Assessing the Transformative Potential of Extractive Sector Transparency Initiatives: Evidence from Local Oil Revenue Management in Indonesia

Abstract

Transparency initiatives are frequently proposed to enhance citizen participation in natural resource management and ensure that resource revenue spending meets its economic and social goals. Many transparency initiatives, however, have failed in achieving their goals. This article develops an analytical framework emphasizing information disclosure, citizen action, and state response in making transparency initiatives effective in promoting change. We portray these three dimensions in the transparency cube to illustrate their simultaneous roles and the different aspects of these dimensions. The article applies the framework to analyse a subnational revenue transparency initiative designed and implemented by the oil-rich Bojonegoro District of Indonesia. We find that the initiative’s strengths were its requirements to disclose information related to the petroleum sector and its establishment of avenues for engagement. The information, however, did not address the public’s needs and preferred ways of receiving information and engaging with their leader. Consequently, citizens did not actively seek to express their concerns about oil revenue management. The article concludes that transparency initiatives need to include context-specific measures to disclose relevant and actionable information and promote active citizenry and consider local political dynamics to sustain government responsiveness as part of its design.