Institutional Rightsizing under Fiscal Constraints: Evidence from Regional Government Reform in Indonesia

Abstract

Fiscal constraints and institutional changes create a dilemma for local governments: organizational structures must be adjusted to available resources without undermining essential government functions and service capacity. This study aims to analyze how fiscal and regulatory pressures are translated into organizational restructuring in Nabire Regency and to formulate an institutional rightsizing configuration that remains aligned with workload, fiscal capacity, geographic characteristics, government needs, and institutional provisions. The study employs an embedded qualitative institutional case study combined with regulatory-based organizational assessment and policy design analysis. Data were obtained through semi-structured interviews with six purposively selected informants and analysis of regulatory, fiscal, organizational, and workload-assessment documents. The analysis combines institutional contextual analysis, weighted organizational assessment, geographic difficulty factors, and comparison of assessment results with the existing organizational structure. The findings show that institutional rightsizing does not operate as a linear downsizing process. Institutional and fiscal pressures trigger reassessment, while organizational decisions are differentiated according to the characteristics of each government function. The assessment produces five organizational responses: retain, merge, integrate/expand, reassign, and restore. The third restructuring alternative reduces the number of regional agencies from 23 to 17 through functional integration while maintaining government affairs and implementation capacity. The study concludes that institutional assessment functions as a meso-level mechanism linking external pressures to organizational design, while robust governance provides the basis for maintaining governance capacity, coordination, and service continuity. Thus, rightsizing represents selective institutional adjustment rather than uniform organizational reduction.

Tekanan fiskal dan perubahan kelembagaan menghadapkan pemerintah daerah pada kebutuhan menyesuaikan struktur organisasi dengan sumber daya yang tersedia tanpa mengurangi fungsi pemerintahan dan kapasitas pelayanan yang esensial. Penelitian ini bertujuan menganalisis bagaimana tekanan fiskal dan regulatif diterjemahkan ke dalam restrukturisasi organisasi di Kabupaten Nabire serta merumuskan konfigurasi institutional rightsizing yang selaras dengan beban kerja, kapasitas fiskal, karakteristik geografis, kebutuhan pemerintahan, dan ketentuan kelembagaan. Penelitian menggunakan embedded qualitative institutional case study yang dikombinasikan dengan regulatory-based organizational assessment dan policy design analysis. Data diperoleh melalui wawancara semi-terstruktur terhadap enam informan yang dipilih secara purposif serta analisis dokumen regulasi, fiskal, kelembagaan, dan penilaian beban kerja. Analisis dilakukan melalui institutional contextual analysis, penilaian organisasi berbobot dengan faktor kesulitan geografis, serta perbandingan hasil penilaian dengan struktur organisasi eksisting. Hasil penelitian menunjukkan bahwa institutional rightsizing tidak berlangsung sebagai proses downsizing yang linear. Tekanan fiskal dan regulatif memicu penilaian ulang, sedangkan keputusan organisasi dibedakan berdasarkan karakteristik setiap fungsi pemerintahan. Penilaian menghasilkan lima bentuk respons, yaitu retain, merge, integrate/expand, reassign, dan restore. Alternatif ketiga mengurangi jumlah perangkat daerah dari 23 menjadi 17 melalui integrasi fungsi tanpa menghilangkan urusan pemerintahan dan kapasitas pelaksanaannya. Penelitian menyimpulkan bahwa institutional assessment berfungsi sebagai mekanisme meso-level yang menghubungkan tekanan eksternal dengan desain organisasi, sedangkan robust governance menjadi orientasi untuk mempertahankan kapasitas pemerintahan, koordinasi, dan kesinambungan pelayanan. Dengan demikian, rightsizing merupakan penyesuaian kelembagaan yang selektif, bukan pengurangan organisasi secara seragam.