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Bulletin of Indonesian Economic Studies

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subscription information:
http://www.tandfonline.com/loi/cbie20

Public-Sector Accounting Reforms in the

Post-Soeharto Era
a

Harun Harun
a

University of Waikato ()
Published online: 05 Dec 2013.

To cite this article: Harun Harun (2013) Public-Sector Accounting Reforms in the Post-Soeharto Era,
Bulletin of Indonesian Economic Studies, 49:3, 382-383, DOI: 10.1080/00074918.2013.850637
To link to this article: http://dx.doi.org/10.1080/00074918.2013.850637

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382

Abstracts of doctoral theses on the Indonesian economy

poor but could fall into poverty should they experience shocks. These results
signal to policymakers that it is not enough to consider the effects of oil-palm
development on income growth, and that there is a need to take future risks into
account in order to develop proactive poverty-reduction policies.
While a simple means comparison shows that contract smallholders are significantly less vulnerable than non-contract smallholders, propensity-score matching
(after having controlled for selection bias) shows that contract participation does
not significantly reduce their vulnerability to poverty in large part because contract farming is dominated by households with greater asset endowments. The
results of my risk-behaviour analysis show that subjective expectation towards
all risks is driven by the level of exposure to past shocks. Asset endowments are
another important determinant. This thesis reveals that a plan for oil-palm investment tends to be encouraged by a high risk expectation in non-oil-palm enterprises and by a low level of risk aversion, and that it seems to be independent of
risk expectations in the oil-palm industry itself.
Overall, this thesis suggests that Indonesias contract-farming schemes need
to be more pro-poor, and that policymakers must take risk into account in their
attempts to reduce poverty.
2013 Eko Ruddy Cahyadi
http://dx.doi.org/10.1080/00074918.2013.850634

Public-Sector Accounting Reforms in the Post-Soeharto Era

Harun Harun (harun.harun@canberra.edu.au)
Accepted 2012, University of Waikato
This study aims to understand the institutionalisation of accrual accounting
systems in the Indonesian public sector. It relies on data from three sources: (a)
official documents (that is, laws and government regulations) on the adoption
and implementation of such accounting systems in the sector; (b) publicly available information about the social, economic and political developments leading
up to the adoption; and (c) interviews with 36 participants with either involvement in or an understanding of the internalisation of accrual accounting in the
sector. Drawn from an integrated model of institutionalisation inspired by new
institutional sociology, this study identifies and discusses the features of the institutionalisation process in Indonesia, both at the national level and within one
municipality (used as a case study).
This study finds that the new ideals requiring the adoption of accrual accounting in the Indonesian public sector were first mobilised in the 1980s by the technocrats (that is, by economists and accountants) in the Ministry of Finance since
the 1980s. This mobilisation occurred when the country encountered a fiscal crisis.
The study also identifies that the desire to adopt accrual accounting may have
been driven by the wish to follow a similar practice to that adopted in other countries. Nonetheless, Indonesias accrual accounting system was formally adopted
only after the collapse, in 1998, of Soehartos regime, through the issuance of Law
17 (2003) and the introduction, in 2005, of new government accounting standards.

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Abstracts of doctoral theses on the Indonesian economy

383

At the organisational level, in the experience of one municipal government (as

a case study), the internalisation of accrual accounting was motivated primarily
by the presence of legal enforcement. Beyond this, the process and outcomes of
the institutionalisation of accrual accounting contradict the intended benefits; the
lack of skills and experience in using accrual accounting has increased the municipalitys accounting costs, and its officials have yet to use accrual-based accounting for real decision making.
In addition, the power and old habits of local actors (in this case study, of senior municipal officials) have made the adoption of accrual accounting the subject
of corruption. In this vein, the technical capacity, power and old habits of local
actors affect the extent to which a new accounting system can be internalised. The
process and outcomes of this institutionalisation are shaped not only by pressures
from external factors but also by the activities, processes and routines of actors
within organisations.
One of the implications of these findings for policymaking is that Indonesias
central government needs to be aware of the capacity of local governments in
implementing policies and programs. The adoption of a business-style accounting system in the public sector may be costly and act against its promoted
purposes, while a lack of competencies may exacerbate frustration within organisations,fuelling active resistance and hindering implementation. Further research
could address the relationship between capability building and the proximity of
educational institutions. The influence of culture, such as a common practice of
bribery, should also be considered. The thesis also contributes to the public-sector
accounting literature by reducing the gap between what is known and unknown
about rarely investigated governmental accounting practices in one of Asias
emerging economies.
2013 Harun Harun
http://dx.doi.org/10.1080/00074918.2013.850637

Agricultural Transformation and the Escape from the

Middle-Income-Country Trap: Challenges Facing Small Farmers in
Indonesia in a Time of Green Restructuring
Shinyoung Jeon(shinyoung.jeon@graduateinstitute.ch)
Accepted 2013, Graduate Institute of International
and Development Studies, Geneva
This dissertation argues that one of the main causes of stagnating growth in
some middle-income economies is inadequate agricultural transformation.
When a country attempts to accelerate its economic growth, it tends to prioritise industrial development over agricultural development the former is more
straightforward, rapid and visible than the latter. However, stunted growth of
rural agriculture will eventually weigh down sustained and balanced growth of
the entire economy. Agriculture, when disregarded, results in an unsustainable
expansion of the informal sector, without real growth of agricultural productivity and efficiency or a constructive transition to formal non-agriculture sectors.