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.