Effectiveness of Decentralization and Regulatory Implementation Challenges in Local Governance

Abstract

This study examines the effectiveness of implementing Law Number 23 of 2014 on Regional Government and Law Number 1 of 2022 on Fiscal Relations between the Central Government and Regional Governments within Indonesia’s decentralization framework. Using a normative juridical method, the research analyzes the consistency, structure, and normative implications of these regulations while identifying key challenges encountered during their implementation. The findings reveal that the effectiveness of decentralization is strongly influenced by the alignment between regulatory complexity and the institutional capacity of local governments. Limitations in human resources, administrative governance, and fiscal management continue to hinder the ability of many regions to translate legal norms into effective policies. Additionally, regulatory inconsistency and overlapping interpretations between national and regional authorities create implementation uncertainty, thereby constraining innovation and regional autonomy. This study highlights the urgent need for strengthened local governance capacity and improved regulatory harmonization to ensure the successful realization of decentralization objectives. Ultimately, enhancing institutional capability and policy coherence is crucial for achieving equitable, effective, and sustainable regional development across Indonesia