(De)centralization and the Missing Middle in Indonesia and Malaysia

Abstract

Indonesia and Malaysia were both initially characterized by a powerful, centralized state apparatus and “soft authoritarianism”. Following the Asian Financial Crisis, they have had very different trajectories. In tandem with a transformative political liberalization process, Indonesia has implemented far-reaching decentralization reforms. Malaysia’s political context has remained relatively static, and it has proceeded to centralize important aspects of governance. Notwithstanding this initial difference, both cases display a notable similarity – the re-scaling of state power has occurred at the expense of the meso-level – provinces in Indonesia and states in Malaysia. Because they focus exclusively on the flow of resources and responsibilities away from central governments, prevailing decentralization frameworks conflate meso- and locallevel governments and are thus not well-equipped to analyse who power does and does not flow to. The “missing middle” in both countries is all the more striking given the fundamentally different state formation processes, experiences of decolonization, and eventual systems of government in the two countries. Beyond pointing to the need to sharpen our conceptual tools for the study of decentralization, this commonality may tell us something about the nature of state power.