Policy and Institutional Reform of Indonesian Planning System: Nexus to Metropolitan and Local Planning Effectiveness

Abstract

Since 1999, Indonesia has embarked on fiscal, administrative, and political decentralization simultaneously. With spatial planning no longer a central government domain, decentralization shifted Indonesia toward one of the most decentralized systems of planning governance and policy. Over the following decade, the Indonesian planning system underwent rapid change with the introduction of new planning policies, ranging from plan-making to land use control, forcing all levels of government to adapt. At the same time, decentralization transformed the relationships between central and local governments. Yet little is known about how these changes affect planning effectiveness at the regional and local levels. This paper examines the implications of policy and institutional changes in Indonesia’s tiered planning system and reviews the strength of planning institutions in delivering region-wide comprehensive plans and municipal master plans in relation to rural–urban development. Using Surabaya’s peri-urban area as a case study, it identifies land use changes and corresponding instruments to understand the consequences of transformations in local land use planning and effectiveness. The analysis considers whether decentralized planning can improve compliance with plans by reducing deviations in land use changes. Findings suggest that decentralization in Indonesia still has a long way to go to achieve its stated aims of promoting good governance.