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The principal-agent problem and SSR agenda in Indonesia

House of Representatives Commission I on defense deputy chairman Tubagus Hasanuddin has accused the government of conducting illegal military operations in Papua, which he says violates the 2004 Law on the Indonesian Military (TNI)

Aditya Batara Gunawan (The Jakarta Post)
Jakarta
Wed, November 23, 2011 Published on Nov. 23, 2011 Published on 2011-11-23T09:49:12+07:00

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ouse of Representatives Commission I on defense deputy chairman Tubagus Hasanuddin has accused the government of conducting illegal military operations in Papua, which he says violates the 2004 Law on the Indonesian Military (TNI).

The law requires the government to seek House approval for any military deployment, as happened in Papua.

However, the TNI denied the accusation, saying its massive presence in Papua is simply to back up the police and maintain domestic security.

Apart from the debate, different perspectives between the Indonesian Democratic Party of Struggle (PDI-P) lawmakers and the government over what is actually happening in Papua reflects the classic principal-agent problems in politics, especially when it comes to the security sector reform (SSR) agenda in the country.

Within any organization there is always a problem of information asymmetry between the principal and the agent. Unlike the agent, the principal always lacks knowledge about the situation in the field. This is because the agent is equipped with experience and specialization in conducting its duties.

The principal only holds the authority to provide incentives to the agent. It is possible for the principal to monitor the agent, yet gathering complete information is regarded as prohibitively expensive.

In politics, the principal-agent problem follows Max Weber’s argument that the “political master” finds himself in the position of the “dilettante” who stands opposite the “expert”, as the trained officials stand within the management of administration. In this sense, bureaucratic administration always tends to manifest in “secret sessions” and in so far as it can, it keeps its knowledge and action from criticism, especially from the public or the House. As a consequence, the government as the agent dominates its interaction with the public or legislators as the principal by mastering the dynamics of the political situation based on its knowledge.

Today, the main challenge facing Indonesia’s SSR agenda concerns the ability of civilians, especially those in the House, to oversee the progress of military reform. Even though some of the politicians have military background, their presence is not enough to leverage the House’s position in front of TNI. In fact, more House members insist that their authority is limited by the Constitution and therefore the problems in military reform rest with the executive’s commitments. Such an argument is not only wrong but also dangerous because it creates political fatalism in the context of SSR agenda in Indonesia.

The question then is how do we solve this long overdue principal-agent problem in Indonesia’s SSR agenda?

There are at least two important steps the House can take based on the principal-agent problem framework. First is reducing the asymmetry of information between the legislators and the government by, among others things, looking for alternative sources of information. This could be done by building stronger networks with civil society to leverage their position vis-à-vis the government.

Although it has been exercised quite a lot since the SSR agenda was introduced, the interactions between the lawmakers and the civil society groups are somewhat vague, depending on the interest of the political powers behind the politicians.

The House members must recognize that the civil society groups could provide extensive information from the field that they will never receive from the government. For example, in the debate over the military’s heavy presence in Papua, the question whether the TNI conducts an operation or not in Papua shall not be answered by taking the government’s statement for granted. The politicians could read a recent report published by the Indonesian Human Rights Monitor (Imparsial) on securitization in Papua. The book, written based on extensive literature and field research on the military presence in Papua, provides a valuable analytical supplement that the House members will need to investigate what the military is actually doing in Papua and the future dangers of its presence there.

The second — and the most important — step that the politicians can do is adopt an economic approach to solve the principal-agent problems. From the economic perspective, the principal-agent problem can be tackled by providing outcome-based incentives such as salary packages or bonuses to maintain the principal’s authority over the agent and increase the organizational profit.

Back to the politics, the House as the principal is authorized to decide the government’s outcome incentives through the state budget allocation. In such circumstances, House Commission I can exercise the culture of merit system in their budget allocation policy to the military. In this sense, the House could check the TNI presence in Papua using the budget instrument.

Of course, this is a complicated job and will require strong commitment from the entire political powers inside Commission I. A possible threat may arise from the outcome-based incentives such as the option for a security approach over dialogue in Papua.

Above all, the message is very clear: The SSR agenda is not over yet and there is still room for improvement to create a more accountable and professional security institution in Indonesia. Hopefully, the frequent tagline in reference to the Commission I, the PKS (Partai Komisi Satu or Commission One Party) shows that there is still hope for lawmakers to preserve the SSR agenda that benefits Indonesian people.

The writer is a lecturer at the Department of Political Science, Bakrie University, Jakarta.

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