INTRODUCTION

Institutions play a central role in the success or failure of natural resource management. As the author and implementor of natural resource policies, government institutions with authority in this area are viewed as a source of hope as well as a source of constraints in relation to proper natural resource management. Today, the institutional challenges to Indonesia's natural resource policies consist of a combination of longstanding, unresolved issues from the New Order era and more recent issues that have emerged since the advent of the reformasi movement and the transition to regional autonomy. A wide range of institutional reforms is under way but will take considerable time to implement. Several studies have observed and analysed these recent institutional changes (World Bank 2001). Several chapters in this book also discuss the ongoing institutional changes in several natural resource sectors and their implications (see Chapter 6 by Fox, Adhuri and Resosudarmo, Chapter 9 by Gellert and Chapter 10 by Dutton).

This chapter works more on a conceptual level; the approach is general, intended to cover multiple natural resource sectors. It depicts the institutional issues currently surrounding natural resource policies and offers some ideas on the institutional transformations needed to ensure effective natural resource policy-making. The chapter points out that some provinces and districts are setting an example in achieving such transformations. However, since the main goal of the chapter is to convey a general concept of the kinds of institutional transformations needed, rather than how these should be implemented in practice, it does not cover practical implementation in any detail.