Since the fall of Soeharto in 1998, economic reforms have been linked to internationally supported programs to introduce market-facilitating "good governance" practices, which include the promotion of democratic elections and administrative and fiscal decentralization. International development organizations have thus put forward decentralization as necessary, essentially, to save Indonesia from becoming an irredeemably "failed state" - an issue that has now grown in importance because of the current nature of western security concerns in Southeast Asia. But this article suggests that the way decentralization has actually taken place can only be understood in relation to the entrenchment of a democratic political regime run by the logic of money politics and violence, and primarily dominated by reconstituted old New Order elites. Taking local party politics in North Sumatra and East Java as case studies, the article shows that local constellations of power, with an interest in the perpetuation of predatory politics, still offer significant sites of resistance to the global neoliberal economic and political agenda.
