28.2kristiansen market for civil servants

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Buying an Income: The Market for Civil Service Positions in Indonesia

Kristiansen, Stein.Ramli, Muhid.

Contemporary Southeast Asia: A Journal of International and

Strategic Affairs, Volume 28, Number 2, August 2006, pp. 207-233

(Article)

Published by Institute of Southeast Asian Studies

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Contemporary Southeast Asia Vol. 28, No. 2 (2006), pp. 207–33 DOI:10.1355/cs28-2b

©2006ISEAS ISSN0219-797Xprint/ISSN1793-284Xelectronic

207

Buying an Income:The Market for Civil ServicePositions in Indonesia

Stein KriStianSen and Muhid raMli

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Keywords:CivilService,transparency,bureaucracy,corruption,collusion,nepotism,

localgovernment,decentralization,buyinganincome,Indonesia.

Indonesiahasrecentlygonethroughadramaticprocessodemocratiza-tion,decentralization,andprivatization.Theghtagainstcorruptionhasbeenanimportantelementintherestructuringosociety,atleastasdeclared.Demandsorlawreormstocurbtherampantcorruption,collusion, and nepotism (KKN) under the Soeharto regime actuallyrepresented a major issue in the oms movements rom 1998onwards(Renoe2002).However,corruptionstillseemstobesystemicand systematic (Holloway 2002), and endemic and exploitative(Goodpaster 2002). Decentralization reorms rom 2001 had littlepositive impact (MacIntyre 2003) and tended to reactivate “money



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politics” and undemocratic practices at local levels. According toTransparencyInternational(2005),Indonesiaisstillamongthemostcorruptcountriesintheworld.

Large-scale corruption siphons rom society into the pockets othepowerul,whilepettycorruptioncontinuesasapartoliewheresmaller amounts o money are tapped rom ordinary citizens intothepalmsocivilservantsianythingistogetdone.AculturehasdevelopedintheIndonesiansocietythatgivesmoralsupportorrent-seekingandprioritiestoprivategainsbeorepublicones.Corruptionisgenerallyasymptomotheailureotransparencyandaccountability,thetwinprerequisitesorgoodgovernance,andIndonesia’spoliticalsystemhaslongtraditionsinthelackoboth.Civilservantsareatthecoreotheproblem,beingthereceiversokick-backsolargeprojects,petty bribery, and “speed” money, and oten elevated above insightand control, also ater the national democratic reorms. The lack otransparencycouldpossiblybeamainreasonbehindcorruptionandalso explainsthe limited empirical research onthis problem.

PermanentemploymentisgenerallyinshortsupplyinIndonesia.Unemployment and underemployment rates may be as high as40percentotheworkorce(Dhanani2004; Jk Pos ,17December

2005).Sotosecureanearningpositionwithstabilityandreasonableincome opportunities,people are willing to make huge investments.In this research, ocus is set on the market or local governmentpositions in Indonesia. We present a survey made among civilservants employed in two districts within one o Indonesia’s34provinces,NusaTenggaraBarat(NTB).Hardactsonamountspaidandpaymentproceduresarepresentedalongwithinormationcollectedinocusgroupdiscussionsandanonymousin-depthinterviews.OurobjectiveistounveiltheprocessesosellingandbuyingCivilService

positions, and possibly also to indicate which are the inormalsources ocivilservant incomes whereinvestmentsinpositions can

be recovered.Thearticleisorganizedasollows.Aterthisintroductionthere

ollows a review o the literature. General theories on corruptionthat are o relevance or understanding our speciic topic arepresented. Thereater we discuss corrupt practices in Indonesiaspecically, based on recent literature. Next, we oer an overviewo the Indonesian Civil Service, its history, and present status ater

the decentralization reorms. The methodological approach andstudy areas are briefy discussed and ollowed by a presentation oour quantitative and qualitative ndings. The article ends with aconcluding discussion.



t Mk o Cv Svc Posos ios 209

Corruption and Civil Service: A Literature Review

Corruption in general is denitely not a new phenomenon and

neither is it bound to speciic regions. For centuries and evenmillennia, rent-seeking and unproductive entrepreneurship basedonthemonopolyopowerwerecommonatvariouslocations,asinancientRome,HellenisticEgypt,andmedievalChina(Baumol1990).Even in developed countries today, unclean business practices arerequentandcorruptinstitutionsarenumerous.FranceandItalyareexamples o business contexts in Western Europe where scandalso huge corruption cases have been unveiled recently. However, theextent o the problem seems to be larger in transitional political

systems,emergingeconomies, and especially inpoor countries withrich natural resources. Post-colonial development oten saw thetranser o concentrated power to elites in Arica and Asia, withouta subsequent mobilizing o people through education and politicalparticipation.Aculturecoulddevelop,otenbasedonoldtraditionsandinheritedlogiconegotiation,git-giving,andsolidaritynetworks,which acilitates dubious economictransactions.

When a civil servant gives a position to a relative rather thantoabetter-qualiedapplicant,itisnepotism;whenapublicoceis

sold,itistodayunanimouslyregardedascorruption(Gardiner2002;Swart 2002). Corruption is a broader and more embracing conceptthan nepotism and bribery and represents “a kind o behaviourwhichdeviatesromthenormactuallyprevalentinagivencontext”,adeviation“associatedwithaparticularmotivation,namely,thatoprivate gain at public expense” (Friedrich 2002, p. 15). Corruptionnormallyoccursbetweentwopartieswhereapatronoranagentgrantsthe client special treatment in exchange or goods or services. It isnormallystudiedasaprocessthattakesplaceintheinteracebetween

the public and private sectors (Rose-Ackerman 1997). Corruption iscommonly dened as illegal and unethical use o ocial positions,political infuence, or public resources or sel-interest and privategain.

In this research we take a multi-disciplinary approach tounderstandtheproblem.Elementsinthecomprehensionocomplexorms and unctions o corruption may have been lost in themono-disciplinary research approaches dominating in the 1990s(HeidenheimerandJohnston2002,p.xiii).Anadequateunderstandingo corruption requires a “grasp o an entire network o infuence”and should be dealt with in a way that “embeds it contextually ina broader analysis o a regime’s political dynamics” (Scott 2002,p. 124).



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Fromapoliticaleconomyperspective,theprincipal-agent-clientmodel oers a ramework or theoretical and empirical analyses ocorruption.Basedontherationalchoicetheory,themodelpresumes

thatanagent,likeabureaucrat,willbecomecorruptithenetbenetsromcorruptpracticesexceedthoseohonesty.Costsrelatedtopay-

backtoprincipalsorrisksobeingdetectedandsanctionedbythem,or instance, the politicians or the judiciary, need to be taken intoconsideration. The model urther predicts that a client will accept

bribery i a net benet can be gained compared with undertaking acleanpractice.Themoralsatisactionarisingromhonestyalsoneedstobevaluedinthismodel,inbalancewithmoralgainsromsupplyingwealthtoone’samilyandriends(Szanto1999).Economists’studiesocorruptionotencomeintheormoeconometriccalculationsogainsand losses or individuals and society rom changing system inputssuchassalaries,risks,andsanctions(AbedandGupta2002).

Klitgaard (1988) laid a solidoundation or subsequent politicaleconomyresearchwithhiswell-knownequation:

Corruption = Monopoly + Discretion – Accountability

It has been generally acknowledged that illicit behaviour fourisheswhenagentshavemonopolypoweroverclients,whenagentshavegreatreedomochoiceorhighdiscretionarypower,andwhenaccountabilityo agents to the principals is weak (Mitchell and Simmons 1994).Lack o transparency is one among other reasons behind all theseweaknessesobureaucracies.Fromapolitical-administrativescienceperspective, ocus has been set on the potential roles o democraticinstitutions (Geddes 1994; Johnston 1997), the rules and ethics o

bureaucracies(Carino1986;Khan1998),andtherolesomediaandcivilsocietyincreatingtransparency(Giglioli1996;Ruzindana1997).

Thereareewempiricalstudiesowhatactuallyacilitatesorhinderscorruption, but there is strong support or a hypothesis stating thatthe problemincreases withlowerlevels otransparency ina society(GoelandRich1989;Szanto1999).

From a cultural science perspective, researchers talk about thecultural embeddedness o the corruption complex (de Sardan 1999).Corruption is regarded as rooted in cultural contexts and webs osocialrelations.Todealwithit,theseculturalcontextsandrelationsneed to be understood, without adopting “cultural relativism” and

justicationsorcorruptpractices.Hope(2000)pointstothepreerencetypically given to private over public interests in Arican cultures.Loyaltybondstokinandriendsmattermorethanobediencetorulesand regulations in articial political and administrative constructs.




Also, when leaders are corrupt they breed a culture that condonesand spreads corrupt practices among ordinary citizens to the extentthatcorruptionalmostbecomesapartolie.

Thereasonsbehindcorruptionhavebeenclassiedasindividual,institutional,andcontextual(Osei-HwedieandOsei-Hwedie2000),andtheyneedtobeunderstoodromtheperspectiveobothpartiesinvolved.Peoplemaybepreparedtopaythecostobribesorimprovedaccesstoresources(contracts,licences,inormation,positions,andsoorth),reducedcosts(customs,taxes,andsoorth),orincreasedspeedincertaintransactions (or instance, obtaining customs clearance, or a driver’slicence).Institutionsmaydevelophabitsandlackotransparencythatencourage bribery and hidden transactions. Also the wider contextsmaybecharacterizedbycultures,ethicalnorms,andcodesoconductthatacilitatecorruptactions.Corruptionhurtsmostpeoplemostothetime,eitherbecausetheyrepeatedlyhavetopaypettyirregulareesorservicesorbecausecommonresourcesarewastedorusedineciently.Thephenomenon,however,mustbeexplainedbasedontheactthatsomepeople,andevenlargergroupsandinstitutions,generallygainrombeinginvolved.Corruptpracticesalwaysprimarilybenetthosealready in power or equipped with economic resources, including

inormation.Powerrelationsandthedominanceoeliteswithuniyingsel-interestsinvariousinstitutionsalsocontributetohidingcasesocorruptionandtherebytothesustainabilityothatsystem.Economicresourcesareusedtogainpoliticalinfuenceandpowerulpositions,andviceversa.Thesystemtendstobesel-ampliying,unlessnon-eliteinterests are able to mobilize and make interruptions. For ordinarycitizens,itisoteneasiertopayabribethantodemonstrateorhisorherrights,andthecostothepettybribemaybelowcomparedwiththecostonotbribing.

Fromaroundthedevelopingworld,weseecleartendenciesthatcorruption is growing in sophistication and complexity and that acocvzo o corruption is taking place. In China, or instance,corruptioncasesshowanalarmingtendencyorpartyandgovernmentocialstocolludewitheachotherinaneorttogainromthepublic(Gong2002).InChinaaswellasinVietnam,collaborativecorruptionhas

becomemoreprevalentunderdecentralizationandprivatizationreorms(Gainsborough2003).Businessenterprisesalsoplayacrucialroleincorruption,andtheinterdependenceopoliticalregimesandbusiness

istypicallystronginAsiancountries(LimandStern2002).Collectivecorruptionisbasedoncollaborationamonggroupsopower-holdersand is utilized or pursuing private gains. By the collectivization ocorruption,theinstitutionalrameworkbecomes“whatthegunorknie



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isorthecommoncriminal—atooltoobtainmoneyromvictims”(Wheeler and Rothman 1982). The institutional ramework consistso,amongothers,mechanismstogainandwithholdinormationand

to avoid transparency and accountability.Civil servants, as gatekeepers o public resources, are oten at

the core othe corruption problem.A corrupt civilservant typicallyregards his oce as a business, where he seeks to maximize hisindividual income (Heidenheimer and Johnston 2002, p. 8). Sale opublic oces has long traditions asanacceptedand legalaair, notleastincontinentalEurope(HeidenheimerandJohnston2002,p.79).AccordingtoSwart(2002),publicocescouldbesoldoronlyaewyearsororalietimeandevenasinheritableproperty.Sellerscould

be monarchs, ministers, or ocials themselves. Based on historicalexamples, van Klaveren (2002, p. 85) explains how a civil servicehierarchymightdisintegrateintoanumbero“maximizingunits”withtheirown interests and thus unreliable or the execution onationalpolicy. The size o the income o the ocials typically depends ontheirrapacityandingenuity(Swart2002,p.96).Asaconsequenceothesystem,civilservantsareselectedonthebasisotheirwillingnessto pay and not their proessional qualication and capacity. Sale o

oces thus has an undemocratic eature, because it “connes oceholdingtopeopleomeans”(Swart2002,p.102)andviolatessharedstandards o justice and equity (Scott 2002, p. 126). Sale o publicoces may disappear with modernization but the system certainlyprevailsinmanypoorcountries,includingIndonesia.

Civil servants, whether they have bought their positions orgained them in competition based on qualications, are gatekeepersto resources belonging to the community. Such resources may benaturaltreasures,governmentbudgets,inormation,orservicesrelated

toeducationandhealthand,inIndonesia,alsoreligion.Gatekeepersaretheagentsintheprincipal-agent-clienttheory.Theymaybepartso the executive body at central or local levels o government, ortheymaybepolicemen,schoolheadmasters,orhealthpersonnel.Wepresent below a model rom Kristiansen (2004) illustrating the roleo gatekeepers in relation to resources, approvers, and the society(Figure1).

Approversarethoselegitimizingtheconductogatekeepersandthey could be democratically elected parliaments at central or local

levels,orthemilitary,thejudiciary,oranyotherbodywithamandatetoenorce.Itseemsthattheclosertheapproversaretothegatekeepersand the urther rom “the society”, the higher are the opportunitiesor corrupt practices.




Corrupt Practices in Indonesia

Recent research on corrupt systems and practices in Indonesia isdominated by studies initiated by the World Bank and its sisterinstitutions. In their reports, privatization and decentralization arecommonly regarded as the main means to overcome the problem.The current dominance o these institutions and solutions appearssomewhat strange in an economic and political context where theWashington-based institutions and ideologies or so long played acentralroleinthegame.Littlehasbeendonebyleadinginstitutions

to create transparency and clean practices, either in government orin business.

Meanwhile, Indonesian scholars have been persistently discreeton the corruption issue and contributed little to critical researchin the Soeharto era as well as later. This may be explained by theactthatmostothemarealsocivilservantsandparticipantsintheproject-generating and client-serving earning system. As stated byNugroho(2005,p.155),Indonesianresearchersarestillailingtotakeacriticalposition,andacademiciansare“subordinatetoadministrative

authority”.Indonesiansocialsciencemayhavemovedromthetyrannyo an authoritarian regime to the tyranny o the market (Hadiz andDhakidae 2005). Little analytical research is produced, while theearnings o university lecturers is improved. Also, while university

Figure1The Gatekeeper System

Resources

Gatekeepers

Approvers

Society



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studentsandtheirorganizationsinIndonesiaareotenstronglyvocalagainstcorruptionintheCivilService,graduates,however,changedto becoming silent when they are absorbed into the system and

conrontedwiththeburdensandchallengesoentranceeerepaymentsandpursuingtheircareerintheCivilService.

InIndonesia,alsoaccordingtotheWorldBank,theCivilServiceisattheheartothecorruptionproblemand“theprevailingbureaucraticcultureosecrecycreatesaveilbehindwhichcorruptionfourishes”(WorldBank2003,p.21).AccordingtoGoodpaster(2002),corruptioninIndonesiajoinswithorganizedcriminalityandeedsonpovertyandwidespreadunemployment.Thesystembearssimilaritieswitheudalismandcolonialism,wherethelowerrankssupporttheupper.ConditionswereuglyintheSoehartoera.Nevertheless,today“Indonesianpoliticsisundamentallymoneypoliticsotheworstkind.People,oces,andvotesandboughtandsold”(Goodpaster2002,p.36).

According to MacIntyre (2003), corruption under Soeharto wasconductedinanorderlyashionthatwaswithinthelimitsowhatthemarketwouldbear.Inrecentyears,corruptionproblemshavebecomelarger and more destructive. The major devolution o power romthe national government to the district level in 2001 has acilitated

regionalgovernmentocialstomaximizetheirownindividualgainswith small riskso control and sanctions. “The country now suersrom hundreds o little Suhartos” (MacIntyre 2003, p. 17). Cassing(2000)employedtheintellectualrootsromDouglasNorthandoundpath dependence in Indonesian institutions that supports continuedcorruptpractices.Institutionalchangeisonlyincremental,andpoliticalinstitutions, such as the local parliaments, and those who allocateresources,suchasthelocalbureaucracies,stillsuerromapoliticalculturethatseeksrewardsthroughrent-seekinginsteadohonestand

productive workor society.Accordingtotheabove-mentionedreportotheWorldBank,

however,thereis“steadyprogress”inmeetingthethreeclassicalcriteriaorthedevelopmentodemocracy:eectivechecksonarbitraryrulers,mechanismsorthereplacementoarbitraryrulers,andtheparticipationoordinarypeopleinthemakingorules(WorldBank2003,p.9;Moore1967).PowerulinterestsromtheSoehartoera,thoughstillallowedtooperateandfourish,areunder“closemonitoringbycivilsocietyandthemedia”,andthereisareasonabledegreeotransparency(WorldBank

2003,p.9).Recentresearchprovesdierently,however(KristiansenandSantoso2005;KristiansenandTrijono2005).Aterthedecentralizationreorms,transparencyseemstohavedecreasedandcorruptionescalated,duemainlytothedevelopmentonewlocalelitesatthedistrictlevel.




The Indonesian Civil Service

The Indonesian Civil Service has its roots in the Dutch colonial

administration, which was certainly not ree rom corruption (Scott2002).Dutchbusinessinterestsusedtobribecolonialadministratorsto secure their desired advantages. During the rst two presidencieso the new republic, under Soekarno and Soeharto rom 1949 to1998,strongorces worked toconcentratepower inthehandso theexecutivebodies,predominantlyatthecentrallevelinJakarta.Limitedinfuencewasgiventoelectedassemblies.Asaraspossible,powershouldnotbeseparatedandinormationonstateandadministrativeissueswasmonopolizedandportionedoutcareullyorthebeneto

the power-holdersbythe central MinistryoInormation(Lim 2003;Nugroho 2000).

EspeciallyduringtheSoehartoera,theCivilServicewasdevelopedto be a political instrument as well as a strong and wide-rangingadministrative apparatus. It grew to encompass more than 4 millionemployees,romcentralandlocaladministrativeunitstothepolice,military, schools, and health institutions. As a political instrument,the CivilServiceplayedanimportantroleincollectingvotes or thePresident’sparty,Golkar.Allcivilservantswereobligedtobemembers

otheso-called“unctionalgroup”.Civilservants’careersdependedontheircontributiontosecuringtheparty’sleadingposition,normallywinning 70–75 per cent o the votes in the regular elections. Thesystem created a culture o unity and reciprocal avours instead odistanceandautonomybetweenpoliticiansandthebureaucracy.

The decentralization reorm in 2001 had some impacts on theorganization and unction o the Civil Service. A main provision othe new law onregional governmentwas the abolition othe ormerstrictly hierarchical relationship between the central government,provinces, and districts. Another was that regional heads at bothprovincial and district levels are now held accountable to regionallegislative bodies rather than to higher levels o government. Thedistricts (kbp/komy), which represent the third level inthepreviousve-tieradministrativesystem,nowbecameresponsibleortheundingandimplementationoactivitiesinsectorsincludingeducation, health, culture, public works, and the environment. Adistrictnowhasanaveragetotalpopulationo500,000.

Three-ourthsotheCivilService,includingteachersandhealthworkers, are now assigned to local governments, predominantly inthe440districts.Aroundonemillioncentralgovernmentemployeeswereinstitutionallytranserredtolowerregionallevelsogovernment



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by the decentralization and regional autonomy reorm. Figures onthe total size o the Civil Service vary remarkably rom sourceto source and there is no recent exact census. So-called “ghost

workers”contributetotheconusiononumbers.Theyarenamesonpayrolls,whonevershowuponpaydaywhilethenancialmeansare still being tapped. Among the current approximately 4 millioncivil servants (Department o Finance 2004), around one millionare school teachers and 300,000 are health workers (BKN 2004). Inaddition to those ormally employed, there are probably close toone million people who have inormal contractual arrangements,so-called honorary employees (hoom d, or HONDA).They are not subject to civil service rules and are not ormally ongovernment payrolls.

Allnewlyrecruitedcivilservants(co pgw g sp ,orCPNS)muststillparticipateinajointtrainingprogramme,thePjbor Pjbs ( p jb so ,ornationalpre-oceduty).Alocalgovernment oce is in charge o the training, which is undertakenjointly with ocers rom the military. The programme used to takeplaceatamilitarycampbutatertheoms itisconductedatlocaltraining centres, where participants must stay or about two weeks.

Subjects taught include military discipline, government regulations,and administrative procedures and management. It is only ater thePjbsthatthenewcivilservantsgettheirnalletteroassignment(s kps, or SK) rom the Ministry o Home Aairs andsubsequentlyalsotheirrstullsalary.Thetrainingshouldormthecompetencebasisorthebureaucracyandalsoa“moralinstrument”to create clean and good governance (Jatim 2005). Another purposeothe Pjbs is to unite civil servants in loyalty to the state andthe constitution. The result has been the construction o a rather

exclusive club o people united in a common culture and code oconduct.AccordingtoaormerHomeAairsMinister,FeisalTamin,theleveloeciencyintheCivilServiceisverylow,however,andheestimatedthattheratiobetween“productive”and“unproductive”civilservantsis40:60(Komps,17May2003).Thechancesogettingred as a civil servant are very small. The annual quota or newrecruitments to the Civil Service is currently around 300,000. Therecruitmentprocessisormallymadeonanationalbasisbutdistrictsareletwithahighdegreeoauthorityintheselectionprocess.The

supplyoqualiedpersonnelishighandtherecruitmentprocessischaracterizedbytoughcompetition.Inprinciple,allnewappointmentsandsubsequentpromotionsaretobebasedonanobjectiveevaluationo competence and perormance.




As regards recruitment and authority in the Civil Service, thelines o authority are not clear (Smeru 2002). Among the centralgovernmentinstitutions,theStateMinistryorAdministrativeReorm

(Menpan), the National Civil Service Agency (Badan KepegawaianNegara, or BKN), the Ministry o Home Aairs, and the Ministryo Finance each plays an important role. There may also be a lacko harmonization between the three levels o administration — thecentral, provincial, and district. Decentralization and privatizationhavenot had any immediate positiveimpactonthelevelandextentocorruptioninsociety.Thereisnoindicationthatregionalautonomy breedsaccountabilityandtransparency.Asstatedbyoneotheoriginalarchitects behind the decentralization reorm in Indonesia, “localparliamentsareplaceswhere‘black’moneyiscirculatingwithoutanylegalinstrumentavailabletostopit”(Rasyid2003,p.66).AccordingtotheWorldBank(2003,p.14),thedecentralizationreormreorganizedthewholesystemopoliticsandbureaucracyandcreatedanewclasso politicians “and their agents, the civil servants”. Local politicaland bureaucratic institutions are developed into means or buildingprivate wealth. Politicians regard receiving gits rom the executiveassomethingnatural(Choi2004).

According to the World Bank (2003, p. 15), civil servants are“not particularly underpaid relative to their market comparators”.Their salaries and various economic compensations have increasedsubstantiallyinrecentyearsandaregenerallycompetitivewiththoseintheprivatesector,especiallyatthelowerranks.However,thebasicinitialsalaryoranocerwithseniorhighschooleducationisstillonly around 800,000 rupiah (US$85) per month, while one with aBachelor’sdegreeshouldhaveonemillion,accordingtogovernmentregulations. There is currently no income tax on salaries under one

millionrupiahpermonth.Thepurchaseoapositioncreatesaormalincomeonastablebasis.Inaddition,governmentpositionsopenoranumberoinormalandotenillegalincome-generatingopportunities.Therearegoodopportunitiesor“arming”,especiallyin“structural”or gate-keeping positionswithdecision-making power.

Elitesintopgovernmentpositionshaveahighdegreeomonopolypoweranddiscretionandareexposedtolowlevelsoaccountability.Theyaredependent,however,on“allowingtheocialsunderthemtoexploittheirocestosecuretheirloyaltyandsupport”(Renoe2002,

p. 107). This is a orm o a patron-client system. Clients are givenample room to manoeuvre as long as there is loyalty. Advancementreliesontheabilitytoaccumulateresourcesandshareupwardswiththoseincharge.Juniorocialsmustpaytheirsuperiorsaquotarom



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their earnings to secure these spots in a kind o payment pyramid.Failuretomeettheirquotameanslosingout“inavourothosewhocan”(Goodpaster2002,p.10).

Illegal or unethical earnings that have been reported amongIndonesianandothercivilservantsincludevariousormsocontractkickbacks, payment rom sta in exchange or positions and hiringon projects, loan accounts structured to earn interest by the agency,provision o ghost services, infated invoicing in collusion withcontractors,proceduresortaxavoidance,irregularpaymentsorhealthandeducationservices,bribestopoliceocersandjudges,andspeedmoneytoobtainormalpapersandpermits(WorldBank2003;Vian2005; Chapman 2005; Azar 2005). In spite o verbal intentions tocreate transparency asa meansto curbcorruption,a billonreedomo access to inormation has been stalled in the central parliamentduetolackopoliticalsupport( Jk Pos ,9February2006),andtargets on implementing e-government are not met (Rose 2004). Asstated by Dwiyanto (2003), i there are opportunities or corruption,civilservantsinlocalgovernmentstendtodowhattheycantoavoidtransparency.Theprevailinglackotransparencyand“arming”optionsocivilservantsmakethepositionsattractiveinspiteothelimited

ormal salaries. Already in 1998, Renoe (2002) ound that the priceogettingabeginningjobasanelementarypublicschoolteacherinarelativelyremoteareainWestSumatrawas5millionrupiah(US$625).Pricesorcivilservantpositionsarerising,asweshallsee.

Methodological Approach

Doingempiricalresearchoncorruptionisnoteasy.InIndonesia,bothgivingandreceivingbribesareormallyorbiddenanditisthereore

diiculttoopeneventhetightlipsothosesueringrompettycorruption,nottotalkabouttheperpetrators.Askinginormationromthosewhohavealreadypaidandgained,andinourcasebeenabletojointheexclusiveclubocivilservants,wouldnormallybeutile.However,someyearsoreormationtalksandsubsequenteagernesstoseeresultsmayhavecreatedanotheratmosphere.Theincumbentpresidenthimselhasinsistentlyandrepeatedlyaskedorreducedcorruptpractices,andpeoplerealizethatsomethingshouldbedonetoimprovethesituation.Ordinarycitizensareashamedwhenconrontedwithsurveyresults

romTransparencyInternational,orinstance,andtheyrealizethatthesocietaldiseaseneedsactivetreatmentortheimprovedwelareoordinarypeople.Theremightbereasonsoroptimismasregardsethicsorwhistle-blowingintheCivilService(Vinten2000).




Sixty civil servants rom various departments accepted to beinterviewedandcontributedtollinginourtwo-pagequestionnaireon age and education, their current position, time o employment,

amounts paid to obtain their position, payment procedures, andtheirperceptiononairness.Weselectedtwostudyareas,KabupatenBima and Kota Mataram. Both are within the province o NTB inthe eastern part o Indonesia. There is no reason to expect that theselected study areas divert substantially rom other urban and ruraldistricts inIndonesia, apartrom the act that payment or positionsmaybeinfuencedbyfowsomoneyandthusbythegrossregionalproductortotaldistrictbudgets.TheprovinceoNTBconsistsotwomainislands,LombokandSumbawa,anditspercapitagrossregionalproductisaboutthenationalaverage.

KotaMataramisthecapitalcityotheprovince.Itisamiddle-incomedistrict,locatedontheislandoLombok,ontheborderbetweenIndonesia’s“inner”(JavaandBali)and“outer”islands.Thepopulationwas328,000in2004.Theeconomyisdominatedbytheservicesector:publicadministration,education,trade,transport,andtourism.Thetotaldistrictbudget,APBD,wasequivalenttoUS$23.2millionin2004(US$71percapita).Thetotalnumberocivilservantsinthedistrictis

around5,000.Kabupaten BimaislocatedontheSumbawaisland,eastoLombok.Thepopulationin2004was419,000.ItisapredominantlyruraldistrictbutalsoincludesthetownandharbouroBima,whichormthecommercialcentreoSumbawaisland.Theeconomyisdominatedbytheagricultureandservicesectors.ThetotalpopulationoSumbawais1.2million,whichisabout29percentothetotalpopulationintheprovince(4.2million).ThedistrictbudgetoBimain2004wasequivalenttoUS$27.3million(US$65percapita).TheexactnumberocivilservantsinBimaisnotknownbutisprobablyhigherthan5,000.

Theselectionorespondentsinthetwodistrictswasbasedonacombinationoactors:convenience,andpurposiveandsnowballsampling.1Westartedbyaskingsomeoneweknewandwhowaswillingtotalk.Thereater,reerralsromearlierparticipantswereusedtogathertherequirednumberoparticipants.Manyothemwereyoungandnewlyrecruited,andwereeagertosharetheirviews.Mostotherespondentswereinterviewedintheirhomes,whilesomewereinvitedtoanotherinormalvenueortalks.Muchthoughthadgoneintothepreparationotheinterviews,withemphasisplacedondiscretionand

prudence,andsonooreignresearchertookpartinthedatacollection.Thebackgroundandpurposeothestudywasullyexplainedandallparticipantswereormallyassuredoullanonymity.Thenumberocivilservantsinanyrelevantadministrativeunitotheselecteddistricts



220 S Kss M rm

wassuicientlyhighsothatitisnoteasytoigureouttheidentityoindividualrespondentsinoursample.Duringtheinterview,theresearcherromtheUniversityoMataramwouldllinthe15-issue

questionnaire,whichhadbeenadjustedtwiceatervepilotinterviewstomakeallquestionsconsistentandcleartoall.Onlyeightrespondentsreusedtocompletetheinterviewatertheormalintroduction.

Aterapreliminaryanalysisothesurveydata,ocusgroupdis-cussionswereconductedinsuitablepremisesinMataramandBima.ResearchersromtheUniversityoMataramacilitatedtheorganizeddiscussionsingroupsoapproximatelytenrepresentativesromgovern-mentinstitutions,studentsassociations,non-governmentalorganizations,themedia,andpoliticians.Dataromthetwosurveyswerepresentedasabasisordiscussionandwehadplannedtoveriyreportedpricesandproceduresorgovernmentemploymentandalsotoassessgeneralattitudestothepractices.Afuentinteractionamongocusgrouppar-ticipantsbroughtoutdieringperspectivesbutgenerallyacknowledgedthendingsoncorruptpracticesinemploymentproceduresandnogreatsurprisewasrevealedovertheratesapplied.Thevalidityandreliabilityosurveydataweresupportedbythesediscussions.Inadditiontothesurveysandocusgroupdiscussions,wealsocarriedoutinormaland

unstructuredinterviewswithanumberocivilservantswhowerewill-ingtotalkingreaterdetailaboutirregularpaymentpractices.

Findings and Discussion

Our60respondentsareequallydividedbetweenthetwostudyareas,BimaandMataram.Mostaremales,65percent,andrelativelyyoung,ascanbeseenromTable1.Thereisaclearpredominanceonewlyrecruitedcivilservants,with73.3percentemployedduringthelast

threeyears(2002–2004).Forthemajority,thecurrentpositionistherstCivilServiceemployment.Respondentsgenerallyhaveahighleveloeducation;58.3percenthavetheminimumoaBachelor’sdegreeromauniversity.Thelargestgrouporespondentsisromtheocesothelocalgovernments, pm(21.7percent),undertheauthorityothedistrictheads(w koorbp ).Othersaredividedamongvariousdepartments,includingtwoocesthatareormallystillunderthecentralgovernmentauthorities,namely,thestatisticsbureau(BadanPusatStastik,BPS)andthedepartmentoreligion(DepartemenAgama).

DescriptivestatisticsaredepictedinTable1.Allthe60respondentsadmitthattheyhadtopaytoobtaintheir

irstCivilServiceposition.Theamountspaidoremploymentarehigh,especiallywhenseeninrelationtotheleveloormalsalaries.




Theoverallreportedaveragepaymenttoobtainemploymentoverthelastthreeyearsis27.4millionrupiah.Forthepurposeocomparison,themonthlynetinitialsalaryoagovernmentoicerisbelow1millionrupiahperyear,dependentontheeducationallevel.Theamountneededtobuyapositionisthusapproximatelytwo-and-halyears’ullsalaryandinvestmentsareinmostcasesbasedonloansromamilyandcloseriends.

There are noteworthy similarities and dierences in paymentor positions depending on the site, gender, year o employment,

Table1Descriptive Statistics

Vb nmb () %

Studyarea Bima Mataram

Age 20–29 30–39 =>40

Gender Female Male

Yearocurrentemployment 1995–98 1999–2001 2002–2004

Education Seniorhighschool Diploma Bachelororhigherdegree

Employmentsector Health Statistics(BPS) Agriculture Education Localgovernment( pm) Religion Publicworks

3030

2528

7

2139

41244

111435

62

109

1311

9

50.050.0

41.746.711.7

35.065.0

6.720.073.3

18.323.358.3

10.03.3

16.715.021.718.315.0



222 S Kss M rm

educationallevel,andemploymentsector.Firstly,thecostoobtainingagovernmentpositionisremarkablyequalatthetwostudysites,asdepicted in Table 2. However, the standard deviation is generally

higherinBimathaninMataram.Thisindicatesthatthepaymentorapositioninsomecasesmaydependonamilyrelationsorriendship.Accordingtoapoliticianinaocusgroupdiscussion,moneyisnotthe only thing that matters or gaining government employment.Recruitment procedures are also aected by nepotism. “Our cultureislikeinaamily…everythingcanbehandledpersonally…soit’sapityorthosewhodon’thavecloseriends”.

Thereisadierencebetweenmalesandemalesasregardspaymentorpositions.Malespayanaverageo25.3millionrupiahwhileemalespay22.6millionrupiahoraposition.Thediscrepancymightbeexplainedbydierencesinleveloeducation,whichishigheramongthemales.However,acloserlookatthedatarevealsthatemaleswithlowereducationallevels(highschool)onaveragehavetopaymoreorapositionthantheirmalecolleagueswithacomparableleveloeducation(means=20.6millionrupiahand18.6millionrupiah,respectively).Meanwhile,menwithauniversitydegreeattheBachelor’slevelorhigherpayanaverageo3.4millionrupiahmorethanthewomenor

aposition.Focusgroupdiscussionsindicatethatmenmaybemoreaggressiveinsearchingorstructuralpositionsandalsohaveahighersocialobligationtondanincometosupporttheiramilies.

AsdepictedinTable3,thepricespaidorgovernmentpositionswere stable in the years 1998–2001, in spite o the high infationespeciallyin1998.Adramaticincreaseoccuredinratespaidin2002,as can be seen in Table 3. This was ater the implementation o thedecentralization reorms. Even when adjusted or increases in theconsumer price index, there are signicant price hikes recently. We

alsoseethatthereisatendencyoincreasingdierencesinratespaid,orinstance,asindicatedbyastandarddeviationashighas10.0in2004. Increasing rates and price variances are interpreted as resultsogreaterdiscretionarypoweramongleadingdistrictbureaucratsater

Table2Average Payments in the Two Study Areas

(Million rupiah)

Sy a M nmb () S dvo

Bima 24.1 30 10.2Mataram 24.7 30 8.6




Table3Payment by Year of Employment

(Million rupiah)

Y o C empoym

M

nmb ()

S dvo

ifor (%)*

1995 5.0 1 n.a.

1997 10.0 1 n.a. 20.71998 17.5 2 3.5 58.01999 17.5 2 3.5 2.02000 17.0 5 4.5 9.5

2001 17.5 5 6.6 12.62002 26.5 10 6.0 10.02003 25.7 21 8.7 5.12004 30.8 13 10.0 6.4

n.a.:Notapplicable;nostandarddeviationwithonlyonecase.*SourceS:BadanPusatStatistik1999–2004(http://www.bps.go.id);InternationalMonetaryFund1997–98(http://www.im.org).

Figure2Increasing Payment after Decentralization

16.6

27.4

0

5

10

15

20

25

30

1995–2001 2002–2004



224 S Kss M rm

decentralization reorms. The numbers o applicants and new CivilServicerecruitsorthe years2001–2004 are depictedin Appendix1(beore the “ReerencesCited”) or the two districts.

Theincreaseintheaveragepaymentorpositionsinthepre-andpost-decentralizationperiodsisillustratedinFigure2.

Paymentsorapositiondiersignicantlyamonglevelsoeduca-

tion. The overall average price or a position requiring a Bachelor’sdegreeis26.4millionrupiah,comparedwith19.3millionrupiahorpositionsobtainedbycandidateswithonlyaseniorhighschooleduca-tion.ThedierencesamongeducationlevelsareillustratedinFigure3.

Pricesalsovarysignicantlyamongsectorsogovernment.Thecheapestpositionsarethoseinthehealthdepartments,whileapplicantstotheministryoreligionandopublicworkshavetopayalmostdoubletheaverageprices.InTable6,themeanratesoentriesintopositionsaredepicted,speciedorthesevengovernmentsectorsincludedin

ourstudy.All health department ocers in our survey have a diploma

education,whilethoseintheagriculturalsectorholdaBachelor’sorhigheruniversitydegree.Furthermore,respondentsinthedepartments

0

5

10

15

20

25

30

19.3

23.4

26.4

Senior high Diploma Bachelor’s

Figure3Differences in Payment for Positions among Major Education Groups




Table6Payment by Sector

(Million rupiah)

Oc/dpm/ds M nmb () S dvo

Health 17.0 6 4.4721Statistics 20.0 2 0.0000Agriculture 20.5 10 10.916Education 23.6 9 9.1097Localgovernment( pm) 23.7 13 9.2767Religion 29.6 11 8.5013Publicworks 30.0 9 7.9057

o education and religion have higher levels o education than theaverage participants inthe survey. Dierencesinlevelo education,and thereby ormal salaries alone, do not explain the variances inpaymentorpositionsamongvariousgovernmentsectors.Thevariancesclearlyrefectunequalopportunitiesorinormalincome-generationinthedierentdepartments.Thepublicworksdepartmentchannelshuge

fowsomoneyorconstructionandinrastructuredevelopment,andthe department o religion has the sole responsibility or issuing anumber ocerticatesas well asor hajj-related activities.

Asregardsormsopaymentorpositions,surveyrespondentsorparticipantsinocusgroupdiscussionsdonotwishtorevealtowhomthe payment is made. As stated by one participant in a ocus groupdiscussion in Mataram, “it is better to cut my head i you want toknowmoreaboutthat”.However,mostinormantsindicatethatthereare brokers with close connections to the highest local government

ocials. The majority o respondents report that they paid by banktransertoaknowninsideocerviaamiddleman.

Regarding payment or a promotion, ew respondents havewillingly contributed detailed inormation or that part o thequestionnaire “Procedures are too complicated” as stated by one.Comments clearly indicate, however, that promotions are otendependentmoreonachievementsinirregularincomegenerationthanin proessional competence and the accomplishment o legal workandormalduties.Asexpressedbyoneparticipantinaocusgroup

discussion:“Ihavenotbeenpromotedbecauseiyouhavenomoney,thingsarenotrunningsmoothly”(k s k ms).

The survey instrument does not touch on irregular incomeopportunities. However, in-depth interviews and ocus group



226 S Kss M rm

discussionshavepointedtoavailablealternatives.A“mark-up”strategyin the daily activities at work is widely used to infate the incomeo some civil servants. This is an example o how such a strategy

may work: In the procurement o stationary items, photocopying,and so orth, the invoice presented or reimbursement are typicallyjacked up by some 30 to 40 per cent o the real value. Similarly,or employees’ travels, ake invoices and receipts (or example, airticketsand hotelbills)are regularly made.Dependingonthetypeoservicesoered,civilservantsmaydemand“speedmoney”ovaryingamounts.Chargeableservicesincludetaxavoidance,healthtreatment,school enrollment, clearance rom police inspections, issuance oweddingcerticates,andsoorth.Aastmedicalcheck-upcouldcost50,000 rupiah, or instance, and irregular admission ees to schoolsotenreach1millionrupiah.Moneyparking(orinterestrategains)andsaleopositionsrepresentothersourcesoirregularincomeorcivil servants. There is general consensus among respondents thatthevariousormsoirregularpaymentorpettycorruptioncontributeto higher costs and longer waiting time or the provision o regularpublicservices.

The larger amounts o irregular payment are normally ound

in contracts between local governments and suppliers o goods andservices.Atypicalmarkupiscurrentlybetween30and50percent,which is money taken by public ocers in charge and distributedamongocemembers,politicians,andotherinsidersaccordingtorankand bargaining power. A localized market or government contractsisbeingdeveloped,whichlimitscompetitionamongsuppliers.Civilservants and private businesses collude to decide on the allocationo contracts or construction projects or the supply o products andservices to local short-listed companies. This leads to markets with

oligopolies, where there is no real competition and where contractsaredividedamongsuppliersaccordingtoarotatingsystem(s).Incomesorlocalgovernmentocersarealsocreatedromcompanies’paymenttogetshort-listed.

Ahighpercentage(76.7percent)ndthatthesystemopaymentor government positions is unair, unethical, and that it should bechanged. Specic reerence is made by some to the strict Islamicrules that prohibit the giving and receiving o bribes. A minorityo 13.3 per cent report that they nd the system to be customary

and thereore also acceptable. The remaining 10 per cent did notwant to comment on these issues. Among those who accept thecurrentsystem,atypicalremarkisthat“thereisnowayout”.More

bureaucratic procedures in the recruitment process would only add




to the complexity o gatekeepers. The majority, however, regard thelackotransparencyinthebureaucracyasthemainproblem.Whenaskedortheiropiniononalternativerecruitmentprocedures,typical

comments are “must be transparent and merit-based”, “must beopen, transparent, and well supervised”, and “tight supervision andstrong law enorcement”. Many also emphasize the need or changeinindividualmorale and institutionalcultureand somepointto theneed or independent and proessional non-government institutionsintheselectionocandidates.

Thereisgenerallylittletrustinpoliticianswithregardtosolutionstotheproblemothesaleoocepositions.Accordingtoaparticipantin the ocus group discussion in Bima, local parliament (DPRD)members “work in the political milieu, so it is hard to expect thatthey can represent the true aspirations o the people”. Few put any

blameonindividualapplicantswhopaytoobtainaposition—thatissimplytheonlywaytogetin.Asstatedbyaemaleactivistoanon-governmentalorganizationandormercivilservantapplicantwhoparticipatedinaocusgroupdiscussion:“Iwanttogetmarriedandeedmychildren,soIhadtotry.…Thestatedrecruitmentprocessis only a ormality. … In reality, it’s just like a sh market where

manypeoplecompetetobuycertainshes”.

Conclusions

Inthisarticle,ocushasbeensetonthemarketorlocalgovernmentpositions in Indonesia. Our main objective has been to uncover theprocessesosellingandbuyingCivilServicepositions.Wehavealsocollected inormation on available opportunities to earn additionalincomeromwhichamajorpartotheirinvestmentgoneintoseeking

positions may be recovered. Doing quantitative research on corruptpracticesisobviouslycomplicatedandthestudyhascertainlimitations.First and oremost, in our survey we were unable to get a randomselectionocivilservantstointerview,andbecauseothisourndingscannotbegeneralizedorthewholeoIndonesia.However,byuseoocusgroupdiscussionsandadditionalin-depthinterviews,thevalidityand reliabilityothe survey datainthe selectedprovincehavebeenchecked,andourndingsseemtohavebeensupported.

Formal positions are generally in high demand in Indonesia,

andonly1to5percentoapplicantsorCivilServicepositionsareacceptedasnewrecruitsinthetwostudyareasoBimaandMataram.Based on the data o our survey o the two districts, we can clearlyconcludethatthereisamarketorCivilServicepositionsinIndonesia



228 S Kss M rm

and that the cost o securing a position is high compared with thestated salary the position oers. Our ndings also show a deniteriseintheratespaidorpositionsaterthedecentralizationreorms

startedin2001.Costsoobtainingpositionsvarysubstantiallyamongsectorsordepartmentsandrefectthevalueoalternativeandirregularsources o earnings. In 2004, people were willing to pay more than30million rupiah (US$3,200) or anaverage startingpositionwith aormal salary o around one million rupiah. The positions that costhigherarethoseinthedepartmentsoreligionandpublicworksandthosethat require a university education. Willingness topay ishighamongpotential candidates but the vast majorityoour respondentsnd the system to be unethical and unair. Those who have paidand obtained a position blame the system and not the individualapplicants,and they think that there should be greater transparencytocleanuptheemploymentprocedures.

Thesellingopublicocesisundoubtedlyacaseocorruption.Corruptpracticesaregenerallyasymptomotheailureotransparencyand accountability in a society or an institution. In Indonesia, theCivilServiceisgenerallycharacterizedbynon-transparency.Aculturehas developed through the decades,whichallows transactions tobe

hiddenandwhichgivesmoralsupportorrent-seekingandprioritiestoprivategainsbeorepublicones.Inspiteotherecentdemocratizationreorms,thereisalackopoliticalwilltosolvetheproblem,however.Itseemsthatthenewlocalpoliticaleliteshavecolludedwithcorrupt

bureaucratsinuncleanandunethicalpractices.Theactthat60civilservantshavevolunteeredtotellhowtheir

positionshavebeenbought,andthattheydetesttheunethicalcurrentrecruitment procedures gives reasons or hope. In addition to themainrecommendationsromtheintervieweesinthisstudy,ocusing

ontransparencyandproessionalismintheselectionoCivilServicecandidates,wewilladdtwopolicyrecommendations.

Firstly,thereisaneedtoreworkthelegalrameworktoenhancetransparency.Thoseinpowergenerallyhavenorealincentivestoghtcorruption because they prot rom the status quo (Sherlock 2002).However, with the rapid development o politics and civil societyawarenessinIndonesianowadays,thereareopportunitiesorpoliticalmanoeuvring to amend one law and approve another. The currentanti-corruption law, putting equalguiltonthe briber and the bribed

(Undang-Undangno.20,2001,Pasal5)shouldbeamendedtoreducethe ear to unveil corrupt practices by those who had paid in pettycorruptioncases.Whistleblowingshouldbeencouraged.Inaddition,theproposedFreedomoInormationAct,whichiscurrentlystalled




intheHouseoRepresentatives,shouldbepassedtogiveeveryonetherighttoinsightandinormation.InthecaseoCivilServicerecruitmentand promotion, selection criteria or each specic position should

be clearly spelt out, and a list o the applicants should be madegenerallyavailable,includingsuchinormationastheapplicant’snameandage,placeoresidence,educationalbackground,currentposition,andcareertrack.

Secondly,stepsshouldbetakentocleanuptheCivilServiceitselandreducetheincentivetosellpositions.Thesenseoproessionalism,eiciency, and hard work seems to be missing in the currentsystem. The Pjb (Civil Service Introductory Course) needs to bereworked.Stepscouldbetakentobringinrulesandproceduresotenassociatedwiththeprivatesector.Thereshouldbe strongerdemandsto meet targets, and individual incentives should be perormance-oriented. It should be possible to re employees who choose toremaininecientorareinvolvedinillegalactivities.Themonopolypowerocertaininstitutionscouldalsobecurbed.Experiencesromimprovedbureaucraciesinotherdevelopingcountries(Grindle1997)indicate that high expectations about employee perormance and ashared commitment to meet targets were crucial elements o their

organizationalculture.PrivatizationopublicservicesitselisprobablynotthebestsolutionorIndonesiaasmarketailuresaresubstantialand oligopolic orms o collaboration are common. Hence today itmaycostevenmoretogetapositioninthecorporatebusinesssectorthanintheCivilService.

Appendix1Civil Service Recruitment in Bima and Mataram, 2001–2004

rgo/Mcpy

Kbp Bm Ko Mm

Y

no. o appcs*

accp

%accp

no. o appcs

accp

%accp

2001 2,000 50 2.5 8,136 115 1.42002 4,000 166 4.2 5,821 173 3.02003 6,000 150 2.5 3,154 100 3.2

2004 8,000 283 3.5 4,186 211 5.0

*Norecordonexactnumber.Figuresinthiscolumnareestimatesgivenbyanoceratthehumanresource/personnelsection(bg kpgw)PemdaBima.SourceS:KantorSekdakabupatenBimadankotaMataram2005,2006.



230 S Kss M rm

NOTES

*ThetwoothercontributingauthorsareAnwarFachryandHajiBusainiotheCentreorPopulationandDevelopmentStudies,UniversityoMataram,Lombok,Indonesia.

1 Fordetails on purposiveand snowball sampling,see Patton (1990).

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28.2kristiansen market for civil servants

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