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

Abstract

Indonesia has recently gone through a dramatic process of democratization, decentralization, and privatization. The fight against corruption has been an important element in the restructuring of society, at least as declared. Demands for law reforms to curb the rampant corruption, collusion, and nepotism (KKN) under the Soeharto regime actually represented a major issue in the reformasi movements from 1998 onwards (Renoe 2002). However, corruption still seems to be systemic and systematic (Holloway 2002), and endemic and exploitative (Goodpaster 2002). Decentralization reforms from 2001 had little positive impact (MacIntyre 2003) and tended to reactivate politics and undemocratic practices at local levels. According to Transparency International (2005), Indonesia is still among the most corrupt countries in the world. Large-scale corruption siphons from society into the pockets of the powerful, while petty corruption continues as a part of life where smaller amounts of money are tapped from ordinary citizens into the palms of civil servants if anything is to get done. A culture has developed in the Indonesian society that gives moral support for rent-seeking and priorities to private gains before public ones. Corruption is generally a symptom of the failure of transparency and accountability, the twin prerequisites for good governance, and Indonesia's political system has long traditions in the lack of both. Civil servants are at the core of the problem, being the receivers of kick-backs of large projects, petty bribery, and speed money, and often elevated above insight and control, also after the national democratic reforms. The lack of transparency could possibly be a main reason behind corruption and also explains the limited empirical research on this problem. Permanent employment is generally in short supply in Indonesia. Unemployment and underemployment rates may be as high as 40 per cent of the workforce (Dhanani 2004; Jakarta Post, 17 December 2005). So to secure an earning position with stability and reasonable income opportunities, people are willing to make huge investments. In this research, focus is set on the market for local government positions in Indonesia. We present a survey made among civil servants employed in two districts within one of Indonesia's 34 provinces, Nusa Tenggara Barat (NTB). Hard facts on amounts paid and payment procedures are presented along with information collected in focus group discussions and anonymous in-depth interviews. Our objective is to unveil the processes of selling and buying Civil Service positions, and possibly also to indicate which are the informal sources of civil servant incomes where investments in positions can be recovered. The article is organized as follows. After this introduction there follows a review of the literature. General theories on corruption that are of relevance for understanding our specific topic are presented. Thereafter we discuss corrupt practices in Indonesia specifically, based on recent literature. Next, we offer an overview of the Indonesian Civil Service, its history, and present status after the decentralization reforms. The methodological approach and study areas are briefly discussed and followed by a presentation of our quantitative and qualitative findings. The article ends with a concluding discussion. Corruption and Civil Service: A Literature Review Corruption in general is definitely not a new phenomenon and neither is it bound to specific regions. For centuries and even millennia, rent-seeking and unproductive entrepreneurship based on the monopoly of power were common at various locations, as in ancient Rome, Hellenistic Egypt, and medieval China (Baumol 1990). Even in developed countries today, unclean business practices are frequent and corrupt institutions are numerous. France and Italy are examples of business contexts in Western Europe where scandals of huge corruption cases have been unveiled recently. …