THE ROLE OF PERFORMANCE MEASUREMENT SYSTEM IN BUILDING TRUST BETWEEN CENTRAL GOVERNMENT, LOCAL GOVERNMENT AND ITS CONSTITUENTS
THE ROLE OF PERFORMANCE MEASUREMENT SYSTEM IN BUILDING TRUST BETWEEN CENTRAL GOVERNMENT, LOCAL GOVERNMENT AND ITS CONSTITUENTS

Summary/Abstract: The widespread adoption of decentralization throughout the world is based on a common belief that decentralization is considered to have the potential to improve the performance of the public sector and will result in stronger municipalities. However, some argue that the assertion on decentralization’s potential to improve performance may be applicable to the developed countries, but it is not the case in developing countries. Inability centralized planning in promoting equal development and financial difficulty have been quoted as main reasons for decentralization. However, along with the autonomy in planning, resource allocation and implementation comes heavier burden of newly delegated responsibilities. Cost cutting and improving the efficiency of programs became the major concerns for local governments that many of them decided to adopt performance measurement in the hope that it might contribute to the improvement of their financial status. Recent study shows an increasing number of government institutions have reformed their performance measurement system to address the decentralization process. As every approach has its strengths and weaknesses, learning the experience of Indonesian government would provide a valuable lesson on the role of performance measurement system in the decentralization.

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