Publicly Built, Commercially Governed? The Fiscal Genealogy of Indonesia's State-Owned Enterprises and the Governance Challenge of Danantara

Loso Judijanto

doi:10.61100/tacit.v4i2.382

Authors

Loso Judijanto IPOSS Jakarta

DOI:

https://doi.org/10.61100/tacit.v4i2.382

Keywords:

State-Owned Enterprises, Fiscal Genealogy, Public Capital, Danantara, Corporate Governance

Abstract

Existing studies examine state-owned enterprise (SOE) performance, governance, fiscal risk, and commercialization without sufficiently reconnecting governance to the historical public resources and institutional arrangements that enabled asset formation. This qualitative literature review addresses that gap by developing fiscal genealogy as an analytical perspective on Indonesian SOEs. Drawing primarily on peer-reviewed literature from 2020–2026 and historical financing records, the study examines Telkom, PLN, and PGN as illustrative rather than representative cases and situates them within Indonesia’s restructuring of state ownership under Danantara. The synthesis shows that historical public support does not justify permanent inefficiency, while commercialization does not eliminate public accountability for strategic assets. Centralized ownership may improve management, capital allocation, and risk oversight, but also heightens transparency and governance requirements. The study proposes a literature-derived Public Capital Stewardship Framework integrating historical public capital, public value and mandates, and fiscal and governance risk as an interpretive basis for future empirical evaluation.

References

Adebayo, A. (2026). Managerial and legal accountability in state-owned enterprises: Exploring financial sustainability through accounting for and reporting public service obligations. Accounting Research Journal, 39(2), 197–219. https://doi.org/10.1108/ARJ-02-2025-0068

Adebayo, A., & Ackers, B. (2024). Managing trade-offs between environmental, social, governance and financial sustainability in state-owned enterprises: Insights from an emerging market. Australian Accounting Review, 34(1), 55–73. https://doi.org/10.1111/auar.12415

Affuso, E., Istiak, K. M., & Sharland, A. (2022). Sovereign wealth funds and economic growth. Journal of Asset Management, 23(3), 201–214. https://doi.org/10.1057/s41260-022-00260-6

Aguilera, R. V., Duran, P., Heugens, P. P. M. A. R., Sauerwald, S., Turturea, R., & Van Essen, M. (2021). State ownership, political ideology, and firm performance around the world. Journal of World Business, 56(1), 101113. https://doi.org/10.1016/j.jwb.2020.101113

Agustina, E. S. A. S., Listiyanto, E., & Komaria, N. (2025). Debt sustainability of state-owned enterprises in Indonesia. Cogent Business & Management, 12(1), 2453822. https://doi.org/10.1080/23311975.2025.2453822

Alami, I., & Dixon, A. D. (2020). State capitalism(s) redux? Theories, tensions, controversies. Competition & Change, 24(1), 70–94. https://doi.org/10.1177/1024529419881949

Amar, J., & Lecourt, C. (2023). Sovereign wealth fund governance: A trade-off between internal and external legitimacy. International Business Review, 32(6), 102193. https://doi.org/10.1016/j.ibusrev.2023.102193

Andrews, R., Ferry, L., Skelcher, C., & Wegorowski, P. (2020). Corporatization in the public sector: Explaining the growth of local government companies. Public Administration Review, 80(3), 482–493. https://doi.org/10.1111/puar.13052

Anguelov, D. (2024). State-owned enterprises and the politics of financializing infrastructure development in Indonesia: De-risking at the limit? Development and Change, 55(3), 493–529. https://doi.org/10.1111/dech.12828

Apriliyanti, I. D. (2023). Continuity and complexity: A study of patronage politics in state-owned enterprises in post-authoritarian Indonesia. Critical Asian Studies, 55(4), 516–537. https://doi.org/10.1080/14672715.2023.2257223

Asian Development Bank. (2013). Java-Bali 500-kilovolt power transmission crossing (Project 42362-013). https://www.adb.org/projects/42362-013/main

Babic, M., Dixon, A. D., & Fichtner, J. (2023). Varieties of state capital: What does foreign state-led investment do in a globalized world? Competition & Change, 27(5), 663–684. https://doi.org/10.1177/10245294221139524

Badan Pemeriksa Keuangan Republik Indonesia. (2026, February 11). BPK dorong sinergi pemeriksaan dan pengawasan BUMN untuk perkuat kinerja Danantara Indonesia. https://www.bpk.go.id/news/bpk-dorong-sinergi-pemeriksaan-dan-pengawasan-bumn-untuk-perkuat-kinerja-danantara-indonesia

Baum, A., Hacknay, C., Medas, P., & Sy, M. (2024). Governance and state-owned enterprises: How costly is corruption? Economics of Governance, 25, 181–208. https://doi.org/10.1007/s10101-024-00311-1

Boubakri, N., Durnev, A., & Oliveira dos Santos, I. (2025). State ownership and financial reporting quality: Evidence from natural advantage industries. Journal of Corporate Finance, 91, 102687. https://doi.org/10.1016/j.jcorpfin.2024.102687

Broughel, J. (2021). Sovereign wealth funds: A potential solution to market failure and government failure. Economic Affairs, 41, 241–251. https://doi.org/10.1111/ecaf.12464

Butzbach, O., Fuller, D. B., Schnyder, G., & Svystunova, L. (2022). State-owned enterprises as institutional actors: A hybrid historical institutionalist and institutional work framework. Management and Organization Review, 18(6), 1032–1076. https://doi.org/10.1017/mor.2021.25

Cao, T., Li, W., Zhang, Y., & Zheng, M. (2024). Win-win or lose-lose? Dual logic, board factional faultlines, and ambidextrous innovation in state-owned enterprises. Technovation, 137, 103099. https://doi.org/10.1016/j.technovation.2024.103099

Cardinale, R., Landoni, M., & Mi, Z. (2024). Global state-owned enterprises in the 21st century: Rethinking their contribution to structural change, innovation, and public policy. Structural Change and Economic Dynamics, 68, 468–472. https://doi.org/10.1016/j.strueco.2024.01.013

Cheung, Z., Aalto, E., & Nevalainen, P. (2020). Institutional logics and the internationalization of a state-owned enterprise: Evaluation of international venture opportunities by Telecom Finland 1987–1998. Journal of World Business, 55(6), 101140. https://doi.org/10.1016/j.jwb.2020.101140

Cuervo-Cazurra, A., Grosman, A., & Megginson, W. L. (2023). A review of the internationalization of state-owned firms and sovereign wealth funds: Governments’ nonbusiness objectives and discreet power. Journal of International Business Studies, 54, 78–106. https://doi.org/10.1057/s41267-022-00522-w

da Silva, A. D., & Medeiros, J. J. (2024). Walking the tightrope: Successful management of public and private interests in hybrid state-owned enterprises. Public Management Review, 26(4), 884–907. https://doi.org/10.1080/14719037.2022.2117400

Danantara Indonesia. (2025a). Tentang Danantara Indonesia. https://www.danantaraindonesia.co.id/id/about

Danantara Indonesia. (2025b, December 1). Danantara Indonesia paparkan rencana kerja dan anggaran 2026 di hadapan Komisi XI DPR RI. https://www.danantaraindonesia.co.id/id/media-center/press-releases/danantara-indonesia-outlines-2026-work-plan-and-budget-at-meeting-with-house-commission-xi-focus-on-strategic-investments-capacity

Danantara Indonesia. (2026a, March 5). Danantara Indonesia jalankan governance reset dan penguatan fundamental BUMN. https://www.danantaraindonesia.co.id/id/media-center/press-releases/danantara-indonesia-undertakes-governance-reset-and-strengthens-soe-fundamentals

Danantara Indonesia. (2026b, May 12). Pernyataan badan. https://www.danantaraindonesia.co.id/id/media-center/announcement/corporate-statement

Disyon, H., Gultom, E., & Rahmawati, E. (2023). The establishment of state-owned-holding-company: A state’s controlling rights perspective based on Radbruch’s theory. Law Review, 23(1), 68–91. https://doi.org/10.19166/lr.v23i1.6995

Egüez, A. (2021). District heating network ownership and prices: The case of an unregulated natural monopoly. Utilities Policy, 72, 101252. https://doi.org/10.1016/j.jup.2021.101252

Fang, H., Hu, W.-Q., Shi, R., & Zhang, X. (2023). The Chinese-style macroeconomic control: The role of state-owned enterprises. The World Economy, 46(3), 702–725. https://doi.org/10.1111/twec.13272

Ferdiana, N., & Sugiyarto, T. (2022). State-owned enterprises (SOEs): The role in economic development and the determinant of its performance. Jurnal Ekonomi dan Kebijakan Pembangunan, 11(2), 91–107. https://doi.org/10.29244/jekp.11.2.2022.91-107

Fitriningrum, A. (2020). The impacts of government and management conflicting objectives on the state-owned enterprises performances: The case of Indonesia publicly listed SOEs. Jurnal Aplikasi Manajemen, 18(4), 632–644. https://doi.org/10.21776/ub.jam.2020.018.04.03

Goodell, J. W., Li, M., & Liu, D. (2021). Price informativeness and state-owned enterprises: Considering their heterogeneity. International Review of Financial Analysis, 76, 101783. https://doi.org/10.1016/j.irfa.2021.101783

Gunawan, F. I., Dini, A. A., & Sugarda, P. P. (2024). Sovereign wealth fund development in Indonesia: Lessons learned from Norway and Singapore. Yustisia, 13(1), 89–116. https://doi.org/10.20961/yustisia.v13i1.80717

Handoyo, S., Suharman, H., Ghani, E. K., & Soedarsono, S. (2023). The determinants of a firm’s strategic orientation and its implication on performance: A study on Indonesia state owned enterprises. Cogent Business & Management, 10(2), 2220209. https://doi.org/10.1080/23311975.2023.2220209

Hardianto, A. M., & Nursansiwi, D. A. (2024). Corporate governance toward 5.0: Insights from state-owned enterprises in Indonesia. Shirkah: Journal of Economics and Business, 9(2), 181–196. https://doi.org/10.22515/shirkah.v9i2.688

Harymawan, I., Nasih, M., Suhardianto, N., & Shauki, E. (2020). How does the presidential election period affect the performance of the state-owned enterprise in Indonesia? Cogent Business & Management, 7(1), 1750330. https://doi.org/10.1080/23311975.2020.1750330

Heinemann, F., Nover, J., & Steger, P. (2025). State-owned enterprises, fiscal transparency, and the circumvention of fiscal rules: The case of Germany. European Journal of Political Economy, 86, 102633. https://doi.org/10.1016/j.ejpoleco.2024.102633

Herrera Dappe, M., Musacchio, A., Turkgulu, B., Pan, C., Barboza, J., & Semikolenova, Y. (2024). State-owned enterprises as countercyclical instruments: Quasi-experimental evidence from the infrastructure sector. World Development, 179, 106608. https://doi.org/10.1016/j.worlddev.2024.106608

Hidayatulloh, & Erdős, É. (2023). State-owned enterprise’s debt in the state financial regime. Sriwijaya Law Review, 7(1), 105–120. https://doi.org/10.28946/slrev.Vol7.Iss1.1843.pp105-120

Homsy, G. C., & Warner, M. E. (2020). Does public ownership of utilities matter for local government water policies? Utilities Policy, 64, 101057. https://doi.org/10.1016/j.jup.2020.101057

Hu, N., Yu, S., Cao, Y., Guo, S., & Wang, Y. (2023). Unification of power and responsibilities for state-owned enterprises: A quasi-natural experiment. Corporate Governance: An International Review, 31(6), 971–993. https://doi.org/10.1111/corg.12514

Jahja, N. J., Mohammed, N. F., & Lokman, N. (2026). Exploring good corporate governance and performance in Indonesian state-owned enterprises from a qualitative approach. Qualitative Research in Financial Markets, 1–26. https://doi.org/10.1108/QRFM-09-2024-0269

Japan International Cooperation Agency. (1994). ODA loan project data: Extension and improvement of telecommunications networks in expanded Jakarta areas (II), and related telecommunications projects. https://www2.jica.go.jp/en/yen_loan/index.php/module/search?country1=12

Japan International Cooperation Agency. (1998). Transmission line construction project in Java-Bali (III). https://www.jica.go.jp/oda/project/IP-485/

Japan International Cooperation Agency. (2006). Indonesia telecommunications development project records, including PCM, optical fibre and World Bank-linked modernization. https://openjicareport.jica.go.jp/pdf/11817269_04.pdf

Jin, X., Xu, L., Xin, Y., & Adhikari, A. (2022). Political governance in China’s state-owned enterprises. China Journal of Accounting Research, 15(2), 100236. https://doi.org/10.1016/j.cjar.2022.100236

Li, S., & Wu, Y. (2022). Government subsidies, ownership structure and operating performance of state-owned enterprises: Evidence from China. Applied Economics, 54(56), 6480–6496. https://doi.org/10.1080/00036846.2022.2069671

Liao, H., & Van Assche, A. (2022). Building world-class enterprises through mixed-ownership reform: Explaining performance differences in minority and majority state-owned enterprises. Chinese Management Studies, 16(4), 741–764. https://doi.org/10.1108/CMS-03-2021-0084

Liu, I. T., & Dixon, A. D. (2021). Legitimating state capital: The global financial professions and the transnationalization of Chinese sovereign wealth. Development and Change, 52(5), 1251–1273. https://doi.org/10.1111/dech.12681

Liu, I. T., & Dixon, A. D. (2022). What does the state do in China’s state-led infrastructure financialisation? Journal of Economic Geography, 22(5), 963–988. https://doi.org/10.1093/jeg/lbac009

Lo, D. (2020). State-owned enterprises in Chinese economic transformation: Institutional functionality and credibility in alternative perspectives. Journal of Economic Issues, 54(3), 813–837. https://doi.org/10.1080/00213624.2020.1791579

Lopes Junior, E. P., Bandeira-de-Mello, R., & Bucheli, M. (2024). Political influence on the investment of state-owned enterprises. Journal of Economic Policy Reform, 27(4), 452–473. https://doi.org/10.1080/17487870.2024.2353311

Megginson, W. L., Lopez, D., & Malik, A. I. (2021). The rise of state-owned investors: Sovereign wealth funds and public pension funds. Annual Review of Financial Economics, 13, 247–270. https://doi.org/10.1146/annurev-financial-110420-090352

Megginson, W. L., & Mueller, P. C. (2022). Natural monopoly privatization: Minimizing regulatory trade-offs between rent extraction and innovation. Academy of Management Perspectives, 36(1), 111–124. https://doi.org/10.5465/amp.2019.0170

Muttaqin, M. F., Septiarani, I., & Velentina, R. A. (2025). The formation of Danantara: Between efficiency and the threat of moral hazard for state investments. Walisongo Law Review, 7(1), 67–80. https://doi.org/10.21580/walrev.2025.7.1.26982

Nguyen, T. T., & Nguyen, H. T. (2020). State ownership and firm performance in Vietnam: The role of state-owned holding company. Asian Journal of Business and Accounting, 13(2), 181–212. https://doi.org/10.22452/ajba.vol13no2.7

Nicolò, G., & Andrades-Peña, F. J. (2024). Does corporate governance influence environmental, social and governance disclosure practices of state-owned enterprises? An international study. Corporate Social Responsibility and Environmental Management, 31(5), 4715–4731. https://doi.org/10.1002/csr.2824

Piao, L., & Jung, K. (2021). The effect of the Xi Jinping administration’s anticorruption campaign on the performance of state-owned enterprises. Asian Survey, 61(5), 711–741. https://doi.org/10.1525/as.2021.1415523

Ruggiero, P., Sorrentino, D., & Mussari, R. (2022). Earnings management in state-owned enterprises: Bringing publicness back in. Journal of Management and Governance, 26, 1277–1313. https://doi.org/10.1007/s10997-021-09589-3

Santosa, A. A. G. D. H., Sarjana, I. M., Wijaya, I. M. M., & Wijaya, C. V. (2025). Separated state assets in BPI Danantara and its relevance with business judgment rules. Jurnal IUS Kajian Hukum dan Keadilan, 13(3), 559–579. https://doi.org/10.29303/ius.v13i3.1805

Shidarta, & van Huis, S. C. (2020). Between revenues and public service delivery: SOEs and PSAs in Indonesia. Bijdragen tot de Taal-, Land- en Volkenkunde, 176(2–3), 304–337. https://doi.org/10.1163/22134379-bja10006

Sijabat, T. A. P., & Baidhowi. (2026). Reconfiguring governance and control of state-owned enterprise subsidiaries in Indonesia after the establishment of Danantara. Law Research Review Quarterly, 12(2), 859–896. https://doi.org/10.15294/llrq.v12i2.41963

Sulastri, Isnurhadi, & Muizuddin. (2024). Stakeholder value and firm performance: Empirical study of state-owned enterprises in Indonesia. Journal of Creating Value, 10(2), 235–249. https://doi.org/10.1177/23949643241285963

Szarzec, K., Totleben, B., & Piątek, D. (2022). How do politicians capture a state? Evidence from state-owned enterprises. East European Politics and Societies, 36(1), 141–172. https://doi.org/10.1177/0888325420953485

Umanto, U., Hartantiningsih, I. S., & Ikasari, N. (2022). Board structure in state-owned enterprises (SOEs): Two-tier model analysis on the implementation of corporate governance in Indonesia. BISNIS & BIROKRASI: Jurnal Ilmu Administrasi dan Organisasi, 29(3), Article 5. https://doi.org/10.20476/jbb.v29i3.1324

Vagliasindi, M., Cordella, T., & Clifton, J. (2023). Introduction: Revisiting the role of state-owned enterprises in strategic sectors. Journal of Economic Policy Reform, 26(1), 1–23. https://doi.org/10.1080/17487870.2022.2080409

World Bank. (2004). Indonesia domestic gas market development project: Project information and environmental/social assessment documents. https://documents.worldbank.org/curated/en/718281468043483275/pdf/299050rev0pdf.pdf

World Bank. (2014). Indonesia domestic gas market development project: Implementation completion and results report. https://documents1.worldbank.org/curated/en/236221468268217576/pdf/ICR27370P077170IC0disclosed07010140.pdf

Wu, Y., Chen, W., & Yan, H. (2024). The accountability system for operation and investment and audit quality of state-owned enterprises. International Review of Financial Analysis, 96, 103680. https://doi.org/10.1016/j.irfa.2024.103680

Xie, S., Lin, B., & Li, J. (2022). Political control, corporate governance and firm value: The case of China. Journal of Corporate Finance, 72, 102161. https://doi.org/10.1016/j.jcorpfin.2022.102161

Yan, E. (2020). Do state-owned enterprises influence technological development? Economics Letters, 193, 109306. https://doi.org/10.1016/j.econlet.2020.109306

Yasin, M., & Nursadi, H. (2021). Miracle 14: Transparency in Indonesia’s state-owned enterprises. BISNIS & BIROKRASI: Jurnal Ilmu Administrasi dan Organisasi, 28(3), Article 5. https://doi.org/10.20476/jbb.v28i3.1303

Zhan, J., & Zhu, P. (2021). The effects of state ownership on innovation: Evidence from the state-owned enterprises reform in China. Applied Economics, 53(1), 145–163. https://doi.org/10.1080/00036846.2020.1796918

Zhang, R., Li, Y., & Tian, Y. (2022). Corporate bonds with implicit government guarantees. Pacific-Basin Finance Journal, 71, 101697. https://doi.org/10.1016/j.pacfin.2021.101697

Zhu, L., Liu, S., & Kong, D. (2023). Governments’ fiscal stress and firm decentralization. International Review of Financial Analysis, 90, 102911. https://doi.org/10.1016/j.irfa.2023.102911