One institution has remained on the periphery of policy dialogue aboutdecentralization to the regency level-the village. Proper integrationof village governance into the wider system of decentralized governance may, however, offer the last hope for sustainable management of Indonesia’s natural resources. More important still, it could be the most effective way to ensure responsible regency governance while strengthening the sense of national unity and tempering opportunistic calls for regional independence. Villages, however, are still typically perceived by national and regency governments as potential liabilities rather than unique social and political assets for an emerging democratic nation.