Reducing the Effect of Bureaucratization on Business Licensing Service in Indonesia

Muhammad Syafiq and Naufal Sabda Auliya
National Institute of Public Administration, Indonesia

Excessive bureaucracy has caused some bureaucratic pathologies that have impacted on the low performance of licensing services to start a business in Indonesia. The purpose of this study is to identify and analyze the problems in the business licensing process for starting a business, the barriers to simplify the process in business licensing service for starting business, and the strategy to optimize the business licensing process. Mixed methods of a qualitative nature have been used. Data shows that the problems in the business licensing process for starting a business are the number of required documents, the number of agencies involved, the emergence of unofficial fees, and the length of time. The barriers to simplifying the licensing process for starting a business are insufficient delegation of authority, lack of professional human resources, overlapping rules, less than optimal utilization of IT, and non-centralized population data. Some strategies that can be used in optimizing the simplification process of licensing service are synchronizing policies and regulations, delegating authority, optimizing the utilization of IT and capacity building of HR.