ABSTRACT
The Governance and Fiscal Balance Laws,1 enacted by the Indonesian Parliament in May 1999 aim to decentralize both political and economic power away from the central government after decades of highly centralized and autocratic rule. The new legislation recognizes political reality – Indonesians across the country want greater involvement in the management of their day-to-day affairs. In particular, the natural resource-rich regions want a larger share of the resource pie – which was seen as being preempted and often misused by the elite in Jakarta. Thus, the political pressures for decentralization reflect in part the reaction to the demise of an authoritarian regime.
