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The Indonesian government recently intensified its push to make the public service more entrepreneurial, arguing public servants need to embrace innovation to help grow the country’s economy.

But these calls have prompted strong reactions from Indonesia’s civil servants. Many see these appeals as overlooking the most important reform – the urgent need to offer civil servants a decent living wage.

Public servant incomes are neglected

The connection between low incomes and corruption is frequently discussed in anti-corruption literature. For instance, previous studies have shown how providing low salaries to civil servants helped Soeharto’s New Order regime maintain power. Practices such as “thank you money”, illegal fees (pungli), embezzlement, and the like, became widespread as civil servants felt pressure to supplement their meagre wages. This enmeshed them in the wider system of corruption underpinning the regime.

Field research I carried out in 2014 found that corruption motivated by material welfare concerns – especially at the grassroots level – was still widespread in Indonesia. Further research I conducted in 2021 came to a similar conclusion – that incomes remain inadequate and this is a problem that needs to be taken more seriously by the Indonesian government.

However, there is also another school of thought within anti-corruption literature that explains corruption as a normative process of moral failure. This perspective has been criticised for being too reductionist – it fails to dismantle the many complex structural dimensions of corruption and it overlooks the personal experiences of grassroots civil servants.

Public policies focused on eradicating corruption have tended to uphold this moralistic explanation of corruption, which manifests through a hollow emphasis on values like “integrity” and “accountability”. This is then translated into tokenistic managerial initiatives designed to uphold these values, like integrity pacts, standardised documents, awards and reports that are detached from the everyday concerns of public servants.

Experiences of Indonesian reformers

These two schools of thought – the material and managerial perspectives – can also be observed in modern attempts to reform the Indonesian bureaucracy.

I compared the experiences of 27 civil servants from four public agencies undertaking bureaucratic reforms. I found that two distinct approaches guide attempts to make Indonesian bureaucracies more service‑oriented and free from corruption.

The first approach reflects the managerial perspective and seeks to motivate civil servants through financial incentives. This approach has been emphasised by the Ministry of Finance. Their experience of reform has been well documented in a publicly available report, which includes detailed employee testimonials. The report found that corruption and low productivity would be hard to eradicate if employee wages remained inadequate.

As a solution, the Ministry of Finance introduced performance bonuses. Even though basic salaries remain at the same level as before – for example, the basic monthly salary for civil servants just starting their career is Rp. 2,579,400 (approximately AUD $260) – Ministry of Finance employees can now receive additional income from performance bonuses, up to three times the base salary.

But the Ministry of Finance’s reforms have not been adopted by other agencies. The Ministry of State Apparatus Utilisation and Bureaucratic Reform is implementing eight focus areas for bureaucratic reform, but progress on improving civil servant incomes has been slow. This slow progress has been justified by unfavourable economic conditions.

This means staff at the Ministry of Finance now have earning potential well beyond civil servants at other ministries and agencies. The implementation of a single salary pay scale – to better harmonise salaries and bonuses across the civil service – has stagnated since 2015. This income inequality between government agencies is becoming increasingly contentious, further demotivating employees. Civil servants are now openly expressing their disappointment – for example, through the “sultan versus the peasants” analogy which suggests the Ministry of Finance is the sultan and other agencies are the peasants.

The second approach seeks to reform the civil service by building managerial capacity – it is implemented through performance indicators, support systems, training and other capacity building initiatives.

This approach was very evident in one anonymous organisation I examined. Efforts to implement standardised managerial procedures and performance indicators have become tokenistic – filling out forms, creating new standard operating procedures, holding team celebrations, and even creating mascots.

This narrow focus on building managerial capacity is currently the prevailing approach and it has been mainstreamed throughout government human resources teams. These tokenistic initiatives – which have become a hallmark of the managerial approach – are unlikely to create the culture of excellence that Indonesia’s civil service needs. This approach needs to be reconsidered because it is not participatory, and it fails to address the underlying concerns of civil servants. While these managerial considerations are capable of driving incremental improvements, managerial practices also need to be accompanied by material incentives.

Future reforms need to be incentivised

Bureaucratic reform in Indonesia has been ongoing for more than two decades but the results are far from optimal. Instead of making empty calls for public servants to be more entrepreneurial (the managerial perspective), the Indonesian government also needs to start thinking about how it can better incentivise the behaviours it wants to see (the material perspective).

When designing and implementing incentives to reform the civil service, the Indonesian government needs to make sure these incentives are fair and sustainable. The inequitlible application of performance bonuses is prompting some public servants to mentally disengage from work – known as quiet quitting – because they feel they are being exploited. If performance incentives are not applied equitably across the civil service, the performance gains from those agencies with access to substantial performance bonuses, could easily be offset by decreased performance, due to low morale, at agencies without access to incentives.

An earlier Indonesian language version of this article was published on The Conversation Indonesia on 31 May.

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