Munich Personal RePEc Archive

Analysing decentralisation and corruption in Indonesia: a fraud triangle approach

Prasetyono, Pipin (2017): Analysing decentralisation and corruption in Indonesia: a fraud triangle approach.

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Abstract

Implementation of a decentralisation system in 2001 has brought a fundamental change in institutional arrangements between central and local government in Indonesia. Despite its success story to foster local development and economic growth in Indonesia, decentralisation has also been regarded as one of the responsible factors in the growing number of corruption cases in local areas. This paper attempts to systematically examine the rising corruption phenomena at local level in Indonesia’s decentralisation system from the perspective of fraud triangle which are perpetrators’ non-shareable pressure, perceived opportunity and rationalisation to engage in corrupt activities. This paper argues that decentralisation systematically shapes pressure and creates opportunity for the emergence of corruption in Indonesia, while growing corruption cases and a corrupt justice system become two strong rationalisation factors towards corrupt behaviour.

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