Regional Authority in the Shadow of Centralization: Reconfiguring Licensing Governance after the Job Creation Law

Licensing reform under Law No. 6 of 2023 on Job Creation has reconfigured the institutional architecture of local government authority in licensing administration and raised questions about the future of decentralization. This study examines the concept of regional licensing authority within the framework of the Job Creation Law and identifies changes in the allocation of authority compared with Law No. 23 of 2014 on Regional Government. The study employs a normative legal research method using statutory, conceptual, historical, and comparative approaches. The findings indicate that regional licensing authority has not been eliminated but rather reconfigured through national standardization, integration into the Online Single Submission (OSS) system, and the adoption of a risk-based licensing framework. The allocation of authority has shifted from a model primarily structured around the division of governmental affairs and territorial jurisdiction toward one based on the risk, scale, location, and potential impact of business activities. Although these reforms strengthen regulatory certainty and administrative efficiency, they simultaneously narrow the scope of local governmental discretion. The study concludes that the reform constitutes a form of “recentralization through standardization and digital integration,” thereby requiring a careful balance between national regulatory certainty and the preservation of meaningful regional autonomy.

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Publication Details

Journal
JIHK
Published
2026-11-03
DOI
https://doi.org/10.46924/jihk.v8i2.517
Primary Topic
Indonesian Legal and Regulatory Studies
Type
article
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article

Regional Authority in the Shadow of Centralization: Reconfiguring Licensing Governance after the Job Creation Law

Dewi Cahyandari, Shinta Hadiyantina, Nandaru Ramadhan
JIHK
Indonesian Legal and Regulatory Studies
article

Regional Authority in the Shadow of Centralization: Reconfiguring Licensing Governance after the Job Creation Law

Dewi Cahyandari, Shinta Hadiyantina, Nandaru Ramadhan
article en

Abstract

Licensing reform under Law No. 6 of 2023 on Job Creation has reconfigured the institutional architecture of local government authority in licensing administration and raised questions about the future of decentralization. This study examines the concept of regional licensing authority within the framework of the Job Creation Law and identifies changes in the allocation of authority compared with Law No. 23 of 2014 on Regional Government. The study employs a normative legal research method using statutory, conceptual, historical, and comparative approaches. The findings indicate that regional licensing authority has not been eliminated but rather reconfigured through national standardization, integration into the Online Single Submission (OSS) system, and the adoption of a risk-based licensing framework. The allocation of authority has shifted from a model primarily structured around the division of governmental affairs and territorial jurisdiction toward one based on the risk, scale, location, and potential impact of business activities. Although these reforms strengthen regulatory certainty and administrative efficiency, they simultaneously narrow the scope of local governmental discretion. The study concludes that the reform constitutes a form of “recentralization through standardization and digital integration,” thereby requiring a careful balance between national regulatory certainty and the preservation of meaningful regional autonomy.

JIHKVol. 8(2)
University of Brawijaya (ID), Politeknik Negeri Malang (ID)
Openalex Percentile: Top 6%
Indonesian Legal and Regulatory Studies
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Regional Authority in the Shadow of Centralization: Reconfiguring Licensing Governance after the Job Creation Law — Dewi Cahyandari, Shinta Hadiyantina, et al. · JIHK (2026) | TGRS Research Map | TGRS