Decentralization of Public Services: Mutualism Symbiosis between the State, Market and NGO

Abstract

In developing countries like Indonesia, people's welfare is highly dependent on their abilities to gain access and the abilities to use public services. Decentralization is a notion that tries to challenge the weaknesses that exist in the discourse of centralization. Centralization of all public affairs only to the state, with the ideal jargon of Welfare State, in reality is only rhetoric. As a source of public services, the role of the state is very complementary with the market mechanism (private) and non-government organizations. These three sources of public services are equally necessary in the process of socioeconomic transformation of society. Each should work complementarily in providing services to the public at large. The main balance for providing power to market mechanisms in the provision and distribution of community needs is due to its highly efficient working mechanism. The forces within the market work are very efficient because they are designed by profit. Only those who can work efficiently will be able to enjoy the profit. The mechanism of market work determined by price is very different from the mechanism of bureaucratic work because the bureaucracy works based on authority and monopoly; therefore the bureaucratic work mechanism tends to be inefficient. However, not all the needs of society can be provided by the market efficiently. The absence of market mechanisms is economically inefficient and socially unacceptable as a sub-service of public (economic and social market failures). The supply of public goods and social goods market mechanisms often does not work efficiently, because the price mechanisms cannot work properly (due to externalities or because the requirements required for the operation of market mechanisms are not met). In such a situation, the presence of a government bureaucracy or a non-governmental organization is required as an alternative provider of public services.