Front. Polit. Sci. Frontiers in Political Science Front. Polit. Sci. 2673-3145 Frontiers Media S.A. 10.3389/fpos.2026.1739763 Policy Brief Policy options for resolving local revenue leakage through collaborative governance in Keerom Regency, Indonesia Jaya Muhamad Efendi 1 Investigation Conceptualization Writing – original draft Methodology Silo Akbar 1 * Supervision Formal analysis Writing – original draft Conceptualization Writing – review & editing Mollet Julius Ary 1 2 Writing – review & editing Validation Formal analysis Maniagasi Yusuf Gabriel 1 3 Validation Writing – review & editing Methodology Idris Usman 4 Visualization Resources Writing – review & editing Doctoral Program in Social Sciences, Postgraduate Program, Cenderawasih University, Jayapura, Indonesia Doctoral Program in Economic Sciences, Faculty of Economics and Business, Cenderawasih University, Jayapura, Indonesia Government Science Study Program, Faculty of Social and Political Sciences, Cenderawasih University, Jayapura, Indonesia Doctoral Program in Social Sciences, Faculty of Social and Political Sciences, Airlangga University, Surabaya, Indonesia Correspondence: Akbar Silo, assilo708@gmail.com 03 03 2026 2026 8 1739763 05 11 2025 04 02 2026 09 02 2026 Copyright © 2026 Jaya, Silo, Mollet, Maniagasi and Idris. 2026 Jaya, Silo, Mollet, Maniagasi and Idris https://creativecommons.org/licenses/by/4.0/ This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

This policy brief examines the leakage of Locally-Owned Revenue (PAD) in Keerom Regency, Papua Indonesia, driven by weak inter-agency coordination, fragmented fiscal oversight, and limited data integration in border areas. Vulnerabilities are identified in the data collection, determination, collection, and reporting stages of PAD, which open up opportunities for leakage. To address these issues, this policy brief discusses and compares two policy options: strengthening informal inter-agency coordination and institutionalizing collaborative governance. Comparisons are made based on feasibility, cost, time of impact, risks, and monitoring indicators. Based on this analysis, a phased approach is recommended that combines short-term responses with medium-term institutionalization policies to strengthen fiscal accountability and sustainable PAD governance.

 collaborative governance institutional coordination Keerom Regency regional revenue policy regional fiscal reform The author(s) declared that financial support was not received for this work and/or its publication. section-at-acceptance Comparative Governance Introduction

This policy brief is informed by qualitative evidence drawn from document analysis and stakeholder consultations conducted in Keerom Regency during 2023–2024. Sources include local regulations on regional revenue management, available PAD realization reports, and semi-structured consultations with key actors from the regional revenue agency (BAPENDA), the Keerom Resort Police, and related local government units. These inputs were used to identify coordination gaps, institutional fragmentation, and vulnerability points in local revenue management rather than to generate statistically generalizable findings. Secondary literature on fiscal governance and inter-agency coordination was employed to contextualize the case. Limited access to detailed audit reports and disaggregated fiscal data constitutes a key limitation; therefore, this brief does not estimate the scale of PAD leakage, but focuses on diagnosing governance weaknesses and proposing evidence-informed policy options. Accordingly, rather than quantifying the magnitude of PAD leakage, this policy brief prioritizes an institutional and governance-oriented diagnosis to reveal how structural constraints, coordination failures, and accountability gaps shape persistent vulnerabilities in local revenue management.

In the Indonesian context and other developing countries, local governments are usually beset by recurrent problems in realizing their PAD because of structural constraints faced and leaked out systematically. In the case of Keerom Regency, a border area in Papua Province, which is faced with the issue of geographical remoteness combined with institutional limitations and weak law enforcement complicates this problem. Although current regulations call for orderly revenue administration, coordination between the police and revenue agencies is rare and often symbolic. As a result, enforcement of local financial regulations is uneven and creates large gaps in revenue leakage (Smoke, 2015). Fiscal decentralization, which should strengthen local autonomy, becomes an obstacle when collaborative mechanisms are not systematically developed. Keerom is a clear example of how institutional fragmentation and weak accountability exacerbate this problem.

The collaborative governance model offers a potential solution to cross-sectoral problems through shared ownership and collective decision-making (Ansell and Gash, 2008). Inter-agency collaboration enables transparency and accountability, which is particularly important in areas prone to informal economic activity and regulatory avoidance. International studies show that formal collaboration between law enforcement agencies and fiscal authorities has a positive impact on the effectiveness of revenue collection (Emerson et al., 2012; Hearn, 2014). The experiences of Uganda and the Philippines indicate that inter-agency task forces can reduce corruption and increase fiscal compliance (Fjeldstad and Fjeldstad, 2012). In Keerom, where legal pluralism and informal practices are deeply rooted, collaboration should not only be viewed as a policy, but as an operational culture integrated into the regional governance architecture (Shiferaw et al., 2015; Hadiz and Robison, 2013). The Keerom PAD system is vulnerable due to weak coordination between institutions, poor fiscal oversight, and the absence of real-time data, enabling malpractice. Decentralization is exploited by local elites to exploit legal loopholes (Hadiz and Robison, 2013). The remote location of the border further complicates oversight. Without collaborative governance, public trust and fiscal credibility will continue to decline.

To avoid treating local revenue (PAD) leakage as a generic or purely normative issue, this policy brief clarifies the diagnosis by identifying concrete leakage points along the PAD management chain in Keerom Regency. In practice, leakage emerges at several critical stages: (1) the identification and registration of tax and retribution objects and subjects, where outdated or incomplete data—particularly related to business licensing, market retributions, and cross-border economic activities—create persistent blind spots; (2) the assessment stage, which is vulnerable to under-assessment due to limited field verification capacity and weak coordination between agencies; (3) the collection stage, where non-remittance, informal payments, or collusive practices may occur in the absence of joint supervision; and (4) the reporting and oversight stage, which remains fragmented because fiscal data systems are not integrated and joint audit mechanisms are lacking. Within this framework, collaboration between revenue authorities and law enforcement is positioned not as a general solution, but as a targeted intervention at specific control points, including the verification of high-risk taxpayers, enforcement against repeated violations, and protection of the integrity of PAD collection processes. Accordingly, each policy option proposed—such as real-time data integration, joint monitoring and evaluation forums, and cross-agency capacity building—is directly linked to these control points, thereby clarifying how collaborative governance can realistically reduce PAD leakage and improve fiscal accountability.

 Governance fragmentation and institutional disconnects

Despite the formal establishment of collaborative structures between the Keerom Regency Resort Police and the Regional Revenue Service, functional synergy remains elusive. A truism within the interagency collaboration is that it should promote greater public revenue systems and governance outcomes. Unfortunately, excluding such instruments as memoranda of understanding (MoUs) or standard operating procedures (SOPs) has rendered them professionally detached in outcomes. Without proper arrangements being in place, along with shared accountability mechanisms, they will react merely when issues arise and operate in an ad hoc manner. From Bingham et al. (2005) views, appropriate governance arrangements must rest on mutual trust, clear rights and obligations on all parties, and ideally, be institutionally represented in laws. Under these circumstances, most of the underlying arrangements have never come together in Keerom, leading to the unsettling scenario of an otherwise fragmented operational reality that exists alongside the structuring.

Cultural mismatches in the functioning of bureaucratic institutions naturally worsen the coordination inefficiencies. The police carry a militaristic, hierarchical cultural badge often clashing operationally with an administratively-minded revenue office that cherishes procedural compliance and deliberation. Misalignments between these cultures result in miscommunications; priorities become skewed; actual field implementation faces delays. According to Emerson and Nabatchi (2015), truly collaborative governance should rest on shared interpretive frames and a cross-sector comprehension to keep these disjunctions at bay. In divided institutional contexts such as Keerom, overt structural integration is insufficient; instead, it will require intentional capacity-building and adaptive leadership to actually bridge these divides.

Technological and participatory gaps also weaken the collaborative potential. In Keerom, the fiscal information system still remains non-integrated and does not have the real-time updating capability for actors to timely identify any anomalies or leakage points. Minimal citizen participation and oversight mechanisms push the collaborative activities away from public eyes and hence, decrease transparency along with legitimacy. Kapucu et al. (2017) suggest that digital interoperability and community participation are formative pillars in building and fortifying inter-agency cooperation. Hence, the delayed information flow and a lack of citizen monitoring in Keerom only reinforce the argument to innovate governance so that it may connect institutional silos, infuse technology, and provide avenues for civic engagement.

 Policy option for addressing PAD leakage in Keerom Regency Policy option 1: strengthened informal inter-agency coordination Option description

This policy option refers to the strengthening of informal inter-agency coordination that is already in practice in local government, particularly between regional revenue government agencies and law enforcement officials in Keerom Regency. Informal coordination includes situational ad hoc meetings, the use of personal networks between officials, and case-specific collaboration without the support of memorandums of understanding (MoUs), standard operating procedures (SOPs), or binding formal regulations. In the context of a region with limited institutional capacity and social complexity like Keerom, this type of coordination pattern often serves as a pragmatic mechanism for quickly responding to issues of regional revenue leakage, particularly when addressing incidental violations that require cross-sectoral action within a short timeframe. Governance literature indicates that informal institutions often serve as “operational shortcuts” when formal institutions are unable to operate effectively or still experience fragmented mandates (Helmke and Levitsky, 2006). Therefore, this option is not positioned as an ideal model, but rather as a realistic depiction of the coordination practices currently most likely to be implemented under the conditions prevailing in Keerom.

 Rationale and expected benefits

Strengthening informal coordination is seen as a relevant policy option because it offers several significant practical advantages, particularly in the short term. First, this approach can be implemented relatively quickly because it does not require regulatory changes, the creation of new structures, or significant technological investments. Second, its implementation costs are low because it relies on existing resources, such as personal communication, limited coordination meetings, and flexible cross-agency working mechanisms. Third, in the context of limited regional bureaucratic capacity, informal coordination allows for adaptive responses to the dynamics of local revenue leakage without having to wait for lengthy administrative processes. Several studies have shown that in institutionally weak governance environments, informal mechanisms can yield short-term benefits in the form of increased responsiveness and cross-sectoral problem-solving (Andrews, 2013; Meagher, 2012). Therefore, this option should not be viewed as a failure of governance, but rather as a transitional solution that can realistically improve operational coordination in situations of structural limitations.

 Limitations and risks

While offering flexibility and speed, strengthening informal coordination has limitations and risks that need to be seriously considered in policy analysis. High dependence on specific individuals—both leaders and key officials—makes this coordination vulnerable to personnel changes, transfers, or local political dynamics. Furthermore, the lack of a legal basis and formal accountability mechanisms makes it difficult to evaluate performance, track responsibility, and control abuses of authority. Governance literature warns that non-institutionalized informal institutions have the potential to reinforce patronage practices, elite capture, and inconsistent rule enforcement, particularly in sectors vulnerable to economic rents, such as local revenue (PAD) management (Helmke and Levitsky, 2006; Hadiz and Robison, 2013). In this context, informal coordination can paradoxically improve short-term coordination, but simultaneously weaken structural reform efforts if it becomes the primary mechanism without a clear institutionalization direction.

 Implementation requirements

For the option to strengthen informal coordination to be implemented more effectively and in a controlled manner, several minimum prerequisites must be met. First, the leadership of relevant agencies needs to consistently encourage cross-sector communication and provide informal legitimacy to the collaboration carried out by subordinates. Second, regular communication mechanisms—even simple ones—need to be maintained, for example through regular coordination meetings or direct communication channels between key officials, to prevent sporadic and reactive coordination. Third, the informal division of roles between agencies needs to be mutually understood, even if not yet formalized, to prevent overlapping authority or shifting responsibility. Studies on cross-sector collaboration show that even in the absence of formal structures, role clarity and adaptive leadership are crucial factors in maintaining effective collaboration (Ansell and Gash, 2008; Bryson et al., 2014). However, these prerequisites also emphasize that this option has inherent limitations and is ideally positioned as a short-term solution or initial step toward strengthening more institutionalized collaboration.

 Policy option 2: institutionalized collaborative governance framework Description of the option

This policy option emphasizes the institutionalization of collaborative governance through formal instruments that provide legal certainty regarding the roles, procedures, and mechanisms of inter-agency cooperation in managing Regional Original Revenue (PAD). In this document, formal collaborative arrangements are defined as a form of inter-agency collaboration institutionalized through instruments with a legal basis and procedural clarity, such as Memoranda of Understanding (MoUs), joint Standard Operating Procedures (SOPs), and regional head regulations (e.g., Regent Regulations) that explicitly regulate the division of authority, coordination mechanisms, and institutional responsibilities between revenue management agencies and law enforcement officials. This form of collaboration is clearly distinguished from informal coordination, which is ad hoc, dependent on personal relationships, and not supported by adequate accountability mechanisms and institutional sustainability. The institutionalization of collaboration is also strengthened through the establishment of a periodic cross-agency evaluation forum and the development of an integrated PAD-law enforcement information system to support controlled data exchange. This framework is positioned as a policy option that can be considered by regional governments according to institutional readiness and local dynamics, rather than as a single normative solution.

 Rationale and expected benefits

In essence, institutionalizing inter-agency collaboration is expected to enhance the sustainability of PAD governance beyond short-term leadership cycles and political dynamics. Formal frameworks such as regulations and joint SOPs have the potential to clarify the mandates of each institution, thereby reducing overlapping authority and ambiguity of responsibility that have weakened local revenue oversight. In the context of public governance, institutionalized collaboration is also expected to strengthen accountability through process documentation, shared reporting mechanisms, and traceability of decisions across agencies (Ansell and Gash, 2008; Emerson and Nabatchi, 2015). With an integrated evaluation forum and information system, local revenue oversight is expected to become more systematic and data-driven, enabling early detection of potential leaks and enhancing local governments’ fiscal credibility in the public eye (Fjeldstad and Fjeldstad, 2012). However, these benefits are understood as contextual outcomes and cannot be considered as automatic guarantees, because the effectiveness of institutionalizing cross-institutional collaboration is highly dependent on the suitability of institutional conditions, bureaucratic capacity, and the level of political commitment of local actors in each region.

 Limitations and risks

While offering the potential to strengthen governance, the option of institutionalizing collaboration also carries limitations and risks that need to be realistically considered. Implementing a formal framework requires a relatively high investment of resources, both in developing information technology systems, increasing human resource capacity, and in inter-agency coordination costs. Furthermore, bureaucratic resistance can arise due to differences in organizational culture, sectoral interests, and concerns about the loss of institutional autonomy, potentially triggering conflicts of authority (Emerson and Nabatchi, 2015). Cross-agency data integration also carries the risk of information misuse if it is not accompanied by adequate access and security arrangements. Furthermore, the sustainability of a collaborative framework is heavily influenced by local political stability and the commitment of regional leaders; changes in leadership can weaken support for established collaborative mechanisms if they are not firmly embedded in regulations and daily bureaucratic practices (Bryson et al., 2014).

 Implementation requirements

For this policy option to be effective, several implementation prerequisites must be met. First, a clear and consistent legal basis is needed to legitimize cross-institutional collaboration, either through regional head regulations or other relevant legal instruments. Second, institutional technical capacity must be strengthened, particularly in data management, information system interoperability, and fiscal analysis capabilities. Third, the success of collaboration depends heavily on collaborative leadership capable of building trust, mediating differing interests, and encouraging mutual learning between institutions (Ansell and Gash, 2008). Finally, clear monitoring and evaluation mechanisms need to be established from the outset to assess collaboration performance, identify implementation barriers, and ensure that the institutionalized framework truly contributes to the ongoing strengthening of oversight and management of local revenue (Emerson et al., 2012) (Figure 1).

Formulation of a collaborative governance model to address local revenue leakage in Keerom Regency.

Flowchart depicting the process for reducing local revenue leakage, starting from issues like PAD leakage, lack of supervision, and weak coordination, through a collaboration process between stakeholders, establishing trust, joint monitoring, and resulting in increased transparency, public trust, and collaborative strategic actions for audits and socialization. Comparative overview of policy options

To ensure that policy recommendations are not normative and single-minded, this section presents a brief comparison between two main policy options for addressing local revenue leakage in Keerom Regency. This comparison is intended to help decision-makers understand the trade-offs inherent in each option, taking into account limitations in bureaucratic capacity, fiscal resources, and local political dynamics. Rather than pointing to a single ideal solution, the following table presents each option as a viable alternative, depending on the implementation context and short- and medium-term policy objectives.

The comparison shows that the two policy options have different strengths and limitations and cannot be treated as mutually exclusive solutions. Strengthening informal coordination is more appropriate as a short-term response to limited institutional capacity and the immediate need to address local revenue leakage. In contrast, institutionalizing collaborative governance offers the potential for more sustainable and systemic impacts, although it requires greater resource investment and political commitment. Thus, policy choices are not purely technical but strategic, depending on time priorities, institutional readiness, and the risks tolerated by local governments. This comparison provides a basis for formulating realistic policy directions, either through gradual adoption or a combination of options tailored to the local context of Keerom Regency, Papua, Indonesia (Table 1).

Comparison of policy options for handling PAD leakage in Keerom Regency.

Kriteria Option 1: Strengthened informal inter-agency coordination Option 2: Institutionalized collaborative governance framework
Feasibility High in the short term because it does not require formal regulatory changes and can leverage existing personal networks and ad hoc mechanisms. Moderate to high, but dependent on the political commitment of regional leaders and the bureaucracy’s readiness to accept structural changes.
Cost Relatively low; especially in terms of coordination costs, informal meetings, and staff time. Relatively high; includes the costs of drafting regulations, developing IT systems, increasing human resource capacity, and cross-agency coordination.
Time-to-impact Quick (0–6 months), especially for handling urgent cases of local revenue leakage. Medium (6–18 months), as it requires legalization, system development, and institutional adjustments.
Risks Reliant on individuals, unsustainable, minimal formal accountability, and vulnerable to elite capture. Resistance between institutions, conflicts of authority, the risk of data misuse, and dependence on local political stability.
Monitoring indicators Frequency of coordination meetings, number of cases handled jointly, and rapid response to local revenue violations. Existence of joint regulations/SOPs, level of integration of local revenue data, number of joint audits or operations, and increased taxpayer compliance.
Recommendation

Based on a comparison of various policy options and taking into account the characteristics of governance, institutional capacity, and local political dynamics of Keerom Regency, the main recommendation in this policy brief is the implementation of a phased policy approach that combines strengthening informal coordination as an initial step with institutionalization of collaborative governance as a medium-term goal. In the short term, the Keerom Regency Government is advised to utilize existing cross-agency coordination mechanisms to address the most pressing local revenue leakage points, while building trust and collaborative working patterns between institutions. In parallel, preparatory steps towards institutionalization need to be initiated immediately through the development of a regulatory framework, mapping technical capacity needs, and designing interoperable information systems. This phased approach is expected to minimize bureaucratic resistance, control implementation costs, and maintain policy continuity across leadership levels, ensuring that local revenue management reforms are not only responsive to short-term pressures but also contribute to strengthening fiscal accountability and sustainable local governance.

 Conclusion

This policy brief emphasizes that the leakage of Locally-Owned Revenue (PAD) in Keerom Regency is not solely a technical collection issue, but rather a reflection of weak inter-agency coordination and the limitations of an integrated governance framework. Through process mapping and a comparison of policy options, it is clear that no single solution can be implemented instantly without considering institutional capacity and local political dynamics. Strengthening informal coordination and institutionalizing collaborative governance each have strategic roles at different time horizons, making a phased approach the most realistic option. By linking policy interventions to specific leakage points and measurable monitoring mechanisms, PAD management reform is expected to move from ad hoc responses to a more accountable, adaptive, and sustainable fiscal oversight system.

 Author contributions

MJ: Investigation, Conceptualization, Writing – original draft, Methodology. AS: Supervision, Formal analysis, Writing – original draft, Conceptualization, Writing – review & editing. JM: Writing – review & editing, Validation, Formal analysis. YM: Validation, Writing – review & editing, Methodology. UI: Visualization, Resources, Writing – review & editing.

 Acknowledgments

We would like to express our gratitude to all informants, especially BAPENDA, Keerom Police, and regional stakeholders who have provided valuable support and input in the preparation of this policy brief.

 Conflict of interest

The author(s) declared that this work was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

 Generative AI statement

The author(s) declared that Generative AI was not used in the creation of this manuscript.

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Edited by: Tiago Cruz Gonçalves, Universidade de Lisboa, Portugal

Reviewed by: Haryono Kamase, Tadulako University, Indonesia