Published at : 19 Jul 2021
Volume : IJtech
Vol 12, No 3 (2021)
DOI : https://doi.org/10.14716/ijtech.v12i3.4345
Miming Miharja | School of Architecture, Planning, and Policy Development, Institut Teknologi Bandung, Jl. Ganesha 10 Bandung 40132, Indonesia |
Johan Woltjer | Faculty of Spatial Sciences, University of Groningen, Landleven 1, 9747 AD Groningen, The Netherlands |
Sheryta Arsallia | School of Architecture, Planning, and Policy Development, Institut Teknologi Bandung, Jl. Ganesha 10 Bandung 40132, Indonesia |
Azman Hafid Diab | School of Architecture, Planning, and Policy Development - Institut Teknologi Bandung |
Roughly 2 decades ago, the Indonesian
Decentralization Act 22/1999 (revised by Act 32/2004 and Act 23/2014) initiated
a remarkable shift in the governance system for Indonesia: from a strongly
hierarchical system to a further decentralized one. The shift has created
fragmented governance for metropolitan transportation planning. Consequently,
Indonesian metropolitan areas have experienced increasing transaction costs in
policy coordination and difficulties in supplying sufficient transport
infrastructures. Earlier research has pointed to a range of possible solutions,
including strengthening local government capacity. This paper sets out to identify current perceptions regarding
transaction costs in Indonesian metropolitan transportation planning. To what
extent do high transaction costs create fragmented planning? Have planning
actors’ perceptions changed over time? Using Q-methodology and in-depth
interviews, the research identifies significant changes in actors’ perceptions,
mainly towards the need to establish supra-regional
institutions and regional development
priorities. The findings are critical for institutional reformulation to
support comprehensive transportation planning at the metropolitan level.
Decentralization; Metropolitan transportation planning; Transaction costs
A decentralized governance system has been
implemented in Indonesia since 1999 (following the Decentralization Act
22/1999, revised by Act 32/2004 and Act 23/2014). These legislative changes
have affected the Indonesian governance system, which was initially highly
hierarchical, to become much less hierarchical (Seymour
and Turner, 2002).
Under Decentralization Act, the central government, to a great extent, has lost
much of its power, while local governments wield greater authority in managing
their area. A typical consequence of decentralization is that, while it
encourages local government’s autonomous decision-making, it also tends to
motivate them to solely focus on their respective territories (Firman, 2009). The consequence of this situation to planning fragmentation is quite predictable; local governments might easily neglect cross-jurisdictional
development issues and tend to focus on their inward-looking programs in
response to their inhabitants demands (Lowery, 2000).
A
metropolitan area refers to an extensive region where urban functions and
activities across the area are interconnected. For transportation, in particular,
metropolitan problmes such as
congestion, pollution, and economic loss are directly related to thesuccess or failure of efficient transport
service provision, whose planning issues would go beyond the boundaries of one
local government. Fragmented planning by local governments can easily result in
an unbalance between transport demand and supply, which has been a fundamental
cause of severe metropolitan transportation issues today (Hirschhorn et al., 2019).
From a
transaction theory point of view, inter-local collaboration is assumed to be
voluntary, while decision-making processes are dominated by cost and benefit
considerations (Alexander, 1992; Feiock, 2005). The transaction-cost theory
is often used to express social costs inherent to activities needed for
coordination in policy-making processes. These activities include exploring
possible projects, trust-building, agreement making, meetings, communication,
setting up partnerships, and dispute resolution (Hijdra
et al., 2014).
The
application of transaction-cost theory has been used to study cooperation
between firms (North, 1990), or, over the last two
decennia, between public organizations as well (Alexander,
2001). A focus on
transaction costs for applied fields such as transport management or urban and
environmental planning is more recent (Hijdra et
al., 2014; Boschet and Rambonilaza, 2018). An emerging debate is about the linkages between
transaction costs and institutional design for planning policies. Different
institutional characteristics, such as those distinctive to transportation
planning, will imply different transaction costs.
This
research has identified a remarkable shift in perceived transaction cost over a
decade for a case of transportation planning coordination in a profoundly decentralized
context (involving the case of Bandung Metropolitan transportation planning
collaboration). An earlier study in 2010 concluded that Indonesian decentralization
had required a much stronger local government authority, which has subsequently
stimulated various manifestations of fragmented metropolitan transportation
planning. A lack of strong, consistent legal assurance and government cultural
constraints were found to be the most influencing elements that created a high
transaction cost at that time. However, dynamic socio-economic and political
processes over a decade have changed the decision-making of planning actors who
most influence perceived transaction cost elements to support or not support
metropolitan transportation planning collaboration. This research reveals that
today’s most influencing transaction cost elements involve the re-establishment
of supra-regional institutions and promoting regional development through
private sector-coordinated participation. The research suggests that giving
back authority at an acceptable level to supra-regional institutions would
reduce the value of transaction costs. However, while practicing its greater
authority to promote a stronger metropolitan transportation planning
coordination, this supra-regional institution should focus on regional economic
developments by involving the private sector in well-coordinated engagement.
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