From Policy to Practice: How Decentralization Reshapes Village Political Institutions in Indonesia

Abstract

Indonesia's decentralization reforms—anchored in Law No. 22/1999, Law No. 32/2004, and the landmark Village Law No. 6/2014—represent one of the most ambitious local-governance transformations in Southeast Asia. Yet a persistent gap exists between the aspirations inscribed in these policies and their lived realities in village political institutions. This qualitative study examines how decentralization policies reshape village political institutions across three dimensions: structural transformation of village governance bodies, redistribution of authority between central and local government, and participatory practices within village deliberation forums. Drawing on in-depth interviews, focus-group discussions, and documentary analysis across twelve purposively selected villages in Java and Sulawesi, the study reveals that while formal institutional structures have been significantly redesigned, substantive autonomy remains constrained by regulatory centralism, fiscal dependency, and weak local capacity. Village Representative Councils (BPD) function more as rubber-stamp bodies than genuine deliberative organs. Village funds (Dana Desa) have expanded development budgets but simultaneously introduced new accountability burdens that reproduce central oversight. The findings advance a "constrained institutionalism" framework that explains how macro-level policy innovations are filtered, diluted, and locally negotiated before taking institutional form.