- _Capital (matching) grants to fiscally disadvantaged jurisdictions_ to overcome infrastructure deficiencies in setting national minimum standards for merit services. These grants should be based upon a planning view of identified infrastructure deficiencies and should contain matching requirements that vary inversely with fiscal capacity. These grants combined with ouput based operating grants will create a level playing field and enable poorer juridictions to integrate with the broader national economy and help reduce regional income and fiscal disparities.

- _Assistance for responsible capital market access_ to richer local jurisdictions.

The above mentioned reforms will result in an intergovernmental finance system that is more transparent, objective, predictable and simpler with a sharper focus on objectives. These reforms may be considered as integral elements of any effort at fine tuning the existing fiscal system of multi-order governance in Indonesia. In closing, reform is eternal, we never fully succeed at first but we must keep trying.

# **References**

- Bishop, George and Anwar Shah, 2011. Sharing Petroleum Resources in Iraq: Obstacles or Foundations to Decentralization. In Jorge Martinez-Vazquez and Francois Vallancourt, eds. _Decentralization in Developing Countries_ . Chapter 16: 549-594. Cheltenham, UK: Edward Elgar Press

- Boadway, Robin and Anwar Shah, 2009. _Fiscal Federalism: Principles and Practice of Multiorder Governance._ New York and London: Cambridge University Press.

- <mark>Robin Boadway and Anwar Shah, editors, 2007.</mark> _<mark>Intergovernmental Fiscal. Transfers: Principles and Practice</mark>_ <mark>. Washington, DC: World Bank</mark>

- Eckardt, Sebastian And Anwar Shah 2007. Local Government Organization and Finance: Indonesia. In Anwar Shah, ed. _Local Governance in Developing Countries_ . Chapter 7:233-274. Washington, DC: World Bank

- Fadliya and Ross H. McLeod, 2010. Fiscal Transfers to Regional Governments in Indonesia.  Working paper no. 2010/14, ANU College of Asia and the Pacific.

- Harjowiryono, Marwanto, 2011. Lessons Learned From Indonesia‘s Fiscal Decentralization. Paper presented at the International Conference on Fiscal Decentralization in Indonesia a Decade after the Big Bang. Ministry of Finance, Jakarta.

- Mochida, Nobuki 2008. Measuring Fiscal Needs: Japan‘s Experience. In Kim, Junghun and Jorgen Lotz, eds. 2008. _Measuring Local Government Expenditure Needs. The Copenhagen Workshop 2007._ Chapter 7:166-187, Copenhagen, Denmark: The Danish Ministry of Social Welfare

- Moisio, Antti, Heikki Loikkanen and Lasse Oulasvirta, 2010. Public Services at the Local Level – The Finnish Way. Government Institute for Economic Research, Helsinki, Finland.

- Qibthiyyah, Riatu 2011. Review of Incentives and Sanctions Linked Intergovernmental Transfers. Working paper ADB-INO.TA 7184-Local Government Finnace and Governance Reform, Jakarta, Indonesia.

- Shah, Anwar., 1983. The New Fiscal Federalism in Australia. , Expenditure Needs and Fiscal Equalization Grant Series Working Paper #1,, Ministry of Finance, Government of Canada, Ottawa.

- <mark>----------- and Zia Qureshi et al. 1994a. Intergovernmental Fiscal Relations in Indonesia. Issues and Reform Options. World Bank Discussion Paper Series. No. 239. Washington, DC: World Bank.</mark>

- ———. 1996. ―A Fiscal Need Approach to Equalization.‖ _Canadian Public Policy_ 22 (2): 99–115.

- <mark>———. 1998. ―Indonesia and Pakistan: Fiscal Decentralization—An Elusive Goal?‖ In</mark> _<mark>Fiscal Decentralization in Developing Countries,</mark>_ <mark>ed. Richard Bird and François Vaillancourt, 115–51. Cambridge: Cambridge University Press.</mark>

- <mark>———. 2004. ―The Australian Horizontal Fiscal Equalization Program in the International Context.‖ Presentation at the Heads of the Australian Treasuries (HOTS) Forum, Canberra, September 22, and the Commonwealth Grants Commission, Canberra, September 23.</mark>

- <mark>———. 2005. ―A Framework for Evaluating Alternate Institutional Arrangements for Fiscal Equalization Transfers.‖ World Bank Policy Research Working Paper 3785, Washington, DC.</mark>

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