Financing Education in Indonesia

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Presentation transcript:

Financing Education in Indonesia Presentation for International Conference on Governance & Accountability in Social Sector Decentralization Intergovernmental Finance of Education Thursday, 19th February 2004 (Session 5a) Kai Kaiser, PRMPS 9/18/2018 Financing Education in Indonesia

Financing Education in Indonesia Context Diverse Archipelago 171,000 public primary schools / 1.4 million teachers 31,000 secondary schools / 0.68 million teachers 1997/8 Economic Crisis 2001 “Big Bang” Decentralization 400+ Districts 30 Provinces 9/18/2018 Financing Education in Indonesia

Financing Education in Indonesia Challenges Equity Inter-regional Quality Issues Governance & Accountability “Leakages” Expenditure Assignments 9/18/2018 Financing Education in Indonesia

Pre-Decentralization Financing Flows Decentralized “Earmarked” Transfers Recurrent Subsidies (SDOs) Capital Grants (Inpres) Deconcentrated Expenditures Kanwil DIP/DIK-DAs 9/18/2018 Financing Education in Indonesia

Post-Decentralization Funding Decentralized Expenditures Block Grant (DAU) Revenue Sharing (Natural Resource/Other) Own Revenues Conditional Grant (DAK) Central Expenditures DIPs Deconcentrated Agencies (Kanwil’s) Abolished 9/18/2018 Financing Education in Indonesia

Post-Decentralization Multiple Flows Source: WB Education Sector Review 2004 9/18/2018 Financing Education in Indonesia

Post-Decentralization: Center and Regions Finance Source: WB Education Sector Review 2004 9/18/2018 Financing Education in Indonesia

District Wage Pressures versus Expenditure Levels 9/18/2018 Financing Education in Indonesia

Challenges for Equitable Service Delivery District/Provincial Funding DAU Equalization Design versus Political/Transitional Constraints Decentralized Education Allocations Local Preferences/Accountability Minimum Standards/Obligatory Functions Deconcentrated Expenditures Equalization vis-à-vis Decentralized Expenditures Parental Contribution 9/18/2018 Financing Education in Indonesia

Challenges for Financing Instruments Minimum Standards Definition/Proliferation Affordability Implementability Earmarked/Conditional Financing DAK (Capital Grant versus Conditional Grant) “Decentralizing” Deconcentrated Financing Central Teachers 196K Central Teachers for Regions 2003/4 9/18/2018 Financing Education in Indonesia

Challenges of Decentralization M&E Central M&E Systems Collapse as regions no longer have incentives to report Local Budget Reporting APBD-SIKD Central Budget Allocations Limited Transparency 9/18/2018 Financing Education in Indonesia

Financing Education in Indonesia Conclusion Continued tensions between decentralized and centralized financing models Uncertainly about resource composition and accountability at the facility level Too early to determine decentralization impacts on service delivery outcomes Increased heterogeneity 9/18/2018 Financing Education in Indonesia