Performance Improvement through the Implementation of Public Entrepreneurship, Accountability and Enforcement of Bureaucracy Ethics at Local Governments in Indonesia

Since the autonomy era was implemented in Indonesia by enacting Local Government Act No.22 year 1999 up to now only a few local governments have a very high achievement of their performance. Many issues might influence the performance of local governments in Indonesia, but the lack of understanding and implementing spirit of public entrepreneurship in local bureaucracy is assumed as the main factor leading to unperformed achievement. This research was intended to investigate the role of public entrepreneurship by considering the characteristics of local governments (total assets, fiscal capacity, entrepreneurial behavior and capacity of management) related to strategic environment and the improvement of local governments’ performance in Indonesia focusing on 33 provincial governments, 48 city governments and 64 counties. Based on previous studies, the role of entrepreneurial orientation (EO) mostly focus on the private sectors, but some scholars say that the public entrepreneurship also has an important role in improving the performance of public sectors, in this case is local governments. The elements of EO (innovation, creativity, proactiveness and risk taking) not only should be owned by private managers, but also public managers should have the spirit of public entrepreneurship (PE). The main difference of private sectors and public sectors is the challenge, in the public sectors which are more complex. Besides, the expectations of public (public needs) are very difficult to be identified even in normal situation. This research finds that PE has a significant impact to the excellence of the local government performance, but not directly to the performance, it shall be supported by bureaucracy ethics and accountability. The most contributive element of PE to the latent variable of PE itself is creativeness of individual bureaucracy, while the risk taking is still questionable for public officials of local governments in implementing PE. Keywords: bureaucracy ethics, characteristics of local government, public entrepreneurship, strategic environment