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Journal : jle

Budget Efficiency vs Public Service: A Critical Evaluation of Presidential Instruction No. 1 of 2025 Munawir, Munawir; Suherman, Agus; Ahmada, Naufal Haidar
Journal of Law and Economics Vol. 4 No. 2 (2025): NOVEMBER
Publisher : Yayasan Kawanad

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.56347/jle.v4i2.376

Abstract

This study evaluates Presidential Instruction No. 1/2025 on Budget Efficiency using William N. Dunn's policy evaluation model across five dimensions: effectiveness, efficiency, adequacy, responsiveness, and equity. The policy mandates IDR 256.1 trillion in budget cuts, including IDR 50.59 trillion in regional transfers. The qualitative-descriptive approach analyzes official policy documents, Ministry of Finance publications, Indonesia Corruption Watch data, and international literature on OECD fiscal consolidation practices. While aiming to reduce wasteful spending, the blanket-cutting approach—lacking performance-based evaluation and empirical evidence—threatens service delivery in education, health, and infrastructure. Regional transfer cuts undermine local autonomy and service capacity, particularly concerning given that 88% of regions depend on central transfers. Comparative analysis with Australia, Latvia, and Chile reveals that Presidential Instruction No. 1/2025 lacks critical mechanisms: ring-fencing protections, performance-based evaluation, results-driven incentives, and adequate compensation schemes. The study recommends temporary moratoriums for vital sectors, systematic spending review mechanisms, selective budget reduction targeting ineffective and leakage-prone programs, and strengthened institutional capacity for value-for-money budget management. Implementation requires strong political commitment, effective inter-governmental coordination, and robust information systems to achieve fiscal efficiency without sacrificing public service quality.
Co-Authors Abdul Khohar Abdul Kohar Abdul Kohar M Abdul Kohar M. Abdul Kohar Mudzakir Abdul Kohar Muzakir Abdul Rosyid Abdul Rosyiod Adhyaksa Dault Adhyaksa Dault Adhyaksa Dault Adhyaksa Dault Agus Sutisna, Agus Agustin, Rifki Dimas Aldise Kresna Dewi Tutianvia Amboro, R. Tono ANDRI KURNIAWAN Aprilianti, Baby Novega Ardoni Ardoni Arminarahmah, Nur Bambang Mardi Sentosa Bogi Budi Jayanto Bogi Budi Jayanto Bogi Budi Jayanto Budhi Hascaryo Iskandar Cicik Setia Ningsih Dian Wijayanto Djodie Rizky Prima Dyah Rahayu Ningtyas Emil Yahya Faik Kurohman Fauziyah, Annemarie Fatimah Firdaus, M. Yus Firdiyani, Fitria Hendrik Anggi Setiawan Hernuryadin, Yayan Herry Boesono Herry Boesono Hesa Karunia Fitri Imam Triarso Imam Triarso Indradi Setiyanto Inoe, Hiromu Khusaini, Khusaini Koirala, Pankaj Kukuh Eko Prihantoko Lestari, Lina Widya Lintang, Dona Machrunnisa, Machrunnisa Mahrus Mahrus, Mahrus Manalu, Intan Rosari Martini Martini Mas A Santosa Mohammad Imron Moralitha Mayza, Thita Much Arif Much Arif Wijayanto Muchtadi, Achmad Muhamad Fathikul Umam Muhammad Irham Khoirul Jauhari Muhtadi, Tb. Yudi Mulyono S. Baskoro Munawir Munawir Murodi, Ahmad musyafak Musyafak Naufal Haidar Ahmada Noegroho, Tegoeh Novitri, Bella Suci Nugroho, Kun Budi Nugroho, Prasetyo Catur Nurul Anriani Nurul Huda, Hamdan Patadungan, Widiarso Pri Utami Prihantoko, Kukuh Eko Puji Hastuti Pujiyanto Pujiyanto Putri, Walla Astianty Rahmad Dharmawan Rahmadi Sunoko Rianto, Joko Riris Amaylia Putri Rizki Wahyuni Batubara Rohmah, Tri Ainun Salsabilla, Natashia Sarip Hidayat, Sarip Setyorini Setyorini Sholih Sholih, Sholih Siti Annisa Dwi Setiani Nurfadillah Sock, Fatou Sony Harbintoro, Sony Stephanie Juwana Suherman, Suherman Sundusiah, Siti Suroso, Wawi Teuku Firmansyah, Mohammad Timilsina, Raja Rajendra Tri Wiji Nurani Tutianvia, Aldise Kresna Dewi Untoro, Firli Viani, Okta Widiarti, Aniek Yudi Firmansyah Yuniar, Dimas Rizki Yusuf, Yusmedi