Licensing Centralization under Indonesia's Job Creation Law: Constitutional Implications for Regional Autonomy and Fiscal Capacity

This article examines the constitutional and fiscal implications of licensing centralization under Indonesia’s Job Creation Law. The reform aims to simplify business licensing through the Online Single Submission Risk-Based Approach (OSS-RBA), yet it also reallocates substantial licensing discretion from regional governments to the national government. This study asks whether such reallocation is consistent with the constitutional guarantee of regional autonomy and how it affects regional fiscal capacity. Using a doctrinal legal method and a quantitative comparative fiscal-panel design, the article analyses the 1945 Constitution, the Job Creation Law, Law No. 23 of 2014 on Regional Government, relevant Constitutional Court decisions, and PAD data from all 38 Indonesian provinces for 2023–2025. The findings show that licensing centralization creates doctrinal tension by separating regional responsibility from regional authority. Empirically, aggregate provincial PAD increased from 2023 to 2025, and the declines in Papua and Papua Barat are more plausibly associated with the 2022 Papua redistricting than with licensing centralization alone. The Cilacap vignette further shows that regional responses are conditional and shaped by fiscal pressure. The article contributes by framing licensing centralization not merely as administrative reform, but as a constitutional issue requiring regulatory harmonization, meaningful regional participation, and fiscal safeguards in Indonesia.