Dina Suryawati, Hermanto Rohman, Anwar, Muhammad Iqbal Maulana, Yola Rezki Handika, Amalinda Nazili Hanim, M.R. Khairul Muluk, Fathur Rochman
In developing countries, adaptive responses to policy reform are crucial for ensuring that national mandates can be effectively localized within diverse and often resource-constrained governance environments. This study examines how local governments in developing countries adapt to national fiscal reform through an integrated institutional response. Drawing on the case of Banyuwangi Regency in Indonesia, this research investigates subnational governance adaptation following the enactment of Law Number January 2022 on Intergovernmental Fiscal Relations (HKPD Law). This study employs a descriptive qualitative approach using a single case study design. Findings demonstrate that Banyuwangi's proactive adaptation, including anticipatory legal reforms, cross-agency coordination, and empathetic engagement with taxpayers, reflects a pragmatic form of governance that aligns national policy with local socio-cultural realities. The study contributes to the literature on fiscal decentralization by proposing a context-sensitive framework of institutional adaptation and offers actionable insights for policymakers seeking to strengthen subnational governance capacity in response to reform dynamics. These findings hold particular relevance for developing economies aiming to bridge national fiscal mandates and local governance realities. Copyright © 2026. Published by Elsevier Ltd.
Department of Public Administration, University of Jember, Indonesia; Community Empowerment Center Coordinator, University of Jember, Indonesia; Faculty of Administrative Science, University of Brawijaya, Indonesia; National Research and Innovation Agency (BRIN), Indonesia
