The formulation of a rural development strategy is a difficult task within a country as large and diverse as Indonesia. Before the decentralisation era, rural development planning was carried out through a top-down development approach. Central policy making and development planning occurred at the National Planning Board (BAPPENAS), which is complemented by a regional planning board (BAPPEDA) in each province. Funding of development projects comes from three main sources: from the national development budget, which is channelled through central lines agencies; from the provincial development budget; and from presidential grants (INPRES) that go directly to various beneficiaries, especially the poor (Thorbecke & van der Pluijm, 1 99 3 : 2 1 ). In this regard, despite the stated intention to decentralise authority, such as establishing provincial planning boards and provision of development funds from provincial budgets, the central government continues to exercise control over lower l evel administrations. Almost all regional or sub-regional as well as rural development programmes and projects are designed and selected by the central authority.
This centralised decision-making is also reflected by several agricultural policy interventions. The BIMAS intensification programme that includes the use of high yielding varieties (HYV) of seeds, using agricultural inputs, extension and credit services, and expansion and rehabilitation of irrigation systems, is a good example of top-down government intervention in the agricultural sector. However, the top-down
78 BlMAS credit system also caused high default and high loan delinquency, which in turn effected the termination of this programme in 1 98 3 (Meyer & Nagarajan, 1 999).
With regard to village governance, the centralised government system under the Soeharto administration decreed Law 5 of 1 979 concerning Village Governance (Antlov, 2003 : 1 95). In this case, village government was under the firm control of higher authorities, and village structure was designed homogeneously, which did not allow either traditional governance structure or room for innovation from below. The power of the village leaders (Kepa/a Desa) was dominant because they are the 'extension hands' of the central government, which means that the structure of local politics was based on patronage. Although it is stated that the village government consists of two parts: the head (and his/her staff) and the Village Consultative Assembly
(LMDILembaga Musyawarah Desa) (paragraph 3 of Law 511 979), there is no separation of power between these two, meaning that the village head could become the chair of the LMD. Thus, there was no mechanism for village people to have an accountable village head due to his/her paradoxical role: very weak and co-opted (seen from above), and very powerful (seen from below) (Antlov, 200 3 : 1 97).
After the launch of the decentralisation era through Law 22 of 1 999 on Regional Governance, and Law 25 of 1 999 on the Fiscal Balance between the Centre and the Regions, the responsibility of planning and implementation of rural development and poverty alleviation schemes was moved down to the provinces' and districts' government. Through these two laws, the districts and municipalities ' government have freedom to decide local policies, to raise their own revenue, and to deliver the services to the community without any interference from the higher authorities.
With regard to village governance, Law 221 1 999 replaced the previous Law 511 979, which is specifically outlined in paragraph No.93 to No. l l l . It is stated that the regulations in the village government are 'diversity, participation, genuine autonomy, democratisation, and people' s empowerment' (section 9. 1 of Law 2211 999 cited from Antlov, 2003 : 1 97) This means that a big change has been made from the previous Law, that the village government was homogenous with the principle of ' singular loyality' , to support a certain political party, lack of people participation, and the dominant power of the village leader. The new village government is an autonomous government, and
79 provides a space of diversity and responsiveness to local aspirations. For example, the village can be called by any traditional name such as Nagari in West Sumatra, and
Lembang in Central Sulawesi (Antlov, 2003 : 1 99).
Importantly, there is a clear separation of power between the village head and Village Representative Board (BPDIBadan Perwakilan Desa), in which the village head is responsible to the village population through the BPD, and is required only to submit an administrative report to the sub-district head once a year (Bennet, 2002 : 63). The BPD is a democratic organisation, and the village parliament, which drafts village legislation, approves the village budget and monitors village government. The village government also has the right to establish independent organisations according to the village people's needs, including the right to create self-help groups and their activities to raise village revenue.
With regard to the implications of this village government autonomy for rural development programmes, it is likely that it will be more difficult for local government to implement programmes in the future, because, under the Law 25/1 999, the central government has a diminishing capacity to provide funding for local government. However, this could have both positive and negative impacts. It is positive because it signals the end of central government's dominant authority, and allows for local creativity and innovations. It is negative when local government cannot find an alternative source of revenue, and poverty would thus be on the rise at the village level. Furthermore, to date, local government has not been successful in addressing issues of rural development (Antlov, 2003 : 208).