Institute of Southeast Asian Studies (ISEAS) Contemporary Southeast Asia

Buying an Income: The Market for Civil Service Positions in Indonesia
Author(s): STEIN KRISTIANSEN and MUHID RAMLI

Source: Contemporary Southeast Asia, Vol. 28, No. 2 (August 2006), pp. 207-233
Published by: Institute of Southeast Asian Studies (ISEAS)
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Contemporary Southeast Asia Vol. 28, No. 2 (2006), pp. 207-33 DOI: 10.1355/cs28-2b
O 2006 ISEAS ISSN 0219-797X print / ISSN 1793-284X electronic
Buying an Income:
The Market for Civil Service
Positions in Indonesia
STEIN KRISTIANSEN AND MUHID RAMLI
In Indonesia, positions in the Civil Service are subject to hidden market

transactions. The demand for stable sources of income is high, and lack
of tmnsparency makes sales possible by government officers in core
positions. The recent decentralization reforms have blurred borders of
responsibility and lines of reporting in the bureaucracy and facilitated
increasing rent-seeking at local levels. The article reports from a study
of payment for government positions in an urban and a rural district
in a province in Indonesia, Nusa Tenggara Barat. The survey reveals
that prices for positions are rising and vary among departments in
accordance with available opportunities to boost their income. Prices
are higher where many projects are available and the compensation is
good. The article concludes that current practices are unethical and hurt
the society and that increased transparency in employment procedures
must be in place before things can get any better.
Keywords: Civil Service, transparency, bureaucracy, corruption, collusion, nepotism,

local government, decentralization, buying an income, Indonesia.
Indonesia has recently gone through a dramatic process of democratiza

tion, decentralization, and privatization. The fight against corruption
has been an important element in the restructuring of society, at least
as declared. Demands for law reforms to curb the rampant corruption,
collusion, and nepotism (KKN) under the Soeharto regime actually
represented a major issue in the reformasi movements from 1998
onwards (Renoe 2002). However, corruption still seems to be systemic
and systematic (Holloway 2002), and endemic and exploitative
(Goodpaster 2002). Decentralization reforms from 2001 had little
positive impact (Maclntyre 2003) and tended to reactivate "money
207
208 Stein Kristiansen and Muhid Ramli
politics" and undemocratic practices at local levels. According to

Transparency International (2005), Indonesia is still among the most
corrupt countries in the world.
Large-scale corruption siphons from society into the pockets of
the powerful, while petty corruption continues as a part of life where
smaller amounts of money are tapped from ordinary citizens into
the palms of civil servants if anything is to get done. A culture has
developed in the Indonesian society that gives moral support for rent
seeking and priorities to private gains before public ones. Corruption is
generally a symptom of the failure of transparency and accountability,
the twin prerequisites for good governance, and Indonesia's political
system has long traditions in the lack of both. Civil servants are at the
core of the problem, being the receivers of kick-backs of large projects,
petty bribery, and "speed" money, and often elevated above insight
and control, also after the national democratic reforms. The lack of
transparency could possibly be a main reason behind corruption and
also explains the limited empirical research on this problem.
Permanent employment is generally in short supply in Indonesia.
Unemployment and underemployment rates may be as high as
40 per cent of the workforce (Dhanani 2004; Jakarta Post, 17 December
2005). So to secure an earning position with stability and reasonable
income opportunities, people are willing to make huge investments.
In this research, focus is set on the market for local government
positions in Indonesia. We present a survey made among civil
servants employed in two districts within one of Indonesia's
34 provinces, Nusa Tenggara Barat (NTB). Hard facts on amounts paid
and payment procedures are presented along with information collected
in focus group discussions and anonymous in-depth interviews. Our
objective is to unveil the processes of selling and buying Civil Service
positions, and possibly also to indicate which are the informal
sources of civil servant incomes where investments in positions can
be recovered.
The article is organized as follows. After this introduction there
follows a review of the literature. General theories on corruption
that are of relevance for understanding our specific topic are
presented. Thereafter we discuss corrupt practices in Indonesia
specifically, based on recent literature. Next, we offer an overview
of the Indonesian Civil Service, its history, and present status after
the decentralization reforms. The methodological approach and
study areas are briefly discussed and followed by a presentation of
our quantitative and qualitative findings. The article ends with a
concluding discussion.
The Market for Civil Service Positions in Indonesia 209
Corruption and Civil Service: A Literature Review

Corruption in general is definitely not a new phenomenon and
neither is it bound to specific regions. For centuries and even
millennia, rent-seeking and unproductive entrepreneurship based
on the monopoly of power were common at various locations, as in
ancient Rome, Hellenistic Egypt, and medieval China (Baumol 1990).
Even in developed countries today, unclean business practices are
frequent and corrupt institutions are numerous. France and Italy are
examples of business contexts in Western Europe where scandals
of huge corruption cases have been unveiled recently. However, the
extent of the problem seems to be larger in transitional political
systems, emerging economies, and especially in poor countries with
rich natural resources. Post-colonial development often saw the
transfer of concentrated power to elites in Africa and Asia, without
a subsequent mobilizing of people through education and political
participation. A culture could develop, often based on old traditions
and inherited logic of negotiation, gift-giving, and solidarity networks,
which facilitates dubious economic transactions.
When a civil servant gives a position to a relative rather than
to a better-qualified applicant, it is nepotism; when a public office is
sold, it is today unanimously regarded as corruption (Gardiner 2002;
Swart 2002). Corruption is a broader and more embracing concept
than nepotism and bribery and represents "a kind of behaviour
which deviates from the norm actually prevalent in a given context",
a deviation "associated with a particular motivation, namely, that of
private gain at public expense" (Friedrich 2002, p. 15). Corruption
normally occurs between two parties where a patron or an agent grants
the client special treatment in exchange for goods or services. It is
normally studied as a process that takes place in the interface between
the public and private sectors (Rose-Ackerman 1997). Corruption is
commonly defined as illegal and unethical use of official positions,
political influence, or public resources for self-interest and private
gain.
In this research we take a multi-disciplinary approach to
understand the problem. Elements in the comprehension of complex
forms and functions of corruption may have been lost in the
mono-disciplinary research approaches dominating in the 1990s
(Heidenheimer and Johnston 2002, p. xiii). An adequate understanding
of corruption requires a "grasp of an entire network of influence"
and should be dealt with in a way that "embeds it contextually in
a broader analysis of a regime's political dynamics" (Scott 2002,
p. 124).
From a political economy perspective, the principal-agent-client

model offers a framework for theoretical and empirical analyses of
corruption. Based on the rational choice theory, the model presumes
that an agent, like a bureaucrat, will become corrupt if the net benefits
from corrupt practices exceed those of honesty. Costs related to pay
back to principals or risks of being detected and sanctioned by them,
for instance, the politicians or the judiciary, need to be taken into
consideration. The model further predicts that a client will accept
bribery if a net benefit can be gained compared with undertaking a
clean practice. The moral satisfaction arising from honesty also needs
to be valued in this model, in balance with moral gains from supplying
wealth to one's family and friends (Szanto 1999). Economists' studies of
corruption often come in the form of econometric calculations of gains
and losses for individuals and society from changing system inputs
such as salaries, risks, and sanctions (Abed and Gupta 2002).
Klitgaard (1988) laid a solid foundation for subsequent political
economy research with his well-known equation:
Corruption = Monopoly + Discretion - Accountability
It has been generally acknowledged that illicit behaviour flourishes

when agents have monopoly power over clients, when agents have great
freedom of choice or high discretionary power, and when accountability
of agents to the principals is weak (Mitchell and Simmons 1994).
Lack of transparency is one among other reasons behind all these
weaknesses of bureaucracies. From a political-administrative science
perspective, focus has been set on the potential roles of democratic
institutions (Geddes 1994; Johnston 1997), the rules and ethics of
bureaucracies (Carino 1986; Khan 1998), and the roles of media and
civil society in creating transparency (Giglioli 1996; Ruzindana 1997).
There are few empirical studies of what actually facilitates or hinders
corruption, but there is strong support for a hypothesis stating that
the problem increases with lower levels of transparency in a society
(Goel and Rich 1989; Szanto 1999).
From a cultural science perspective, researchers talk about the
cultural embeddedness of the corruption complex (de Sardan 1999).
Corruption is regarded as rooted in cultural contexts and webs of
social relations. To deal with it, these cultural contexts and relations
need to be understood, without adopting "cultural relativism" and
justifications for corrupt practices. Hope (2000) points to the preference
typically given to private over public interests in African cultures.
Loyalty bonds to kin and friends matter more than obedience to rules
and regulations in artificial political and administrative constructs.
Also, when leaders are corrupt they breed a culture that condones
and spreads corrupt practices among ordinary citizens to the extent
that corruption almost becomes a part of life.
The reasons behind corruption have been classified as individual,
institutional, and contextual (Osei-Hwedie and Osei-Hwedie 2000), and
they need to be understood from the perspective of both parties involved.
People may be prepared to pay the cost of bribes for improved access
to resources (contracts, licences, information, positions, and so forth),
reduced costs (customs, taxes, and so forth), or increased speed in certain
transactions (for instance, obtaining customs clearance, or a driver's
licence). Institutions may develop habits and lack of transparency that
encourage bribery and hidden transactions. Also the wider contexts
may be characterized by cultures, ethical norms, and codes of conduct
that facilitate corrupt actions. Corruption hurts most people most of the
time, either because they repeatedly have to pay petty irregular fees for
services or because common resources are wasted or used inefficiently.
The phenomenon, however, must be explained based on the fact that
some people, and even larger groups and institutions, generally gain
from being involved. Corrupt practices always primarily benefit those
already in power or equipped with economic resources, including
information. Power relations and the dominance of elites with unifying
self-interests in various institutions also contribute to hiding cases of
corruption and thereby to the sustainability of that system. Economic
resources are used to gain political influence and powerful positions,
and vice versa. The system tends to be self-amplifying, unless non-elite
interests are able to mobilize and make interruptions. For ordinary
citizens, it is often easier to pay a bribe than to demonstrate for his or
her rights, and the cost of the petty bribe may be low compared with
the cost of not bribing.
From around the developing world, we see clear tendencies that
corruption is growing in sophistication and complexity and that a
collectivization of corruption is taking place. In China, for instance,
corruption cases show an alarming tendency for party and government
officials to collude with each other in an effort to gain from the public
(Gong 2002). In China as well as in Vietnam, collaborative corruption has
become more prevalent under decentralization and privatization reforms
(Gainsborough 2003). Business enterprises also play a crucial role in
corruption, and the interdependence of political regimes and business
is typically strong in Asian countries (Lim and Stern 2002). Collective
corruption is based on collaboration among groups of power-holders
and is utilized for pursuing private gains. By the collectivization of
corruption, the institutional framework becomes "what the gun or knife
is for the common criminal ? a tool to obtain money from victims"

(Wheeler and Rothman 1982). The institutional framework consists
of, among others, mechanisms to gain and withhold information and
to avoid transparency and accountability.
Civil servants, as gatekeepers of public resources, are often at
the core of the corruption problem. A corrupt civil servant typically
regards his office as a business, where he seeks to maximize his
individual income (Heidenheimer and Johnston 2002, p. 8). Sale of
public offices has long traditions as an accepted and legal affair, not
least in continental Europe (Heidenheimer and Johnston 2002, p. 79).
According to Swart (2002), public offices could be sold for only a few
years or for a lifetime and even as inheritable property. Sellers could
be monarchs, ministers, or officials themselves. Based on historical
examples, van Klaveren (2002, p. 85) explains how a civil service
hierarchy might disintegrate into a number of "maximizing units" with
their own interests and thus unreliable for the execution of national
policy. The size of the income of the officials typically depends on
their rapacity and ingenuity (Swart 2002, p. 96). As a consequence of
the system, civil servants are selected on the basis of their willingness
to pay and not their professional qualification and capacity. Sale of
offices thus has an undemocratic feature, because it "confines office
holding to people of means" (Swart 2002, p. 102) and violates shared
standards of justice and equity (Scott 2002, p. 126). Sale of public
offices may disappear with modernization but the system certainly
prevails in many poor countries, including Indonesia.
Civil servants, whether they have bought their positions or
gained them in competition based on qualifications, are gatekeepers
to resources belonging to the community. Such resources may be
natural treasures, government budgets, information, or services related
to education and health and, in Indonesia, also religion. Gatekeepers
are the agents in the principal-agent-client theory. They may be parts
of the executive body at central or local levels of government, or
they may be policemen, school headmasters, or health personnel. We
present below a model from Kristiansen (2004) illustrating the role
of gatekeepers in relation to resources, approvers, and the society
(Figure 1).
Approvers are those legitimizing the conduct of gatekeepers and
they could be democratically elected parliaments at central or local
levels, or the military, the judiciary, or any other body with a mandate
to enforce. It seems that the closer the approvers are to the gatekeepers
and the further from "the society", the higher are the opportunities
for corrupt practices.
Figure 1
The Gatekeeper System
Resources
Gatekeepers
_y_
Approvers
t
Society
Corrupt Practices in Indonesia

Recent research on corrupt systems and practices in Indonesia is
dominated by studies initiated by the World Bank and its sister
institutions. In their reports, privatization and decentralization are
commonly regarded as the main means to overcome the problem.
The current dominance of these institutions and solutions appears
somewhat strange in an economic and political context where the
Washington-based institutions and ideologies for so long played a
central role in the game. Little has been done by leading institutions
to create transparency and clean practices, either in government or
in business.
Meanwhile, Indonesian scholars have been persistently discreet
on the corruption issue and contributed little to critical research
in the Soeharto era as well as later. This may be explained by the
fact that most of them are also civil servants and participants in the
project-generating and client-serving earning system. As stated by
Nugroho (2005, p. 155), Indonesian researchers are still failing to take
a critical position, and academicians are "subordinate to administrative
authority". Indonesian social science may have moved from the tyranny
of an authoritarian regime to the tyranny of the market (Hadiz and
Dhakidae 2005). Little analytical research is produced, while the
earnings of university lecturers is improved. Also, while university
students and their organizations in Indonesia are often strongly vocal

against corruption in the Civil Service, graduates, however, changed
to becoming silent when they are absorbed into the system and
confronted with the burdens and challenges of entrance fee repayments
and pursuing their career in the Civil Service.
In Indonesia, also according to the World Bank, the Civil Service is
at the heart of the corruption problem and "the prevailing bureaucratic
culture of secrecy creates a veil behind which corruption flourishes"
(World Bank 2003, p. 21). According to Goodpaster (2002), corruption
in Indonesia joins with organized criminality and feeds on poverty and
widespread unemployment. The system bears similarities with feudalism
and colonialism, where the lower ranks support the upper. Conditions
were ugly in the Soeharto era. Nevertheless, today "Indonesian politics
is fundamentally money politics of the worst kind. People, offices, and
votes and bought and sold" (Goodpaster 2002, p. 36).
According to Maclntyre (2003), corruption under Soeharto was
conducted in an orderly fashion that was within the limits of what the
market would bear. In recent years, corruption problems have become
larger and more destructive. The major devolution of power from
the national government to the district level in 2001 has facilitated
regional government officials to maximize their own individual gains
with small risks of control and sanctions. "The country now suffers
from hundreds of little Suhartos" (Maclntyre 2003, p. 17). Cassing
(2000) employed the intellectual roots from Douglas North and found
path dependence in Indonesian institutions that supports continued
corrupt practices. Institutional change is only incremental, and political
institutions, such as the local parliaments, and those who allocate
resources, such as the local bureaucracies, still suffer from a political
culture that seeks rewards through rent-seeking instead of honest and
productive work for society.
According to the above-mentioned report of the World Bank,
however, there is "steady progress" in meeting the three classical criteria
for the development of democracy: effective checks on arbitrary rulers,
mechanisms for the replacement of arbitrary rulers, and the participation
of ordinary people in the making of rules (World Bank 2003, p. 9; Moore
1967). Powerful interests from the Soeharto era, though still allowed to
operate and flourish, are under "close monitoring by civil society and the
media", and there is a reasonable degree of transparency (World Bank
2003, p. 9). Recent research proves differently, however (Kristiansen and
Santoso 2005; Kristiansen and Trijono 2005). After the decentralization
reforms, transparency seems to have decreased and corruption escalated,
due mainly to the development of new local elites at the district level.
The Indonesian Civil Service

The Indonesian Civil Service has its roots in the Dutch colonial
administration, which was certainly not free from corruption (Scott
2002). Dutch business interests used to bribe colonial administrators
to secure their desired advantages. During the first two presidencies
of the new republic, under Soekarno and Soeharto from 1949 to
1998, strong forces worked to concentrate power in the hands of the
executive bodies, predominantly at the central level in Jakarta. Limited
influence was given to elected assemblies. As far as possible, power
should not be separated and information on state and administrative
issues was monopolized and portioned out carefully for the benefit of
the power-holders by the central Ministry of Information (Lim 2003;
Nugroho 2000).
Especially during the Soeharto era, the Civil Service was developed
to be a political instrument as well as a strong and wide-ranging
administrative apparatus. It grew to encompass more than 4 million
employees, from central and local administrative units to the police,
military, schools, and health institutions. As a political instrument,
the Civil Service played an important role in collecting votes for the
President's party, Golkar. All civil servants were obliged to be members
of the so-called "functional group". Civil servants' careers depended
on their contribution to securing the party's leading position, normally
winning 70-75 per cent of the votes in the regular elections. The
system created a culture of unity and reciprocal favours instead of
distance and autonomy between politicians and the bureaucracy.
The decentralization reform in 2001 had some impacts on the
organization and function of the Civil Service. A main provision of
the new law on regional government was the abolition of the former
strictly hierarchical relationship between the central government,
provinces, and districts. Another was that regional heads at both
provincial and district levels are now held accountable to regional
legislative bodies rather than to higher levels of government. The
districts [kabupaten/kotamadya), which represent the third level in
the previous five-tier administrative system, now became responsible
for the funding and implementation of activities in sectors including
education, health, culture, public works, and the environment. A
district now has an average total population of 500,000.
Three-fourths of the Civil Service, including teachers and health
workers, are now assigned to local governments, predominantly in
the 440 districts. Around one million central government employees
were institutionally transferred to lower regional levels of government
by the decentralization and regional autonomy reform. Figures on

the total size of the Civil Service vary remarkably from source
to source and there is no recent exact census. So-called "ghost
workers" contribute to the confusion of numbers. They are names on
payrolls, who never show up on pay day while the financial means
are still being tapped. Among the current approximately 4 million
civil servants (Department of Finance 2004), around one million
are school teachers and 300,000 are health workers (BKN 2004). In
addition to those formally employed, there are probably close to
one million people who have informal contractual arrangements,
so-called honorary employees {Honorarium Daerah, or HONDA).
They are not subject to civil service rules and are not formally on
government payrolls.
All newly recruited civil servants [colon pegawai negeri sipil, or
CPNS) must still participate in a joint training programme, the Prajab
or Prajabnas [pra jabatan nasional, or national pre-office duty). A local
government office is in charge of the training, which is undertaken
jointly with officers from the military. The programme used to take
place at a military camp but after the reformasi it is conducted at local
training centres, where participants must stay for about two weeks.
Subjects taught include military discipline, government regulations,
and administrative procedures and management. It is only after the
Prajabnas that the new civil servants get their final letter of assignment
[surat keputusan, or SK) from the Ministry of Home Affairs and
subsequently also their first full salary. The training should form the
competence basis for the bureaucracy and also a "moral instrument"
to create clean and good governance (Jatim 2005). Another purpose
of the Prajabnas is to unite civil servants in loyalty to the state and
the constitution. The result has been the construction of a rather
exclusive club of people united in a common culture and code of
conduct. According to a former Home Affairs Minister, Feisal Tamin,
the level of efficiency in the Civil Service is very low, however, and
he estimated that the ratio between "productive" and "unproductive"
civil servants is 40:60 [Kompas, 17 May 2003). The chances of getting
fired as a civil servant are very small. The annual quota for new
recruitments to the Civil Service is currently around 300,000. The
recruitment process is formally made on a national basis but districts
are left with a high degree of authority in the selection process. The
supply of qualified personnel is high and the recruitment process is
characterized by tough competition. In principle, all new appointments
and subsequent promotions are to be based on an objective evaluation
of competence and performance.
As regards recruitment and authority in the Civil Service, the

lines of authority are not clear (Smeru 2002). Among the central
government institutions, the State Ministry for Administrative Reform
(Menpan), the National Civil Service Agency (Badan Kepegawaian
Negara, or BKN), the Ministry of Home Affairs, and the Ministry
of Finance each plays an important role. There may also be a lack
of harmonization between the three levels of administration ? the
central, provincial, and district. Decentralization and privatization
have not had any immediate positive impact on the level and extent
of corruption in society. There is no indication that regional autonomy
breeds accountability and transparency. As stated by one of the original
architects behind the decentralization reform in Indonesia, "local
parliaments are places where 'black' money is circulating without any
legal instrument available to stop it" (Rasyid 2003, p. 66). According to
the World Bank (2003, p. 14), the decentralization reform reorganized
the whole system of politics and bureaucracy and created a new class
of politicians "and their agents, the civil servants". Local political
and bureaucratic institutions are developed into means for building
private wealth. Politicians regard receiving gifts from the executive
as something natural (Choi 2004).
According to the World Bank (2003, p. 15), civil servants are
"not particularly underpaid relative to their market comparators".
Their salaries and various economic compensations have increased
substantially in recent years and are generally competitive with those
in the private sector, especially at the lower ranks. However, the basic
initial salary for an officer with senior high school education is still
only around 800,000 rupiah (US$85) per month, while one with a
Bachelor's degree should have one million, according to government
regulations. There is currently no income tax on salaries under one
million rupiah per month. The purchase of a position creates a formal
income on a stable basis. In addition, government positions open for a
number of informal and often illegal income-generating opportunities.
There are good opportunities for "farming", especially in "structural"
or gate-keeping positions with decision-making power.
Elites in top government positions have a high degree of monopoly
power and discretion and are exposed to low levels of accountability.
They are dependent, however, on "allowing the officials under them to
exploit their offices to secure their loyalty and support" (Renoe 2002,
p. 107). This is a form of a patron-client system. Clients are given
ample room to manoeuvre as long as there is loyalty. Advancement
relies on the ability to accumulate resources and share upwards with
those in charge. Junior officials must pay their superiors a quota from
their earnings to secure these spots in a kind of payment pyramid.

Failure to meet their quota means losing out "in favour of those who
can" (Goodpaster 2002, p. 10).
Illegal or unethical earnings that have been reported among
Indonesian and other civil servants include various forms of contract
kickbacks, payment from staff in exchange for positions and hiring
on projects, loan accounts structured to earn interest by the agency,
provision of ghost services, inflated invoicing in collusion with
contractors, procedures for tax avoidance, irregular payments for health
and education services, bribes to police officers and judges, and speed
money to obtain formal papers and permits (World Bank 2003; Vian
2005; Chapman 2005; Azfar 2005). In spite of verbal intentions to
create transparency as a means to curb corruption, a bill on freedom
of access to information has been stalled in the central parliament
due to lack of political support {Jakarta Post, 9 February 2006), and
targets on implementing e-government are not met (Rose 2004). As
stated by Dwiyanto (2003), if there are opportunities for corruption,
civil servants in local governments tend to do what they can to avoid
transparency. The prevailing lack of transparency and "farming" options
of civil servants make the positions attractive in spite of the limited
formal salaries. Already in 1998, Renoe (2002) found that the price
of getting a beginning job as an elementary public school teacher in a
relatively remote area in West Sumatra was 5 million rupiah (US$625).
Prices for civil servant positions are rising, as we shall see.
Methodological Approach
Doing empirical research on corruption is not easy. In Indonesia, both
giving and receiving bribes are formally forbidden and it is therefore
difficult to open even the tight lips of those suffering from petty
corruption, not to talk about the perpetrators. Asking information from
those who have already paid and gained, and in our case been able to join
the exclusive club of civil servants, would normally be futile. However,
some years of reformation talks and subsequent eagerness to see results
may have created another atmosphere. The incumbent president himself
has insistently and repeatedly asked for reduced corrupt practices, and
people realize that something should be done to improve the situation.
Ordinary citizens are ashamed when confronted with survey results
from Transparency International, for instance, and they realize that
the societal disease needs active treatment for the improved welfare of
ordinary people. There might be reasons for optimism as regards ethics
for whistle-blowing in the Civil Service (Vinten 2000).
Sixty civil servants from various departments accepted to be

interviewed and contributed to filling in our two-page questionnaire
on age and education, their current position, time of employment,
amounts paid to obtain their position, payment procedures, and
their perception on fairness. We selected two study areas, Kabupaten
Bima and Kota Mataram. Both are within the province of NTB in
the eastern part of Indonesia. There is no reason to expect that the
selected study areas divert substantially from other urban and rural
districts in Indonesia, apart from the fact that payment for positions
may be influenced by flows of money and thus by the gross regional
product or total district budgets. The province of NTB consists of two
main islands, Lombok and Sumbawa, and its per capita gross regional
product is about the national average.
Kota Mataram is the capital city of the province. It is a middle
income district, located on the island of Lombok, on the border between
Indonesia's "inner" (Java and Bali) and "outer" islands. The population
was 328,000 in 2004. The economy is dominated by the service sector:
public administration, education, trade, transport, and tourism. The
total district budget, APBD, was equivalent to US$23.2 million in 2004
(US$71 per capita). The total number of civil servants in the district is
around 5,000. Kabupaten Bima is located on the Sumbawa island, east of
Lombok. The population in 2004 was 419,000. It is a predominantly rural
district but also includes the town and harbour of Bima, which form the
commercial centre of Sumbawa island. The economy is dominated by the
agriculture and service sectors. The total population of Sumbawa is 1.2
million, which is about 29 per cent of the total population in the province
(4.2 million). The district budget of Bima in 2004 was equivalent to
US$27.3 million (US$65 per capita). The exact number of civil servants
in Bima is not known but is probably higher than 5,000.
The selection of respondents in the two districts was based on
a combination of factors: convenience, and purposive and snowball
sampling.1 We started by asking someone we knew and who was willing
to talk. Thereafter, referrals from earlier participants were used to gather
the required number of participants. Many of them were young and
newly recruited, and were eager to share their views. Most of the
respondents were interviewed in their homes, while some were invited
to another informal venue for talks. Much thought had gone into the
preparation of the interviews, with emphasis placed on discretion and
prudence, and so no foreign researcher took part in the data collection.
The background and purpose of the study was fully explained and all
participants were formally assured of full anonymity. The number of
civil servants in any relevant administrative unit of the selected districts
was sufficiently high so that it is not easy to figure out the identity
of individual respondents in our sample. During the interview, the
researcher from the University of Mataram would fill in the 15-issue
questionnaire, which had been adjusted twice after five pilot interviews
to make all questions consistent and clear to all. Only eight respondents
refused to complete the interview after the formal introduction.
After a preliminary analysis of the survey data, focus group dis
cussions were conducted in suitable premises in Mataram and Bima.
Researchers from the University of Mataram facilitated the organized
discussions in groups of approximately ten representatives from govern
ment institutions, students associations, non-governmental organizations,
the media, and politicians. Data from the two surveys were presented
as a basis for discussion and we had planned to verify reported prices
and procedures for government employment and also to assess general
attitudes to the practices. A fluent interaction among focus group par
ticipants brought out differing perspectives but generally acknowledged
the findings on corrupt practices in employment procedures and no great
surprise was revealed over the rates applied. The validity and reliability
of survey data were supported by these discussions. In addition to the
surveys and focus group discussions, we also carried out informal and
unstructured interviews with a number of civil servants who were will
ing to talk in greater detail about irregular payment practices.
Findings and Discussion

Our 60 respondents are equally divided between the two study areas,
Bima and Mataram. Most are males, 65 per cent, and relatively young,
as can be seen from Table 1. There is a clear predominance of newly
recruited civil servants, with 73.3 per cent employed during the last
three years (2002-2004). For the majority, the current position is the
first Civil Service employment. Respondents generally have a high level
of education; 58.3 per cent have the minimum of a Bachelor's degree
from a university. The largest group of respondents is from the offices
of the local governments, pemda (21.7 per cent), under the authority
of the district heads (wali kota or bupati). Others are divided among
various departments, including two offices that are formally still under
the central government authorities, namely, the statistics bureau (Badan
Pusat Stastik, BPS) and the department of religion (Departemen Agama).
Descriptive statistics are depicted in Table 1.
All the 60 respondents admit that they had to pay to obtain their
first Civil Service position. The amounts paid for employment are
high, especially when seen in relation to the level of formal salaries.
Table 1
Descriptive Statistics
Variable Number (n) %

Study area
Bima 30 50.0
Mataram 30 50.0
Age
20-29 25 41.7
30-39 28 46.7
= >40 7 11.7
Gender
Female 21 35.0
Male 39 65.0
Year of current employment
1995-98 4 6.7
1999-2001 12 20.0
2002-2004 44 73.3
Education
Senior high school 11 18.3
Diploma 14 23.3
Bachelor or higher degree 35 58.3
Employment sector
Health 6 10.0
Statistics (BPS) 2 3.3
Agriculture 10 16.7
Education 9 15.0
Local government (pemda) 13 21.7
Religion 11 18.3
Public works 9 15.0
The overall reported average payment to obtain employment over the

last three years is 27.4 million rupiah. For the purpose of comparison,
the monthly net initial salary of a government officer is below
1 million rupiah per year, dependent on the educational level. The
amount needed to buy a position is thus approximately two-and-half
years' full salary and investments are in most cases based on loans from
family and close friends.
There are noteworthy similarities and differences in payment
for positions depending on the site, gender, year of employment,
educational level, and employment sector. Firstly, the cost of obtaining

a government position is remarkably equal at the two study sites, as
depicted in Table 2. However, the standard deviation is generally
higher in Bima than in Mataram. This indicates that the payment for a
position in some cases may depend on family relations or friendship.
According to a politician in a focus group discussion, money is not
the only thing that matters for gaining government employment.
Recruitment procedures are also affected by nepotism. "Our culture
is like in a family ... everything can be handled personally ... so it's
a pity for those who don't have close friends".
There is a difference between males and females as regards payment
for positions. Males pay an average of 25.3 million rupiah while females
pay 22.6 million rupiah for a position. The discrepancy might be
explained by differences in level of education/which is higher among
the males. However, a closer look at the data reveals that females with
lower educational levels (high school) on average have to pay more for a
position than their male colleagues with a comparable level of education
(means = 20.6 million rupiah and 18.6 million rupiah, respectively).
Meanwhile, men with a university degree at the Bachelor's level or
higher pay an average of 3.4 million rupiah more than the women for
a position. Focus group discussions indicate that men may be more
aggressive in searching for structural positions and also have a higher
social obligation to find an income to support their families.
As depicted in Table 3, the prices paid for government positions
were stable in the years 1998-2001, in spite of the high inflation
especially in 1998. A dramatic increase occured in rates paid in 2002,
as can be seen in Table 3. This was after the implementation of the
decentralization reforms. Even when adjusted for increases in the
consumer price index, there are significant price hikes recently. We
also see that there is a tendency of increasing differences in rates paid,
for instance, as indicated by a standard deviation as high as 10.0 in
2004. Increasing rates and price variances are interpreted as results
of greater discretionary power among leading district bureaucrats after
Table 2
Average Payments in the Two Study Areas
(Million rupiah)
Study Area Mean Number (n) Standard Deviation

Bima 24.1 30 10.2
Mataram 24.7 30 8.6
Table 3
Payment by Year of Employment
(Million rupiah)
Year of Current Number Standard Inflation

Employment Mean (n) Deviation Rate (%)*
1995 5.0 1 n.a.
1997 10.0 1 n.a. 20.7
1998 17.5 2 3.5 58.0
1999 17.5 2 3.5 2.0
2000 17.0 5 4.5 9.5
2001 17.5 5 6.6 12.6
2002 26.5 10 6.0 10.0
2003 25.7 21 8.7 5.1
2004 30.8 13 10.0 6.4
n.a.: Not applicable; no standard deviation with only one case.

* Sources: Badan Pusat Statistik 1999-2004 (http://www.bps.go.id); International Monetary
Fund 1997-98 (http://www.imf.org).
Figure 2
Increasing Payment after Decentralization
1995-2001 2002-2004
224 Stein Kristiansen and Muhid Rarnli
Figure 3
Differences in Payment for Positions among Major Education Groups
Senior high Diploma Bachelor's
decentralization reforms. The numbers of applicants and new Civil

Service recruits for the years 2001-2004 are depicted in Appendix 1
(before the "References Cited") for the two districts.
The increase in the average payment for positions in the pre- and
post-decentralization periods is illustrated in Figure 2.
Payments for a position differ significantly among levels of educa
tion. The overall average price for a position requiring a Bachelor's
degree is 26.4 million rupiah, compared with 19.3 million rupiah for
positions obtained by candidates with only a senior high school educa
tion. The differences among education levels are illustrated in Figure 3.
Prices also vary significantly among sectors of government. The
cheapest positions are those in the health departments, while applicants
to the ministry of religion and of public works have to pay almost double
the average prices. In Table 6, the mean rates of entries into positions
are depicted, specified for the seven government sectors included in
our study.
All health department officers in our survey have a diploma
education, while those in the agricultural sector hold a Bachelor's or
higher university degree. Furthermore, respondents in the departments
Table 6
Payment by Sector
(Million rupiah)
Ofpce/Department/Dinas Mean Number (n) Standard Deviation

Health 17.0 6 4.4721
Statistics 20.0 2 0.0000
Agriculture 20.5 10 10.916
Education 23.6 9 9.1097
Local government [pemda) 23.7 13 9.2767
Religion 29.6 11 8.5013
Public works 30.0 9 7.9057
of education and religion have higher levels of education than the

average participants in the survey. Differences in level of education,
and thereby formal salaries alone, do not explain the variances in
payment for positions among various government sectors. The variances
clearly reflect unequal opportunities for informal income-generation in
the different departments. The public works department channels huge
flows of money for construction and infrastructure development, and
the department of religion has the sole responsibility for issuing a
number of certificates as well as for hajj-related activities.
As regards forms of payment for positions, survey respondents or
participants in focus group discussions do not wish to reveal to whom
the payment is made. As stated by one participant in a focus group
discussion in Mataram, "it is better to cut my head if you want to
know more about that". However, most informants indicate that there
are brokers with close connections to the highest local government
officials. The majority of respondents report that they paid by bank
transfer to a known inside officer via a middleman.
Regarding payment for a promotion, few respondents have
willingly contributed detailed information for that part of the
questionnaire "Procedures are too complicated" as stated by one.
Comments clearly indicate, however, that promotions are often
dependent more on achievements in irregular income generation than
in professional competence and the accomplishment of legal work
and formal duties. As expressed by one participant in a focus group
discussion: "I have not been promoted because if you have no money,
things are not running smoothly" {tidak ada fulus tidak mulus).
The survey instrument does not touch on irregular income
opportunities. However, in-depth interviews and focus group
discussions have pointed to available alternatives. A "mark-up" strategy

in the daily activities at work is widely used to inflate the income
of some civil servants. This is an example of how such a strategy
may work: In the procurement of stationary items, photocopying,
and so forth, the invoice presented for reimbursement are typically
jacked up by some 30 to 40 per cent of the real value. Similarly,
for employees' travels, fake invoices and receipts (for example, air
tickets and hotel bills) are regularly made. Depending on the type of
services offered, civil servants may demand "speed money" of varying
amounts. Chargeable services include tax avoidance, health treatment,
school enrollment, clearance from police inspections, issuance of
wedding certificates, and so forth. A fast medical check-up could cost
50,000 rupiah, for instance, and irregular admission fees to schools
often reach 1 million rupiah. Money parking (for interest rate gains)
and sale of positions represent other sources of irregular income for
civil servants. There is general consensus among respondents that
the various forms of irregular payment or petty corruption contribute
to higher costs and longer waiting time for the provision of regular
public services.
The larger amounts of irregular payment are normally found
in contracts between local governments and suppliers of goods and
services. A typical markup is currently between 30 and 50 per cent,
which is money taken by public officers in charge and distributed
among office members, politicians, and other insiders according to rank
and bargaining power. A localized market for government contracts
is being developed, which limits competition among suppliers. Civil
servants and private businesses collude to decide on the allocation
of contracts for construction projects or the supply of products and
services to local short-listed companies. This leads to markets with
oligopolies, where there is no real competition and where contracts
are divided among suppliers according to a rotating system [arisan).
Incomes for local government officers are also created from companies'
payment to get short-listed.
A high percentage (76.7 per cent) find that the system of payment
for government positions is unfair, unethical, and that it should be
changed. Specific reference is made by some to the strict Islamic
rules that prohibit the giving and receiving of bribes. A minority
of 13.3 per cent report that they find the system to be customary
and therefore also acceptable. The remaining 10 per cent did not
want to comment on these issues. Among those who accept the
current system, a typical remark is that "there is no way out". More
bureaucratic procedures in the recruitment process would only add
to the complexity of gatekeepers. The majority, however, regard the

lack of transparency in the bureaucracy as the main problem. When
asked for their opinion on alternative recruitment procedures, typical
comments are "must be transparent and merit-based", "must be
open, transparent, and well supervised", and "tight supervision and
strong law enforcement". Many also emphasize the need for change
in individual morale and institutional culture and some point to the
need for independent and professional non-government institutions
in the selection of candidates.
There is generally little trust in politicians with regard to solutions
to the problem of the sale of office positions. According to a participant
in the focus group discussion in Bima, local parliament (DPRD)
members "work in the political milieu, so it is hard to expect that
they can represent the true aspirations of the people". Few put any
blame on individual applicants who pay to obtain a position ? that
is simply the only way to get in. As stated by a female activist of a
non-governmental organization and former civil servant applicant who
participated in a focus group discussion: "I want to get married and
feed my children, so I had to try. ... The stated recruitment process
is only a formality. ... In reality, it's just like a fish market where
many people compete to buy certain fishes".
Conclusions
In this article, focus has been set on the market for local government
positions in Indonesia. Our main objective has been to uncover the
processes of selling and buying Civil Service positions. We have also
collected information on available opportunities to earn additional
income from which a major part of their investment gone into seeking
positions may be recovered. Doing quantitative research on corrupt
practices is obviously complicated and the study has certain limitations.
First and foremost, in our survey we were unable to get a random
selection of civil servants to interview, and because of this our findings
cannot be generalized for the whole of Indonesia. However, by use of
focus group discussions and additional in-depth interviews, the validity
and reliability of the survey data in the selected province have been
checked, and our findings seem to have been supported.
Formal positions are generally in high demand in Indonesia,
and only 1 to 5 per cent of applicants for Civil Service positions are
accepted as new recruits in the two study areas of Bima and Mataram.
Based on the data of our survey of the two districts, we can clearly
conclude that there is a market for Civil Service positions in Indonesia
and that the cost of securing a position is high compared with the
stated salary the position offers. Our findings also show a definite
rise in the rates paid for positions after the decentralization reforms
started in 2001. Costs of obtaining positions vary substantially among
sectors or departments and reflect the value of alternative and irregular
sources of earnings. In 2004, people were willing to pay more than
30 million rupiah (US$3,200) for an average starting position with a
formal salary of around one million rupiah. The positions that cost
higher are those in the departments of religion and public works and
those that require a university education. Willingness to pay is high
among potential candidates but the vast majority of our respondents
find the system to be unethical and unfair. Those who have paid
and obtained a position blame the system and not the individual
applicants, and they think that there should be greater transparency
to clean up the employment procedures.
The selling of public offices is undoubtedly a case of corruption.
Corrupt practices are generally a symptom of the failure of transparency
and accountability in a society or an institution. In Indonesia, the
Civil Service is generally characterized by non-transparency. A culture
has developed through the decades, which allows transactions to be
hidden and which gives moral support for rent-seeking and priorities to
private gains before public ones. In spite of the recent democratization
reforms, there is a lack of political will to solve the problem, however.
It seems that the new local political elites have colluded with corrupt
bureaucrats in unclean and unethical practices.
The fact that 60 civil servants have volunteered to tell how their
positions have been bought, and that they detest the unethical current
recruitment procedures gives reasons for hope. In addition to the
main recommendations from the interviewees in this study, focusing
on transparency and professionalism in the selection of Civil Service
candidates, we will add two policy recommendations.
Firstly, there is a need to rework the legal framework to enhance
transparency. Those in power generally have no real incentives to fight
corruption because they profit from the status quo (Sherlock 2002).
However, with the rapid development of politics and civil society
awareness in Indonesia nowadays, there are opportunities for political
manoeuvring to amend one law and approve another. The current
anti-corruption law, putting equal guilt on the briber and the bribed
(Undang-Undang no. 20, 2001, Pasal 5) should be amended to reduce
the fear to unveil corrupt practices by those who had paid in petty
corruption cases. Whistle blowing should be encouraged. In addition,
the proposed Freedom of Information Act, which is currently stalled
in the House of Representatives, should be passed to give everyone the

right to insight and information. In the case of Civil Service recruitment
and promotion, selection criteria for each specific position should
be clearly spelt out, and a list of the applicants should be made
generally available, including such information as the applicant's name
and age, place of residence, educational background, current position,
and career track.
Secondly, steps should be taken to clean up the Civil Service itself
and reduce the incentive to sell positions. The sense of professionalism,
efficiency, and hard work seems to be missing in the current
system. The Prajab (Civil Service Introductory Course) needs to be
reworked. Steps could be taken to bring in rules and procedures often
associated with the private sector. There should be stronger demands
to meet targets, and individual incentives should be performance
oriented. It should be possible to fire employees who choose to
remain inefficient or are involved in illegal activities. The monopoly
power of certain institutions could also be curbed. Experiences from
improved bureaucracies in other developing countries (Grindle 1997)
indicate that high expectations about employee performance and a
shared commitment to meet targets were crucial elements of their
organizational culture. Privatization of public services itself is probably
not the best solution for Indonesia as market failures are substantial
and oligopolic forms of collaboration are common. Hence today it
may cost even more to get a position in the corporate business sector
than in the Civil Service.
Appendix 1
Civil Service Recruitment in Bima and Mataram, 2001-2004
Region/Municipality
Kabupaten Bima Kota Mataram
No. of % No. of %
Year Applicants* Accepted Accepted Applicants Accepted Accepted
2001 2,000 50 2.5 8,136 115 1.4
2002 4,000 166 4.2 5,821 173 3.0
2003 6,000 150 2.5 3,154 100 3.2
2004 8,000 283 3.5 4,186 211 5.0
* No record on exact number. Figures in this column are estimates given by an officer
at the human resource/personnel section [bagian kepegawaian) Pemda Bima.
Sources: Kantor Sekda kabupaten Bima dan kota Mataram 2005, 2006.
NOTES
* The two other contributing authors are Anwar Fachry and Haji Busaini of the Centre
for Population and Development Studies, University of Mataram, Lombok, Indonesia.
1 For details on purposive and snowball sampling, see Patton (1990).
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The Indonesian Civil Service

by the decentralization and regional autonomy reform. Figures on

As regards recruitment and authority in the Civil Service, the

their earnings to secure these spots in a kind of payment pyramid.

Sixty civil servants from various departments accepted to be

Findings and Discussion

Variable Number (n) %

The overall reported average payment to obtain employment over the

educational level, and employment sector. Firstly, the cost of obtaining

Study Area Mean Number (n) Standard Deviation

Year of Current Number Standard Inflation

n.a.: Not applicable; no standard deviation with only one case.

Senior high Diploma Bachelor's

decentralization reforms. The numbers of applicants and new Civil

Ofpce/Department/Dinas Mean Number (n) Standard Deviation

of education and religion have higher levels of education than the

discussions have pointed to available alternatives. A "mark-up" strategy

to the complexity of gatekeepers. The majority, however, regard the

in the House of Representatives, should be passed to give everyone the

Maclntyre, A. 2003. "Institutions and the Political Economy of Corruption in Developing

Smeru. 2002. "Regional Autonomy in Indonesia: Field Experiences and Emerging

Stein Kristiansen is Professor of Development Studies at the School of

Muhid Ramli is a Senior Researcher at the Centre for Population and

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