The proposed Project will develop institutional capacity for 38-40 regional governments 
within the geographic focus area of the Asian Development Bank (ADB), to increase their operational capability with regard to: (i) the efficient delivery of public services in accordance with minimum service standards, (ii) the maintenance of essential public facilities, (iii) 
the promotion of equitable economic development, and (iv) the management of poverty reduction programs.
Indonesia is undergoing significant political and economic change. The ultimate goals for the transition to democracy and a market economy stand in sharp contrast to the country's 
centralist and authoritarian past. The ongoing decentralization process represents an attempt at substantial governance reform, illustrating the magnitude of current change. Administrative, fiscal, and service delivery responsibilities have been shifted from central Government to regional governments and most administrative functions and service delivery are now the responsibility of district governments. Decentralization has clearly moved decision making and resource management closer to the ultimate stakeholders. However, district governments have little experience in many decentralized functions and the capacity to provide good and effective governance is insufficient in many cases.