engage in local political affairs. The expanding role of local businesspeople into the political realm might be driven by business motives (that is, they seek to protect their business interests, particularly natural resources such as coal deposits). If local legislative bodies at both the provincial and district levels are controlled by businesspeople, it is most likely that policies agreed to by the executive and the legislative will be nothing more than the result of "horse- trading” among their respective interests. Therefore, investigating the way policy on economic resources will be directed and controlled is an intriguing question. Second, given the fact that South Kalimantan Province is an institutionalised environment with particular beliefs and traditions, an ethnographic study into the role of written reports in an oral-based society could be interesting.

222

References

Aaltio, I. & Heilmann, P., 2010. Case Study as a Methodological Approach. In: A. J. Mills, G. Durepos & E. Wiebe, eds. Encyclopedia of Case Study Research. London: SAGE Publications Ltd., pp. 66-76. Abdul-Khalid, S.-N., 2009. Sensemaking in Interpretive Management Accounting Research: Constructing a Credible Account. International Journal of Qualitative Methods, 8(1), pp. 41-53. Abidin, S. Z., 2001. Sistem Pengelolaan Pemerintahan Daerah dalam Era Reformasi. Majalah Perencanaan Pembangunan, 24 ed. Jakarta: Bappenas. Acar, M., Guo, C. & Yang, K., 2008. Accountability When Hierarchical Authority is Absent: Views From Public Private Partnership Practitioners. The American Review of Public Administration, 38(1), pp. 3-23. Ackerman, J. M., 2005. Social Accountability in the Public Sector, Washington, DC: The World Bank. ADB, 2004a. Country Governance Assessment Report of Republic of Indonesia, Manila: Asian Development Bank. ADB, 2004b. Report and Recommendation of the President to the Board of Directors on Proposed Loans to the Republic of Indonesia for the State Audit Reform Sector Development Program, Manila: Asian Development Bank. Akbar, R., Pilcher, R. & Perrin, B., 2012. Performance Measurement in Indonesia: The Case of Local Government. Pacific Accounting Review, 24(3), pp. 1-50. Al-Banjari, S. M. A., 2005. Sabilal Muhtadin. Surabaya: PT. Bina Ilmu. Amenta, E. & Halfmann, D., 2000. Wage Wars: Institutional Politics, WPA Wages, and the Struggle for U.S. Social Policy. American Sociological Review, 65(4), pp. 506-528. Anwar, D. F., 2010. The Habibie Presidency: Catapulting Towards Reform. In: E. Aspinall & G. Fealy, eds. Soeharto’s New Order and its Legacy. Canberra: ANU E Press, pp. 99-117.

223

Arendt, H., 1958. The Human Condition. Chicago: University of Chicago Press. Aspinall, E., Klinken, G. V. & Feith, H., 1999. Introduction. In: The Last Days of President Soeharto. Clayton: Monash Asia Institute, pp. i-x. Aucoin, P. & Heintzman, R., 2000. The Dialectics of Accountability for Performance in Public Management Reform. International Review of Administrative Sciences, 66(1), pp. 45-55. Azra, A., 2004. The Origin of Islamic Reformism in Southeast Asia: Networks of Malay- Indonesian and Middle Eastern Ulama in the seventeenth and eighteenth centuries. Crows Nest NSW: Allen & Unwin. Bartley, T. & Schneiberg, M., 2002. Rationality and Insitutional Contingency: the Varying Politics of Economic Regulations in the Fire Insurance Industry. Sociological Perspective, 45(1), pp. 47-79. Basikin, 2007. Vigor, Dedication and Absorption: Work Engagement among Secondary School English Teachers in Indonesia. Fremantle, Perth, Presented at the annual AARE Conference. Bass, B. M., 2008. The Bass Handbook of Leadership. Fourth ed. New York: Free Press. Bassett, B. R., 2010. Iterative. In: A. J. Mills, G. Durepos & E. Wiebe, eds. Encyclopedia of Case Study Research. London: SAGE Publications Ltd., pp. 503-505. Baum, H. S., 1989. Organizational Politics against Organizational Culture: a Psychoanalytic Perspective. Human Resource Management, 28(2), pp. 191-206. Benito, B., Montesinos, V. & Vela, J. M., 2003. Local and Regional Accounting and Reporting in Spain: An Empirical Outlook. Journal of Public Budgeting, Accounting & Financial Management, 15(1), pp. 67-91. Berger, P. L. & Luckmann, T., 1967. The Social Construction of Reality: a Treatise in the Sociology of Knowledge. Garden City, NY: Anchor Books. Berger, P. L. & Luckmann, T., 1991. The Social Construction of Reality: A Treatise in the Sociology of Knowledge. London: Penguin Books . Bertucci, G., 2007. Strengthening Public Sector Capacity for Achieving the Millenium Development Goals. Vienna, United Nations Publication, pp. 1-8.

224

Bird, P., 1973. Accountability, Standard in Financial Reporting. London: Haymarket Publishing. Bisman, J., 2010. Postpositivism and Accounting Research: A (Personal) Primer on Critical Realism. Australasian Accounting Business and Finance, 4(4), pp. 3-25. Blagescu, M., Casas, L. d. L. & Lloyd, R., 2005. Pathways to Accountability The GAP Framework. London: One World Trust. Bovens, M., 2005a. From Financial To Public Accountability. In: H. Hill, ed. Bestandsaufnahme und Perspektiven des Haushalts und Finazmanagement. s.l.:Nomos, pp. 83-193. Bovens, M., 2005b. Public Accountability. In: E. Ferlie, L. E. Lynn Jr & C. Pollitt, eds. The Oxford Handbook of Public Management. Oxford: Oxford University Press, pp. 182-208. Bovens, M., 2007a. Analysing and Assesing Accountability: A Conceptual Framework. European Law Journal, 13(4), pp. 447-468. Bovens, M., 2007b. New Forms of Accountability and EU-Governance. Comparative European Politics, Issue 5, pp. 104-120. Bovens, M., 2010. Two Concepts of Accountability: Accountability as a Virtue and as a Mechanism. West European Politics, 33(5), pp. 946-967. Bovens, M., Schilleman, T. & Hart, P. '., 2008. Does Public Accountability Work?An Assessment Tool. Public Administration, 86(1), pp. 225-242. Boyne, G. A., 2002. Public and Private Management: What’s the Difference?. Journal of Management Studies, 39(1), pp. 97-122. Boyne, G. & Law, J., 1991. Accountability and Local Authority Annual Report: The Case of Welsh District Councils. Financial Accountability and Management, 7(3), pp. 179-194. Bozeman, B., 1987. All Organizations Are Public: Bridging Public and Private Organizational Theories. San Franscisco: Jossey-Bass Publishers. Bozeman, B. & Bretschneider, S., 1994. The "Publicness Puzzle" in Organization Theory: A Test of Alternative Explanations of Differences between Public and Private Organizations. 4(2), pp. 197-223. 225

BPK, 2006. Hasil Pemeriksaan atas Laporan Keuangan Daerah Provinsi Kalimantan Selatan Tahun Anggaran 2005, Banjarmasin: Badan Pemeriksa Keuangan (BPK) Republika Indonesia. BPK, 2008a. Hasil Pemeriksaan Semester II Tahun Anggaran (TA) 2007 atas Pengendalian Kerusakan Pertambangan Umum Tahun 2003-2007, Jakarta: Badan Pemeriksa Keuangan (BPK) Republik Indonesia. BPK, 2009a. Laporan Hasil Pemeriksaan Atas Laporan Keuangan Pemerintah Provinsi Kalimantan Tahun Anggaran 2008., Banjarbaru: Badan Pemeriksa Keuangan (BPK) Republik Indonesia. BPK, 2009b. Laporan Hasil Pemeriksaan Atas Sistem Pengendalian Intern Dalam Kerangka Pemeriksaaan Laporan Keuangan Pemerintah Provinsi Kalimantan Selatan Tahun Anggaran 2008., Banjarbaru: Badan Pemeriksa Keuangan (BPK) Republik Indonesia. BPK, 2009c. Laporan Hasil Pemeriksaan Atas Kepatuhan Terhadap Perundang-Undangan Dalam Kerangka Pemeriksaan Laporan Keuangan Pemerintah Provinsi Kalimantan Selatan Tahun Anggaran 2008., Banjarbaru: Badan Pemeriksa Keuangan (BPK) Republik Indonesia. BPK, 2009d. Ikhtisar Hasil Pemeriksaan Semester II Tahun 2008, Jakarta: Badan Pemeriksa Keuangan (BPK) Republik Indonesia. BPK, 2009e. BPK RI Menunaikan Amanat Konstitusi. Jakarta: Badan Pemeriksa Keuangan (BPK) Republik Indonesia. BPK, 2010. Ikhtisar Hasil Pemeriksaan Semester II Tahun 2009, Jakarta: Badan Pemeriksa Keuangan (BPK) Republik Indonesia. BPK, 2011. Ikhtisar Hasil Pemeriksaan Semester II Tahun 2010, Jakarta: Badan Pemeriksa Keuangan (BPK) Republik Indonesia. BPK, 2012. Ikhtisar Hasi Pemeriksaan Semester II Tahun 2011, Jakarta: Badan Pemeriksa Keuangan (BPK) Republik Indonesia. BPS Kalimantan Selatan, 2007. Kalimantan Selatan Dalam Angka 2007. Banjarmasin: Biro Pusat Statistik (BPS) Kalimantan Selatan.

226

BPS Kalimantan Selatan, 2009. Kalimantan Selatan Dalam Angka 2009. Banjarmasin: Biro Pusat Statistik (BPS) Kalimantan Selatan. Brint, S. & Karabel, J., 1991. Institutional Origins and Transformations: The Case of American Community Colleges. In: W. W. Powell & P. J. DiMaggio, eds. The New Institutionalism in Organizational Analysis. Chicago: University of Chicago Press, pp. 311-336. Budairi, M., 2007. Pemberdayaan Legislatif Lokal Menuju Good Governance. In: Sulkan, T. Arbain & A. Jumbawuya, eds. Mewujudkan Good Governance di Kalimantan Selatan (Kumpulan Pikiran Urang Banua). Banjarmasin: Inspektorat Provinsi Kalimantan Selatan, pp. 217-227. Buehler, M., 2009. Islam and Democracy in Indonesia. Insight Turkey, 11(4), pp. 51-63. Buehler, M., 2012. Countries at the Crossroads 2012: Indonesia, Washington DC: Freedom House. Bünte, M. & Ufen, A., 2009. The New Order and Its Legacy: Reflections on Democratization in Indonesia. In: M. Bünte & A. Ufen, eds. Democratization in Post-Suharto Indonesia. Oxon: Routledge, pp. 3-29. Burchell, S., Clubb, C., Hopwood, A. & Hughes, J., 1980. The Roles of Accounting in Organizations and Society. Accounting, Organizations and Society, 5(1), pp. 5-27. Burns, J., 2000. The Dynamics of Accounting Change Inter-play between New Practices, Routines, Institutions, Power and Politics. Accounting, Auditing & Accountability Journal, 13(5), pp. 566-596. Burns, J. & Scapens, R. W., 2000. Conceptualizing Management Accounting Change: an Institutional Framework. Management Accounting Research, Volume 3, pp. 3-25. Burrell, G. & Morgan, G., 1979. Sociological Paradigms and Organizational Analysis: Elements of Sociology of Corporate Life. London: Heineman Educational Books Ltd.. Butterworth, P., Gray, R. H. & Haslam , J., 1989. The Local Authority Annual Report in the UK: An Exploratory Study of Accounting Communication and Democracy. Financial Accountability and Management, 5(2), pp. 73-87.

227

Campos, J. E. & Hellman, J. S., 2005. Governance Gone Local: Does Decentralization Improve Accountability?. In: East Asia Decentralizes: Making Local Government Work. Washington DC: The World Bank, pp. 237-252. Carpenter, V. L. & Feroz, E. H., 1992. GAAP as a Symbol of Legitimacy: New York State's Decision to Adopt Generally Accepted Accounting Principles. Accounting, Organizations and Society, 17(7), pp. 613-643. Carruthers, B. G., 1995. Accounting, Ambiguity, and the New Institutionalism. Accounting, Organizations and Society, 20(4), pp. 313-328. Carruthers, B. G. & Espeland, W. N., 1991. Accounting for Rationality: Double-Entry Bookkeeping and the Rhetoric of Economic Rationality. The American Journal of Sociology, 97(1), pp. 31-69. Castiglione, D., 2007. Accountability. In: M. Bevir, ed. Encyclopedia of Governance. Thousand Oaks: SAGE Publications, Inc., pp. 1-7. Chalmers, I., 2006. Indonesia: An Introduction to Contemporary Traditions. s.l.:Oxford University Press. Chalmers, I., 2007. The Islamization of Southern Kalimantan: Sufi Spiritualism, Ethnic Identity, Political Activism. Indonesian Journal for Islamic Studies, 14(3), pp. 371- 417. Chavance, B., 2009. Institutuional Economics. London: Routledge Taylor & Francis Group. Child, J., 1972. Organizational Structure, Environment and Performance: The Role of Strategic Choice. Sociology, 6(1), pp. 1-22. Christensen, T., Lægreid, P., Roness, P. G. & Røvik, K. A., 2007. Organization Theory and the Public Sector: Instrument, Culture and Myth. New York: Routledge. Clegg, S., 2010. The State, Power, and Agency: Missing in Action in Institutional Theory. Journal of Managment Inquiry, 19(1), pp. 4-13. Coburn, C. E., 2004. Beyond Decoupling: Rethinking the Relationship Between the Institutional Environment and the Classroom. Sociology of Education, 77(July), p. 211–244.

228

Cochrane, A., 1993. From Financial Control to Strategic Management: The Changing Faces of Accountability in British Local Government. Accounting, Auditing & Accountability Journal, 6(2), pp. 30-51. Cole, W. S., 2001. Roots of Corruption in the Indonesian System of Governance, Washington: Woodrow Wilson International Center for Scholars. Collis, J. & Hussey, R., 2003. Business Research : A Practical Guide for Undergraduate and Postgraduate Students. Basingstoke, UK: Palgrave Macmillan. Cooper, D. J. & Sherer, M. J., 1984. The Value of Corporate Accounting Reports: Arguments for a Political Economy of Accounting. Accounting, Organizations and Society, 9(3/4), pp. 207-232. Covaleski, M. A. & Dirsmith, M. W., 1988. An Institutional Perspective on the Rise, Social Transformation, and Fall of a University Budget Category. Administrative Science Quarterly, Volume 33, pp. 562-587. Covaleski, M. A. & Dirsmith, M. W., 1990. Dialectic Tension, Double Reflexivity and the Everyday Accounting Researcher: on Using Qualitative Methods. Accounting, Organizations and Society, 15(6), pp. 543-573. Covaleski, M. A., Dirsmith, M. W. & Samuel, S., 1996. Managerial Accounting Reserach: The Contributions of Organizational and Sociological Theories. Journal of Management Accounting Research, Volume 8, pp. 1-35. Coy, D., Fischer, M. & Gordon, T., 2001. Public Accountability: A New Paradigm for College and University Annual Reports. Volume 12, pp. 1-31. Coy, D. & Pratt, M., 1998. An Insight into Accountability and Politics in Universities: a Case Study. Accounting, Auditing dan Accountability, 11(5), pp. 540-561. Creswell, J. W., 1998. Qualitative Inquiry and Research Design Choosing among Five Traditions. London: SAGE Publications Ltd. Das, H., 2010. Statistical Analysis. In: A. J. Mills, G. Durepos & E. Wiebe, eds. Case Study as a Methodological Approach. London: SAGE Publications Ltd., pp. 888-892. Daud, A., 1997. Islam dan Masyarakat Banjar: Deskripsi dan Analisa Kebudayaan Banjar. Jakarta: Raja Grafindo Persada.

229

Deephouse, D. L. & Suchman, M., 2008. Legitimacy in Organizational Institutionalism. In: R. Greenwood, C. Oliver, R. Suddaby & K. Sahlin, eds. The SAGE Handbook of Organizational Institutionalism. London: SAGE Publications Ltd., pp. 49-77. Denzin, N. K. & Lincoln, Y. S., 1998. The Landscape of Qualitative Research: Theories and Issues. Thousand Oaks: SAGE Publications, Inc. Denzin, N. K. & Lincoln, Y. S., 2005. Introduction: The Discipline and Practice of Qualitative Research. In: The Sage Handbook of Qualitative Research. London: SAGE Publications Ltd., pp. 1-32. Dey, I., 2005. Qualitative Data Analysis: A User Friendly Guide for Social Scientists. London: Routledge. Dillard, J. F., Rigsby, J. T. & Goodman, C., 2004. The Making and Remaking of Organization context. Duality and the Institutionalization Process. Accounting, Auditing and Accountability Journal, 17(4), pp. 506-542. DiMaggio, P. J., 1991. Constructing on Organizational Field as a Professional Project. In: W. W. Powell & P. J. DiMaggio, eds. The New Institutionalism in Organizational Analysis. Chicago: University of Chicago Press, pp. 267-292. DiMaggio, P. J. & Powell, W. W., 1983. The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Field. American Sociological Review, Volume 48, pp. 147-160. Dixon, K., Coy , D. & Tower, G., 1991. External Reporting by New Zealand Universities 1985-1989: Improving Accountability. Financial Accountability & Management, 7(3), pp. 159-178. Drakeley, S., 2005. The History of Indonesia. Westport: Greenwood Press. DRSP, 2006. Decentralization 2006: Stock Taking on Indonesia’s Recent Decentralization Reform, Jakarta: Democratic Reform Support Program. DRSP, 2009. Decentralization 2009: Stock Taking on Indonesia's Recent Decentralization Reforms Update 2009, Jakarta: Democratic Reform Support Program (DRSP). Dubnick , M. J., 2002. Seeking Salvation for Accountability. Boston, The American Political Science Association.

230

Dubnick, M., 2005. Accountability and the Promise of Performance. Public Performance and Management Review, 28(3), pp. 376-417. Dul, J. & Hak, T., 2008. Case Study Methodology in Business Research. Oxford: Elsevier Ltd.. Eisenhardt, K. M., 1988. Agency and Institutional Theory Explanations: The Case of Retail Sales Compensation. Academy of Management Journal, 31(3), pp. 488-511. Eliraz, G., 2007. Islam and Polity in Indonesia: An Intriguing Case Study, Washington: Hudson Institute. Erkkilä, T., 2007. Governance and Accountability—A Shift in Conceptualisation. Public Administration Quarterly, 31(1), pp. 1-38. Ezzamel, M., Robson, K., Stapleton, P. & McLean, C., 2007. Discourse and Institutional Change: ‘Giving Aaccounts’ and Accountability. Management Accounting Research, Volume 18, pp. 150-171. Fatah, L., 2008. The Impacts of Coal Mining on the Economy and Environment of South Kalimantan Province, Indonesia. ASEAN Economic Bulletin, 25(1), pp. 85-98. Fauzy, Y., 2007. Peran Pemuda Dalam Konteks Good Governance. In: Sulkan, T. Arbain & A. Jumbawuya, eds. Mewujudkan Good Governance di Kalimantan Selatan (Kumpulan Pikiran Urang Banua). Banjarmasin: Inspektorat Provinsi Kalimantan Selatan dan Pustaka Banua. Feith, H., 1957. The Indonesian Elections of 1955. Ithaca, NY: Cornell Modern Indonesia Project. Fine, G. A., 1984. Negotiated Orders and Organizational Cultures. Annual Review of Sociology, Volume 10, pp. 239-262. Finer, H., 1941. Administrative Responsibility in Democratic Governance. Public Administration Review, 51(4), pp. pp. 569-599. Fletcher, M. & Plakoyiannaki, E., 2010. Sampling. In: A. J. Mills, G. Durepos & E. Wiebe, eds. Case Study as a Methodological Approach. London: SAGE Publications Ltd., pp. 837-840.

231

Fogarty, T. J., 1992. Financial Accounting Standard Setting as an Institutionalized Action Field: Constraints, Opportunities and Dilemmas. Journal of Accounting and Public Policy, Volume 11, pp. 331-355. Fogarty, T. J., 1996. The Imagery and Reality of Peer Review in the U.S.: Insight from Institutional Theory. Accounting, Organizations and Society, 21(2/3), pp. 243-267. Fossey, E., Harvey, C., McDermott, F. & Davidson, L., 2002. Understanding and Evaluating Qualitative Research. Australian and New Zealand Journal of Psychiatry, Issue 36, pp. 717-732. Frankel, R. M. & Devers, K. J., 2000. Study Design in Qualitative Research—1: Developing Questions and Assessing Resource Needs. Education for Health, 13(2), pp. 251-261. Frost, N. et al., 2010. Pluralism in Qualitative Research: the Impact of Different Researchers and Qualitative Approaches on the Analysis of Qualitative Data. Qualitative Research, 10(4), pp. 1-20. Gaffikin, M., 2008. Accounting Theory Research Regulation and Accounting Practice. Frenchs Forest, NSW: Pearson Education. Galaskiewicz, J., 1985. Interoganizational Relations. Annual Review of Sociology, Volume 11, pp. 281-304. Galbraith, J. K., 1973. Economics and the Public Purpose. New York: Houghton Mifflin. Gambling, T. E. & Karim, R. A. A., 1986. Islam and 'Social Accounting'. Journal of Business Finance & Accounting, 13(1), pp. 39-50. Geertz, C., 1971. Islam Observed: Religious Development in Morocco and Indonesia. Chicago: The University of Chicago Press. Gerboth, D. L., 1973. Research, Intuition, and Politics in Accounting Inquiry. The Accounting Review, XLVIII(3). Ghozali, I. & Ratmono, D., 2008. Akuntansi Keuangan Pemerintah Pusat (APBN) dan Daerah (APBD). Semarang: University of Diponegoro Press. Giddens, A., 1986. The Constitution of Society: Outline of the Theory of Structuration. Cambridge: Polity Press. Giddens, A., 2009. Sociology. Sixth ed. Cambridge, UK: Polity Press. 232

Gillham, B., 2000. Case Study Research Methods. London: Continuum. Goetz, A. M. & Jenkins, R., 2001. Hybrid Forms of Accountability: Citizen Engagement in Institutions of Public-Sector Oversight in India. Public Management Review, 3(3), pp. 363-383. Graham, C., 2002. Strengthening Institutional Capacity in Poor Countries. The Brookings Policy Brief , April, pp. 1-8. Gray, A. & Jenkins, W. I., 1986. Accountable Management in British Central Government: Some Reflections On The Financial Management Initiative. Financial Accountability and Management, 2(3), pp. 171-186. Green, A. E., 2005. Managing Human Resources in a Decentralized Context. In: East Asia Decentralizes: Making Local Government Work. Washington, DC: The World Bank, pp. 129-153. Guba, E. & Lincoln, Y. S., 1988. Do Inquiry Paradigm Imply Inquiry Methodologies. In: D. M. Fetterman, ed. Qualitative Approaches to Evaluation in Education. New York: Praeger, pp. 89-115. Hägg, I. & Hedlund, G., 1979. “Case Studies” In Accounting Research. Accounting, Organizations and Society, 4(1/2), pp. 135-143. Haira, M. S., 2007. Negara Kuat atau Masyarakat Kuat. In: Sulkan, T. Arbain & A. Jumbawuya, eds. Mewujudkan Good Governance di Kalimantan Selatan (Kumpulan Pikiran Urang Banua). Banjarmasin: Inspektorat Provinsi Kalimantan Selatan dan Pustaka Banua, pp. 121-131. Hak, T. & Dul, J., 2010. Pattern Matching. In: A. J. Mills, G. Durepos & E. Wiebe, eds. Encyclopedia of Case Study Research. London: SAGE Publications Ltd., pp. 663- 665. Hallett, T., 2003. Symbolic Power and Organizational Culture. Sociological Theory, 21(2), pp. 128-149. Hancock, D. R. & Algozzine, B., 2006. Doing Case Study Research: A Practical Guide for Beginning Researchers. New York: Teachers College Press. Hardy, C., 1985. The Nature of Unobtrusive Power. Journal of Management Studies, 22(4), pp. 384-399. 233

Hardy, C., 1996. Understanding Power: Bringing about Strategic Change. British Journal of Management, 7(Special Issue), pp. S3-S16. Hariss, J., Hunter, J. & Lewis, C. M., 2003. Introduction: Development and Significance of NIE. In: J. Hariss, J. Hunter & C. M. Lewis, eds. The New Institutional Economics & Third World Development. New York: Routledge, pp. 1-13. Harlow, C., 2002. Accountability in the European Union. Oxford: Oxford University Press. Hart, N. H., 2001. Anti-Corruption Strategies in Indonesia. Bulletin of Indonesian Economic Studies, pp. 65-82. Harun, 2007. Obstacles to Public Sector Accounting Reform in Indonesia. Bulletin of Indonesian Economic Studies, 43(3), pp. 365-375. Harun, H. & Kamase, H. P., 2012. Accounting Change and Institutional Capacity: The Case of a Provincial Government in Indonesia. Australasian Accounting Business and Finance Journal, 6(2), pp. 35-50. Harun, H., Peursem, K. V. & Eggleton, I., 2012. Institutionalization of Accrual in the Indoensian Public Sector. Journal of Accounting & Organisational Change, 8(3), pp. 257-285. Hawkins, M., 2000. Becoming Banjar. The Asia Pacific Journal of Anthropology, pp. 24- 36. Hayes, T. & Mattimoe, R., 2004. To Tape or Not to Tape: Reflections on Methods of Data Collection. In: C. Humphrey & B. Lee, eds. The Real Life Guide to Accounting Research: A Behind-the-Scenes View of Using Qualitative Research Method. Amsterdam: Elsevier Ltd., pp. 359-372. Hodge, G. A., 2009. Accountability. In: P. A. O'hara, ed. International Encylopedia of Public Policy: Volume 3—Public Policy and Political Economy. Perth: Gperu, pp. 1-17. Hoggett, J. R., Edwards, L. & Medlin, J. F., 2006. Accounting. Sixth ed. Milton, Qld: John Wiley & Sons. Hood, C., 1991. A Public Management for All Sessions?. Public Administration, Volume 69, pp. 3-19.

234

Hooper, K. & Pratt, M., 1995. Discourse and Rhetoric: The case of the New Zealand Native Land Company. Accounting, Auditing & Accountability Journal, 8(1), pp. 10-37. Hope, K. R. & Chikulo, B. C., 2000. Decentralization, the New Public Management, and the Changing Role of Public Sector in Africa. Public Management, 2(1), pp. 25-42. Hopwood, A. G., 1976. The Path Ahead. Accounting, Organizations and Society, 1(1), pp. 1-4. Hopwood, A. G., 1983. On Trying to Study Accounting in the Contexts in Which It Operates. Accounting, Organizations and Society, 8(2/3), pp. 287-305. Hornby, A. S., 2010. Oxford Advanced Learner's Dictionary. Eight ed. Oxford: Oxfor University Press. Horngren, C. T., 1981. Uses and Limitations of Conceptual Framework. Journal of Accountancy, 151(4), pp. 86-95. Hornick, R. N., 2001. A Foreign Lawyer’s Perspective on Corruption in Indonesia, Washington: Woodrow Wilson International Center for Scholars. Hughes, O., 2003. Public Management and Administration: An Introduction. Third ed. London: Palgrave Macmillan. Humphrey, C. & Scapens, R. W., 1996. Methodological Themes: Theories and Case Studies of Organizational Accounting Practices: Limitation or Liberation?. Accounting, Auditing & Accountability Journal, 9(4), pp. 86-106. Imbarrudin, A., 2004. Can You Count on Accountability?. Labour and Management in Development, 5(1), pp. 1-11. Irmansyah, 2003. The Existing Central and Local Government Budgeting and Accounting Practices. Jakarta: The Committee of Government Accounting Standard Development . Irvine, H., 2011. From Go to Woe: How a not-for-Profit Managed the Change to Accrual Accounting. Accounting, Auditing & Accountability Journal, 24(7), pp. 824-847. Irvine, H. & Gaffikin, M., 2006. Getting in, Getting on and Getting Out: Reflections on a Qualitative Research Project. Accounting, Auditing & Accountability Journal, 19(1), pp. 115-145.

235

Jang, Y. S., 2005. The Expansion of Modern Accounting as a Global and Institutional Practice. International Journal of Comparative Sociology, 46(4), pp. 297-326. Jarkasi, 2005. Mencari Sosok Calon Gubernur Terpuji. In: Jarkasi & T. Arbain, eds. Berkelana Mencari "Sultan" Banua Banjar: Jelajah Politik Pilkada Kalimantan Selatan 2005. Banjarmasin: Forum Kajian Budaya Banjar Kalsel, Dewan Kesenian Daerah Kalsel & Pustaka Banua, pp. 237-249. Jarkasi, 2007. Menyetir Landcruiser di Jalan Good Governance. In: Jarkasi, T. Arbain & J. Aliansyah, eds. Mewujudkan Good Governance di Kalimantan Selatan (Kumpulan Pikiran Urang Banua). Banjarmasin: Inspektorat Provinsi Kalimantan Selatan, pp. 45-48. JATAM, 2010. Mautnya Batubara, Pengerukan Batubara dan Generasi Suram Kalimantan. Jakarta: Jaringan Advokasi Tambang. Johnsen, Å., 2008. Accounting and Democratic Accountability in Norway. In: M. Ezzamel, N. Hyndman, A. Johnsen & I. lapsley, eds. Accounting in Politics Devolution and Democratic Accountability. Oxon: Routledge, pp. 134-151. Johnston, J. M. & Romzek, B. S., 1999. Contracting and Accountability in State Medicaid Reform: Rhetoric, Theories, and Reality. Public Administration Review, 59(5), pp. 383-399. Jones, R., 1992. The Development of Conceptual Framework of Accounting for the Public Sector. Financial Accountability and Management, 8(4), pp. 249-264. Jumbawuya, A., 2007. Good Governance: Tergantung Kemauan Bersama. In: Sulkan, T. Arbain & A. Jumbawuya, eds. Mewujudkan Good Governance di Kalimantan Selatan (Kumpulan Pikiran Urang Banua). Banjarmasin: Inspektorat Provinsi Kalimantan Selatan dan Pustaka Banua, pp. 249-254. Karni, A. S. & Hidayat, R., 2006. Belantara Simbol Agama. In: A. S. Karni, ed. Hajatan Demokrasi: Potret Jurnalistik Pemilu Langsung Simpul Islam Indonesia Dari Moderat Hingga Garis Keras. Jakarta: PT Era Media Informasi, pp. 347-361. Kelly, J. M., 2007. The Accountability Trap. National Civic Review, pp. 46-51. Kendall, D., 2011. Sociology in Our Times. Eight ed. Belmont, CA: Cengage Learning.

236

Khalid, S. N. A., 2008. New Public Management in Malaysia: in Search of an Efficient and Effective Service Delivery. International Journal of Management Studies, 15(Bumper Issue), pp. 69-90. Kloot, L. & Martin, J., 2001. Local Government Accountability: Explaining Differences. Accounting, Accountability and Performance, 7(1), pp. 51-72. Kloot, L. & Martin, J., 2007. Public Sector Change, Organisational Culture and Financial Information: A Study of Local Government. The Australian Journal of Public Administration, 66(4), pp. 485-497. Kluvers, R., 2003. Accountability for Perfomance in Local Government. Australian Journal of Public Administration, 62(1), pp. 57-69. Knowles, M. S., 1979. The Professional Organization as a Learning Community. Training and Development Journal, 33(May), pp. 36-40. Koppell, J. G., 2005. Phatologies of Accountability: ICANN and the Challenge of Multiple Accountability Disorder. 65(1), pp. 94-108. KPK, 2010. Laporan Tahunan KPK 2010, Jakarta: Komisi Pemberantasan Korupsi. Lasswell, H. D., 1958. Politics: Who Gets What, When, How. Cleveland: The World Publishing Company. Lawrence, T. B., 2008. Power, Institutions and Organizations. In: R. Greenwood, C. Oliver, R. Suddaby & K. Sahlin, eds. The SAGE Handbook of Organizational Institutionalism. London: SAGE Publications Ltd, pp. 170-197. Ledergerber, Z. & Susanti, B., 2007. Anti-Corruption Policy Making in Practice: Indonesi– A Country Case Study, Bergen, Norway: U4 Anti-Corruption Resource Centre. Leighton, J. P., 2010. Cognitive Biases. In: A. J. Mills, G. Durepos & E. Wiebe, eds. Encyclopedia of Case Study Research. London: SAGE Publications Ltd, pp. 158- 160. Lengkanawati, N. S., 2004. How Learners from Different Cultural Backgrounds Learn a Foreign Language. Asian EFL Journal, p. Article 8. Levaggi, R., 1995. Accountability and The Internal Market. Financial Accountability and Management, 11(4), pp. 283-296.

237

Lewis, J., 2007. Analysing Qualitative Longitudinal Research in Evaluations. Social Policy & Society, 6(4), pp. 545-556. Lewis, M. K., 2001. Islam and Accounting. Accounting Forum, 25(2), pp. 103-127. Liddle, R. W., 1978. Indonesia 1977: The New Order's Second Parliamentary Election. Asian Survey, 18(2), pp. 175-185. Liddle, R. W., 1985. Soeharto's Indonesia: Personal Rule and Political Institutions. Pacific Affairs, 58(1), pp. 68-90. Liddle, R. W., 1996. Leadership and Culture in Indonesian Politics. Sidney: Allen & Unwin. Liddle, R. W., 1999. Indonesia's Democratic Opening. Government and Opposition, 34(1), pp. 94-116. Liddle, R. W., 2000. Indonesian in 1999: Democracy Restored. Asian survey, Volume XL, pp. 32-42. Liddle, R. W. & Mujani, S., 2007. Leadership, Party, and Religion Explaining Voting Behavior In Indonesia. Comparative Political Studies, 40(7), pp. 832-857. Lloyd-Jones, G., 2003. Design and Control Issues in Qualitative Case Study Research. International Journal of Qualitative Methods, 2(2). Lodico, M. G., Spaulding, D. T. & Voegtle, K. H., 2010. Methods in Educational Research. Second ed. San Francisco: Jossey-Bass. Lounsbury, M., 2008. Institutional Rationality and Practice Variation: New Directions in the Institutional Analysis of Practice. Accounting, Organizations and Society, Volume 33, pp. 349-361. Lundberg, C. C., 2001. Working with Cultures in Organizations: a Social Rules Perspective. In: C. L. Cooper, S. Cartwright & P. C. Earley, eds. The International Handbook of Organiational Culture and Climate. West Sussex: John Wiley & Sons Ltd., pp. 325-345. Lynes, D. A., 2010. Postcolonialism. In: A. J. Mills, G. Durepos & E. Wiebe, eds. Encylopedia of Case Study Research. London: SAGE Publications Ltd., pp. 687- 693.

238

MacIntyre, A. & Ramage, D. E., 2008. Seeing Indonesia as a Normal Country: Implications for Australia, Barton ACT: The Australian Strategic Policy Institute. Macionis, J. J., 2012. Sociology. Fourteenth ed. Boston: Pearson. Mack, J. & Ryan, C., 2007. Is There an Audience for Public Sector Annual Reports: Australian Evidence. International Journal of Public Sector Management, 20(2), pp. pp. 134-146. Makarim, N. A., 2001. A Path through the Rainforest: Anti-Corruption in Indonesia, Washington: Woodrow Wilson International Center for Scholars. Markoff, J., 2005. Democracy. In: G. Ritzer, ed. Encyclopedia of Social Theory. London: SAGE Publications Ltd, pp. 191-196. Marshall, C. & Rossman, G. B., 1999. Designing Qualtitative Research. Third ed. Thousand Oaks: SAGE Publications Inc. Martani, D. & Liestiani , A., 2010. Disclosure of Local Government Financial Statement in Indonesia. Gold Coast, 7-10 November 2010, Presented at the Twenty-Second Asian-Pacific Conference On International Accounting Issues. Martin, S. & Parker, D., 1997. The Impact of Privatisation: Ownership and Corporate Performance in the UK. London: Routledge. Mason, J., 2002. Qualitative Researching. Second ed. London: SAGE Publications Ltd. Maurer, B., 2002. Anthropological and Accounting Knowledge in Islamic Banking and Finance: Rethinking Critical Accounts. Journal of the Royal Anthropological Institute, 8(4), pp. 645-667. McDonald, H., 1999. The Puppet Master. In: E. Aspinall, G. V. Klinken & H. Feth, eds. The Last Days of President Soeharto. Clayton: Monash Asia Institute, pp. 104-109. McDonald, V. L., 2010. Before-and-After Case Study Design. In: A. J. Mills, G. Durepos & E. Wiebe, eds. Encylopedia of Case Study Research. London: SAGE Publications Ltd., pp. 51-53. McLaren, P. G., 2010. Inductivism. In: A. J. Mills, G. Durepos & E. Wiebe, eds. Encyclopedia of Case Study Research. London: SAGE Publications Ltd., pp. 457- 459.

239

Messner, M., 2009. The Limit of Accountability. Accounting, Organization and Society, Volume 34, pp. 918-938. Meyer, J. W., 1986. Social Environments and Organizational Accounting. Accounting, Organizations and Society, 11(4/5), pp. 345-356. Meyer, J. W. & Rowan, B., 1977. Institutionalized Organizations: Formal Structure as Myth and Ceremony. American Journal of Sociology, 83(2), pp. 340-363. Mezey, M. L., 2008. Representation and Democracy: Legislators and their Constituents. Lanham: Rowman & Littlefield Publishers, Inc.. Mietzner, M., 2006. The Politics of Military Reform in Post-Suharto Indonesia: Elite Conflict, Nationalism, and Institutional Resistance, Washington: the East-West Center. Mietzner, M., 2010. Indonesia’s Direct Elections: Empowering the Electorate or Entrenching the New Order Oligarchy?. In: E. Aspinall & G. Fealy, eds. Soeharto’s New Order and its Legacy. Canberra: ANU E Press, pp. 173-190. Milazzo, C., 1992. Annual Reports: Impediments to Their Effective Use as Instruments of Accountability. Australian Journal of Public Administration, 51(1), pp. 35-41. Miller, G. & Fox, K. J., 2004. The Building Bridge: Possibility of Analytic Dialogue between Ethnography, Coversation Analysis and Focault. In: D. Silverman, ed. Qualitative Research: Theory, Method and Practice. London: SAGE Publications Ltd., pp. 35-55. Mills, A. J., Durepos, G. & Wiebe, E., 2010. Introduction. In: A. J. Mills, G. Durepos & E. Wiebe, eds. Encyclopedia of Case Study Research. London: SAGE Publications, pp. xxxi-xxxiv. Mizruchi, M. S. & Fein, L. C., 1999. The Social Construction of Organizational Knowledge: A Study of the Uses of Coercive, Mimetic, and Normative Isomorphism. Administrative Science Quarterly, Volume 44, pp. 653-683. Modell, S., 2004. Performarnce Measurement Myths in the Public Sector: A Reseach Note. Financial Accountability & Management, 20(1), pp. 39-55.

240

Moeran, B., 2009. From Participant Observation to Observant Participation. In: S. Ybema, D. Yanow, H. Wels & F. Kamsteeg, eds. Organizational Ethnography: Studying Everyday Organizational Life. London: SAGE Publications Ltd, pp. 139-155. Moore, M., 2010. Knowledge, Power and Politics. In: G. Bammer, A. Michaux & A. Sanson, eds. Bridging the ‘Know–Do’ Gap: Knowledge Brokering to Improve Child Wellbeing. Canberra: ANU E Press, pp. 125-134. Morgan, G., 1980. Paradigms, Metaphors, and Puzzle Solving in Organization Theory. Administrative Science Quarterly, 25(4), pp. 305-622. Mountfield, E. & Wong, C. P., 2005. Public Expenditure on the Frontline: Toward Effective Management by Subnational Governments. In: East Asia Decentralizes: Making Local Government Work. Washington DC: The World Bank, pp. 85-105. Mouritsen, J., 1994. Rationality, Institutions and Decision Making: Reflections on March and Olsen's Rediscovering Institutions. Accounting, Organizations and Society, 19(2), pp. 193-211. Muhammad, 2007. Penerapan Good Governance di Kalimantan Selatan. In: Sulkan, T. Arbain & A. Jumbawuya, eds. Mewujudkan Good Governance di Kalimantan Selatan. Banjarmasin: Inspektorat Provinsi Kalimantan Selatan dan Pustaka Banua, pp. pp. 201-210. Muhammad, F., 2008. Reinventing Local Government: Pengalaman Dari Daerah. Jakarta: Elex Media Komputindo. Mulgan, R., 1997. The Process of Public Accountability. Australian Journal of Public Administration, 56(1), pp. 25-36. Mulgan, R., 2000a. 'Accountability': An Ever-Expanding Concept?. Public Administration, 78(3), pp. 555-573. Mulgan, R., 2000b. Comparing Accountability in the Public and Private Sectors. Australian Journal of Public Administration, 59(1), pp. 87-97. Mulgan, R., 2001. The Accountability of Community Sector Agencies: A Comparative Framework. Third Sector Review, 7(1), pp. 89-105. Mulgan, R. G., 2003. Holding Power to Account : Accountability in Modern Democracies. Hampshire: Palgrave Macmillan (UK). 241

Murray, M. A., 1975. Comparing Public and Private Management: An Exploratory Essay. Public Administration Review, 35(4), pp. 364-371. Namey, E., Guest, G., Thairu, L. & Johnson, L., 2007. Data Reduction Techniques for Large Qualitative Data Sets. In: G. Guest & K. MacQueen, eds. Handbook for Team-Based Qualitative Research. Oakland, CA: AltaMira Press, pp. 137-161. Napier, C., 2009. Defining Islamic Accounting: Current Issues, Past Roots. Accounting History, 14(1/2), pp. 121-144. Nasrullah, 2005. Pilkada, Kuasa Para Penggoda. In: Jarkasi & T. Arbain, eds. Berkelana Mencari "Sultan" Banua Banjar: Jelajah Pilkada Kalimantan Selatan 2005. Banjarmasin: Forum Kajian Budaya Banjar, Dewan Kesenian Daerah Kalsel and Pustaka Banua, pp. 201-205. Nasution, A., 2006. Keuangan Negara. Jakarta, Presented at the Konggres Ikatan Akuntan Indonesia (IAI) X. Nasution, A., 2007. Perbaikan Transparansi dan Akuntabilitas Pengelolaan Keuangan Negara dan Daerah di Indonesia. Surabaya, Presented at the Musyawarah III Asosiasi Pemerintah Provinsi Seluruh Indonesia. Nelson, R. R. & Winter, S. G., 1982. An Evolutionary Theory of Economic Change. Cambridge: The Belknap Press of Harvard University Press. Neu, D., 1991. Trust, Impression Management and the Public Accounting Profession. Critical Perspectives on Accounting, Volume 2, pp. 295-313. Neuman, W. L., 2006. Social Research Methods Qualitative and Quatitative Approaches. Sixth ed. Boston: Pearson Education, Inc.. North, D. C., 2003. The Institutional Economics and The Third World Development. In: J. Harriss, J. Hunter & C. M. Lewis, eds. The Institutional Economics and The Third World Development. London: Routledge Taylor & Francis Group, pp. 17-26. Nugroho, E. D., 2007. Melaksanakan Good Governance di Atas Spanduk. In: Sulkan, T. Arbain & A. Jumbawuya, eds. Mewujudkan Good Governance di Kalimantan Selatan (Kumpulan Pikiran Urang Banua). Banjarmasin: Inspektorat Provinsi Kalimantan Selatan dan Pustaka Banua, pp. 33-36.

242

Nutt, P. C., 2000. Decision-Making Success in Public, Private and Third Sector Organizations: Finding Sector Dependent Best Practice. Journal of Management Studies, 37(1), pp. 77-108. Nutt, P. C. & Backoff, R. W., 1993. Organizational Publicness and Its Implications for Strategic Management. Journal of Public Administration Research and Theory, 3(2), pp. 209-231. O'Connell, L., 2005. Program Accountability as an Emergent Property: The Role of Stakeholders in a Program's Field. Public Administration Review, 65(1), pp. 85-93. Ogden, S. G., 1995. Transforming Framework of Accountability: the Case of Water Privatization. Accounting, Organization and Society, 20(2/3), pp. 193-218. Oliver, C., 1991. Strategic Responses to Institutional Processes. Academy of Management Review, 16(1), pp. 145-179. O'Loughlin, M. G., 1990. What is Bureaucratic Accountability and How Can We Measure It?. Administration Society, Volume 22, pp. 275-302. Ongaro, E., 2009. Public Management Reform and Modernization. Cheltenham Glos, UK: Edward Elgar Publishing Limited. Orton, J. D. & Weick, K. E., 1990. Loosely Coupled Systems: A Reconceptualization. Academy of Management Review, 15(2), pp. 203-223. Parker, L. & Gould, G., 1999. Changing Public Sector Accountability: Critiquing New Directions. 23(2), pp. 109-135. Paslawski, T., 2010. Case Study Research in Medicine. In: A. J. Mills, G. Eurepos & E. Wiebe, eds. Encyclopedia of Case Study Research. London: SAGE Publications, pp. 106-108. Patton, J. M., 1992. Accountability and Governmental Financial Reporting. Financial Accountability & Management, 8(3), pp. 165-180. Perrow, C., 1985. Review Essay: Overboard: with Myth and Symbols. American Journal of Sociology, 91(1), pp. 151-155. Peters, B. G., 2008. Bureaucracy and Democracy. Gothenburg, Presented at the New Public Management and the Quality of Government Conference. Pfeffer, J., 1981. Power in Organizations. Marshfield, Mass: Pitman Publishing. 243

Pfeffer, J. & Salancik, G. R., 1974. Organizational Decision Making as a Political Process: The Case of a University Budget. Administrative Science Quarterly, 19(2), pp. 135- 151. Pielstick, C. D., 2000. Formal vs. Informal Leading: A Comparative Analysis. Journal of Leadership & Organizational Studies, 7(3), pp. 99-114. Pirie, M., 2009. 101 Great Philosophers: Makers of Modern Thought. New York: Continuum International Publishing Group. Pollitt, C., 2003. The Essential Public Manager. Philadelphia: Open University Press. Powell, W. W., 1985. The Institutionalization of Rational Organization. Contemporary Sociology, Volume 14, pp. 564-566. Powell, W. W., 1991. Expanding the Scope of Institutional Analysis. In: W. W. Powell & P. J. DiMaggio, eds. The New Institutionalism in Organizational Analysis. Chicago: The University of Chicago Press, pp. 183-203. Powell, W. W., 2007. The New Institutionalism. In: S. R. Clegg & J. R. Bailey, eds. International Encyclopedia of Organization Studies. London: SAGE Publications Ltd.. Priest, A. N., Ng, J. & Dolley, C., 1999. Users of Local Government Annual Reports: Information Preferences. Accounting, Accountability & Performance, 5(3), pp. 45- 62. Ragin, C. C. & Becker, H. S. eds., 2002. Theory Elaboration: the Heuristics of Case Analysis. In: What is a Case? Exploring the Foundations of Social Inquiry. Cambridge: Cambridge University Press, pp. 173-202. Rahman, T., 2008. Parliamentary Control and Government Accountability in South Asia: A Comparative Analysis of Bangladesh, India and Sri Lanka. London: Routledge. Rainey, H. G., 2009. Understanding and Managing Public Organizations. Fourth ed. San Francisco: Jossey-Bass. Rainey, H. G., Backoff, R. W. & Levine, C. H., 1976. Comparing Public and Private Organizations. Public Administration Review, Issue March/April, pp. 233-244.

244

Rainey, H. G. & Bozeman, B., 2000. Comparing Public and Private Organizations: Empirical Research and the Power of the A Priori. Journal of Public Administration Research and Theory, 10(2), pp. 447-469. Rains, P., 1984. Juvenile Justice and The Boys’ Farm: Surviving a Court-Created Population Crisis, 1909–1984. Social Problems, 31(5), pp. 500-513. Rajiani, I. & Jumbri, I. A., 2011. A Cultural Ecology of New Public Management in Indonesia. Journal of Administrative Science, 8(1), pp. 17-31. Raptis, H., 2010. Documentation as Evidence. In: A. J. Mills, G. Durepos & E. Wiebe, eds. Encyclopedia of Case Study Research. London: SAGE Publications Ltd., pp. 320- 322. Ricklefs, M. C., 2001. A History of Modern Indonesia Since c. 1200. Third ed. Hampshire: Palgrave. Rika, N., Tuiloa, M., Tuiseke, N. & Finau-Tavite, S., 2008. Accounting and Accountability by Provincial Councils in Fiji: the Case of Namosi. Australasian Accounting Business and Finance Journal, 2(1), pp. 15-36. Rinakit, S., 2005. Indonesian Regional Elections in Praxis. Singapore: Institute of Defence and Strategic Studies, NTU. Rinaldi, T., Purnomo, M. & Damayanti, D., 2007. Fighting Corruption in Decentralized Indonesia: Case Studies on Handling Local Government Corruption, Jakarta: The World Bank Office, Indonesia. Roberts, J., 1991. The Possibilities of Accountability. Accounting, Organization and Society, 16(4), pp. 335-368. Robinson, P. & Harun, 2004. Reforming The Indonesian Public Sector: The Introduction of Accrual Accounting. Singapore, Fourth Asia Pacific Interdiscipnary Research in Accounting Conference. Romzek, B. S., 1996. Enhancing Accountability. In: J. Perry, ed. Handbook of Public Administration. Second ed. San Fransisco: Jossey-Bass, pp. 97-114. Romzek, B. S., 2000. Dynamics of Public Sector Accountability in an Era of Reform. International Review of Administrative Sciences, Volume 66, pp. 21-44.

245

Romzek, B. S. & Dubnick, M. J., 1987. Accountability in the Public Sector: Lessons from the Challenger Tragedy. Public Administration Review, Issue May/June, pp. 237- 238. Rosyadi, A., 2006. Bertamu ke Guru Sekumpul: Sebuah Kenangan Buat Abah Guru. Martapura: (Author's Self-Publishing). Rubin, I., 1996. Budgeting for Accountability: Municipal Budgeting for the 1990s. Public Budgeting and Finance, pp. 112-132. Ryan, C., Stanley, T. & Nelson, M., 2002. Accountability Disclosure by Queensland Local Government Council:1997-1999. Financial Accountability & Management, 18(3), pp. 261-289. Salancik, G. R. & Pfeffer, J., 1977. Who Gets Power-And How They Hold on to It: A Strategic-Contigency Model of Power. Organizational Dynamics, Issue Winter, pp. 3-21. Samaratunge, R., Alam, Q. & Teicher, J., 2008. Public Sector Reforms and Accountability: The Case of South and Southeast Asia. Public Management Review, 10(1), pp. 101- 126. Sarman, M., 2005. Pilkada dan Krisdayanti. In: Jarkasi & T. Arbain, eds. Berkelana Mencari "Sultan" Banua Banjar: Jelajah Politik Pilkada Kalimantan Selatan 2005. Banjarmasin: Forum Kajian Budaya Banjar Kalsel, Dewan Kesenian Daerah Kalsel dan Pustaka Banua, pp. 93-101. Sarman, M., 2007. "Good Governace" Itu Untuk Siapa?. In: Sulkan, T. Arbain & A. Jumbawuya, eds. Mewujudkan Good Governance di Kalimantan Selatan (Kumpulan Pikiran Urang Banua). Banjarmasin: Inspektorat Provinsi Kalimantan Selatan dan Pustaka Banua, pp. 111-120. Scapens, R., 2004. Doing Case Study Research. In: C. Humphrey & B. Lee, eds. The Real Life Guide to Accounting Research: A Behind-the-Scenes View of Using Qualitative Research Methods. Amsterdam: Elsevier Ltd., pp. 257-279. Scapens, R. W., 1994. Never Mind the Gap: Towards an Institutional Perspective on Management Accounting Practice. Management Accounting Research, Volume 5, pp. 301-321. 246

Schein, E. H., 2004. Organizational Culture and Leadership. Third ed. San Francisco: Jossey-Bass. Schermerhorn, Jr, J. R., Hunt, J. G., Osborn, R. N. & Uhl-Bien, M., 2010. Organizational Behavior. 11th ed. Hoboken, NJ: John Wiley & Sons, Inc. Schillemans, T. & Bovens, M., 2008. The Challenge of Multiple Accountability. Dayton, Prepared for the Kettering Symposium on Public Accountability, pp. 1-29. Scott, D., 2005. Qualitative Approaches to Data Collection and Analysis: Examinations and Schools. In: G. McKenzie, J. Powell & R. Usher, eds. Understanding Social Research: Perspectives on Methodology and Practice. London: The Falmer Press, pp. 150-166. Scott, W. R., 1987. The Adolescence of Institutuional Theory. Administrative Science Quarterly, Volume 32, pp. 493-511. Scott, W. R., 1991. Unpacking Institutional Arguments. In: W. W. Powell & P. J. DiMaggio, eds. The New Institutionalism in Organizational Analysis. Chicago: University of Chicago Press, pp. 164-182. Scott, W. R., 1992b. Introduction: From Technology to Environment. In: J. W. Meyer & W. R. Scott, eds. Organiational Environments Ritual and Rationality. Newbury Park, California: SAGE Publications, Inc., pp. 13-17. Scott, W. R., 1995. Institutions and Organizations. Thousands Oaks, CA: SAGE. Scott, W. R., 2001. Institutions and Organizations. Second ed. Thousand Oaks: Sage Publications, Inc. Scott, W. R., 2005a. Institutional Theory. In: G. Ritzer, ed. Encyclopedia of Social Theory. London: SAGE Publications Ltd., pp. 408-414. Scott, W. R., 2005b. Institutional Theory Contibuting to a Theoretical Research Program. In: K. G. Smith & M. H. Hitt, eds. Great Minds in Management: The Process of Theory Development. Oxford: Oxford University Press, pp. 460-484. Scott, W. R., 2008. Approaching Adulthood: the Maturing of Institutional Theory. Theory and Society, Volume 37, pp. 427-442.

247

Scott, W. R. & Meyer, J. W., 1992. The Organization of Societal Sectors. In: J. W. Meyer & W. R. Scott, eds. Organizational Environments Ritual and Rationality. Updated ed. Newbury Park, California: SAGE Publications, Inc. Seidel, J. V., 1998. Qualitative Data Analysis. [Online] Available at: http://www.qualisresearch.com/qda_paper.htm [Accessed 3 January 2009]. Selznick, P., 1949. TVA and the Grass Roots: A Study in the Sociology of Formal Organization. Berkeley: University of California Press. Selznick, P., 1996. Institutionalism "Old" and "New". Administrative Science Quarterly, Volume 41, pp. 270-277. Sewell, W. H., 1992. A Theory of Strucure: Duality, Agency and Transformation. American Journal of Sociology, 98(1), pp. 1-29. Shah, A. & Shah, S., 2006. The New Vision of Local Governance and the Evolving Roles of Local Governments. In: A. Shah, ed. Local Goverance in Developing Countries. Washington DC: The World Bank, pp. 1-46. Silverman, D., 2001. Interpreting Qualitative Data: Methods for Analyzing Talk, Text, and Interaction. London: Sage. Simon, H. A. & Ridley, C. E., 1938. Trends in Municipal Reporting. The Public Opinion Quarterly, 2(3), pp. 465-468. Sinclair, A., 1995. The Chameleon of Accountability: Forms and Discourses. Accounting, Organizations and Society, 20(2/3), pp. 219-237. Skogstad, G., 2003. Who Governs? Who Should Govern?: Political Authority and Legitimacy In Canada in the Twenty-First Century. Canadian Journal of Political Science, pp. pp. 955-973. SKPG, 2009a. Laporan Penyelenggaran Pemerintah Daerah (LPPD) Provinsi Kalimantan Selatan Tahun 2008, Banjarmasin: South Kalimantan Provincial Government. SKPG, 2009b. Laporan Keterangan Pertanggungjawaban (LKPj) Kepala Daerah Kalimantan Selatan, SKPG: South Kalimantan Provincial Government. SKPG, 2009c. Informasi Laporan Penyelenggaraan Pemerintahan Daerah (ILPPD), Banjarmasin: South Kalimantan Provincial Government. 248

SKPP, 2009. Rekomendasi DPRD Provinsi Kalimantan Selatan Terhadap Laporan Peranggungjawaban (LKPj) Gubernur Kalimantan Selatan. Banjarmasin: The South Kalimantan Provincial Parliament. SMERU, 2001. Indonesia's Decentralization Policy: Initial Experiences and Emerging Problems. London, The SMERU Research Institute. Smoke, P., 2005. The Rules of the Intergovernmental Game in East Asia: Decentralization Frameworks and Process. In: East Asia Decentralizes: Making Local Government Work. Washington DC: The World Bank, pp. 25-51. Solikin, A., 2006. Penggabungan Laporan Keuangan dan Laporan Kinerja: Perkembangan dan Permasalahan. Jurnal Akuntansi Pemerintah, 2(2), pp. 1-15. Solomons, D., 1978. The Politicization of Accounting: the Impact of Politics on Accounting Standards. The Journal of Accountancy, Issue November, pp. 65-72. Sparrow, P. R., 2001. Assessment and Research Methods. In: C. L. Cooper, S. Cartwright & P. C. Earley, eds. The International Handbook of Organizational Culture and Climate. West Sussex: John Wiley & Sons Ltd., pp. 81-83. Steccolini, I., 2004. Is the Annual Report an Accountability Medium? an Empirical Investigation into Italian Local Governments. Financial Accountability and Management, 20(3), pp. 327-350. Stiglitz, J. E., 2006. Making Globalization Work. New York: W. W. Norton & Company, Inc.. Stone, B., 1995. Administrative Accountability in the 'Westminster’ Democracies: Toward a New Conceptual Framework. International Journal of Policy and Administration, 8(4), pp. 505-526. Suchman, M. C., 1995. Managing Legitimacy: Strategic and Institutional Approaches.. Academy of Management Review, 20(3), pp. 571-610. Sugianto, Gunadi, R. H. & Loho, S., 1995. Akuntansi Pemerintah dan Organisasi Non Laba. Malang: PPA FE Unibraw. Sulistyo, H., 2002. Electoral Politics in Indonesia: A Hard Way to Democracy. In: A. Croissant, ed. Electoral politics in Southeast & East Asia. Singapore: Friedrich- Ebert-Stiftung, pp. 75-99. 249

Suryadinata, L., 2007. The Decline of the Hegemonic Party System in Indonesia: Golkar After the Fall of Soeharto. Contemporary Southeast Asia, 29(2), pp. 333-358. Syarkawie, M., 2007. Tingkatkan Kualitas SDM di Jajaran Birokrasi. In: Sulkan, T. Arbain & A. Jumbawuya, eds. Mewujudkan Good Governance di Kalimantan Selatan (Kumpulan Pikiran Urang Banua). Banjarmasin: Inspektorat Provinsi Kalimantan Selatan dan Pustaka Banua, pp. 73-75. Syukur, M. A., 2005. Kata Pengantar dari Penyalin. In: Sabilal Muhtadin. Surabaya: PT. Bina Ilmu, pp. xi-xviii. Syukur, M. A., 2009. Kata Pengantar. In: Pemikiran-Pemikiran Syeh Muhammad Arsyad Al-Banjari. Banjarmasin: Comdes Kalimantan, pp. v-x. Tambunan, M., 2000. Indonesia's New Challenges and Oportunities: Blueprint for Reform after the Economic Crisis. East Asia: An International Quarterly, 18(2), pp. 50-74. Tan, C., 2011. Islamic Education and Indoctrination: The Case in Indonesia. New York: Routledge. Taylor, D. W. & Rosair, M., 2000. The Effects of Participating Parties, the Public and Size on Government Departments' Accountability Disclosures in Annual Reports. Accounting, Accountability & Performance, pp. 77-97. Tellis, W., 1997a. Introduction to Case Study. The Qualitative Report [On-line serial], 3(2). Tellis, W., 1997b. Application of a Case Study Methodology. The Qualitative Report [On- line serial], 3(3). Thornton, P. H. & Ocasio, W., 2008. Institutional Logics. In: R. Greenwood, C. Oliver, K. Sahlin & R. Suddaby, eds. The SAGE Handbook of Organizational Institutionalism. London: SAGE Publications Ltd, pp. 99-129. Thynne, I. & Goldring, J., 1987. Accountability and Control: Government Officials and The Exercise of Power. Sidney: Law Book Co. Tinker, A. M., Merino, B. D. & Neilmark, M. D., 1982. The Normative Origins of Positive Theories: Ideology and Accounting Thought. Accounting, Organizatins and Society, 7(2), pp. 167-200.

250

Tolbert, P. S. & Zucker, L. G., 1983. Institutional Sources of Changes in the Formal Structure of Organization: The Diffusion of Civil Service Reform, 1880-1935. Administrative Science Quarterly, Volume 28, pp. 23-29. Tomsa, D., 2009. Uneven Party Institutionalization, Protracted Tansition and the Remarkable Resilience of Golkar. In: M. Bünte & A. Ufen, eds. Democratization in Post-Suharto Indonesia. Oxon: Routledge, pp. 176-198. Trochim, W. M., 2006. The Research Methods Knowledge Base, 2nd Edition. [Online] Available at: http://www.socialresearchmethods.net/kb/ [Accessed 2 February 2012]. Turner, M. et al., 2009. Human Resource Management and Regional Autonomy, Canberra: Crawford School of Economics and Government at the Australian National University. UNDP, 2009. Human Development Report 2009, New York: the United Nations Development Programme. UNESCO-IBE, 2011. http://www.ibe.unesco.org/en. [Online] Available at: http://www.ibe.unesco.org/fileadmin/user_upload/Publications/WDE/2010/pdf- versions/Indonesia.pdf [Accessed 12 12 2012]. Vatikiotis, M. R., 2003. Indonesian Politics Under Suharto: the Rise and Fall of the New Order. Third ed. London: Routledge. Vatikiotis, M. R., 2004. The Military and Democracy in Indonesia. In: R. J. May & V. Selochan, eds. The Military and Democracy in Asia and the Pacific. Canberra: ANU E Press, pp. 29-46. Vaughan, D., 1992. Theory Elaboration: the Heuristics of Case Analysis. In: C. C. Ragin & H. S. Becker, eds. What is a Case? Exploring the Foundations of Social Inquiry. Cambridge: Cambridge University Press, pp. 173-202. Veblen, T., 1899. The Theory of the Leisure Class. Mineola, NY: Publications, 1994. Velayutham, S. & Perera, M. H., 2004. The Influence of Emotion and Culture on Accountability and Governance. Corporate Governance, 4(1), pp. 52-64. 251

Vickers, A., 2005. A History of Modern Indonesia. Cambridge: Cambridge University Press. Watkins, A. L. & Arrington, C. E., 2007. Accounting, New Public Management and American Politics: Theoretical Insight into the National Performance Review. Critical Perspectives on Accounting, Volume 18, pp. 33-58. Weber, M., 1947. The Theory of Social and Economic Organization. New York: Free Press. Weber, M., 1978. Economy and Society. Berkeley: University of California Press. West, D., 2008. Informal Public Leadership: The Case of Social Movements. In: P. 't Hart & J. Uhr, eds. Public Leadership: Perspectives and Practices. Canberra: ANU E Press, pp. 133-144. White, R. & Smoke, P., 2005. East Asia Decentralizes. In: East Asia Decentralizes: Making Local Government Work. Washington, DC: The World Bank, pp. 1-23. Widiyanto, Y. N., 2005. The Making of a Multicultural English Teacher. English Teaching: Practice and Critique, 4(1), pp. 106-117. Wiebe, E., 2010. Analysis of Visual Data. In: A. J. Mills, G. Durepos & E. Wiebe, eds. Encyclopedia of Case Study Research. London: SAGE Publications Ltd., pp. 18-20. Wildavsky, A., 1975. Budgeting a Comparative Theory of Budgetary Processes. Boston: Little, Brown and Company. Williams, P. F., 1987. The Legitimate Concern with Fairness. Accounting, Organizations and Society, 12(2), pp. 169-189. Wishart, I., 1995. The Paradise Conspiracy. Auckland: Howling at the Moon Productions Ltd. Woiceshyn, J., 2010. Causal Case Study: Explanatory Theories. In: A. J. Mills, G. Durepos & E. Wiebe, eds. Encyclopedia of Case Study Research. London: SAGE Publications Ltd., pp. 137-138. Woodside, A. G., 2010. Case Study Research: Theory.Methods.Practice. Bingley, UK: Emerald. World Bank, 1997. World Development Report 1997, Washington DC: Oxford University Press. 252

Yin, R. K., 2003. Case Study Research: Design and Methods. Third ed. London: SAGE Publications Ltd. Ziegenhain, P., 2009. The Indonesian Legislature and Its Impact on Democratic Consolidation. In: M. Bünte & A. Ufen, eds. Democratization in Post-Suharto Indonesia. Oxon: Routledge, pp. 33-52. Zucker, L. G., 1977. The Role of Institutionalization in Cultural Persistence. American Sociological Review, 42(October), pp. 726-743. Zucker, L. G., 1987. Institutional Theory of Organization. Annual Review of Sociology, pp. 443-464. Zucker, L. G., 1991. The Role of Institutionalization in Cultural Persistence. In: W. W. Powell & P. J. DiMaggio, eds. The New Institutionalism in Organizational Analysis. London: The University of Chicago Press, Ltd., pp. 83-107.

Legislation and Regulations: Law No. 18 on Local Government. (1965). Law No. 5 on Local Government. (1974). Law No. 22 on Local Government. (1999). Law No. 32 on Local Government . (2004). Government Regulation No. 3 on Accountability Reporting of Local Government. (2007).

253

Appendices

Appendix 1: Ethics Clearance

254

Appendix 2: Development of Modern Organisational Institutionalism

Periods Key Studies Features of the Studies Meyer & Rowan (1977), These works focused on the 1977-1983 Zucker (1977), Meyer & interplay between (Foundations) Rowan (1983), DiMaggio & organisations and their Powell (1983), Tolbert & environments and Zucker (1983) and Meyer & investigated how Scott (1983) organisations coped with social structures (institutions) for securing their societal legitimacy. 1983-1991 Astley & Van de Ven The works of scholars (Early years) (1983), Fligstein (1985), showed various approaches Galaskiewicz (1985), in investigating organisation Brunson (1985, 1989), Scott in relation to the (1991). institutional context such as: processual, cross-category, cross-national and means of transmission.

1991-2007 Scott (1995) Daft (1997), During this period, studies (Expanding horizons) Aldrich (1999), Westphal & on modern organisational Zajac (2001), Elsbach institutionalism cover some (1994), Arndt & Bigelow issues: institutional (2000), Denrell (2003), isomorphism, legitimacy, Dacin, Goldstein & Scott institutional (2002), Thorton (2004). entrepreneurship and change, and institutional logics.

Source: Greenwood et al. (2008), pp. 1-46

255

Appendix 3: Data Collection Process

Activities Characteristic Data Collection Question Locating site/individual A bound “case,” such as a What is studied? process, activity, event, (Define the case.) program, or multiple individuals, is investigated. Gaining Access and making A gatekeeper provides What are any concerns rapport access to information and related to access and assistance in gaining rapport? confidence of participants. (Establish access and rapport.)

Purposefully sampling A “case” or “cases,” an What sites or individuals are “atypical” case, or a going to be studied? “maximum variation” or (Sample with purpose.) “extreme” case is defined. Collecting data A collection of forms, such What type(s) of information as documents and records, will be collected? interviews, observations, or (Delimit data.) physical artifacts, is compiled. Record information A variety of approaches How is information (e.g., field notes, interviews, compiled? and observations) are used to (Record information). gather data. Resolving field issues Concerns may emerge Is data collection difficult? related to intensive data (Address field issues.) gathering. Storing data A large amount of data (e.g., How is information stored? field notes, transcriptions, (Store data for analysis.) computer databases) is typically collected. Source: Creswell (1998, p. 110) and Hancock & Algozzine (2006, p.23)

256