Implementation and challenges of introducing NPM and accrual accounting in Indonesian local government

Abstract

This article provides insights into the implementation of New Public Management (NPM) practices in Indonesia, including the introduction of an accrual accounting system for local government. The adoption of NPM practices was part of political, economic and public sector reforms introduced after 1998. The article discusses the background and obstacles to the reforms and the nature of the accrual accounting system adopted by Indonesian local government.

Finally, the authors make recommendations for policy-makers in Indonesia and other developing nations.

Keywords:

• Accrual accounting
• Indonesia
• local government in developing countries
• NPM
• public sector reform

Acknowledgment

We are grateful for the comments and suggestions made by Professors James Guthrie (University of Sydney) and Jesse Dillard (Portland State University) on an earlier version of this article.

Additional information

Notes on contributors

Harun Harun

Harun Harun is Assistant Professor of Accounting, University of Canberra, ACT, Australia.

Yi An

Yi An is a PhD researcher at the University of Waikato, Hamilton, New Zealand.

Abdul Kahar

Abdul Kahar is Senior Lecturer of Accounting, Tadulako University, Palu, Indonesia.