Does Performance Management Really Improve Performance Management of Public Sector? The Impacts of Minimum Service Standards (MSS) to Performance of Local Governments in Indonesian Decentralised System

How performance management regimes can influence the performance of public sector has long been the subject of intense academic debate. This paper contributes to that debate by investigating the extent to which Minimum Service... [ view full abstract ]

How performance management regimes can influence the performance of public sector has long been the subject of intense academic debate. This paper contributes to that debate by investigating the extent to which Minimum Service Standards (MSS), a performance management tool introduced by the Indonesian government under its highly decentralised system, influences performance of local governments to deliver services. The research deploys a multiple case study in eight districts and cities and thematic analysis. The data is collected from extensive interviews with eighty-three respondents from central government, local governments and non-governmental sector.

The findings show that MSS does not motivate local governments that are already performing well, nor those that are performing badly. However, there is a small positive effect on the motivation of local governments whose performance lies just below the minimum standard. Furthermore, MSS has also a limited impact on planning, no impact on budgeting and no impact on the culture of local governments in either the delivery of services or the service quality itself.

As it has limited influence, the MSS does not achieve its formal objectives. However it survives because it brings benefits in providing a framework for central-local dialogue about public services and any uses with pragmatic reasons. These findings are unexpected and differ from what we would expect from a reading of the existing literature. While the literature notes that sometimes performance management could achieve positive results by improving the performance of public sector, other literature found that performance management will bring about dysfunctional consequences. However, surprisingly, in the Indonesian MSS, it is difficult to detect any significant positive or negative impacts of performance management because of the reasons underpinning the continuation of the regimes.