ABSTRAKHow can performance management influence management influence public sector agencies to improve their performance? This question has long been the subject of intense discussion among scholars. It is often the case that public sector units have no motivation to improve beyond the minimum level required to stay safe and can also result in unambitious average syndrome.
A similar phenomenon potential to arise with the introduction of the Minimum service Standards (MSS) for local authorities within Indonesia's decentralised system. Through the decentralisation policy, which was launched in 1999, the central government has devolved most public service decision-making to local authorities. As a concequence of this policy, inequality has grown, reflecting different capacities and motivations of local government. Yet, the central government has (in principle) a reserve power to intervene and enforce these minimum standards. Thus, instead of a set target or rank for local government, MSS was introduced as a form of compromise between the central and local governments in relation to the minimum quality of service in health and education that should be delivered by local governments.
This paper attempts to assess the influence of public sector performance management on the motivation of local public-sector agencies to improve their performance. There are two main research questions. Firstly, what is the influence of MSS on the motivation of public sector agencies to improve their performance in delivering services? Secondly, how far does the concept of an unambitious average syndrome explain the outcomes attained? Semi-structured interviews with 80 informants in central and local government, as well as scholars, non-government organisations and international agencies were used in data collection, with thematic analysis used for data analysis.
In terms of the results, the influence of MSS on the motivation of local government to improve their performance hardly fits with the idea of the 'unambitious average syndrome'. MSS seems only to motivate improvements in performance among those local governments whose current achievement fall just below the required standard. They are motivated only to pass and deliver just above the required standard. MSS, however, does not appear to motivate local governments delivering either above or well below the standards
