Tuesday, April 10, 2012

Reflections on the Indonesian Bureaucracy (Part II)

Cartoon from here.  
In the last post I discussed some aspects of the Indonesian civil service, which has been much maligned in the media over the past couple of years.  I briefly described the post-independence history of the bureaucracy here as well as its role in politics.  I also talked a bit about why having a large and inefficient bureaucracy is bad.  In the post I'm going to continue my discussion of the Indonesian civil service, focusing on an alarming trend that is especially evident where I live: buying and selling jobs with the government.  My district is somewhat famous, at least regionally, because the people here are willing to pay more to become civil servants than in other places.

The Market for Civil Servant Positions

In the previous post I pointed out how lots of people in my district want to get jobs with the government.  Although I used to have a reflexively bad reaction to this, my thinking on the matter has changed since I've been here.  I think the desire to work for the government is a function of the range of possibilities people perceive for themselves or their children.  I mentioned that this area is primarily agricultural, and although the area is highly commercialized now it wasn't so long ago that people here were basically subsistence farmers.  Thus my defense of the "PNS dream" (1) revolves around the notion that becoming a civil servant is the most familiar, the most feasible way out of agriculture for people here.  However, there is a dark side to this.  Because so many people want to become civil servants, and because the positions are limited, there has emerged a market for the civil servant positions.  I base most of the following discussion on word-of-mouth information, bits and fragments I've gathered from people in conversations and chats since I've been here, because it is difficult to collect hard data on things like this.  I've only recently been making more directed inquiries into this issue with an eye towards future research, so take everything you read with a grain of salt.

Cartoon from here.

Though this is a phenomenon that is found throughout Indonesia, the people of my district are said to be more willing to pay to become civil servants, and thus they drive the price up and distort the market.  I've heard a number of explanations for this; some folks say that there is a great deal of prestige associated with being a PNS, but also it is said that people of this district are relatively wealthier than other districts stemming from the traditionally high agricultural productivity of the district.  Based on my own observations the people in this district do seem to be relatively better off than some other places.

A little Betawi.  Cartoon from here.
There is variation based on the position (more on this in a moment), but the price to become a civil servant here is said to be as high as 150,000,000 rupiah (approximately US$ 16,500).  To put this in perspective, the highest starting salary for civil servants in Indonesia is approximately 1,500,000 rupiah per month (+/- US$165).  This means that it would take approximately 100 months, or more than 8 years just to recoup the initial investment from salary alone.  The price associated with becoming a civil servant varies according to a couple of factors.  The first is the level of education for the applicant.  If you have a bachelors degree and you become a civil servant your starting salary will be significantly higher than that of an applicant that only has a high-school diploma or associate's degree.  The price also depends on what office you want to enter.  For example, a job at the public works bureau costs significantly more than a job at the health office.

I asked a number of informants where the money goes, and most of them describe a pyramid structure in which the money is distributed to several different recipients.  Payment is never made directly to a higher-level official in the government; rather candidates for public office (Calon Pegawai Negeri Sipil, CPNS) negotiate with a middleman or broker, who later disperses payments to senior officials in the office the CPNS wants to enter, as well as officials within the government office responsible for administering the civil service as a whole.  Informants indicate that elected officials, including the district headman and members of the district assembly, also get a piece.

Cartoon from here.
Why are people willing to pay so much?  So far I've heard a couple of answers to this question.  The first is that a lot of people that pay get money from their parents, who are willing to dish out this money to ensure a good future for their children.  This makes some sense; after all wealthy parents in the US spend hundreds of thousands of dollars to put their kids through the best universities, and so I'm sure there's some truth to it.  The other common explanation is that people know they will be able to make the money back via corruption, which I'll discuss in the next section.  It's important to remember also that not everyone is willing to pay.  I've had discussions with a number of bright young Indonesians who express disgust at the current state of things here.  Many of them tell me that they once thought of becoming public servants to help improve the country.  At the same time, they wonder why they should have to pay money for a job after paying university tuition and fees for 4-5 years.  Thus it seems that the current system is driving many of the best and brightest away from public service.  As a result, the bureaucracy is overloaded with people with little or no qualifications, which in turn affects policy formation and implementation.  In addition, the whole system seems to undermine the public's trust in the bureaucracy.

It's also important to remember that not all civil servants pay for their positions; some are chosen on the basis of their merits alone.  From what I've seen, these people have to work harder because their colleagues that paid to enter the civil service aren't very productive.  I've heard and read wide ranging estimates as to what percentage of civil servants are actually "capable"; one former Home Affairs minister estimated that approximately 60% of Indonesia's civil service was "unproductive", while the chart I included in the last post indicated that only 3,352 of a total 67,058 (5%) civil servants in the province of North Sulawesi are "competent".  Estimates here put the number of folks that pay for their jobs as high as 90%.  I imagine there is a lot of variation in region and department.

The Upshot: Institutionalized Corruption

Like I said there certainly are cases of rich parents spending lavishly to ensure a stable future for their children, but most people I talk to indicate that willingness to pay stems from the fact that people know they will be able to make their money back through graft.  That's why the price to become a PNS varies from department to department.  Indonesians describe different positions and government offices as being "wet" (tempat basah) or "dry" (tempat kering) depending on the availability of opportunities to enrich oneself through corruption.  For example, the public works department gets a lot of money for infrastructure development, and so there are many opportunities to skim money off the top.  This happens in a number of ways; bureaucrats will inflate the purchase price of everything from staples to bulldozers in the annual budget, pocketing the difference.  They can also get bribes for ensuring that a contract goes to a particular company, which in turn skimps on building materials to make up for the bribe  Another form of corruption is pungli¸ which refers to informal taxes and payments for services.  Another common tactic is to take phantom business trips or submit phony receipts for expenses, which are later reimbursed.

Graphic from Padang Ekspres.
The result is a bureaucracy thoroughly infected with graft.  One recent government study found that 50% of young civil servants had been involved in corruption, mostly assumed to stem from fictitious projects and bribes.  Sensational new stories of corrupt officials embezzling millions of dollars from public coffers seem to emerge on a weekly basis, and most Indonesians feel that corruption is the biggest problem the country faces.  President Susilo Bambang Yudhoyono has attempted to address the problem through the creation of the Corruption Eradication Commission, but their resources are limited and it's said the cases they can get to are merely the tip of the iceberg.  There's also been a backlash against the Commission, which has very broad authority and has been accused of abusing its power.  Most people seem to feel that corruption is such a part of the system that it's impossible to do anything about it.  And although I've had countless discussions on the issue, I still can't understand why people tolerate it.

A Question of Public Morality?

Graphic from here.  
Based on all of this a question occurred to me this past week.  Before I share the question, though, I'd like to propose a few assumptions (2):

1.  People know they have to pay a lot of money to become a civil servant
2.  They also know that there will be chances to get the money back through corrupt practices
3.  By definition they know that corrupt practices are wrong.  They also know that corruption is one of the main problems facing Indonesia today.
4.  Despite this knowledge there are still people lining up to become civil servant in Indonesia.

Based on these assumptions, what kind of statement can we make about public morality here?  I have heard many people say that the system makes people corrupt.  However, if people are willingly entering the system with the knowledge that they will most likely be forced to take part in corrupt activities, can it really be said that the system makes people corrupt?  It seems that they have accepted the rules of the game already; that they have already made their "Faustian bargain".  This would indicate that people have a fundamentally different perception of what the government is for, and that what I've been referring to as "corruption" might be seen by local folks as "fringe benefits".

There are people here that are engaged in a struggle against corruption.  At the national level there are some very strong non-government organizations working hard to monitor corruption and increase accountability in the public sector.  There are some local organizations at work in this district as well.  They investigate corrupt practices and make reports to the Corruption Eradication Commission.  They are vocal in the media and hold public demonstrations.  Unfortunately, it seems to me that most of the time their objections to the corruption inherent in the system seem to stem from resentment that they aren't able to take part in the benefits of the graft.  I hate to say this, and I really hope that I'm incorrect.

My sense is that these facts mean the problem is not merely structural; it's not a question of merely establishing systems of accountability (though this task has proven quite daunting).  Rather it's a question of redefining the role of the public sector in soceity as well as people's perceptions towards the bureaucracy.


(1) "PNS" is short for Pegawai Negeri Sipil, the Indonesian term for civil servant.

(2)  I am at this point referring to the district where I live.

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