Risk Management in the Local Government of Indonesia: drivers, constraints, and strategies

Abstract

Risk management is an emerging issue in the Indonesia government. This study seeks to reveal why and how risk management applied in local governments. A case study conducted at the Banyuwangi District Government, which was one of the initiators of risk management in Indonesia. In-depth interviews conducted with 19 participants from three work units, namely the Public Works Agency, the Regional Financial and Asset Management Agency, and the Inspectorate. Data analysis uses the constant comparative method with NVivo. The results show that the development of risk management triggered by regulations, preventing corruption, and synchronizing with risk-based audits. There are obstacles such no specific team to handle it, the risk of knowledge and awareness not evenly distributed in all work units, and there are no coercion rules for work units. Implementation of risk management in local governments requires the right strategy.