The Non-Use of Local Administrative Information in Wajo Regency,

South Sulawesi Province, Indonesia: A Principal-Agent Perspective

Muhammad Achyar Nawir

INTRODUCTION

The Information on Local Government Implementation Reports (Informasi Laporan

Penyelenggaraan Pemerintahan Daerah (ILPPD)) is the only mechanism in Indonesia that

mandates local governments to make their annual administrative performance reports available to

the public.1 The report provides the picture of the activities of the local government, and as a result,

more and more information about the performance of the local governments are collected,

available and published for release to residents. In this way, it becomes easier for the residents to

form their opinion on the local government’s performance. However, instead of the fact that the

performance information is available, there is a concern that the residents are not of fashion to use

the information.2 This mark is in line with academic notes that performance information is not

valued3, not used4, not demanded5, or not understood and bothered about6 by stakeholders. As a

result, the local government’s performance is judged based mainly on the personal experience of

individuals rather than on performance information.7 Then, there is a need to explore why the

performance information produced from the transparency mechanism is not used by residents to

whom local government is responsible.

1
The Act of Local Administration Number 23/2014 (32/2004 revised) and Government Regulation (GR) Number 3/2007
related to the Local Administration Report, the Regent’s Responsibility Report, and the Information of Local Government
Implementation Report, require local governments to submit administrative performance reports to the central government,
the local parliament, and citizens. The names of these two annual reports are Laporan Penyelenggaraan Pemerintahan
Daerah (LPPD)/Local Administration Report and Laporan Keterangan Pertanggungjawaban Kepala Daerah
(LKPj)/Regent’s Responsibility Report. Besides, it is also a duty for local governments to make the summary of the
administrative reports under the name of Informasi Laporan Penyelenggaraan Pemerintahan Daerah (ILPPD)/Information
of Local Government Implementation Report and release the information to the public.
2
Considering that proving the absence of information-fashion among residents is rather difficult, the lack of administrative
data request and the lack of local online news concerning local government’s performance observed in the author’s initial
observation in the Wajo Regency, South Sulawesi Province, Indonesia (Wajo) could be existing evidence. The local online
news observed: https://wajoterkini.com/, http://news.kabarwajo.com/, https://wajotv.com/, http://mediacelebes.com/
3
Pollitt 2006, 3
4
OECD 2003, 7
5
Dooren, Bouckaert, and Halligan 2015, 148
6
Dooren and Walle 2016, 2
7
Darlow, Hawtin, and Jassi 2008, p. 9
1
 To enter the depth of the phenomenon of the residents’ non-use of local government’s

performance information, this study utilizes the Principal-Agent Theory (PAT). PAT specifies the

set of actors, the possible actions they can take, and the way they evaluate the consequences of

those actions.8 Based on this frame, this study is to analyze how the ILPPD is transmitted and

distributed and how the flow of information makes up the dynamics in the relationship between the

Wajo local government and the ILPPD stakeholders, and by utilizing the PAT, identify the

problems that may arise in the relationship between both parties.

This is an exploratory single case study in the context of Wajo regency, a locale area with a

long history of a moral system and democratic practices since the fifteenth century. Direct

observation, document analysis, and in-depth interviews were carried out to grasp a deep

comprehension.

PERFORMANCE INFORMATION

2.1. Administrative Information Stakeholders at Local Level

The public/citizens are variously described as the ultimate stakeholder of local government

performance information and the consumer of government services 9 . They benefit because

performance information increases transparency, as it becomes easier for them to judge whether

governments perform appropriately or poorly.

Moreover, UNDP 10 conceptualizes the demand side of accountability as citizens or

stakeholders’ tool while the supply side of accountability belongs to service providers or the

government. Accountability and transparency issues need to be understood from demand and

supply viewpoints; that the ‘public information’ is shared by the local governments with the

stakeholders of the system. The following figure shows various stakeholders on the demand and

supply sides:

8
Gailmard 2012, 3
9
Cohn Berman 2008
10
in Murali 2014, 13
2
 Figure 1.. Stakeholders on the demand and supply side of accountability

Source:: Murali, R.S. 2014. Analysis of the Demand Side of Accountability in the Urban Sector.
Sector p. 14

Three parties demand the performance

p information; they are internal stakeholders,
stakeholders external

up-vertical
vertical stakeholders, and external down-vertical
vertical stakeholders. This study will focus on the

external down-vertical
vertical stakeholders in which the citizen is the main subject.

2.2. The Use

se of Performance Information

erformance information as a system has been highly appreciated11 and the flow
Even though performance

of information on local government’s performance has been, to a great deal, increasing during

these last two decades12, most

ost of the literature in previous studies claimed the lack of provision and

the use of performance information by any stakeholders.

The executive,
xecutive, such as public managers, officials, and civil servants, as the internal user of

performance information who has a duty to provide, as well as, to use the information report is

unwilling to expose13, possibly distorts14, inappropriately disclose15, or largely ignored the quality

11
Montesinos, et al., 2013
12
Behn 2002; Pollitt and Bouckaert 2011;
2011 Radin 2006
13
Eden and Hyndman 1999
14
Kluvers 2003
15
Adi et al. 2016
3
of information, yet primarily accommodated the performance interests of the mayor/regent.16

Moreover, in spite of the fact that performance reports are made, many researchers have warned of

the difficulties using them.17 Pollitt (2006) explained that the use of performance information by

external users (outside the local governance system) is only when it is instantly available when

they are taking decisions. While on the other side, the use by the executive is limited and

symbolic18; only to complete statutory obligation to collect the report as a sign of information

delivery.19 Ho and Coates (2004) argue that the difficulty using the performance information is

because the performance management systems are designed without consideration of what

citizens want to know about the actions of their governments.20

After all, while the normative belief that citizens should be interested and informed about

local administration exists in many studies21, literature about performance information written

from citizens’ perspective is still limited. This gap will be the basis of this study in which the need

for performance information will be studied from a citizens’ viewpoint instead of a normative

viewpoint.

PRINCIPAL-AGENT THEORY (PAT)

PAT is also known as agency theory. PAT explains how to organize relationships. One party

(the principal) determines the work and another party (the agent) undertakes the work with the

expectation that the agent will make decisions that are in the best interest of the principal.22 In

return, the agent and the principal make an agreement on how much payment or resources will be

given to the agent for the effort necessary to complete the task. This agreement is usually in the

form of a contract.23

16
Mimba, Helden, and Tillema 2013
17
Pollitt and Bouckaert 2011; Rivenbark and Kelly 2000.
18
Montesinos et al. 2013
19
Adi et al. 2016; Brown 2004
20
Box (1999) terms this market-like practice of performance information. According to him, it contains a focus on efficiency
and cost-effectiveness, instead of a citizen-driven approach that would be more suited for public organizations.
21
See Box 1999; Glaser and Hildreth 1999; Tayib, Coombs, and Ameen 1999; Aucoin and Heintzman 2000; Bovens 2007
22
Eisenhardt 1985, 1989; Jensen and Meckling 1976
23
In Indonesian context, the contract between the two parties, the residents and the local government, is implemented through
such a program so-called Musrenbang (Development Planning Deliberation). Musrenbang is a mechanism where citizens
at the lowest level make a planning agreement with the government on what the local government should do during the
entire year.
4
 Most of the agency literature adopts two very important assumptions concerning agency

relationships. There must be (a) informational asymmetries and (b) goal conflicts are

simultaneously present in the agency relationship.24 The existence of these two assumptions in an

agency relationship means that an agency problem may exist due to discrepancies between the

entities as it relates to information and/or a misalignment of goals. In these cases, PAT provides a

framework for outlining such assumptions by identifying agents, principals, whether contracts

exist, and to what extent.

3.1. Information Asymmetries

Information asymmetry is the claim that an agent possesses more or better information about

the details of individual tasks assigned to said agent, as well as the agent’s own actions, abilities,

and preferences.25 By and large, principal-agent relationships tend to assume that agents have an

innate tendency to seek autonomy from organizational rules, to minimize the burden of

responsibilities and to hoard rather than pass through information which is considered power.26

The assumption is that the principal generally faces difficulties in acquiring information possessed

by the agent.27

3.2. Goal Conflict

The second assumption is goal conflict. This is the situation in which principals and agents’

desires and interests concerning the task are in conflict and both prefer a different course of action.

The principal’s objective is for the agent to expend as much necessary effort as possible to

complete a task. Conversely, it is assumed that the agent acts with self-interest and will produce at

the minimum accepted level to meet the principal's expectation unless the agent can increase the

24
Eisenhardt 1989; Moe 1984
25
Eggertsson 1990
26
Frederickson et al. 2015
27
Under the conditions of incomplete information and uncertainty, two agency problems arise: moral hazard and adverse
selection. Moral hazard was first defined by the French economist Drèze in 1961 (Mooney 1994); the condition is that the
principal cannot be sure if the agent has put forth maximal effort (Eisenhardt 1989). Additional research (Lane and Kivisto
2008; Moe 1984; Ross 1973) on moral hazard describe “shirking” as a typical problem. Shirking is to avoid or neglect a
duty or responsibility; act of working less when there is no chance of earning a higher return. One of the main purposes of
the principle-agent theory is to solve this shirking problem (e.g., to find instruments that will motivate the agent to behave
in the principal’s interests) (Lane and Kivisto 2008). Adverse selection is the condition under which the principal cannot
ascertain if the agent has accurately represented the agent’s ability to do the work for which the agent is being paid. This
problem occurs before the principal enters into an agency relationship with the agent. The principal assumes to know the
nature of the tasks the agent should perform and the abilities needed to perform such tasks successfully (Bergen, 1992).
However, in situations of adverse selection, problems arise from the principal’s uncertainty regarding the agent’s true
abilities and intentions.
5
economic benefit. 28 Goal conflict arises due to the agent’s self-interest and the tendency to

maximize or pursue his own utility. Therefore, the principal faces the problem of insuring that the

agent complies with the contract. The conflicts between the principal and agent do not need to be

permanent or constant, but there must be a certain allowance for them to occur.29

Information asymmetry and goal conflict can be considered “the spark plugs” of agency

theory.30 These two components together create agency problems. If a goal conflict does not exist,

the existence of information asymmetry does not matter, and the agent automatically chooses the

actions desired by the principal. The assumption and existence of goal conflict are necessary for

agency theory.31 Similarly, if the same information were equally and readily available to principals

and agents, there would be no conflict of interest or information asymmetry.

RESEARCH SITE OVERVIEW

4.1. Wajo Semi-Democracy

The greatness of the Wajo Regency in the past includes its progress in government,

leadership, democracy, and guarantees of the rights of people. It is all found in the lore of Lontaraq

Sukkuna Wajo (old manuscript). The practice of democratic values in the political system of the

traditional way can be traced back to the Wajo Kingdom, an old monarchy in Indonesia in Bugis,

located in the south of Sulawesi Island, established during its golden era around the end of the

15th to early 16th century.32 Wajo democratic practices and moral system (pangngadereng), such

as the state’s acknowledgment and respect to its people’s right of freedom, the freedom of

speech, the existence of a board of the highest lords (similar to people’s representative body in

the modern political system), king elections, and people equal right before the law33, have an

early and long history.

28
Petersen 1993
29
Milgrom and Roberts 1992
30
Waterman and Meier 1998
31
Davis, Schoorman, and Donaldson 1997
32
Some scholars have claimed Wajo to be a ‘democratic-aristocratic kingdom’ (Pelras 2006), ‘aristocratic republic’
(Mattulada 2014), a ‘democratic kingdom’ (Abidin 1983).
33
Halim 2016
6
4.2. Wajo General Overview

4.2.1. Geography

Wajo is a region in South Sulawesi, capital located in Sengkang. This region has an area of

2,056.19 km² and a population of approximately 400,000 residents. The capital of the Wajo

Regency is located approximately 250 km from the Makassar Capital of South Sulawesi Province.

This city is known as a commercial city and renowned as the City of Silk.34

The Wajo Regency is one of the areas located amid the province of South Sulawesi and in the

middle zone of the province. This area is known as one of the rice granaries of South Sulawesi with

fertile soil conditions with large agricultural areas where the wetland area reaches 93,002 km2 or

37.11% of the total Wajo area.

4.2.2. Economic Source and Budget

The Gross Regional Domestic Product (GDP) of Wajo in 2016 amounted to 15,095 billion

rupiahs. The sectors that account for the most significant contribution are agriculture, forestry, and

fisheries. Wajo economic growth rate from 2012 is 6.50, 6.92, 9.68, and in 2016 is 7.0. Financial

and insurance sector is the sector with the highest rate at 15.38%.35

4.2.3. Cultural and Social System

The socio-cultural condition of the people in Wajo from the past to the present is an integral

part of social dynamics. The cultural conditions are social stratification, kinship system, social

values that are all common in the society.

• Social Stratification

The people of South Sulawesi are rather strict in holding the prevailing tradition, especially in

terms of social stratum. Historically, since pre-Islamic society, South Sulawesi people are familiar

with social stratification. This social stratification results in the emergence of social distance

between the upper and lower classes. 36 Presently, however, the base in determining social

stratification in the Bugis community generally has changed. Today’s stratification is rather based

34
Wajo community activity in managing silk fabric has been done for generations and can be found almost in every district in
Wajo area.
35
The year 2016 is the latest current total year data available
36
In the Bugis society, including in Wajo regency, they adhere to three social levels, namely AnaArung (noble son of the
king), To Maradeka (the free person who is not enslaved by others), and Ata (slaves).
7
more on one’s achievement in the society. It is now more common that social stratification is based

on the ownership of property and level of education and prestige.

• Kinship system

Basically, the kinship system is developed from a group of nucleus families (Bugis: anak

maranak). However, in the Bugis family, a household is not inhabited only by a family, but by

some families outside the nucleus family. The extended family is formed from a blood relationship

called seajing or sumpunglolo. Sumpung means connect (ion), while lolo means intestine or liver.

A group of close relatives is called seajing mareppe or seajing macawe and a distant relative group

called seajing mabela. Wija; is a wider group of relatives, the group of individuals who have blood

relations of a character (grandmother, grandfather) who serve as a pride of family or her offspring.

People of the Wajo, thus, call themselves Wija To Wajo, which means a big family of Wajo.

• Sociological Values

Bugis people generally have a set of norms called pangaderrang. Pangaderrang is a way to

behave toward human beings. Some norms can be identified through the expression;

siwolongpolong, sipatuo, sipatokkong, which means work and live together, support one another,

and raise one another, or in another expression; mali siparappe, rebba sipatokkong, malilu

sipakainge which means getting hold of one another in terms of floating off, raise one another in

terms of falling apart, and remind one another in terms of neglect. There are three other norms that

are close to the communicative relationship; sipakatau, sipakalebbi, sipakainge. Sipakatau means

to put people as human beings. Sipakalebbi means to appreciate, dignify, give respect and honor to

others, and sipakainge means to remind others of the truth.

All the values are in the term of ade’. The importance of ade’ as the philosophy of life is

reflected in the emblem of the Wajo government, the phrase sounds "Maradeka To the WajoE

Adenami Napopuang", the Wajo people are free, and only ade’ (custom) is to divinify. It has long

been the principle and obligation in the social contract between Arung Matowa (king) and its

people that everyone is free yet under the norm and constitution.

8
 RESULT AND DISCUSSION

This chapter is to answer how the ILPPD is transmitted and distributed and how the flow of

information makes up the dynamics in the relationship between local government and external

stakeholders. In order to achieve the study objectives, direct observation, document analysis, and

in-depth interviews with three officials and five experts and public figures were conducted by the

authors. The complete result of the interview is displayed in Nawir (2018).

5.1. ILPPD Publication and Accessibility

5.1.1. Legal Requirement

In the review of regulations regarding the ILPPD, it is found that articles in the regulations

explaining the ILPPD are limited. The points on the ILPPD in regulations include the definition,

time to publish the ILPPD, sanction, content, and feedback. However, none of the information is

specific and explicit enough to put ILPPD to practice. See the Table. 1. below.

The lack of technical assistance regarding the ILPPD publication gives a wide discretion in

what to publish; in what way to publish; where to publish; and what extent to publish. This

discretion opens the opportunity for local governments to implement the best practice or the least

practice for their respective conditions in the ILPPD publication. For example, there is no strict

statement of where to publish. Then, local governments may select to display the ILPPD on an

information board, publish it in on a local or national newspaper, or provide it online on the official

website.

Table 1. Summary of regulations regarding the ILPPD

No. Regulation
1 Act No. 23/2014 on Local
Administration (Act No. 32/2004
revised)
2 Government Regulation No.
3/2007 on Local Administration
Report, Regent’s Responsibility
Report, and Information of Local
Administration
Article Point Notes
69 (1) Mandatory for the heads of local government to
publish the summary of LPPD
72 Publication of the summary of LPPD to the public Time, not specific
along with LPPD reporting
73 Written warning sanction for not publishing the
summary of LPPD
74 A further provision in Government Regulation
1 (10) Definition of ILPPD Insists on publication to citizens
with media available
27 (1) Mandatory to publish ILPPD via print media or One of them or both, optional
electronic media

9
 27 (2) Publication of the summary of LPPD to the public Time, not specific.
along with LPPD reporting
27 (3) ILPPD is a summary of LPPD Content, local governments'
preference in summarizing
27 (4) Openness for citizens to feedback How and what channel, not
specific
27 (5) A further provision in Ministry Regulation
3 Government Regulation No. 1 (8) Definition of ILPPD Insists on publication to citizens
6/2008 on Guidelines for Local with media available
Administrative Evaluation 16 (i) Citizens' feedback to ILPPD having been No explanation on what then local
published is one of the complementary information government should provide
for the evaluator team in doing the evaluation regarding feedback
4 Ministerial Regulation No. 4 (i) Citizens' feedback to ILPPD having been No more explanation on what then
73/2009 on Technical Assistance published is one of the complementary information local government should provide
for Evaluation of Local for the evaluator team in doing the evaluation regarding feedback
Administrative Performance

Source: Author’s document analysis.

5.1.2. Content and Documentation

The ILPPD essentially summarizes the LPPD. However, no regulation clearly specifies which

key information or data the ILPPD should contain. In practice, when asked about how the content

of the ILPPD represents the Wajo government’s administrative performance, the functionary of

Wajo government pointed out a limited helpfulness of the ILPPD to show the real performance for

the ILPPD does not contain a deep review of whether a program is needed by the residents or not,

and what the benefit and the outcome of the programs are.

5.1.3. Timeliness

Document review was conducted to determine the mandated statement for the ILPPD

publication, and it is found that the timeline in any legal document focuses more on the LPPD

submission to the central government. The time to publish the ILPPD to residents is stated in GR

No. 3/2007 (Article. 27 (2)). It is written that the time of the ILPPD publication is the same time as

submitting the LPPD to the central government. The deadline for submitting the LPPD is at the end

of March of the next year (Kemendagri 2016); means that the deadline of the ILPPD to be

published is also at the end of March. No more detail statement is available.

5.1.4. Transmission

The media that local governments may use to transmit information are manifold. They

include, for example, newspapers, leaflets, websites and bulletin boards. Depending on the media

chosen, the range of distribution varies. An adequate distribution ensures that the information
10
reaches the residents. As for the media used to distribute the information, the Wajo government

prefers the local newspapers. That is the only channel chosen by the officials.37

Moreover, it has also been confirmed by the practitioners of the ILPPD, Officer 1 and 2 that

there is no forum or discussion conducted regarding the ILPPD. Both administrators indicated the

non-use of publishing the ILPPD in the notice that even though the ILPPD has been established,

there is no feedback from readers or residents.

5.2. Reception by External Stakeholders

Given the variety of means of communication, it was of interest how stakeholders receive the

information and inform themselves, how they communicate with local authorities, and, whether the

information reaches them or not.

5.2.1. From the Point of View of Local Government

Administrative information is widely available but apparently does not reach the people. The

administrators of the ILPPD refer to the enormous exemplars of the ILPPD published through the

local newspaper, but nonetheless, do not provoke any reactions from the residents.

The information is, in fact, published and available in the office of General Administration

Sub-Section of Regional Secretary of the Wajo Government, but people are not aware of it. There

is no indication that residents are interested in the ILPPD. The interview told us that those who

could be considered responsible for spreading information seem not to want to take the blame if the

information does not reach the citizens. They assume that their duty has been fulfilled as soon as

the information has been published. For them, their tasks are to publish no matter the content is

sufficient to be informing or not. The officer without a doubt admitted the normative fulfillment of

publishing the ILPPD.

In the same line with that statement, the researcher caught the impression when interviewing

Officer 2 about the commitment of the upper-level administrators. He uttered the words “so-so”,

37
The reason for the lack of variety of channel to publish ILPPD and the lack of the dissemination by the Wajo government
could not be explained clearly by the administrator. His argument seemed to be normative and maneuvering. He talked
about his position as not being the decision-maker regarding ILPPD and talked about technical hardship in the arrangement
of LPPD. It also took time to mention the name of the media by which the ILPPD is published. When asked about the
frequency of publication, he preferred to use the term “once-published” which means it is published at least once, rather
than to use “published once” which means it has been published once in a period.
11
“as ordinary”, and “just enough” when asked about the adequacy of the budget. Furthermore, the

following is the administrators’ perception of the lack of ILPPD demand and use by residents.38

First, Officer 1 identified the contextual barrier for citizens to use the ILPPD. He argued that

the Wajo community is originated from a feudal community. From that patrimornial condition

occurs hesitation of the people when dealing with the ruler. Secondly, the level of education in the

Wajo Regency is another cause of inactivity for the residents do not understand their citizenry

rights that have to be fulfilled by the local government. Thirdly, Officer 1 acknowledged a problem

with the local government itself. He named the situation “value fogging” where the logics of

principal-agent relation is disguised yet tends to be switched over. Residents who supposedly see

themselves as the principal are likely to associate themselves with the ones whose interests depend

on the agent. Simply saying, what residents want should be implemented by the local government.

However, in fact, in the field, there is a gap that disassociates residents to the local government and

the result is that residents are willing to wait for what the local government wants.

Furthermore, in his statement, Officer 1 considered performance information is to educate

residents about their right to information, to demand it and to utilize it. An admission about the lack

of intention to use information as a means of educating is expressed.

5.2.2. From the Point of View of External Stakeholders

In the following, the form of communication between the external stakeholders with various

backgrounds and the administration will be described. The relevant question is how stakeholders

receive administrative performance information, whether the information offered reaches them,

and how they respond to the situation. In-depth interviews were carried out to grasp a deeper

understanding of the external stakeholders. The time rate of the interview is ranging from 30

minutes to 2 hours.

38
The interviewer tried to catch argument-based perception. Thus, the author intentionally omits pre-judgments without
argument in this discussion.
12
• Public Advocate

A public advocate with name code C1 was interviewed. C1 identified a lack of reception of

the ILPPD by residents.C1 assessed that the publication is not adequately effective to make

residents know the availability of such information.

A limited variety of media and distribution, for C1, has brought about the unknowingness of

residents about the availability of the ILPPD. Along with the distribution, C1 concerned to the

display of the ILPPD. C1 exemplified himself as the person who is socially active, yet still thinks

twice to read the information. C1 argued the lack of motivation to read the information is an

implication of residents’ distrust in the process of governance. He expressed that “residents’ trust

in the government process is decreasing more and more”.

Beside the citizens’ unknowingness of the ILPPD availability, C1 also argued on residents’

lack of awareness. This situation is caused by, according to C1, stereotypes and bad practices of

administration. The residents’ demand for administrative transparency in the local setting is

occasionally stereotyped not as an effort of pure transparency demand, yet to uncover bad practice

in the administration. This situation creates miscommunication between the residents and the

administration. Thus, the administration shows reluctance in providing its performance

information.

Bad administration practice also contributes to residents’ demand for the administrative

performance information. Confusion between political area and administrative area are identified

by C1. He used the term “mixing-up” or “puzzling”. He implied that the situation does not come as

it is, yet is set. C1 mentioned a practice where political efforts are used to keep administrative

problems at bay. These factors have made residents be “ignorant”.

• Local Education Figure

A figure known for his attention to local education issues was interviewed. Code named C2

was attached to this interviewee. C2 emphasized his attention to administrative information access

and the provision on the government’s website for it is the easiest way to find information.

C2’s concern is not on the ILPPD yet rather addressing about a wide range of administrative

information, from the Musrenbang (Development Planning Deliberation) as a performance

13
contract, the process of performing, to the ILPPD as a responsibility report on an agreed

performance.

Musrenbang is a mechanism where residents at the lowest level make a planning agreement

with the government on what the local government should do during the entire year. However, it is

only a procedural and does not reflect what residents want. Such planning formulation condition

has brought about the distrust of the residents toward the whole process of administration,

including the ILPPD as a report of performance. For him, accessing administrative information in

an active way is not a big problem. However, the distrust in the information has brought about the

current manner of residents in responding to the ILPPD. The distrust has been a response in the

practice of silences among residents.

• Local Humanist.

The humanist is coded C3. An in-depth interview was conducted to understand the non-use of

the ILPPD by residents in Wajo from the point of view of the Wajo’s nature.

According to C3, ILPPD should have been a means of educating residents about their

citizenship right toward the local government. However, this means is not well implemented. The

local government must undertake progressive efforts in informing its ILPPD to the residents,

especially because of the nature of Wajo which is much affected by a patrimonial condition,

cultural rules in communication, and the kinship factor.

The patrimonial effect is inevitable in terms of communication between the residents and the

administration. Besides, the Wajo philosophy of life contributes to the non-use of administrative

information and in a way residents communicate to administration. The concept of sipakalebbi

sipakainge is still opaque, so if it is possible not to do criticism, then do not do it.

Moreover, kinship system is also discussed by C3. In Wajo, there is the cultural condition in

which closeness, friendship, kinship, relationsip are quite strong. If one is corruptive-indicated,

he/she may not be of my family, yet he/she may be my friend or my friend's related. That is why

there are only a few of demonstrations in Wajo. Unless it is about their private livelihood, they will

not look favorably to march. C3’s arguments confirm that residents’ interest in administrative

performance is dependent on the individual interest of each resident. Only if their direct interest is
14
in the challenge, they tend to be reactive. If the reaction results in nothing of betterment, then

leaving the country is the final individual solution.

• Local Bureaucracy Observer

A local bureaucracy observer was interviewed and is coded here as C4. The focus of his

discussion is the local government’s commitment to public-oriented bureaucracy.

According to C4, the intention and commitment of the administration to publish its

performance are questionable. C4 then compared the situation of ILPPD publication with other

conditions to argue the less commitment of administration. C4 questioned the commitment of the

administration to ease the heavy organization structure and the budget for civil servants’ salary and

allocate the budget more to public development projects. C4 also paid more attention to the lack of

program and planning which directly reaches the residents.

• Journalist

A journalist who is given the interview code C5 is also a key informant in this study.

C5 consider that the publication of the ILPPD will not reach all the residents. The only

channel chosen by the local government to publish its administrative performance information is

local newspaper. The channel is not adequate while the paper media users in Wajo are only 30%.

The effort to publish the information on the website has now begun to be apparent. The Wajo

government’s official website has been online even though the ILPPD document is still not

presented. At least, this shows the intent of information openness by the administration.

In residents’ response to administrative information, C5 believes that there lies the apathy on

administrative performance by residents. This is because political education among residents is

inclusive; limited to politicians, scholar students, NGOs, and bureaucrats. Moreover, he suggests

that it is the local government’s duty to conduct an educational forum for political, administrative,

and legal education of commonalty.

The ILPPD as a means to stimulate monitoring by residents is not maximal. It should be put in

a forum in the frame of educating residents about their rights. Moreover, when questioned about

the lack of ILPPD discussion in local media, C5 tended to explain the situation of local

administration-local journalists relationship. Most of the local journalists are dependent on the
15
administration. Most of the local media readers and advertising customers are the administrative

agencies. That is the main reason that administrative performance has paid little attention to in

local media.

5.3. The Case through the Lens of Principal-Agent Theory (PAT)

PAT suggests that, in an institution-to-institution relationship, an agent will complete the

work for a principal through some sort of agreement and/or contract.39 In this study, an agency

relationship exists by exploring how the Wajo government interacts with the Wajo residents’

expectations and needs related to transparency.

5.3.1. Information Asymmetry

Information asymmetry, sometimes referred to as information failure, is present whenever

one party possesses greater material knowledge than the other party does. In the context of local

government transparency of administrative performance, information asymmetry should be

reduced for the rationale that transparency will only exist if the performance information of local

government as the agent is available and accessible to residents as the principal and if the flow of

the information exists.

In the Wajo setting, it seems that both local government and external stakeholder are not in

alignment with one another and the information asymmetry exists. Interviewee attributed the

misalignment between both to an irregular flow of information and the hardness of finding

available performance information. There exists an information asymmetry instead of the fact that

the mechanism of the ILPPD is conducted to function to minimize information asymmetry, and

instead of the fact that local government is ruled to publish its performance information and

progression annually.

The situation is reflected in the obscurity of the external stakeholder in giving their opinion

toward the Wajo government performance based on explicit data. Most of them agreed that the way

external stakeholders assess the Wajo government administrative performance is partial; based on

observations and the personal interest of residents. Even more, the ILPPD as a mechanism to bring

39
Eisenhardt 1985
16
transparency to local level has not been more useful than merely as a formal document to fulfill a

regulatory requirement.

External stakeholders as principal were able to observe only to a certain extent of actions,

outcomes, and the effort of the agent, because the effort of the Wajo local government was often

difficult to monitor. As put by Arrow (1984), the effort of an agent is the most typical hidden

action. In this case, the Wajo government is lack of effort to improve the monitoring structure, as

for instance, no other channels to publish the ILPPD. The lack of ILPPD distribution and

publication frequency means the lack of the provision of the necessary information.

5.3.2. Goal Conflict

Goal conflict is the situation in which principals’ and agents’ desires and interests concerning

the task are in conflict, and both prefer a different course of action. The principal’s objective is for

the agent to expend as much effort as necessary to complete a task. Conversely, it is assumed that

the agent acts with self-interest and will produce at the minimum accepted level to meet the

principal's expectation unless the agent can increase the economic benefit.40

The environment of goal conflict can be identified in the interviewees’ arguments on distrust

of contract. Some interviewees were not invited to Musrenbang while others were not interested in

attending. For them, Musrenbang as a performance agreement between the Wajo government and

the residents is only to fulfill the legal technical requirement. The residents’ need for performance

is always different from what is implemented. This distrust of contract has brought about distrust in

the whole of the administrative process and leading to the ignorance toward the local government’s

performance information.

CONCLUSION

6.1. Conclusion

This study explored the relationship between the Wajo local government and the external

stakeholders in the frame of the ILPPD publication processes. In this study, Principal-Agent

Theory (PAT) provided insight into how the Wajo administration carries out its duties as an agent

40
Petersen 1993
17
for the principal; and how the external stakeholder as a principal manages its relationship with the

Wajo local government.

It seems from the manner of the Wajo government in publishing ILPPD that information

asymmetry is kept in existent. The practices of limited channel distribution, the lack of information

dissemination, the insufficient frequency of publication, personal approach in accessing

administrative information, and the absence of channels for feedback have not only been directed

to the effortless of disclosing its administrative performance information, but also hinted the

intention of maintaining information asymmetry.

The external stakeholders as principal, as a result, suffer from being unable to monitor the

Wajo government’s activities directly for the lack of information. Thus, at the same time, external

stakeholders cannot offer their own preferred actions for administrative improvement and

betterment.

The lack of information regarding the Wajo government’s administrative performance has led

to the state of lack of communication between the Wajo administration and the external

stakeholders. In a rather extreme expression, external stakeholders have exited the principal-agent

relationship with the Wajo administration.

Besides, because of the lack of performance information, external stakeholders’ distrust of the

performance contract has led to the distrust of the performance information available. Explicitly,

the distrust of performance contract in Musrenbang has led to the distrust of the whole process of

administration. That is one more thing that results in the non-use of ILPPD as administrative

performance information. External stakeholders, the principal, did not put pressure on the

administration to reveal administrative information nor control or revise the contract. Instead of

doing some effort to overcome information asymmetry and goal conflict, external stakeholders

preferred to exit the relationship. Hence, the agent lacked incentives to perform according to the

expectation and the need of external stakeholders. The situation can be presented as per the figure

below:

18
 Figure 2.. Administration-Stakeholder
Administration Stakeholder relationship in the Wajo Regency

Source: Author’s analysis

Beside information asymmetry and goal conflict that existed, other factors, which are

contextual, have also contributed to the non-use of ILPPD.

The capacity of the receivers or the external stakeholders to manage the information in ILPPD

has been paid attention to..41 Politic intermingling with the practice of administration has also

impeded the communication between the Wajo administration and the external stakeholders. This

has caused some external stakeholders to hesitate to criticize. Personal interest is also supposed to

contribute much to the non-use

non of administrative performance information, and transparency. A

41
However, the author regarded the capacity factor as insubstantial argument to the current context of Wajo. Greater in-depth
in
research on this issue is considered necessary.
19
practice of dependency of local journalists on local government, for instance, has affected the way

local media delivers the news of administrative performance. Social stratification, kinship system,

and indigenous wisdom are the most agreed upon factors, among interviewees, that cause

hesitation among external stakeholders from demanding administrative performance information.

After all, this study has come to the conclusion of two core obstacles in the principal-agent

relationship between the Wajo local government and the ILPPD stakeholders, namely poor

practices of administration and the lack of social activism. These two obstacles subsequently

necessitate two approaches, bureaucratic and civil society strengthening approaches, to enhance

the transparency of local government performance in Wajo context.

6.2. Policy Recommendation

This study has identified two core challenges to tackle, poor practices of administration and

the lack of social activism. So, therefore, some suggestions can be given according to the

identification.

In the area of bureaucratic approach, the political will of the local government officials needs

to be improved. The Wajo government should enforce the importance of administrative

performance information publication by setting up e-government system to achieve the excellent

information service. Providing integrated official website, online complaint and feedback

mechanism, and issuing monthly or per-three-month performance information updates can be put

into practice.

In the area of civil society strengthening approach, it is basic for the citizen to enhance its

participation in policy making, to raise the awareness of the right to obtain information from the

government, to supervise the local government activities, and to monitor the implementation of

administrative performance. For those to achieve, active information sharing and discussion

through voluntary collectivism is required. Moreover, public management and politics on-line

class for local communities and organizations can be put into practice to improve discussion

among citizens. I hope that both approaches will improve the transparency state in Wajo context.

Finally, this paper explores an area of research where few studies have previously been

conducted; therefore, the paper is to some extent exploratory. In the future, the number of empirical
20
examples could be increased, and the different problems in the system of transparency of local

government could be discussed in greater detail.

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