analisis kebijakan pendidikan ace suryadi

Report No. 29506

INDONESIA

EDUCATION IN INDONESIA:MANAGING THE TRANSITION TO DECENTRALIZATION(In Three Volumes) Volume 1

The World Bank August 2004

TABLE OF CONTENTS Volume 1

Page

FOREWORD viii

ACKNOWLEDGEMENTS ix

EXECUTIVE SUMMARY x

CHAPTER 1: INDONESIA’S EDUCATIONAL PROGRESS AND CHALLENGES 1

Enrollment Expansion 1

Educational Challenges 2Closing Large Regional Gaps 2

Reducing Inequality across Income Groups 3 Improving the Quality of Education 3

Decentralization: Promise or Peril for Education? 4

Topics for this Review 5 Governance and Management 6 Finance and Public Spending 6 Education Quality 6 Teacher Management 6

CHAPTER 2: GOVERNANCE AND MANAGEMENT 9

Legal Framework and Governance Structures 9

Basic Challenges in Governance and Management 9 Clarifying Governance Functions 10 Rebuilding Management Systems 11

Reframing the Role of the MoNE 13 Building Local Capacity 13

CHAPTER 3: FINANCE AND PUBLIC SPENDING 17

Financing Framework And Structures Under Decentralization 17

Expanding the Resource Envelope for Education 18

Making Education Expenditures Count 20 Spend Locally 21 Differentiate Assistance to Districts and Schools 21 Spend More Resources on Those Most in Need 22 Leverage Governmental Resources – But Consider Consequences of the Poor 24 Track and Monitor Spending 24

CHAPTER 4: QUALITY ASSURANCE AND IMPROVEMENT 27

Two Approaches to Improving Quality 27 Quality Assurance or Control 27

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Quality Improvement 29

Policies to Improve the Quality of Education 32 Support National-Programs, District Projects,

and School-Improvements 32 Adapt a Balanced Scorecard Approach to Plan and Manage Support

to Districts and Schools 33 Address Structural Weaknesses of the System 34 Ensure Equity in Quality Improvement 35 Stimulate Demand for and Supply of Innovations and Good Practice

for Improving Teaching 35 From Setting Standards to Meeting Standards 35

CHAPTER 5: TEACHER MANAGEMENT AND PERFORMANCE 37

Management Changes Under Decentralization 37Responsibility for Teacher Employment and Deployment 37 Responsibility for Setting and Monitoring Teacher Performance Standards 38 Responsibility for Teachers’ Professional Development and

Career Development 39

Teacher Employment and Deployment 39

Teacher Professional Development 41

Teacher Compensation and Incentives 43

Using Teacher Management Systems to Achieve Education Goals 44

CHAPTER 6: THE WAY FORWARD: MAKING DECENTRALIZATION WORK FOR EDUCATION 47

A Policy Reform Agenda 47

Implementing the Policy Agenda 52 Supply-Side and Demand Led Progress 52

Learning from Past and Ongoing Efforts 53 REFERENCES 61

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TABLES IN TEXT

Table 1.1 Rising education enrollment rates at all levels, 1995-2002 1Table 1.2 Inequality in enrollment rates: wider gaps within than between

provinces, 2002 2Table 1.3 Education equality at the primary level and increasing equality

at higher levels: Net enrollment rates by income quintile, 1993-2002 3

Table 1.4 Student performance on mathematics and science tests: ranking among 38 countries 4

Table 1.5 Some challenges and issues in implementing decentralization in education 7

Table 3.1 Sources of local revenues, fiscal year 2001 17Table 3.2 Per capita education spending, 2001-2002 19Table 4.1 School committees still not fully engaged 31Table 5.1 Primary teacher absence rate in public schools, 2002-03 39Table 5.2 A proposed national framework for a teacher management

system 46Table 6.1 Proposed policy agenda for educational development under

decentralization 54

FIGURES IN TEXT

Figure 1.1 Gross and net enrollment rates in East Asian countries, 2000 1Figure 1.2 Highest grade completed by 16-18 year olds, by income quintile 3Figure 2.1 Flows of governance and managerial accountability in

decentralized Indonesia 10Figure 3.1 Indonesia: Education spending by level of government, 2001 20Figure 3.2 Relationship between two dimensions of educational

development 22Figure 4.1 Balanced scorecard to determine appropriate action for each

district/unit 34Figure 5.1 Districts vary in proportion of primary teachers with minimum

training qualification, percentage of teachers 41

BOXES IN TEXT

Box 2.1 Information systems and management in Brazil and Spain 12Box 2.2 Transforming the current organizational structure of the

Ministry of National Education 14Box 4.1 Minimum service standards 28Box 4.2 Improving the quality of madrasah education 30Box 5.1 A new teacher deployment scheme in the Philippines 42Box 5.2 Mexico’s Carrera Magisterial program 43Box 5.3 Brazil’s FUNDEF program and teacher compensation reform 45

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CHAPTER 1: GOVERNANCE AND MANAGEMENT UNDER DECENTRALIZATION 1

The Situation as Decentralization Gets Under Way 2

The Basic Challenge: Clarifying Governance and Management Functions 7

Are Current Policies Helping? 12

Minimum Service Standards 14

Governance and Management Systems Lacking 15

Governance and Management Development Tasks 20

References for Chapter 1 22

Appendix 1.1 List of Governance and Management Problems 25

Appendix 1.2 List of Interviewees 28

Appendix 1.3 Decentralization Case Studies 30

Appendix 1.4 Citizen Perception and Educational Reality: Insights

from the Governance and Decentralization Survey 37

Appendix 1.5 Organizational Issues for DEPDIKNAS Under Decentralization 47

Appendix 1.6 Minimum Service Standards as Management and

Governance Tools 56

CHAPTER 2: FINANCING EDUCATION UNDER DECENTRALIZATION 65

New Fiscal Structures under Decentralization 65

Public Spending for Education at the National and Local Levels 68

Private Spending for Education Remains Low 71

Equitable Financing in an Unequal World 73

Increasing Efficiency Under Decentralization 76

Summary of Implications for Policy 80


Appendix 2.1 Cost Implications of Quality Education for All 86

CHAPTER 3: QUALITY ASSURANCE AND IMPROVEMENT 89

Approach and Rationale 89

Methodology 90

Basic Terms 91

Quality Management 91

Quality Assurance 99

Quality Improvement 104

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Conclusions and Summary of Recommendations 111


Appendix 3.1: Quality Improvement Projects in Indonesia Since 1990 115

Appendix 3.2: A Quality Management Model 121

Appendix 3.3: A Case Study of Project-Based School Rehabilitation 125

CHAPTER 4: TEACHER MANAGEMENT SYSTEM 127

The Changing Context of Teacher Management in Indonesia 128

Transparent Employment Processes and Conditions of Service 137

School-oriented Performance Standards and Monitoring 146

Career-Long Professional Development 149

Using Teacher Management Systems to Achieve Education Goals 153


Appendix 4.1: What Teachers Need to Know and be able to Do 160

Appendix 4.2: Supplementary Information on International Experience 161

TABLES IN TEXT

Table 1.1 Diagnosis of governance, management, and related decentralized challenges 3

Table 2.1 Public expenditures for education: How does Indonesia compare with other Asian countries? 69

Table 2.2 Household expenditures on education, by income quintile, 2002 72Table 2.3 Source of inequality in enrollment rates: Between and within

provinces 73Table 2.4 Determinants of education expenditures using APBD: Results

from regression analysis 75Table 3.1 Common uses of national and school-based tests in quality

assurance 97Table 3.2 Comparing the school effectiveness and school reform

approaches 106Table 4.1 Teacher management functions for public schools (except

Madrasahs) after decentralization 134Table 4.2 Average number of hours worked per week 142Table 4.3 The impact of corrupt practices with the education sector 144 Table 4.4 Comparing two teacher performance evaluation systems in Chile 149Table 4.5 Potential policy tools for managing the teaching workforce 154

FIGURES IN TEXT

Figure 1.1 Flows of governance and managerial accountability in a decentralized Indonesia 8

Figure 2.1 Post-decentralization financial structure 66Figure 2.2 Education expenditures, 2001 71Figure 2.3 Enrollment rates of children ages 12-15 by province 73

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Figure 2.4 Inequality in the distribution of 2001 education expenditures from APBD and APBN allocations 74

Figure 3.1 Diagram of quality management system 92Figure 3.2 Relationships between standard-setting entities being developed 94

BOXES IN TEXT

Box 1.1 In South Africa, a lack of definition as to who could set minimum standards, combined with sectoral collusion in teacher management, led to the emergence of unfunded mandates and fiscal problems after decentralization 18

Box 1.2 In Brazil and Spain, devising good management information systems under decentralization was difficult and problematic but was possible with effort and partnership 19

Box 2.1 Unequal education spending among districts 72Box 2.2 Brazil’s experience with municipalization 77Box 2.3 School funding – A gap in financial policy 80Box 3.1 Hypothetical use of performance information in a school 92 Box 3.2 Information from a national evaluation system changed the

focus of debate in Brazil 98Box 3.3 Quality assurance of the teaching force 101Box 3.4 The New Zealand equalization program 108Box 3.5 School development plans and quality inputs 110Box 4.1 Cost-effective strategies for raising academic achievement 130Box 4.2 Permanent or contract teachers? 145Box 4.3 The importance of teacher quality 147Box 4.4 International evidence on schooling, resources, educational

institutions and student performance 148Box 4.5 Teacher education programs that made a difference 151Box 4.6 Mexico’s incentive scheme for teacher development 153

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Table 1 Highest Level of Education as a Percentage of the Population, by Location 1 Table 2 Net and Gross Primary Enrollment Rates, by Gender 3 Table 3 Net and Gross Junior Secondary Enrollment Rates, by Gender 4 Table 4 Net and Gross Senior Secondary Enrollment Rates, by Gender 5 Table 5 Net and Gross Primary Enrollment Rates, by Location 6 Table 6 Net and Gross Junior Secondary Enrollment Rates, by Location 7 Table 7 Net and Gross Senior Secondary Enrollment Rates, by Location 8 Table 8 Percent of Primary Students Enrolled, by Type of School 9 Table 9 Percent of Junior Secondary Students Enrolled, by Type of School 10 Table 10 Percent of Senior Secondary Students Enrolled by Type of School 11 Table 11 Adult Literacy Rates 12 Table 12 Primary School Classrooms and Teacher Profiles 13 Table 13 Teacher Profile in Junior Secondary Schools 14 Table 14 Teacher Profile in Senior Secondary Schools 15 Table 15 Test Scores of Junior Secondary Students 16 Table 16 Test Scores of Senior Secondary Students 17 Table 17 Average Monthly Household Income 18 Table 18 Education Expenditure as a Proportion of Total Household Expenditure 19 Table 19 National Education Development Expenditure, 2001 20 Table 20 Gross Regional Domestic Product at Current Market Prices, 1998-2000 21 Table 21 Per Capita Provincial Revenues, 2001 22

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FOREWORD

Improving the lives of its citizens is at the center of Indonesia’s development challenge. Economic growth creates more jobs and reduces hunger and poverty, but it is clearly not enough. It is widely recognized that being literate, more skilled, and more knowledgeable about the world also gives people the capacity to control and to enrich their lives. For this reason, it is important that Indonesia continues to raise educational levels, especially for poor and disadvantaged people.

Schooling will count for more when its quality is improved. Indonesia achieved significant progress in bringing children to school during the last 30 years. Enrollment rates at the basic levels are high, even as compared to countries with higher incomes. The key challenge now is to raise the quality of education available to young people so that they are well prepared to participate in Indonesia’s ever more dynamic society and economy. Schools must be well managed, staffed with motivated and competent teachers, and supported by a system that both provides resources and requires accountability.

Indonesia continues to make important changes at all levels of education. In

particular, significant steps have been taken to decentralize authority for managing education to local government and to build partnerships with civil society to improve the quality of schooling. While we join the education community in applauding these steps, we recognize too that many other policies and actions are needed.

This Education Sector Review discusses the issues and the range of options for policies and actions around the issues of management and governance, financing, teachers, and quality of the education system. It specifically addresses the complex and changing nature of the relationships between central and local governments that have resulted from Indonesia’s decentralization process. The Review is a collaborative undertaking by Government and donors, and its broad consultation process with many of stakeholders at the national and local levels gives us also the perspective of those who are closest to the schools and the classrooms and has fuelled profound discussions on the key challenges of the sector. We trust that the reader will find this report stimulating and enriching reading.

Andrew Steer Country Director for Indonesia, World Bank

David Ritchie Australian Ambassador to Indonesia

ACKNOWLEDGEMENTS

This report was prepared by a team consisting of Audrey Aarons, Luis Crouch, Susiana Iskandar, Jennica Larrison, H. Moegiadi, Fredi Munger, Jerry Strudwick, Suheru Muljoatmodjo, and Elizabeth King (Team Leader). It also benefited from the helpful advise and generous contributions of a large number of people—many national education officials at all levels, advisors to the government, regional government officials, school personnel and other stakeholders in various districts outside Jakarta. For their time, advise, and candor throughout the process of preparing this report, we are grateful to the national education leaders, Baedhowi, Secretary General, Ministry of National Education; Boediono, now former Head of Research and Development, Ministry of National Education; Herwindo Haribowo, Secretary, Research and Development, Ministry of National Education; Indra Djati Sidi, Director-General, Primary and Secondary Education, Ministry of National Education; Fasli Jalal, Director-General, Non-Formal Education; Satryo Soemantri Brodjonegoro, Director-General, Higher Education; Ace Suryadi, Senior Adviser to the Minister, Ministry of National Education; Nina Sardjunani, Director, Education and Religious Affairs, National Planning Agency; A. Qodri Azizy, Director-General, Development of Islamic Institutions, Ministry of Religious Affairs; Bambang Indriyanto, Head, Policy Research Center, Research and Development, Ministry of National Education; and a group of young technocrats in government who are committed to Indonesia’s educational development (Hamid Muhammad, Abdul Azis, Renani Pantjastuti, Harris Iskandar, Suharti, Totok Suprayitno, Ratna Kesuma, Agung Purwadi, Agus Hariyanto, Yun Widiati, Slamet Soleh, Husaini Wardi, Ninasapti Triaswati, and Herry Sukarman). We thank Joel Friedman, Frank Hijmans, Walter McMahon, and Blane Lewis, technical advisers in the Ministry of

Home Affairs, Ministry of Education, and Ministry of Finance; David Sloper; peer reviewers at the World Bank, Marlaine Lockheed, Lant Pritchett, and Haneen Sayeed, and other colleagues including Vivi Alatas, Michael Borowitz, Deon Filmer, Scott Guggenheim, Bert Hofman, Robin Horn, Emmanuel Jimenez, Kai Kaiser, Samuel Lieberman, Jessica Poppele, Fadia Saadah, Andrew Steer, and Christopher Thomas for their comments on earlier drafts; Owen Haaga and Ali Subandoro for their very able research assistance; Fiona MacKintosh for her editorial contributions; and Elsa Warouw, Idawati Harsongko, Dinni Prihandayani, Datty Sembodo, Dety Palimbong, Imani Rasheeda Haidara, and Dorothy Judkins for helping the office processes go smoothly.

We acknowledge the faithful and vigilant support of the donor community in Indonesia—Asian Development Bank, Australian Agency for International Development, European Union, the Royal Netherlands Government, UNESCO, and UNICEF—and especially the funding assistance given by AusAID and the Royal Netherlands Government for the preparation of the report and the subsequent regional and national consultation activities. Lastly, this report benefited significantly from the comments of many more leaders and experts who attended the various consultative meetings that were organized during the preparation of this report.

The Team wishes to honor the memory of Dr. H. Moegiadi, professor, mentor, colleague, and friend to many education leaders in Indonesia. Dr. Moegiadi, who was part of the report team during his last days, enriched the report with his vision of educational development in Indonesia and his experiences in working for that vision while in government.

ABBREVIATIONS AND ACRONYMS

Acronym /Term Bahasa Indonesia English Equivalent ADB Bank Pembangunan Asia Asian Development Bank AKU Arah Kebijakan Umum General Policy Directions APBD Anggaran Pendapatan dan Belanja Daerah Provincial or district budget

APBN Anggaran Pendapatan dan Belanja Negara National budget

APPKD Anggaran Penerimaan dan Pengeluaran Kas Desa Village budget

ASEAN Association of South East Asian Nations AusAID Australian Agency for International

Development BAPPEDA Badan Perencanaan Pembangunan Daerah Regional Development Planning Board

BAPPENAS Badan Perencanaan Pembangunan Nasional National Development Planning Agency

BAS Badan Akredetasi Sekolah School Accreditation Body

BKN Badan Kepegawaian Negara Civil Service Board BO Biaya Operasi Sekolah School operation fund BOMM Bantuan Operasional Manajmen Mutu Operational Assistance for Quality

Management BP3 Badan Pembantu Penyelenggaraan Pendidikan Parents' association

BPS Biro Pusat Statistik Central Bureau of Statistics Bupati Head of district Camat Head of sub-district CBBEP Community-Based Basic Education ProjectCGI Consultative Group for Indonesia CIDA Canadian International Development

Agency CLCC Creating Learning Communities for

Children COPSEP Community Participation in Strategic

Education Planning for School Improvement (JICA)

DAK Dana Alokasi Khusus Special allocation fund DAU Dana Alokasi Umum General allocation fund DBEP Decentralized Basic Education ProjectDBO Dana Bantuan Operasional School block grant DEPDAG Departemen Agama Ministry of Religious Affairs DEPDAGRI DDN - Departemen Dalam Negeri Ministry of Home Affairs DEPKEU Departemen Keuangan Ministry of Finance Desa Village DFID Department for International Development

(United Kingdom) DIK Daftar Isian Kegiatan Routine or recurrent budget of a central

ministry Dinas A Provincial, District, Sub-District Office

with sectoral responsibility

Dinas P & K Dinas Pendidikan dan Kebudayaan Provincial, District, Sub-District Education Office with responsibility for education

DIP Daftar Isian Proyek Development budget of a central ministry

DISD Directorate for Islamic Schools Development (MORA)

DPR Dewan Perwakilan Rakyat Legislative Assembly

DPRD Dewan Perwakilan Rakyat Daerah Regional Legislative Assembly DSSD Capacity Building for Decentralised Social

Services Delivery (ADB) EBTANAS Evaluasi Belajar Tahap Akhir Nasional National end-of-level examination

(formerly used)

EFA Education For All ESR Education Sector Review (this Review) EU Uni Eropa European Union Gaji Salary and wages GER Angka Partisipasi Kasar Gross enrolment rate GOI Government of the Republic of Indonesia GTZ Gesellschaft für Technische

Zusammenarbeit (Germany) Guru Teacher GPN Guru Pegawai Negeri Government teacher HRD Human Resource Development IKIP Institut Keguruan dan Ilmu Pendidikan Teachers College

INPRES Instruksi Presiden Presidential Instruction JBIC Japan Bank for International Cooperation JICA Japan International Cooperation Agency JPS Jaring Pengaman Sosial Social safety net program JSE Pendidikan Lanjutan tingkat Pertama Junior secondary education JSS SMP – Sekolah Menengah Pertama Junior secondary school Kabupaten Kabupaten District Kacab Kepala Cabang Branch Head Kades Kepala Desa Village Head Kadin P & K (Diknas) Kecamatan

Kepala Dinas P & K (Diknas) Kecamatan Head of the Sub-District Education and Culture Office

Kakancam Kepala Kantor Kecamatan Head of Sub-District office of central Government ministry

Kakandep Kepala Kantor Departemen (Kabupaten) Head of District Office of Central Government Ministry

Kakanwil Kepala Kantor Wilayah (Propinsi) Head of Provincial office of central Government ministry

Kakua Kepala Kantor Urusan Agama (Kecamatan) Head of Sub-District Office of Religious Affairs

Kancam Kantor Kecamatan Sub-District office of central Government ministry

Kandep Kantor Departemen District office of central Government ministry

Kandep Diknas Kantor Departemen Pendidikan Nasional (P & K)

District Education Office

Kanin Kantor Inspeksi Inspection Office Kanincam Kantor Inspeksi Kecamatan Sub-District Inspection Office

Kanwil Kantor Wilayah Provincial office of central Government ministry

Kecamatan Sub-district Kelompok Group Kepala Desa Village head Kepmen Keputusan Menteri Ministerial Decree Keppres Keputusan Presiden Presidential Decree KKKS (K3S) Kelompok Kerja Kepala Sekolah Principal's working group Kota Autonomous city KW Kewenangan Wajib (UU 22/99) Obligatory Functions (Law 22/99) Kyai Veneration title for Islamic religious teacher

or leader LKGI Latihan Kerja Guru Inti Training program for core teachers LKMD Lembaga Ketahanan Masyarakat Desa Village community development council

LMD Lembaga Musyawarah Desa Village council LPMP Lembaga Penjamin Mutu Pendidikan Education Quality Assurance Institution Lurah Village head (in urban area) LSM Lembaga Swadaya Masyarakat Non-Government Organization Madrasah Islamic school

MBBS Manajemen Berbasis Sekolah School Based Management

Menpan Menteri Pendayagunaan Aparatur Negara Ministry of State Personnel

MESA SPPM (Studi Pengembangan Sub- Sektor Pendidikan Madrasah )

Madrasah Education Sector Assessment study (ADB/AusAID)

MGMP Musyawarah Guru Mata Pelajaran Meeting of Working Group of Subject Teacher of Secondary Schools

MI Madrasah Ibtidaiyah Islamic primary school MKKS Musyawarah Kerja Kepala Sekolah Meeting of Principals' Working Group MOF DEPKEU - Departemen Keuangan Ministry of Finance MOHA DEPDAGRI - Departemen Dalam Negeri Ministry of Home Affairs

MONE DEPDIKNAS - Departemen Pendidikan Nasional

Ministry of National Education

MORA DEPAG - Departemen Agama Ministry of Religious Affairs MSS SPM - Standar Pelayanan Minimal Minimum service standard MTs Madrasah Tsanawiyah Islamic junior secondary school MPR Majelis Permusyawaratan Rakyat People's Consultative Assembly Negeri State / national NER Net enrolment rate NGO LSM - Lembaga Swadaya Masyarakat Non-Government Organization NZDA New Zealand Development Assistance LSM Lembaga Swadaya Masyarakat Non-Government Organization PAD Pendapatan Asli Daerah Regional own source revenues Pejabat Functionary, government officer PERDAS Peraturan Daerah Local regulations Pesantren Islamic boarding school PIU UPP - Unit Pelaksanaan Proyek Project implementation unit PP Peratuan Pemerintah Government Regulation PROPEDA Program Pembangunan Daerah Regional Development Program

PROPENAS Program Pembangunan Nasional National Development Program PROPEDATA Program Pembangunan Daerah Tahunan Regional Development Annual Program RAPBS Rencana Anggaran Pendapatan dan Belanja

SekolahSchool revenue and expenditure plan

REDIP Regional Educational Development and Improvement Program (JICA)

Rp Rupiah Indonesian currency unit SBM MBBS - Manajemen Berbasis Sekolah School Based Management SD Sekolah Dasar Primary school

SLTP Sekolah Lanjutan Tingkat Pertama Junior secondary school SLTP Terbuka Sekolah Lanjutan Tingkat Pertama Terbuka Open junior secondary school

SPM Standar Pelayanan Minimal (MSS) Minimum service standards SPPM Studi Pengembangan Sub-sektor Pendidikan

Madrasah Madrasah Education Sector Assessment study (ADB/AusAID)

SSA SAB - Standar Analisa Belanja Standard Spending Assessments SUSENAS Survei Sosial Ekonomi Nasional National Socio-Economic Survey Swasta Private TFEA Targeted Funding for Educational

Achievement (New Zealand case ) TPK Tim Pengembangan SLTP Kecamatan Sub-district Junior Secondary School

Development Team

UAS Ujian Akhir Sekolah Final school test (set nationally, marked at schools)

UNDP United Nations Development Programme UNESCO United Nations Educational, Scientific, and

Cultural Organisation UNICEF United Nations International Children's

FundUSAID United States Agency for International

Development UU Undang-Undang Law Walikota Mayor WB Bank Dunia World Bank WHO World Health Organisation WTO World Trade Organisation Yayasan Private Non-profit Foundation

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EXECUTIVE SUMMARY

Indonesia’s population of school-age children is one of the largest in the world. A sustained drive to build schools across the country since the 1970s has resulted in more and more of those children attending school every year. This is an impressive accomplishment. But there is a widespread perception that several critical barriers have prevented Indonesia from achieving its goals of: (i) enrolling all students through to the end of junior secondary level, (ii) ensuring that poorer and disadvantaged children have full and equal access to schools that provide a safe and healthy learning environment and effective instruction, and (iii) providing education that is of acceptable quality and is relevant to the economy and society.

First, behind the impressive increase in enrollment at the national level, wide regional differences remain, which means that the likelihood of reaching junior secondary school is very different for two young Indonesians, one who resides in a well-to-do community in Yogyakarta and the other in a poor rural area in South Sulawesi. And even larger than this between-province variation are disparities among districts within provinces.

Second, although Indonesia’s enrollment expansion closed the enrollment gap between males and females and across income groups, especially at the primary education level, striking inequalities between richer and poorer children remain at the junior secondary and senior secondary levels. While nearly all children enter the early primary grades, those who belong to the poorest income quintile drop out first, thus completing much less than full basic education, on average.

Third, the quality of schooling in Indonesia is low and declining, and it is worst in the poorest parts of the country. Decades of rapid expansion of enrollment have not produced graduates withthe consistently high quality of knowledge and skills needed to build a strong society and competitive economy. Underlying the quality

problem is the failure to provide students with the rudiments of instruction—textbooks, a blackboard, writing supplies, and a teacher who has mastered the curriculum and regularly comes to class.

Because Indonesia’s school system is immense and diverse, it will be necessary to understand these problems as they manifest themselves across all of the regions of the country and across all of its demographic groups, searching for factors that explain the low quality of education.

Decentralization

Indonesia’s ambitious decentralization program is transforming the nature and level of public service delivery, including education. How decentralization applies to the education system has been defined in Education Law 20/2003, which transfers the principal responsibilities, authority, and resources for the delivery of education to lower levels of government, while some decisionmaking power is transferred to schools themselves.

There are four key conditions for decentralization to overcome barriers and stimulate educational development: (i) clear division of responsibilities and power among the different levels of government, (ii) greater decisionmaking power and autonomy to local governments, (iii) greater voice of teachers and parents on how schools operate, and (iv) effective accountability mechanisms and financial structures that are consistent with educational goals. By distributing power and responsibility more widely throughout the education sector, decentralization has the potential to increase the efficiency of the system and its responsiveness to the needs of its constituencies. The freedom to experiment is another potential benefit from decentralization, and locally generated innovations can stimulate continuing improvements in education if a region can learn from the experiments carried out in other regions.

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However, despite its promising aspects, decentralization is not a policy panacea. Conflicts and inefficiencies can sometimes arise when the goals of the different levels of governments contradict each other. And even when everyone’s goals are aligned, paternalistic behavior left over from decades of centralistic policymaking, on the one hand, and the extreme dependency of some areas, on the other, can be hard to change simply by edict. Inevitably, there will be lags and variations in implementing decentralization across the country. Thus, the process of reform is likely to be a slow one, punctuated by bursts of progress and frequent setbacks that may lead to rising frustration and mistrust among stakeholders if they do not understand that these are inherent aspects of the reform process.

The Challenges of Implementation

Like other countries that have decentralized their education system, Indonesia faces many implementation challenges. However, most of these challenges really stem from two fundamental problems—unclear, incomplete, and inappropriate assignment of governance and management functions and a shortage of the management and technical skills needed to operate a decentralized education system.

Numerous questions about decentralization have emerged with its implementation. This review focuses on four broad issues.

Governance and Management. Will the shift in authority, responsibilities, and resources from the central level to district governments and communities help to achieve the desired education outcomes in Indonesia? This depends on how certain design and implementation issues regarding governance and management systems are resolved. These include how the relationships between district governments and district- and school-level service providers change; what are the functions and roles of the large number of decisionmaking bodies in the sector; whether local government officials and school staff have the capacity and skills to fulfill their devolved functions and responsibilities; and whether the central agencies are ready and

able to restructure and re-equip themselves to undertake their new roles.

Finance and Public Spending. Decentralization has shifted the flow and allocation of fiscal resources from the national government to the district governments and from the district governments to the schools. Are the fiscal resources for education sufficient? Are these resources being used more efficiently and more equitably than before? How can the use of resources be improved? What are the implications of the new fiscal arrangements at the school level and thus on educational outcomes?

Education Quality. Under decentralization, improving quality will mean identifying those institutional arrangements (such as standards, structures, and incentives) that will improve performance and accountability. What then are the best ways to raise quality in the context of local autonomy? How can performance standards be set, measured, and monitored throughout the education system?

Teacher Management. In Indonesia, as elsewhere, teachers are a critical element in the process of educational development and, reflecting this, their salaries and benefits account for the bulk of resources spent on education. How will decentralization affect the incentives faced by teachers, how will it determine teachers’ entry into and progression within the profession, and what management systems are likely to be effective in a decentralized context?

A Policy Reform Agenda

The following set of policy recommendations emerged mainly from the meetings held by the team that undertook this education sector review with many stakeholders, including officials in the central agencies, provincial and district officials, teachers, head teachers, members of school committees (including some parents), national education experts, and the staff of aid agencies. They are informed also by analyses of enrollment, school supplies and public expenditures data in Indonesia, and by the

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lessons from experience of other countries that have decentralized their education system.

Assign functions clearly and efficiently within the education system and align them with appropriate governance and management structures and financing arrangements at all levels.

The assignment of governance, managerial, and financing functions in the education sector remain vague. Similar functions and roles have been given to different levels of government, which is a recipe for replication, conflict, and chaos. Also, functions and structures are not aligned (for example, the central Ministry of National Education is still quite large despite the transfer of many of its responsibilities to lower levels of government) and financing arrangements do not conform to functions (as illustrated by the many different sources of financing for capital expenditures at the local level). Moreover, some devolved functions are best left to the national or provincial levels, such as coordinating the strategic direction of the education system and setting education standards. Resolving these issues will require reviewing and revising the decentralization laws to clarify the assignment of functions, to correct the misalignments between functions and structures and between functions and financing arrangements, and to follow through with corresponding structural changes.

Reform the central Ministry of Education so that it can articulate and harmonize education policies and design an implementation program, and an investment and funding plan for those policies, while ensuring that local governments and civil society have a voice in this process.

The MoNE should be reorganized according to its new major functions consistent with its oversight role in a decentralized education system. In particular, the Ministry should:

Harmonize and link new education policies and programs for example,

standard setting, teacher certification, and school rehabilitation and repair, and retire any leftover policies and programs that undermine the goals under decentralization.

Develop, test, and disseminate new management and operations systems in three areas—gathering and reporting information, budget and expenditure tracking, and planning, monitoring, and evaluation of performance—at all levels of government and at the school level.

Foster a national education information system consistent with decentralization with financial incentives offered to districts for reporting information to this national-level education database.

Develop management and technical capacities at all levels and define performance standards and measures for all decentralized functions and a corresponding checklist of basic competencies needed to carry them out.

Increase the resources that are available to the district governments for education.

To implement their assigned functions under decentralization, local governments should manage far more educational resources than just teacher salaries. Only a very small proportion of the transfers to these governments is available for non-salary expenditures. The result is either that schools are starved of much-needed capital investments or that capital investments in schools are financed in a fragmented and unplanned way by the central government or aid agencies, robbing the districts of the ability to manage their education systems. To rectify the situation, the central government should expand the education allocation through the block transfer mechanism and should develop and disclose a multi-year plan for financial, technical and management assistance to local governments. These educational assistance plans should be developed, in consultation with local governments.

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Require provincial and district governments to prepare and implement multi-year regional investment and financing plans as well as a corresponding assistance plan for each school in accordance with regional goals and with school capacities and needs.

Giving transfers to lower levels of governments is more effective when efforts are also made to build local planning skills, to increase transparency in the allocation and use of local funds, and to require accountability in return for the transfers. Start by replacing the budgeting process that local governments and schools go through each year and replace it with a multi-year investment plan and an annual spending plan. In doing so, a clear funding mechanism is also needed to transfer resources to schools that is easy to implement and to monitor. Districts should disclose publicly how much they will be giving to each school well before the beginning of the school year. A periodic financial audit of schools is an input into the preparation of the schools’ multi-year assistance plans and makes the implementation of these plans easier. These are concrete actions that provincial and district governments can take together.

Help all schools to make and implement decisions that will improve quality, especially those in poor areas.

But more resources to schools are not sufficient to improve them. Making schools the center of a strategy that is performance based is. The first step in improving school quality is to bring the physical and human infrastructure up to minimum standards for accreditation and to ensure that schools are funded at least to the minimum necessary for operations and maintenance. This should be accompanied by a periodic audit of schools on the basis of a checklist of standards, require schools to report their own expenditures in a timely fashion, establish a proposal-based grants program that would allow schools to request extra resources for specific innovations and experiments, and develop a policy for targeting special assistance to those schools that do not meet the minimum

quality standards, especially in poor areas. In line with this, the central government should adopt pro-poor education programs to stimulate demand consistent with the goals of the global Education for All initiative, and provide adequate and timely technical assistance to local governments to build the capacity of local governments to carry out their new responsibilities effectively. As for the central government, the Indonesian government should adopt a “one policy roof” for all schools, and, as a first step, assess all religious and private schools according to the same national minimum education quality standards that apply to public schools.

Establish a teaching service, separate from the civil service, that includes a transparent, system-wide appointment and deployment process and a professional development system that is school-based and performance-led.

Our most critical recommendation is for the establishment of a separate teaching service that involves: merit-based appointments, transfers, and promotions; school-based performance evaluations; and professional development that covers all phases of the teachers’ career including their initial training, their induction into the teaching profession, school life, and continuous professional development. This service would need to be built up over time.

Implementing the Policy Agenda

Finally, there is the question of how best to implement these recommended actions. Both supply-side and demand-side approaches will be needed to fill existing policy and technical gaps. Supply-side investments are needed to strengthen the capacity of central education agencies to make policy, to plan, to set standards, and to measure the performance of districts and schools. They are also needed to stimulate the development of new solutions that can be used by local governments. It is vital to link all of the different supply-side investments in one institution-building agenda instead of

xiv

undertaking them separately with no coordination.

However, in the spirit of decentralization and in recognition of the great diversity that exists across Indonesia, demand-side programs are also needed. First, the central government must expand its use of block transfers to regional governments, rather than move away from them, as the channel for education resources, while investing urgently in enhancing local capacities to manage there resources well. Second, the national government should establish grants targeted to the poorest districts to fund projects initiated by local schools and communities. To encourage districts to collaborate to take advantage of economies of scale, the grants program could award more money to those proposals that are submitted by associations of districts. Third, as a managerial safety net, the government should evaluate and support the education management systems being developed and used in different regions.

There is also a need to examine both past and ongoing pilot initiatives in education - to build a body of evidence-based, analytical lessons about how to deliver education services of good quality in the new decentralized education system. An integral part of this evaluation effort must be to establish a mechanism to ensure that these lessons are widely publicized so that they can be taken into account in national and local policymaking and school-based management.

Conclusion

Many messages have emerged from the review, but the two overarching messages are:

Improving education quality across the system is the key educational challenge for Indonesia today, and even concerns about equity and serving the poor must be couched in terms of universal access to education of acceptable quality.

Decentralization can potentially help to meet this quality challenge—by spreading the governance and managerial responsibility for improving better education across different stakeholders, by strengthening accountability mechanisms, and by enhancing incentives to innovate. However, any delays in clarifying and rationalizing functions, structures, and financing throughout the education system and any lack of commitment from the government to confronting some difficult implementation issues could erode the effectiveness of the reform.

1

Table 1.1: Rising Education Enrollment Rates at all Levels, 1995-2002

1995 1997 1998 1999 2000 2002

Gross enrollment rate

Primary level 107.0 108.0 107.6 108.0 107.7 106.0

Junior secondary level 65.7 74.2 73.4 76.1 77.6 79.9

Senior secondary level 42.4 46.6 47.4 48.4 50.2 48.2

Net enrollment rate

Primary level 91.5 92.3 92.1 92.6 92.3 92.7

Junior secondary level 51.0 57.8 57.1 59.2 60.3 61.7

Senior secondary level 32.6 36.6 37.5 38.5 39.3 38.2

Data sources: Pradhan (2001) and calculations using SUSENAS, 2002

Chapter 1: Indonesia’s Educational Progress and Challenges

Enrollment Expansion

Indonesia’s population of school-age children is one of the largest in the world, but a sustained drive to build schools across the country since the 1970s has resulted in more and more of those children attending school every year. This has been an impressive accomplishment for the country. The primary school enrollment rate has grown from 62 percent in 1973 to nearly universal coverage by 1983 and stayed high even through the financial crisis of the late 1990s. In 2002, the gross primary enrollment rate exceeded 100 percent, and net enrollment rate was 93 percent (Table 1.1). The gross enrollment rate for junior secondary education showed more marked increases, rising from 18 percent in the 1970s to 66 percent in 1995

and to 80 percent in 2002. In 2002, the net enrollment rate was 62 percent. The senior secondary enrollment rate has been rising too, though at a much more modest rate. These enrollment rates, especially at the primary level, compare favorably with enrollment rates in other countries in East Asia with much higher per capita incomes (Figure 1.1).

Figure 1.1: Gross and Net Enrollment Rates in East Asian Countries, 2000

Notes: GNP per capita data (in parenthesis) are for 2002 Data sources: UNESCO, 2003 and World Bank Edstats (http://www1.worldbank.org/education/edstats)

0

20

40

60

80

100

Indonesia($710)

Philippines($1020)

Thailand($1980)

Malaysia($3540)

Korea($9930)

Secondary Gross enrollment Secondary Net enrollment

0

20

40

60

80

100

120

Indonesia($710)

Philippines($1020)

Thailand($1980)

Malaysia($3540)

Korea($9930)

Primary Gross enrollment Primary Net enrollment

Education Sector Review Volume 1

2

Table 1.2: Inequality in Enrollment Rates: Wider Gaps within than between Provinces, 2002

Source of inequality Primary

Juniorsecondary

Senior secondary

Between provinces 30.5 29.2 27.5

Gross enrollment rates Within

province 69.5 70.8 72.5 Between provinces 39.2 35.8 29.9

Netenrollment rates Within

province 60.8 64.2 70.1 Notes: The coefficients of variation for enrollment rates across the years are small at the primary level (ranging from 4 to 7 percent for net enrollment rates), as compared with those at the junior secondary level (22-28 percent) and at the senior secondary level (41-46 percent). Data sources: District-level database for ESR, using data from various years of SUSENAS.

The financial crisis of the late 1990s threatened to derail the educational progress that Indonesia had made in the previous decade. Enrollment rates faltered immediately after the crisis but have since recovered. Impressively, large decreases in enrollment rates were avoided even though real household education expenditures—and the share of education expenditures in total household expenditures—declined by about one-third from 1998 to 2000 (Pradhan, 2001). Perhaps this is partly attributable to the national pro-poor scholarship and school grants program that the government launched at that time to mitigate the adverse effects of the crisis (Cameron, 2002 and Filmer et al, 2001), and perhaps also to a more established demand for schooling in Indonesia, even among the poor.

Educational Challenges

There is a widespread perception that several critical barriers have prevented Indonesia from achieving its Education for All (EFA) goals of: (i) enrolling all students through to the end of junior secondary level, (ii) ensuring that poorer and disadvantaged children have full and equal access to schools that provide an appealing learning environment and effective instruction, and (iii) providing education that is of acceptable quality and is relevant to the economy and society (PROPENAS, 2000-2004 (Jalal and Musthafa, 2001). These challenges are discussed in this section.

Closing Large Regional Gaps

Behind the impressive increase in enrollment at the national level, wide regional differences remain. In a country as large, spread out, and diverse as Indonesia, differences among regions are to be expected. However, extreme differences mean that some regions have been lagging for sustained periods and thus need extra help. In 2002, net enrollment rates in primary education ranged from 83.5 percent in the province of Gorontalo to 94.4 percent

in Sumatera Utara. At the junior secondary level, net enrollment rates ranged from 40.9 percent in Nusa Tenggara Timur to 77.2 percent in Jakarta, and at the senior secondary level, from 24.5 percent in Nusa Tenggara Timur to 58.4 percent in Yogyakarta.1

Even larger than this between-province variation are disparities among districts within provinces. Only about one-fourth to one-third of the total inequality in enrollment rates in primary to senior secondary education is due to differences between provinces; the rest of the inequality is due to differences among the districts within provinces (Table 1.2). This means that how education resources are distributed among districts within each province matters more than how resources are distributed among provinces if equality in education outcomes is to be realized.

1 These comparisons exclude a few provinces where the samples tended to be in urban areas. According to the SUSENAS Work Manual (BPS, 2002), “Because of the unfavorable security situation, in the following provinces/regencies SUSENAS 2002 is only conducted in Banda Aceh (Aceh), Ambon (Maluku), Ternate (North Maluku), Sorong (West Irian Jaya), Timica (Central Irian Jaya), and Jayapura (East Irian Jaya).”

Chapter 1 Indonesia’s Educational Progress and Challenges

3

Table 1.3: Education Equality at the Primary Level and Increasing Equality at Higher Levels: Net Enrollment Rates by Income Quintile, 1993-2002

Primary Junior secondary Senior secondary Income quintile 1993 1997 2002 1993 1997 2002 1993 1997 2002Poorest 86.7 90.3 91.4 22.6 37.7 45.5 7.0 12.4 17.8 2 90.7 93.0 93.6 37.5 52.2 57.9 15.4 24.4 28.0 3 92.5 93.4 93.8 47.5 60.0 65.1 25.2 34.2 37.9 4 93.3 93.5 93.2 61.3 69.2 72.0 42.3 47.8 49.8 Richest 93.0 92.4 91.4 72.5 75.1 76.9 60.8 60.9 62.0 Q5/Q1 1.07 1.02 1.00 3.21 1.99 1.69 8.68 4.91 3.48

Data source: Calculations based on SUSENAS data, various years. Data exclude East Timor. 2002 exclude most of Aceh and Papua.

Figure 1.2: Highest Grade Completed by 16-18 year olds, by Income Quintile

0

10

20

30

40

50

60

70

80

90

100

1 2 3 4 5 6 7 8 9 10 11 12grade

percent

poorest quint ile

richest quintile

second poorest quint ile

Data source: SUSENAS, 2002.

Reducing Inequality across Income Groups

Indonesia’s past enrollment expansion closed the enrollment gap between males and females and across income groups, especially at the primary education level, but striking inequalities remain at the junior secondary and senior secondary levels. In 2002, the net enrollment rate in junior secondary school of the richest one-fifth (quintile) of the population was 69 percent higher than that of the poorest quintile, and their senior secondary net enrollment rate

was three and a half times that of the poorest quintile (Table 1.3). While nearly all children enter the early primary grades, those who belong to the poorest income quintile drop out first, thus completing the fewest years of schooling (Figure 1.2). These patterns point to the critical junctions in the school cycle when children from poor households begin to fall far behind.

Improving the Quality of Education

There is a common perception that the quality of schooling in Indonesia is low and declining and that decades of rapid expansion of enrollment have not produced graduates with the consistently high quality of knowledge and skills needed to build a strong society and competitive economy. National newspapers periodically comment on the gap between what schools offer and the desires of parents for their children to be taught moral and religious rectitude, the needs of civil society for an engaged electorate, and the demands of the enterprise sector for employees and entrepreneurs with imagination and problem-solving skills. According to the results of the 2002 examinations published on the National Examination Center website, the more than 2.2 million students from nearly 20,000 schools who took the tests averaged scores of 5.79 for math, 5.11 for Bahasa Indonesia, and 5.29 for English, out of a possible 10 points for each subject area. These confirm another piece of evidence—that eighth-


4

Table 1.4: Student Performance on Mathematics and Science Tests, Ranking

among 38 Countries Country Mathematics

score & rank Science score

& rank Singapore 604 (1) 568 (2) Korea 587 (2) 549 (5) Taiwan 585 (3) 569 (1) Hong Kong 582 (4) 530 (15) Japan 579 (5) 550 (4) Malaysia 519 (16) 492 (22) Thailand 467 (27) 482 (24) Indonesia 403 (34) 435 (32) Philippines 348 (36) 345 (36)

Data source: Trends in International Mathematics and Science Study, 1999.

graders in Indonesia performed well below most of its Asian neighbors on international tests in 1999 (Table 1.4). However, this is just the tip of the quality problem. National averages mask wide variation across provinces and across districts. In urban areas alone, government expenditures per school ranged from a minimum of Rp 3,000 to a maximum of Rp 460,000 in 2001 (McMahon, 2003). This staggering variation defines the starkly different worlds of students around the archipelago.

Indonesia’s school system is immense and diverse. In 2001/02, there were 28.9 million primary school students and 1.4 million primary school teachers in more than 171,000 primary schools across some 400 districts and municipalities. At the junior secondary level, in grades 7 through 9, there were 9.4 million students and about 680,000 teachers in more than 31,000 schools, including general, religious, public, and private schools. Raising the quality of education in a system this large is not an easy task. Underlying the quality problem is the failure to provide students with the rudiments of instruction—textbooks, a blackboard, writing supplies, and a teacher who has mastered the curriculum and regularly comes to class. One in six schools in Central Java and at least one in two schools in Nusa Tenggara Timur are reported to be in “bad condition,” according to school survey data from the Ministry of National Education (MoNE).

The kind of education system that has succeeded in expanding enrollment rates is not necessarily the same kind of system that can effectively address the kinds of challenges related to quality. To find solutions, it is necessary to understand the problem across all of the regions of the country and across all of its demographic groups and to examine the factors that explain it. A December 2003 article in TheEconomist emphasized that Indonesia cannot afford to ignore the challenge of improving education quality:

“If the priorities of South-East Asia’s politicians are anything to judge by, few subjects are more important than education. … No wonder. Before the crash of 1997, education was said to be propelling South-East Asia’s breakneck growth. Now it is billed as the factor that could fuel another boom. In fact, the region’s erstwhile tigers still scratch above their weight in educational terms. … But South-East Asian leaders are terrified that their countries will lose out on foreign investment and economic growth unless they produce more skilled workers” (Economist.com, 2003).

Decentralization: Promise or Peril for Education?

Indonesia’s decision to decentralize its government was driven primarily by political considerations—a national call for democracy, the end of the Soeharto regime, and the failures of the highly centralistic government, intensified by the financial crisis of 1997. Its decentralization laws (Law 22 and Law 25 of 1999) are based on the principles of democracy, community participation, equity and justice, recognition of the potential and diversity among regions, and the need to strengthen local governance. This reform is also transforming the nature and level of public service delivery, including education. How decentralization applies to the education system has been defined in Education Law 20/2003.


5

According to this law, the principal responsibilities, authority, and resources for the delivery of education are transferred to lower levels of government, while some decisionmaking power is transferred to schools themselves.

Can this reform cure what ails Indonesia’s education system and help to stimulate educational development? If decentralization changes the distribution of accountability among the different stakeholders in the education system and focuses that accountability on measurable educational outcomes, then the answer is yes. By distributing responsibility and power more widely throughout the education sector, decentralization has the potential to increase the efficiency of the system and its responsiveness to the needs of its constituencies. It also gives the freedom to innovate. In a large country like Indonesia, local conditions vary widely enough to make it rewarding and even necessary to experiment, and locally generated innovations can stimulate continuing improvements in education if a region can learn from the experiments carried out in other regions.

However, decentralization also raises difficult issues. Despite its promising aspects, it is not a policy panacea. Conflicts and inefficiencies can sometimes arise when the goals of the different levels of governments contradict each other. For example, the central government may want to allocate public funds in such a way as to equalize education indicators across the country, which might be resisted by a wealthy district that already has achieved a high education quality level. How to resolve such disparate education goals among stakeholders in the sector is a permanent challenge under decentralization. And even when everyone’s goals are aligned, paternalistic behavior left over from decades of centralistic policymaking, on the one hand, and the extreme dependency of some areas, on the other, can be hard to change simply by edict. There will inevitably be

lags and variations in implementing decentralization across the country. Thus, the process of reform is likely to be a slow one, punctuated by bursts of progress and frequent setbacks that may lead to rising frustration and growing mistrust among stakeholders if they do not understand that these are inherent aspects of the reform process.

For decentralization’s promise to be realized in Indonesia, government commitment to the reform is necessary but not sufficient in itself. Four key conditions have to be met: (i) a clear the division of responsibilities and power among the different levels of government, (ii) real decisionmaking power and autonomy to local governments, (iii) greater voice of teachers and parents on how schools operate, and (iv) effective accountability mechanisms and adequate financial and technical resources that are consistent with educational goals. Table 1.5 lists the supporting conditions that have helped other countries to implement decentralization and indicates whether the conditions are present in Indonesia.2 Like other countries that have decentralized their education system, Indonesia faces many implementation challenges. However, most of these challenges really stem from two fundamental problems—unclear, incomplete, and inappropriate assignment of governance and management functions and a pervasive lack of the management and technical skills needed to operate a decentralized education system.

Topics for this Review

Numerous questions about decentralization have emerged with its implementation. This review focuses on four broad issues, which are discussed in this section.

2 The information is derived from a series of interviews conducted for this report with various policymakers, experts on governance and management issues, and representatives from education boards and school committees.


6

Governance and Management

Will the shift in authority, responsibilities, and resources from the central level to district governments and communities help to achieve the desired education outcomes in Indonesia? This depends on how certain design and implementation issues regarding governance and management systems are resolved. These include how the relationships between district governments and service providers (district and school-level providers) have changed; what are the functions and roles of the large number of decisionmaking bodies in the sector; whether local government officials and school staff have the capacity and skills to fulfill their devolved functions and responsibilities; and whether the central agencies are ready and able to restructure and reequip themselves to undertake their new roles.

Finance and Public Spending

Decentralization has shifted the flow and allocation of fiscal resources from the central government to the district governments and from the district governments to the schools. While Indonesia is no stranger to transfer mechanisms, such as its current block grant system to districts, it has now become one of the most decentralized countries in the world. Are the fiscal resources for education sufficient? Are these resources being used more efficiently and more equitably than before? How can the use of resources be improved? What are the implications of the new fiscal arrangements at the school level and thus on educational outcomes?

Education Quality

Improving the quality of the education provided in schools has emerged as a high priority in the government’s policy and issues papers. It has focused on how to provide more and better inputs such as textbooks and teaching aids to schools. Under decentralization, however, improving quality will mean identifying those institutional arrangements (such as standards, structures, and incentives) that will improve performance and accountability. What then are the best ways to raise quality in the context of local autonomy? How can performance standards be set, measured, and monitored throughout the education system?

Teacher Management

In Indonesia, as elsewhere, teachers are a critical element in the process of educational development. No systems for managing the teaching force have been fully specified in either the general decentralization laws or in the new Education Law. Yet such systems are vital for managing the employment, deployment, and career opportunities of this very large workforce and to ensure that schools reach a level of performance that is consistent with the country’s education goals. How will decentralization affect the incentives faced by teachers, how will it determine teachers’ entry into and progression within the profession, and what management systems are likely to be effective in a decentralized context?


7

Table 1.5: Some Challenges and Issues in Implementing Decentralization in Education

Common challenges in implementing decentralization*

Present in Indonesia?

1 Clear and efficient definition and assignment of roles and responsibilities (function assignment)

No. Key features and elements of the new institutional arrangements under decentralization remain unfinished, ambiguous, and controversial. The law has specified the obligatory sectors for district governments, but their functions within those sectors have yet to be decided. There are inconsistent regulations that affect accountability and mismatches between the functions of and resources available to the different government levels.

2 Alignment of responsibility and authority Not yet; function assignment is not clear, even in the new Education Law. 3 State or provincial governments sharing

authority with lower levels of government and with schools

No. Provinces do not have overall power relative to districts and schools.

4 Effective management systems and skills (generic and system-based) to implement the reform

No, though highly variable. Many districts do not have the skills to implement education decentralization, though some do. There is no serious (universal) diagnostic against a complete and detailed function assignment, partly because function assignments are not clear. Some samples have been done. Some districts are so small that they may never have the skills.

5 Community, parent, and private sector participation

Pilot projects suggest interest is high, but few opportunities exist for participation.

6 Organizational and individual accountability

No clear mechanisms but there is a proposal for obligatory functions.

7 Information of high quality and information about quality

No. Information infrastructure has to be rebuilt and needs to be linked to performance.

8 Effective technical support and guidance No. Most instructions and guidelines and the regulatory tradition are aimed at control rather than support.

9 Equitable educational access, opportunities, and quality

No. There are large variations across districts and schools in indicators of school quality.

10 Efficient and equitable resource allocation

No. Funding formulae are inefficient. Spending per student varies greatly among districts and among schools.

11 Support for decentralization and political and legal support

Not a serious problem at local levels. Districts are interested in their new powers. School-level decentralization has not yet been tested sufficiently to assess degree of resistance. Some resistance at national level to decentralization of certain functions, e.g., those related to teacher management.

12 Project design supports decentralization objectives

Does not appear to be a problem. There were decentralization pilot projects ahead of the legislation and regulation, but there have been problems in applying lessons from pilot projects to legislation and regulation.

13 Institutional and political predictability Appears to be a problem; policy vacillates and implementation sometimes contradicts policy.

14 Form and process of resolving disputes or contested roles and responsibilities

No.

Notes: *As captured by the knowledge management tools at: http://www1.worldbank.org/education/globaleducationreform/06.GovernanceReform/governace_ref.htm.


8

9

Chapter 2: Governance and Management

Legal Framework and Governance Structures

Laws 22/1999 and 25/1999, as well as the newly ratified Education Law 20/2003, have firmly established decentralization in Indonesia, but many important legal and implementation issues remain unresolved. The Education Law, which takes decentralization a step further from the district to the school level and which was the subject of national debate, clarifies but does not resolve all these issues. For example, conflicts may arise from the fact that the central government continues to be in charge of setting pay rates for civil servants, including teachers, even while district governments have been given the responsibility for hiring and paying teachers in all public schools except madrasahs. In fact, many districts use their legal prerogative to provide supplementary benefits and incentives to the teachers within their jurisdictions. Also, while initial teacher training remains the function of those universities that are accredited by the MoNE’s Directorate General of Higher Education, it is not clear who is responsible for teachers’ continuing professional development.

Some functions may have been decentralized too far, leaving district governments to wrestle with very difficult managerial and technical tasks that they are unprepared for. It is possible for districts to collaborate with each other and some are creatively doing precisely that, but there are hardly any guidelines, principles, or good practice examples to inform this type of collaboration. These conditions have caused anxiety among education managers at the local level, as the MoNE recognized in a planning document in 2003:

“[there have been] apathies and confusion in the process of decentralization and autonomy in education as it restructures the ways of thinking, especially in issues related to school and community based management, dichotomy between public and private schools… and education management and coordination.” (MoNE, 2003, p.29).

Basic Challenges in Governance and Management

Education systems have many different decisionmakers, actors, and stakeholders. For decentralization to contribute to educational development, it must transform the relationships among these various individuals and agencies. In Indonesia, this means redefining the roles of the MoNE and local governments; increasing transparency and accountability at the local level from principals and teachers to parents and community and from the kepala dinas to the DPRD and the education board; opening up information flows among parents, students, and school personnel; and ensuring that local input is taken into account in the learning process. In principle, these changes in relationships should be facilitated by corresponding shifts in the system’s organizational structure.

Figure 2.1 reflects what is taking place in Indonesia. In the figure, the governance or representative line of accountability is shown as separate from the management or executive line of accountability. It also shows that provincial governments are essentially missing from the new functional structure of basic education.


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Clarifying Governance Functions

There are several unexamined or unresolved issues relating specifically to the governance line. Here we highlight a few.

To make well-informed decisions, governance bodies at each level (in other words, the DPR at the central level, the DPRDs at the district level, and the school committees at the school level) need regular access to timely and accurate information and to the results of technical analyses. Currently, however, the governance bodies do not have any systematic mechanisms for evaluating the soundness of legislation,

policies, and regulations that are independent of the executive or management line. This could be achieved if local legislatures were to provide research and analysis assistance to governance bodies, perhaps through consulting services.

The role of the district education boards needs to be revisited. These boards consist of district leaders, including the district head, and are supposed to assist the DPRDs in making policy decisions about education. However, the divisions of labor between these boards and the DPRDs, between these boards and the

Depdiknas

Managementor Executive Aspect of

Government:Management Accountability

Governance orRepresentative Aspect of

Government:Governance Accountability

MPR

MoHA

National Level

(Provincial Level)

Kabupaten/KotaLevel

Regents, Mayors(Bupati, Walikota)

Head of DistrictEducation Service

(Kepala DinasPendidikan)

School Level

Principals

DPRD(Regional People's

RepresentativeAssembly)

SchoolCommittees

MoF

President of theRepublic

standard-setting(sets standards of reportingon financial and educational issues)(accountability is around standards)

report onorganization ofregional governmentthrough MoHA,reporting to standards

reporting to standards



reporting to standardsEducation

Boards/Councils

DPR

Figure 2.1: Flows of Governance and Managerial Accountability in Decentralized Indonesia

Chapter 2 Governance and Management

11

kepala dinas, and between these boards and the school committees do not appear to be effective.

As defined by ministerial decree (KepMen 044/U/2002) and the Education Law, the duties and powers of the school committee need to be made clearer and more efficient. In the case of financial management, should school committees have oversight over all financial matters rather than just the issues related to funds raised by parents? Many of the duties of school committees appear to require them to enter into contracts, but do they have the legal right to do so, and if so, how will this legal status be supported? It would be very inefficient if each of over 400 district governments had to resolve these issues on its own.

At the moment, many functions have been decentralized too far, that is, down to a level that does not have the capacity to perform that function effectively. Having recognized this, some districts and provinces are coming together to form agencies that can handle certain of their functions on a collective basis (as suggested in Law 22/1999). For example, various districts in East Java are collaborating on the development of student tests; each district develops the exam for one academic subject and then all of the exams are shared across districts, thereby taking advantage of economies of scale. Apart from this, there are other tasks that are most usefully undertaken in collaboration—but how should collaboration agreements be developed?

Rebuilding Management Systems

It is clear that the systems that are currently in place at the lower levels of government are not sufficient to perform the many functions that have been devolved to them. Nor do the staff at these levels have the necessary skills to carry out those new and

expanded roles. Management systems at all levels of government that used to operate the education system have broken down or are now obsolete. New systems that will allow local governments to perform the functions that have been transferred to them under the decentralization reform are just beginning to emerge, but there is no national strategy for encouraging or disseminating good practices. There is also some concern that staff at the local levels are not sufficiently trained and experienced to carry out their new and expanded roles. Moreover, field visits conducted for this review revealed that there is a great deal of confusion surrounding the functions related to, for example, teacher management (including training, recruitment, deployment, performance evaluation, human resources databases, payroll, and redeployment) or to the allocation of resources to schools. We highlight a few issues here.

The MoNE stopped receiving regular information through its past data collection mechanisms because districts, now being autonomous, no longer feel compelled to transmit information upwards. In 2002, the annual school census yielded only a 30 percent response rate from schools as compared with 80 percent in 2000. As shown in Box 2.1, this has also been the case in other countries that have decentralized their education sectors.

The experimentation that follows from the implementation of decentralization makes it possible to adapt systems to natural variations in local conditions. For example, some districts have experimented with upgrading their budgeting and finance systems by setting formulae for district–to–school funding. One dynamic bupati in Bali has managed to eliminate certain fees by consolidating schools and reducing certain types of expenditure, thus making enough room in the budget to eliminate school fees and still cover costs. The lessons from these various


12

Box 2.1: Information Systems and Management in Brazil and Spain

In Brazil and Spain, devising good management information systems under decentralization was difficultand problematic but was possible with effort and partnership between the various levels of government.

Brazil. Until 1995, educational databases in Brazil were outdated and data collection was unsystematic.Not only was there no up-to-date information available to guide policymaking but there was also no way tomonitor or follow up on policy actions. This caused a huge amount of waste in the use of funds. In theabsence of a standard national system of information and indicators, several states built their own datagathering and processing systems that were not compatible with each other. As a result, Brazil could notprovide international organizations with consistent national data on education, and the available informationwas neither sufficient nor reliable enough to be used as a basis for designing policies.

However, in 1995 the federal government issued guidelines for the creation of evaluation mechanisms tomonitor the country’s education system. Since then, the educational information system has been graduallyreformulated and now has an integrated but decentralized structure that meets the country’s monitoring andevaluation needs. Several factors have contributed to this successful reorganization - the strong leadershipof the Ministry of Education in constant partnership with sub-national authorities and representatives of theeducation sector, growing public support for systematic evaluations of schools and other educationalinstitutions, and multilateral cooperation in building capacity and disseminating the experiences of othercountries.

Spain. As the decentralization process unfolded in the 1980s, the country needed a planning mechanism tocoordinate the educational policies and programs being developed and executed by Ministry of Educationand the decentralized autonomous communities. One example of why such a coordinating mechanism wasnecessary was the fact that soon after the decentralization process began the capacity to gather andreproduce nationwide educational statistics was lost. Various regions had begun gathering their own data inways that could not be aggregated at the national level.

The Education Law of 1985 created the Conference of Counselors, with the Minister of Education and theautonomous community counselors (chief educational officers) of the seven already decentralized regions asmembers. Much of the work of the Conference (which meets at least once a year), is carried out by fivetechnical sub-committees each focusing on a specific issue (such as personnel, the curriculum, or statistics).The Conference is an instrument of cooperation and not coordination because none of the decentralizedregions is obligated to carry out the decisions of the Conference when they believe their own statutes ofautonomy are being violated. Also, several autonomous communities worry that the Ministry may use theConference to control the actions of the decentralized regions. Another problem is that, even though issuesare brought to the Conference as technical problems, the proposed solutions tend to have heavy politicalovertones. After all, the Minister and the Counselors sitting around the table are all appointees of particularpolitical parties, so political agendas are never far from the surface. Nevertheless, at times the Conference iscapable of reaching important agreements and carrying out complex actions.

Sources: Gumaraes de Castro, 2000 and Hanson, 2000.

experiments, however, have not been systematically documented at the national level or analyzed to see how applicable they might be to other situations. And even in those districts that are experimenting, it is not always clear if the evolving financial arrangements are ideal or what functions to decentralize to schools and why.

At present, responsibility for personnel management is nominally decentralized

to the districts, but if a district takes any action that would result in changes in the payroll database, it must report this action to the national-level personnel board, which has the power to veto the action. With unresolved issues about the assignment of functions, it is not surprising that districts do not yet have adequate teacher management systems.

Increased corruption under decentralization has been raised as a

Chapter 2 Governance and Management

13

concern. The argument is that it is more difficult to monitor 400 districts than it is to monitor the central government. In principle, however, decentralization has the potential to reduce corruption. Corruption can be kept under control if resources are transferred to districts using transparent allocation formulae, such as a per student funding allocation, if all actors know the amount of the transferred resources and when the funds are transferred, and if a culture of public disclosure is engendered at all levels of government.

Reframing the Role of the MoNE

Many major responsibilities and powers now rest with district and provincial governments. However, there are some important policies and programs that these governments have no incentive to carry out because they cannot fully capture the returns, because they are unable to perform them well because of a lack of economies of scale, or because they do not have sufficient resources to undertake them. For these reasons, the central government needs to step in if such policies and programs are to be undertaken. Such policies and programs include setting goals for and standards of service provision, experimenting when needed, rewarding innovations from other parts of the system, disseminating information widely and regularly, establishing a transparent regulatory framework and enforcing it, ensuring more equitable education spending, and motivating districts and schools to adopt national education goals.

Because these may be unfamiliar roles to the central education agencies, they may be tempted to hold on to their previous roles rather than to redefine their mission (and those of their deconcentrated units in the provinces in the case of the MoNE), to reorganize themselves accordingly, and to update their own skills. Evidence from other countries shows that the central government has to be politically committed to the

principles of the reform because it must be willing to assume the costs involved in changing its role in the management of education (Box 2.2).

Building Local Capacity

There has not yet been an audit of available local skills covering all of the likely functions that would need to be carried out at the district level under a rationalized model of decentralization. While districts clearly must be responsible for raising their own skills to the level necessary to carry out their decentralized functions, the national government is responsible for the maintenance of standards. Therefore, it seems appropriate that the central government should be responsible for carrying out a nationwide, district-level audit of current management skills and standards. At a minimum, the central government should devise an instrument and protocol for doing such an audit and for compiling and communicating the results, as having each district devise its own protocol would be wasteful. It may be tempting for the central government to slow down the pace of decentralization for fear that district and provincial governments do not have sufficient capacity to carry out their newly assigned responsibilities effectively. However, there is greater capacity at the local level than most central government policymakers assume. Since few real decisions have had to be made locally before, the actual extent of capacity and skill at these levels has not been put to the test. As decentralization proceeds, it may be that existing local talents and capacities emerge naturally, at least in some places. It is clear that this is already happening in some parts of Indonesia, as some districts have much better and more talented bupatis than others. The same process will undoubtedly occur when authority is decentralized to the school level; it will become clear that there are many principals and community leaders capable of wielding that authority effectively.


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This is not to minimize the importance of training and capacity building, particularly on the question of inequality. In fact, considerable emphasis is being placed on this aspect in the various planning and policy documents as noted above. One possibility is to decentralize authority only to those schools where capacity already exists, while continuing to support those schools that still need to develop it (a

process known as “asymmetric” decentralization). However, it is important not to make the criteria that schools must meet to be given decentralized powers so strict that very few can meet them. This has happened in some countries (for example, in Colombia’s asymmetric decentralization down to the district level) but not in others (for example, South Africa’s asymmetric decentralization down to the school level).

Box 2.2: Transforming the Current Organizational Structure of the Ministry of National Education

Since the government of Indonesia has not yet arrived at a final and optimal function assignment and since organizational form should follow function, it is difficult to suggest improvements for the Ministry of National Education (MoNE) in any detail. However, judging by the organizational structure of the central agencies of many countries that are decentralized or effective or both, Indonesia’s MoNE is not optimally organized to provide support and guidance to lower-level government units and to schools.

The national level of modernizing and decentralizing governments, in other words, those that do not implement policies but guide their implementation by local governments, is characterized by:

Less focus on traditional line functions such as early childhood, primary, and secondary education and more focus on “transversal” support functions such as governance improvement, financial equalization, and quality control.

Relatively less focus on supporting the direct execution of projects and hence fewer staff devoted to the inspection and audit functions of these projects.

More focus on the procurement not so much of goods and construction services but of analytical and developmental services.

The separation of those functions that support narrow issues of human resources or budgeting as they apply to the MoNE itself and to projects run by the national level from those functions that apply to the country as a whole.

With regard to size, it should be noted that central authorities in many decentralized countries have very few staff. One extreme in the developed world is Canada, where the national education body functions with a staff of only a few dozen, since there is no central authority but only a council of provincial ministers with a very small secretariat. The United States functions with about 5,000 education staff at the federal level. Developing countries such as China, Argentina, and South Africa have as few as a few hundred to little over a thousand national-level staff.

The training and capacity of staff matter much more than the number. The dedication of staff time to functions that have been appropriately assigned to the national ministry is also key. Staff who are highly capable and whose actions create considerable leverage—because they are focused on overall direction, policy, measurement, and comparisons—are much more important than the number of staff at the apex of a decentralized system.

The proportion of the total budget spent by the national level in decentralized countries varies but is generally higher than the proportion of staff working at the national level. At the pre-tertiary level in decentralized countries, this ranges all the way from less than 10 percent (in China, the United States, South Africa, and Hungary) to as high as 20-40 percent (in Australia, Poland, and Spain). As noted above, the staff working at the national level in decentralized countries have a great deal more leverage over resources than similar staff in a centralized system or than similar staff at lower levels of government.

15

Box 2.2: Transforming the Current Organizational Structure of the Ministry of National Educationcontinued

In sum, a central ministry in a decentralized system does not implement policies or interventions. Instead, its functions should be to:

Set standards and measures of performance (ideally related to outcomes rather than inputs) and ensure that the necessary information systems exist to collect and report them, (including and engage in goal-setting or minimum service standard-setting, again outcome-oriented

Focus on institutions of delivery (for example, schools or colleges) rather than “levels” (such as primary or secondary)

Ensure competition and emulation between decentralized regions

Ensure that decentralized units can raise their quality up to the necessary standard through systems development, teacher training, and sufficient funding

Ensure that functions with large economies of scale are carried out at a level that takes advantage of those economies of scale, perhaps by brokering associations between districts or provinces

Use funding or norming to correct spillovers between regions, for example in specialized areas of education where one institution could serve more than one district

Defend equity in funding and outcomes by norming funding equity if possible and, if not, by persuasion

Make planning, forecasting, and investment priorities for the whole education system, including forecasting and analyzing teacher supply and demand

Encourage experimentation and disseminate any lessons learned from those experiments.

Chapter 1 in Volume 2 of this review contains a more considered discussion of these issues and proposes, for discussion purposes, an organizational structure for the MoNE that might better suit Indonesia’s needs

than the current one.


16

17

Table 3.1: Sources of Local Revenues, Fiscal Year 2001

Source Rupiah (Billions)

Percent

Carry-over from previous year 2,157 2.7 Own-source revenues 5,233 6.6 Transfers from central government

69,280 87.2

Of which the DAU allocation 54,401 68.5 Other revenues 2,783 3.5 Total revenues 79,453 100.0

Source: Ministry of Finance

Chapter 3: Finance and Public Spending

Financing Framework and Structures under Decentralization

Decentralization has changed not only the distribution of authority and responsibilities within the education sector but also how fiscal resources are generated and allocated. Prior to decentralization, the central government transferred public funds to the regional governments through the Autonomous Government Subsidy (Subsidi Daerah Otonom or SDO) and through Presidential Instruction grants (Instruksi Presiden or INPRES). Now, intergovernmental transfer arrangements largely consist of block grants given by the central government to district governments, supplemented by an expansion of the districts’ share of the revenues generated from local economic activity and natural resources. The new transfer system is a combination of two grant channels—the General Purpose Fund (Dana Alokasi Umumor DAU) and the Specific Purpose Fund (Dana Alokasi Khusus or DAK)—and

various revenue-sharing mechanisms. On average, the DAU transfers account for about 70 percent of the total revenues of provincial and district governments, and

own-account revenues and shared revenues for the remaining 30 percent (Table 3.1).3This significant restructuring of intergovernmental transfers affects what public resources are available for education and who controls how those resources are spent.

In principle, the DAU allocation is based on a formula that takes into account differences in the needs and means of provinces and districts; in practice, however, the central government simply guarantees that a province or district will receive an allocation at least equal to the amount it received in the past and that will cover its past wage obligations. As long as a large part of the block grants are protected under the “hold harmless”4 components, regional governments will have little control over the transfers that they receive, nor will they have a strong incentive to spend those resources efficiently. This is particularly true in the education sector where the salaries of the teaching force account for more than 90 percent of expenditures, leaving districts only a small fraction of their budgets to allocate.

Law 34/2000 has given taxing authority to district governments. Districts, but not provinces, are now allowed to generate their own taxes provided that the taxes are authorized by the national government and that they are in accordance with the principles set out in Law 34/2000.5 Since

3 These new financial structures are described in greater detail in various studies, including Hofman, Kaiser, and Goga (2003) and Lewis (2001, 2002, and 2003).4 This is to say that the central government is not responsible if all of the block grant funding does not reach the regional governments. 5 This is not a new phenomenon, however. Law 18/1997, the previous law on local taxes and levies, was intended to stop the practice that then prevailed in


18

being given this authority, district governments have been creating new taxes aggressively (Lewis, 2002).6 In reality, district governments have limited capacity to raise taxes from their own resources such as land, buildings, and natural resources, so these constitute only about 5 percent of their revenues. Provincial governments have a larger own-resource base but must share this with district governments. Moreover, the revenue bases of provinces and districts are highly unequal. For example, the per capita non-oil and gas GDP of DKI Jakarta is almost nine times larger than that of the poorest province, East Nusa Tenggara (Akita and Alisjahbana, 2002); in 2002, the richest local government had 32 times the revenues per capita of the poorest one (World Bank, 2003b).

To supplement local financial resources, district governments are allowed to borrow, but are limited in the extent to which they can go into debt. They must get the approval from the Ministry of Finance in the case of foreign loans and none of their loans can be guaranteed by the central government. Law 25/1999 prevents local governments from borrowing except for projects that will generate a financial return, although this clause has been loosened up by the implementing regulations. At the national level, about half of the development budget (DIP) continues to consist of donor project loans, and the central government currently bears the debt-servicing burden on

local government of creating a plethora of local government taxes. Many of these taxes had little revenue potential but imposed high costs on the taxpayer and the economy. Law 18 restricted regional taxes to a specified list and made any additional taxes conditional upon the approval of the Ministry of Home Affairs with advice from the Ministry of Finance. 6 Property taxes are administered and collected mainly by the national government, although regional governments assist with collecting these taxes in both rural and urban areas. Until recently, the national government retained 10 percent of total tax revenues for its own use, 9 percent was provided to local tax offices to assist with collections, 16 percent was given to provincial governments, and 65 percent to local governments (Lewis, 2002).

these expenditures (Hofman, Kadjatmiko, and Kaiser, 2002). As district governments increasingly exercise their right to borrow, it will be necessary to improve the framework of on-lending and on-granting mechanisms that apply to the regions.

Expanding the Resource Envelope for Education

In the past, Indonesia ranked lowest among its Asian neighbors in the share of GDP that is spent on education; in the late 1990s, Indonesia spent just 1.4 percent of its GDP on education compared with 4.7 percent in Thailand and 4.6 percent in Malaysia. Since decentralization, the total government spending for education has increased considerably. According to SIKD estimates, education expenditures for primary and junior secondary education in 2002 were 2.4 percent of Indonesia’s GDP at the district level, totaling about Rp 43 trillion. This spending may well have increased close to the EFA cost implications for 2004, provided that education spending increased by the same projected percentage increase in DAU transfers. (McMahon, 2003). In the past, Indonesia was able to achieve impressive progress in its basic education enrollment rates, which was due in part to the country’s sustained focus on boosting primary education enrollments and in part to the low cost of doing so.7 A greater focus on education quality requires greater resources and, more importantly, a more effective use of those resources.

Some recent legislation has attempted to secure a greater slice of the country’s revenue pie for education. The new Education Law stipulates that a minimum of 20 percent of the central APBN budget,

7 Duflo (2001) examined the effect of the large number of schools built between 1973-74 and 1978-79 and concluded that each new school constructed per 1000 children resulted in 0.12-0.19 year more schooling in Indonesia and 1.5-2.7 percent increase in earnings for the first cohort that benefited fully from the program. This result implies an economic return to education of 6.8-10.6 percent.

Chapter 3 Finance and Public Spending

19

Table 3.2: Per Capita Education Spending, 2001-2002

2001 (Actual) 2002 (Planned)

Total 134,000 (1,586 – 463,753)

175,058(1,193 - 540,479)

Routine 126,118 (998 - 450,789)

159,460(1,013 - 539,287)

Development 16,185 (177 - 205,044)

21,692(402 - 415,463)

Notes: Numbers in parentheses indicate minimum and maximum values. Source: SIKD, Ministry of Finance

exclusive of salary costs, and 20 percent of the districts’ APBD budgets, also exclusive of salaries, must be allocated to education. Including salaries, districts now spend on average about 40 percent of their APBD budgets on education. Excluding salaries, they spend less than 10 percent (assuming that salaries are a modest 80 percent of education spending out of APBD resources) or less than one-half of what is stipulated in the Education Law. To double the share of education spending in APBD net of salaries, districts will need to make significant reductions in the shares of other sectors, which may or may not be politically possible.

Likewise, earmarking 20 percent of the APBN when the MoNE is supposed to have devolved most of its functions to local governments may be well-intentioned but has disadvantages. It puts pressure on the MoNE to develop its own spending programs in the regions, which would mean that most of the capital investments in education would be outside the control of district governments. The experience of other countries shows that this kind of earmarking often leads to more spending but not better outcomes because these centrally initiated interventions guarantee the provision of funds regardless of regionalperformance and creates multiple opportunities for corruption. The challenge then is to ensure that central and local education budgets are indeed spent on schools and students, that they cover the basic operating expenses of schools besides the costs of teaching and non-teaching staff and their career development activities (including instructional supplies, the routine activities of the school committee, the maintenance of a school database, the dissemination of information to parents and the community, utilities, and light repair of the school buildings and other maintenance).

Our principal recommendation about ensuring adequate resources for districts and schools is for the education system to adopt a formula-based funding mechanism that is

easy to monitor and to implement, is non-discretionary, and depends on just a few key measurable criteria. One important step is to define minimum learning standards that will be the basis for an agreed level of funding per student. The advantages of this type of funding mechanism are that it makes it easier for local governments and schools to plan ahead because they will know precisely how much funding to expect. It is also more transparent, which ensure accountability. One of its disadvantages is that it relies on the availability of accurate and timely local enrollment data. If these are not available, then the allocations to schools and districts may either fall short of what is needed or fall prey to corrupt efforts to use bloated enrollment numbers (Ross and Leva i ,1999). This formula for funding should become the routine way to allocate basic education resources in Indonesia, and, in the process, it will facilitate school-based management by allowing schools to manage assistance in cash rather than in kind.

There has already been an attempt as part of the Education for All effort to estimate the per-student level of spending that would be consistent with attaining universal enrollment and improving education quality in Indonesia (McMahon, 2003). What needs to be done is to open up this proposed formula to national scrutiny and debate in order to validate it and to obtain political support for it. What also needs to happen is for the funding formula to be applied to the local processes of allocating the DAU, not the DAK. Lastly, the funding mechanism needs to take into account the extreme


20

variation in the current per-student allocation of the routine and development budgets in the sector. Clearly, those districts that are at the lower end of the range will not meet any kind of education standard (Table 3.2), so the funding mechanism should be designed to enable district governments to mitigate specific inequalities among schools. For example, the funding formula might apply only to the per-student level of routine operational expenditures.

Alternatively, the funding mechanism could use a per-school rather than per-student resource formula to deploy teachers and other staff to schools and to determine capital investments. Many schools in Indonesia have urgent development needs, ranging from staff development to the construction of a library or science laboratory. Richer districts will be able to undertake these capital investments themselves, but poorer districts will not, so a pro-poor investment program will be needed. In fact, because poorer districts repeatedly find themselves unable to fulfill their responsibility to deliver education of acceptable coverage or quality (as is evident from the strikingly wide range in the per capita level of education expenditures across districts), in the short-run, direct assistance to schools in the form of cash would be needed even to cover their basic operational costs, perhaps through a special DAK allocation.

Significant capital investments for education can also be made through the DAK allocation. If there are key areas of investments that are clearly called for by the national education program, the MoNE could consider setting aside a special DAK allocation for those capital expenditures and inviting local governments to submit proposals for receiving a share of that allocation. The advantages of using the DAK allocation instead of the MoNE’s development budget (DIP) is that local governments can incorporate their DAK grants into their overall planning and budgeting processes, whereas DIP initiatives

are off-budget and local governments often have no knowledge of them. In 2003, there were around 400 different education projects in operation in Indonesia, but there was little coordination and information exchange among them. During field visits for this report, regional education officials in Yogyakarta and Central Java expressed frustration at not knowing the full extent of the resources (in kind) available to them. Without information and without transparency, it is very difficult for local governments and schools to plan ahead, to develop coherent and effective educational programs, and to monitor and assess the flow of funds through the system. Another significant advantage of using the DAK

allocation and minimizing DIP initiatives is that, by increasing the transparency of the distribution of development or capital funds across regions, this would make it considerably easier to use the DAU transfers to increase equity among regions.

Making Education Expenditures Count

Under decentralization, the impact of education spending on education goals will depend on how fiscal resources are spent at

Figure 3.1: Indonesia: Education Spending by Level of Government, 2001

Recurrent penditures (APBD)

60%

LG Capital Expenditures

(APBD) 6%

Central Recurrent

Expenditures (APBN)

12%Central Capital Expenditures (APBN) 18%

Province Capital Expenditures

(APBD)3%

Province Recurrent

Expenditures (APBD) 1%

Source: APBN and APBD data Notes: LG=Local government


21

the central and local levels, on whether those resources reach the schools, and, within the schools, on how those resources are used. Certain key actions can increase the efficiency of these education resources.

Spend Locally

There are three important ways to make expenditures more effective. The first way is to change the pattern of spending on education, especially by district governments. In the system as a whole, three-quarters of resources are spent on recurrent items, mostly on salaries and benefits and a small amount on operational costs and pedagogical supplies, and one-quarter is spent on capital outlays (Figure 3.1). This pattern is more extreme at the district level; in 2002, 95 percent of the routine budgets of district governments was spent on the salaries of teachers at the primary and junior secondary levels and other personnel.8 Often, even the tiny share left over for development expenditures, which is supposed to be devoted to building new classrooms, repairing school facilities, and teacher training, is occasionally used to cover routine expenditures, especially staff salaries. This expenditure allocation is going to have to change if education quality is to improve. Teachers do play the key role in the teaching process, as will be discussed in the next two chapters, but adequate resources need to be devoted not only to salaries but also to teacher professional development and classroom supplies.

It is not a good idea for the central government to step in to fill the capital expenditure deficits at the local level. The current system of development projects designed and controlled by the central

8 Article 49 of the new Education Law states that the salaries of teachers and personnel appointed by the central government will be paid out of the national budget, the APBN. Presumably, the teachers and personnel whose salaries were transferred to the districts as part of the decentralization reform will continue to be paid under the local budgets, the APBD.

government was successful in expanding enrollment, but has not been effective in raising the quality of education to a minimum acceptable standard. The financing issue that most affects the quality of education (the topic of the next chapter) is whether budgets for schools are sufficient to cover schools’ basic operation costs, let alone to support their efforts to improve quality. Many junior and senior secondary schools now receive 50 percent or less than their pre-decentralization budgets (McMahon, 2003).9 Therefore it is important to ensure that resources find their way to schools and do not get appropriated – whether legally or through corruption – by the district governments.

Differentiate Assistance to Districts and Schools

When allocating DAK or DIP funds across districts, it is crucial to differentiate among districts based on their resources and needs. Provided that reliable data on districts and schools are available, the national government should be able to develop an assistance program to local governments that is based on three indices: (i) an index that characterizes educational progress in all of the 400-plus districts, (ii) a financial needs index, and (iii) an education management capacity index that measures the effectiveness of each district’s performance assessment, information system, and financial processes. All districts can be ranked in a three-dimensional grid defined by these indexes and grouped into discrete categories that would correspond to different packages of assistance from the central government.

For example, those districts with the worst education index and the poorest financial and management capacities would qualify for the highest level of investment and

9 Districts with high levels of local revenue and districts that are required to maintain particular levels of funding to qualify for project funds have maintained or increased their level of financing for schools.


22

technical assistance program for accelerating educational development. In exchange for a high level of financial assistance, these districts would be required to agree to accept a correspondingly high level of technical and managerial assistance from the MoNE. At the other end of the spectrum, those districts with the best education index and the highest capacities would qualify only for enough assistance to enhance their educational development but would not be required to take technical or managerial assistance in exchange for financial help. The idea behind the varying level of oversight is that districts prefer to have more autonomy (less technical and managerial support) than less autonomy (more technical and managerial support), so this acts as an additional incentive for better performance. To illustrate, Figure 3.2 portrays the distribution of districts according to two dimensions of educational development – school enrollment rates and average student

test scores. Those districts that appear in the upper right-hand quadrant are those that performed the best in both respects (enrollment rate and test scores), given their income levels, while those that appear in the lower left-hand quadrant are those that performed the worst.10 Needless to say, those in the upper right-hand quadrant should not be receiving the kind and level of assistance that those in the lower left-hand quadrant should be. The chart also shows that, in general, districts that do better or worse in one dimension also do better or worse in the other. However, there are districts that do well in one dimension but not the other, and the type and

level of assistance to them should be different also.

Spend More Resources on Those Most in Need

A common concern about decentralization is that the transfer of authority and responsibilities to local governments weakens the central government’s ability to close gaps between the richest and poorest areas of the country and thus inequalities grow. Districts with the most resources are frequently those with higher enrollment

10 Regression analysis was used to identify the relationship between education outcomes (that is, test scores or enrollment rates) and the districts’ average household income levels. The regression results were then used to obtain “residual” test scores and “residual” enrollment rates that could be attributed to differences in the education systems and other factors and not to differences in the economic status of the district.

Figure 3.2: Relationship between Two Dimensions of Educational Development

Plot of individual districts by their average test scores and gross enrollment rate, with the effect of household incomes on test scores and enrollment rates netted out

Res

idua

l tot

al sc

ore

varia

tion

Residual variation of total score and gross enrollmentResidual gross enrollment variat

Residual total score variation Linear trendline

-4 -2 0 2

-4

-2

0

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2 222 2 22 2222

222

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282929

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Data source: 2002 EBTANAS test scores for junior secondary schools averaged by district; gross enrollment data by district from SUSENAS 2002. Note: The codes for the plots refer to the provincial affiliation of each district.


23

rates and better schools, whereas districts with fewest resources are those with lower education indicators. The current formula for the DAU allocations includes poverty as one of its criteria (albeit affecting only a small part of the allocation), but there is no similar mechanism for ensuring that district governments themselves use poverty as a criterion for funding schools. In addition, the trend towards local governments raising their own resources may widen the gap between those districts that have a strong revenue base and those that are less prosperous. Currently, districts receive twice as many resources from intergovernmental transfers as from their own revenues, so if transfers are used equitably, they can be a powerful mechanism for reducing regional inequalities.

Do district governments consider the same factors as the central government does when allocating their funds? When we examined what factors appear to influence education spending by districts, using their level of per-student education expenditures (from the 2002 APBD allocation), we found that those districts with greater fiscal capacity make larger capital investments in education than those districts with lower fiscal capacity. Also, poorer districts (with the level of poverty measured as the proportion of the population below a certain poverty threshold) do not spend more on education from their budgets than richer districts despite receiving a larger allocation more from the DAU. Since the households in poorer districts are less able to spend for education themselves, both central and local governments should be willing to compensate for this deficit in order to reduce inequality among districts.

To make pro-poor policies and programs financially sustainable, it is important to target them to those who need them most. There are valuable lessons to be learned from around the world (for example, from Bangladesh, Brazil, and Mexico) on how this can be achieved. Indonesia’s own past

experience with its large scholarship and school grants program, launched at the onset of the recent financial crisis, can also be an important input into the design of such a targeted program.

One estimate of the cost of raising the education of poor youths is given in the EFA costing report for Indonesia (McMahon, 2003). The report recommends eliminating fees. Currently, fees are charged for entrance; BP3; examinations; procurement of textbooks, notebooks, and school bags; transport; and so on. Districts and schools would have to be able to forego revenues from these fees while increasing the enrollment of poor students and without a worsening of education quality. At the primary level, eliminating fees would mean foregone revenues of Rp 13,000 per pupil in 2004 (2003 prices), on average. At the junior secondary level, foregone revenues amount to about Rp 57,000 per pupil.

The report also recommends an additional grant for the poorest 18 percent of students to cover the opportunity cost of schooling incurred by their parents and the cost of teacher salary supplements in their schools. The report estimates a student grant of Rp 290,000 per pupil per year at the primary level, which is more than doubling the current grant by the government, and Rp 93,000 per pupil per year at the junior secondary level. It would be advisable to initiate pilot tests of these and alternative grant amounts in order to ascertain the likely responses of poor families across different parts of Indonesia.

Lastly, the central government can influence the allocation decisions of the better-off districts, for example, by instituting a reward system for those districts where the education indicators of the poorest communities or schools significantly improve and, conversely, by taxing those where indicators become worse.


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Leverage Governmental Resources – But Consider Consequences for the Poor

The total resource envelope for education includes private expenditures as well as public expenditures. The new Education Law states that the financing of education is a responsibility shared by the government and the community (Articles 9, 47, and 54). Indeed, students already pay a variety of school fees, including monthly tuition fees, entrance fees for new students, term and final test fees, and extra-curriculum fees, averaging an estimated Rp 213,000 per pupil in primary and junior secondary schools (McMahon, 2003). These fees together constitute a substantial contribution to the income of any school. One study found that, on average, fees consist of about one-third of schools’ non-salary expenditures, which usually account for about one-fifth to one-tenth of a school’s budget (McMahon et al, 2001).11 Schools also receive revenues in the form of BP3 contributions and other donations from parents, private foundations, and NGOs.

Should schools be relying on students and the local community for resources? There are opposing views on this. On the one hand, those schools that receive considerable financing from the local community tend to have greater parental involvement, to operate more efficiently, and to have more successful educational outcomes (Bray, 1997; Jimenez and Paqueo, 1996; and James, King, and Suryadi, 1996). People who pay at least a small amount directly for education and other school services come to value those services more highly than when they receive those services for free. On the other hand, if schools yield benefits to

11 A similar situation prevailed a decade ago when public schools obtained 92 percent of their total funding (both salary and non-salary) from government allocations. However, there was considerable variation among regions. In Jakarta, public schools depended on government resources for only 70 percent of their total budget, while in other parts of the country, public schools depended on the government for more than 90 percent of their budgets (James, King, and Suryadi, 1996 and King, 1997).

society that exceed the benefits that they yield to individuals, there is good reason for society to subsidize the provision of basic education. In addition, if the direct and indirect costs of education are too high, they deter poor children from going to school. In the various sites that were visited for this study, most schools seem to have granted exemptions to those who could not afford the fees, even in cases where the fees were quite low, but this is clearly a situation to watch as practice differs across districts and across schools.12

Track and Monitor Spending

The importance of establishing an effective information system has already been discussed above. Having access to accurate and timely information helps governments to plan and manage the system, and sharing the information with local stakeholders, such as parents, through periodic reports may put pressure on district officials themselves to be more transparent and efficient. The focus group meetings with teachers, principals, and district officials undertaken as part of this review indicate that decentralization, while mostly a positive change, has created more opportunities for bribery and corrupt practices (Vanwel, Musthafa and Miftahuddin 2003). Bribes in money or kind are said to be more costly, processes often take longer than before, and the distribution of grants, scholarships, and other school funds is particularly vulnerable to corruption. Also, school principals complained that the lack of transparency about budget allocations at the central and district levels prevents schools from predicting how much revenue they will receive except through fees collected at the school level and makes it impossible for

12 At the beginning of the financial crisis in 1997, the MoNE reminded schools that the school admissions fee had been abolished in government primary schools in 1984 and that BP3 payments were voluntary. School revenues decreased in real terms by as much as one-third because of the drop in the real values of fees and government subsidies as well as an increase in the non-payment of fees.


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them to do any multi-year improvement planning. These problems are exacerbated by the fact that district governments and schools receive funding from a number of different sources, often too many for them to keep track of, all with different management arrangements.13 Because of the fragmented nature of the funding allocations at the district level in Indonesia, it is almost impossible for the ultimate beneficiary (the school or the student) to know how much funding they are supposed to receive and whether the funds have been released. In this situation, standards and information are very important in increasing transparency and compliance with policies, regulations, and laws and in reducing corruption at all levels of the system.

The experience of countries around the world shows that better information and greater disclosure are key to maximizing the effectiveness of decentralization (Bird and

13 This is not a new phenomenon. It was noted in World Bank’s report “Education in Indonesia: From Crisis to Recovery” (World Bank, 1998) that essential information on the budget is “scattered among five different ministries,” making the management of the education system a very difficult task.

Smart, 2002). For Indonesia, this means requiring local governments to prepare both an adequate investment plan and an adequate maintenance plan. Meanwhile, the central government should provide technical assistance to help local governments to develop plans, arrange financing, and operate the local education system as efficiently as possible. Also, financial accounting and reporting processes should become a standard part of the operating procedures at all levels of government and in schools.

At least as much managerial effort needs to be spent on accounting and reporting processes as is spent on planning and budgeting. It is already clear that a program for building the financial management capacity of local officials and school personnel is urgently needed. This capacity building program also needs to focus on reporting responsibilities and techniques.


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Chapter 4: Quality Assurance and Improvement

As already mentioned, there is a common perception that the quality of schooling in Indonesia is low and declining. In its final report in 2002, Indonesia’s National Commission on Education expressed concern that the education system does not provide Indonesia’s graduates with the skills needed to compete successfully in a global knowledge economy (MoNE, 2002a). It may help to begin this chapter by defining education quality, as the term can mean different things to different people. Education quality is typically defined in terms of its instrumental value in increasing student academic performance. In other words, quality is usually defined as that mix of inputs, classroom practices, school environment, and school organization that helps students to learn. This definition can be broadened to include also those inputs and practices that provide children with safe, healthy, and pleasant places to learn regardless of their impact on learning achievement.

Two Approaches to Improving Quality

In Indonesia, there have been two conceptually related policy approaches towards improving the quality of education—quality assurance or control andquality improvement. Both approaches rely on standards, measures, indicators of performance, timely and accurate feedback from schools, and strategic implementation plans, but they use these to achieve different ends. These approaches have been used by government and by development agencies that have supported programs in the sector. However, the absence of a coordinating policy framework to link these various efforts has prevented them from being as effective as they could be.

Quality Assurance or Control

Quality assurance or control refers to processes for guaranteeing that schools meet particular standards. It has three goals: (i) equivalence – providing a basis for comparing the credentials of teachers and school graduates through programs that include pupil and teacher certification; (ii) equity – meeting the basic right of even very poor children to get a decent education through programs that ensure districts are providing minimum service standards for all; and (iii) groundwork – providing a level of material and human infrastructure that is equal and high enough for schools and communities to improve quality as defined by both national and local expectations.

Quality control is not new to Indonesia. Indeed, there is hardly any aspect of the education system that is not regulated, but regulations and guidelines are often not followed or implemented as intended for a variety of reasons, including the impracticality of the regulations, a lack of resources to implement the guidelines, a lack of incentives to encourage compliance, and an absence of consequences for non-compliance. The current national education reform accompanying decentralization aims to control quality by specifying standards and processes for certifying students, teachers, and schools (Box 4.1). Quality assurance pertaining to individuals (students and teachers) is administered through certification programs that are largely examination-based. The incentives for compliance with standards are clear, as are the consequences of failing; for example, senior secondary students who do not pass the final national examination are not allowed to graduate, and candidate teachers who fail knowledge tests are not certified.


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Box 4.1: Minimum Service Standards

Since 2002, there has been an attempt in Indonesia to reach agreement on a set of minimum servicestandards. Despite a rocky start, a model-building group led by the MoHA produced a set of draft minimumstandards for the education sector in 2003. A detailed analysis of these draft education standardsundertaken as part of this review suggests that they have several crucial failings that must be addressedbefore they can usefully be applied to the sector’s governance and management.

Numbers. There are nearly 200 standards, which is too many. This will lead to a loss of focus and willincrease, rather than decrease, the transaction costs of accountability.

Type. Most of the existing indicators are not true service standards oriented at improving the delivery ofeducation (for example, the maximum number of days it should take the school to provide a service toparents) or at increasing mutual accountability between service units (for example, the maximum number ofweeks it should take the Dinas Pendidikan to supply a school with books).

Motivation. The motivation behind these draft standards is overwhelmingly bureaucratic rather than relatedto the need for accountability. The standards also appear to have been structured to protect special or sub-sectoral interests (for example, sports or teachers’ privileges rather than their rights and responsibilities)rather than to improve the delivery of general and basic education.

Technical quality. Few of the indicators are measurable, at least as currently specified, either in theory or inpractice.

Level to be reached. For many of these indicators it makes little sense to specify an actual level to bereached because the initial levels of those that can be measured vary tremendously and thus the rate ofchange in levels might be a more sensible metric. Furthermore, those who are drafting these standards donot appear to have seen the logic of allowing competition to determine the actual level to be reached. Forsome key variables, the level should indeed be set centrally (albeit with some local input), but in other casesthere is no theoretical or practical justification for setting an absolute level.

Level at which measured. It would require a special effort to measure too many of the indicators; thus theycontain a built-in disincentive. Under the current system, there are few incentives for local educationmanagers to report even the most basic variables such as enrollment rates.

Source: See Volume 2, Chapter 1, Appendix 1.6 of this review.

The standardized examinations14 for competence of candidate teachers, though far from ideal, are based on specified curricular or professional competencies.

Quality assurance as it pertains to individual schools, or groups of schools as in a district, is based on self-assessment against some normative and some self-determined

standards rather than on external inspections against absolute standards as in the past, but the processes involved are still in the planning phase. Some of the basic issues

14 MoNE technical experts acknowledge that the student final examinations (Ujian Akhir Nasional) are not yet adequately standardized in terms of test taking, although much progress has been made in this direction.

that are still being discussed are the incentives for compliance, the consequences of non-compliance with minimum standards, and the mechanisms for undertaking performance or process audits of more than 400 districts and 180,000 schools and madrasahs. The development of past programs related to quality standards has tended to be ad hoc, which has sent

conflicting messages to districts and schools regarding minimum standards and procedures for quality assurance. At present, the directorate of the MoNE responsible for basic education has 54 projects providing resources directly from the central government to schools, weakening the ability of district governments to fulfill their obligatory function to plan, finance, and manage

Chapter 4 Quality Assurance and Improvement

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education and making it impossible for them to monitor centrally funded projects.15

In schools, the quality assurance system is in its early stages. According to our focus group discussions with school principals and teachers in Lampung and Makassar, the performance monitoring presently being done in schools still concentrates largely on financial matters. The principals and teachers in the focus groups said that they had not yet discussed setting school performance standards, and school supervision and inspection documents collected during the focus group exercise show that the tools used by inspectors in Lampung and Makassar for supervising schools still emphasize administrative issues rather than professional development.

As set forth in the Education Law and a ministerial decree (KepMen, 087/U/2002),16

the post-decentralization model emphasizes the need for standards. This is evident in the school accreditation process that is currently being developed and that will apply to all public, private, general, and madrasah schools. Under this system, schools will be accredited as either “viable” or “not viable” by a school accreditation body (SAB). Viable schools will be ranked into three categories, with the lowest category including schools that meet some absolute minimum standards. The aim of the system is to raise all schools within a district to the highest category of accreditation by targeting resources to the schools that need

15 Chapter 2 in Volume 2 of this review contains an appendix showing the plethora of standard-setting initiatives that are currently underway. 16 Article 60 of the Education Law stipulates that the accreditation of schools will be the responsibility of the government and/or an independent body. The KepMen 087/U/2002, which predated the law, established an independent accreditation body (BAS) and listed nine school components to be evaluated during accreditation including: the curriculum and the teaching/learning process; school administration and management; school/institutional organization, equipment, and infrastructure; staffing; budgeting; teachers and students; community participation; and the school environment and culture.

them the most. The accreditation document suggests that schools should apply for accreditation after undertaking their own evaluation to determine if their inputs and processes meet national requirements and their own expectations. If schools feel that they are viable, then they should request a visit from the local accreditation body.17

Accreditation must be renewed every four years. It is unclear, however, what will happen to those schools that do not meet minimum accreditation requirements over an extended period of time. It is anticipated that many schools, particularly the numerous small private madrasahs that provide educational services to many poor children, especially in remote areas, will fall far short of the minimum accreditation standards (Box 4.2).18 The school accreditation policy states that the national government will support and help all non-accredited and low ranking schools, but it is not clear from where the funding and technical support will come.

Quality Improvement

Quality improvement is a different approach that involves upgrading inputs, the learning environment, teaching practices, school organization, and school performance. In Indonesia, these efforts have tended to be limited to particular geographic areas and to specific supply and/or demand-side interventions. Past projects have provided schools with specific inputs (such as teacher training, infrastructure repair, or textbooks) or have funded processes (such as active learning methods or continuous assessment)

17 Primary and junior secondary schools will apply to the district body for accreditation, while senior secondary schools will apply to the province. 18 In 2002, according to MoRA data, 5.7 million children were enrolled in 37,362 madrasahs (ibtidaiyah, tsanawiyah, and aliyah, which correspond to the primary, junior secondary, and senior secondary levels of regular schools). Numerous community-organized madrasah diniyahs also serve a large number of children, but no reliable enrollment rates are on record for this type of school. In addition, about 2.7 million children were enrolled in 11,312 pesantrens.


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on the supply side, and social mobilization and school quality improvement grants on the demand side. The assumption has been that, if inputs are improved, then teaching and management processes and, ultimately, school quality will improve. Supply-side

approaches are appropriate when a lack of access is the key problem in an education system, as was the case in Indonesia until the mid-1980s, or when schools have physical, material, or teaching conditions that are below the minimum requirements.

Box 4.2: Improving the Quality of Madrasah Education

In 2002, according to SUSENAS data in 2002, fewer than 10 percent of all children were enrolled inmadrasahs, except at age 14 when madrasah enrollment exceeds 10 percent. Over the last five years, however,enrollment in madrasahs has grown faster than enrollment in regular public schools.

Enrollment Rate in Regular Schools and Madrasahs

010

2030

405060

7080

90100

7 8 9 10 11 12 13 14 15 16 17 18Age

Perc

ent o

f chi

ldre

n

Data source: SUSENAS, 2002

Average student test scores are lower in madrasahs than in regular public schools in 17 out of 26 provinces,although their overall averages are not very different. Other evidence indicates that madrasahs lack adequateschool facilities, teaching and learning materials, and trained teachers. Those that are registered or accreditedare considered public madrasahs and receive some funding from the Ministry of Religious Affairs; however,this funding is often not enough to meet their minimal operational and salary needs. Occasional publicsubsidies are available also for private madrasahs (in the form of grants, teacher training, the provision of landand teaching materials, and the secondment of government teachers), but these schools mostly rely oncommunity contributions and student fees.

Under the decentralization reform, the government is considering treating all schools (whether public, private,or madrasah) exactly the same according to one policy under the governance of the MoNE at the central leveland of provincial and district governments at the local level. To integrate madrasahs into the regular schoolsystem will mean not only reconciling the governance and funding structures of public and religious schoolsbut also addressing critical challenges related to quality. Thus, being integrated into the mainstream educationsystem will bring both benefits and costs to madrasahs. The benefits include the increased ability of madrasahgraduates to transfer to regular public schools and universities and to find employment. Also, they may receivegreater technical and budgetary support from district governments and communities than they now receive fromthe national government. However, there is a risk that the opposite will happen – that madrasahs will receiveless support from district governments, partly because they will not be able to compete for resources againstregular public schools. They have to subject themselves to district oversight and of having to adopt thedistrict’s general curriculum, to hire qualified teachers, to use textbooks, and to build facilities such aslaboratories that are required by the curriculum. Madrasahs will face a double burden in that they must teachthe public school curriculum as well as a religious curriculum. The Islamic State Institutes (IAINs), whichcurrently produce the majority of the 450,000 graduates who become teachers in madrasahs, will need to beintegrated into the national teacher training system. Also, madrasahs may find it increasingly difficult to denyadmission to non-Muslim students.

Sources: Aziz (2002); Faiqoh (2002); Jalal (2000); Ministry of National Education/Office of Educational Research andDevelopment (2002).


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Table 4.1: School Committees Still Not Fully Engaged

Percentage distribution by frequency of School Committee meetings

Every week 0.5 Every two weeks 0.7 Every month 18.3 Every six months 43.7 Every year 20.5 Only once in awhile 16.3

Data source: Bali Impact Crisis Survey, 2003

Indonesia has experimented with quality improvement projects for over 30 years, but the many lessons from these projects have not been integrated into the way in which teachers teach and principals manage schools. This is partly because of low political willingness at the national level to follow through on successful models and partly because there are not enough professionals in the government and in schools with the competence to implement these good practices on a wide scale.

Quality improvement projects have followed two models – school effectiveness and school reform in Indonesia. School effectiveness models, which have been built on a solid foundation of empirical studies in developed and developing countries, are about the mix of inputs that define “the school climate” and about the “enabling conditions” and “teaching/ learning process” that most effectively produce cognitive achievement. In Indonesia, these programs were largely expert-driven and developed at the central level. Very few projects became nationwide programs, and innovations rarely spread on their own from school to school.19

In contrast to school effectiveness models, school reform models are inherently grounded in management theory, particularly management for change. These models emphasize relationships among stakeholders and recommend making decisions based on negotiation, standard measures, comparative and publicly available information, and accountability to achieve school development goals. Under decentralization, this is the key policy that the Indonesian government has adopted for improving school quality (Article 51 Law

19 Two exceptions include the active learning/contextual learning projects (CBSA-SPP) that established communication channels and innovative teaching approaches through local teacher groups and the new competency-based curriculum. The National Curriculum Center reports that numerous teachers from Jakarta’s private schools have requested materials and have obtained guidance from the Center’s website.

20/2003). School-based management (SBM) is a form of decentralization in which the individual school is the primary unit of improvement and the transfer of decisionmaking authority to the school is the primary means through which improvements can be stimulated and sustained (Malen et al, 1990). Its purpose is to engage people from the schools’ local communities in planning, monitoring, and improving school quality by serving on school committees (Article 56 Law 20/2003).20

Our findings indicate that school committees are in place in Indonesia but are not yet operating as instigators of quality improvement. For example, a survey of 425 schools in Bali in 2003 revealed that 97 percent of schools had a school committee, mostly consisting of teachers, parents, and honorary members who might include the bupati. In more than 80 percent of these schools, however, the committees met at most once every six months and played only a peripheral role in the schools’ decisionmaking processes (Table 4.1). Similarly, we found in our focus group discussions with teachers and principals in Lampung and Makasar and our meetings with school committees in Central Java and Yogyakarta that there is confusion about the role of these committees and a high level of skepticism about what they can achieve. Many principals had not yet discussed performance standards or improvement

20 The model has been tested at the junior secondary level (in the BOMM and JSE projects, for example) and is a component of several large projects (such as the DBEP, SIGP, and BEP).


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planning with school committees, and there were not enough public funds to sustain the committees. This situation has created a financial burden for parents that has led to mistrust between schools and communities. Nevertheless, the focus group participants reported that decentralization has empowered teacher and principals and given them more confidence in their ability to manage the teaching/learning process.

These mixed reviews were further confirmed by a 2003 survey of 36 schools in five districts undertaken by the Managing Basic Education Project. The survey found that school committees have been constituted and that they meet two or three times a year to discuss problems regarding facilities and fundraising, but the teachers felt that the committees were not active enough.

Policies to Improve the Quality of Education

We recommend the following policies:

Support National Programs, District Projects, and School Improvements

As districts and schools begin implementing both quality assurance and quality improvement measures, the role of the central government needs to be redefined. Instead of undertaking new project-based initiatives, the MoNE should: (i) phase out any of their policies that inhibit schools from managing their own plans; (ii) crack down on entrenched behavior like patronage and petty corruption that prevents the effective use of resources in the system; (iii) phase in programs that set standards and rules but not targets for quality management; (iv) adopt policies that foster quality improvements, for example, by introducing regulated market-based incentives to encourage districts and schools to improve their performance; (v) develop the central government’s capacity to provide needed services to districts, such as better teacher training, student assessment mechanisms,

information collection and processing systems; and (vi) circulate information on good practices to schools to spread effective ideas for school quality improvement as widely as possible.

Many districts are responding with enthusiasm and initiative to their new responsibilities. Having these responsibilities is giving them a much greater incentive to assess the education provided within their boundaries. Because of the magnitude of the changes involved, however, the situation at the local level may be chaotic for a while as institutions redefine their roles and relationships, debate how best to allocate and manage resources, and learn to become more democratic and accountable to civil society. In addition, many districts lack the experience and knowledge to develop multi-year, information-based plans that address issues such as low completion rates, poor learning achievement, and rigid teaching methods. Inadequate information and obsolete management information systems also limit the extent to which districts can plan for the future effectively. In sum, significant investment and time will be required before districts will be able to develop and implement information-based strategies for educational development.

Everything that is measured, monitored, and evaluated is aimed in the end at improving the performance and practices of schools. Hence, the bulk of investment in the new decentralized education system must be at the school level. Likewise, these investments must be planned, managed, and monitored at the school level. Whether they are meant to rehabilitate crumbling school buildings or to revise teaching practices, if they do not happen in and for the schools, they simply will not yield the required results – better education quality and higher student academic achievement.


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Adapt a Balanced Scorecard Approach to Plan and Manage Support to Districts and Schools

The balanced scorecard approach is a concept that can help education managers to plan and monitor performance measures across multiple elements or components and to respond appropriately to those results. 21

If this approach is adopted by districts and schools, it will streamline the hundreds of standards and indicators that are currently being proposed, into a manageable number of bell-weather indicators. Specifically, the scorecard can have one to four components that capture the key priorities of the education system and the measures of performance corresponding to each priority. Four potential components of the scorecard are :

Finance: This component includes human, material, and financial resources provided to schools (and districts), and the flow of provisions or funds from the point of origin to districts or schools. Current MoNE work on minimum per-pupil expenditures, formulas for district to school transfers, performance-based accounting procedures, procurement protocols, and accountability requirements through public disclosure can be included in this component.

Minimum conditions of learning: This component includes safe and healthy school buildings, equipped classrooms, and certified and trained teachers. The MoNE’s work on accreditation standards, teacher certification standards, teacher licensing, and criteria

21 An article by Robert Kaplan and David Norton entitled “The Balanced Scorecard - Measures that Drive Performance” in the Harvard Business Reviewin 1992 sparked interest in the method, and led to their business bestseller, “The Balanced Scorecard: Translating Strategy into Action,” published in 1996. Since that time, many businesses, school districts, and schools in the United States, Australia, and England have adopted the method for quality management.

for textbook approval are germane to this component.

Stakeholder satisfaction: This component includes student achievement, parent satisfaction, the accomplishment of district and national goals and targets, and the relevance of schooling to the enterprise sector. All standards, indicators, and targets for student academic achievement, as well as targets for district enrollment, transition, and completion rates are relevant to this component.

Governance and management: This component includes processes for making policies, regulations, or rules, transparency in decisionmaking, accountability for decisions, and community participation. Progress in implementing school-based management, whether schools and districts comply with governance procedures, transparency in teacher posting and professional development, and other school performance standards pertain to this component.

For each of the four components, districts or schools can be positioned along a continuum of key indicators. This is the basic concept behind school accreditation and district monitoring, but we propose adding a second dimension to capture the progress that each school or district makes in implementing its own multi-year quality improvement plan. Taken together, the two dimensions give four categories of districts or schools: good getting better, good getting worse, bad getting better, and bad getting worse (Figure 4.1). Different interventions can then be determined for each category of district or school, thus shifting the entire education system away from a supply- driven, one-size-fits-all model. This adaptation of the balanced scorecard approach recognizes that performance is dynamic and that districts and schools can get worse as well as better.


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Address Structural Weaknesses of the System

Schools are no longer directly accountable to the MoNE, but the MoNE is still accountable for the performance of the education system as a whole. Thus, the national level needs to change its focus away from specific interventions towards programs that address underlying structural weaknesses such as the vastly uneven capacity of districts,22 the fact that there is no incentive for improving school performance, and the fact that there are few

22 Capacity in this context includes the district governments’ policies, infrastructure, organization, and bureaucratic procedures, as well as the skills and knowledge of their staff.

providers of affordable and effective quality improvement services for schools (such as competent financial advisors, teacher trainers, program planners, and information systems specialists) outside the big cities. At present, the central government has a near monopoly on teacher training and the development of education materials like textbooks, and there are not enough competent government and university-based trainers to meet the growing demand for such services under decentralization. The central government can encourage the development of these service providers by instituting a program of competitive grants that would stimulate a larger supply of trainers.

Figure 4. 1: Balanced Scorecard to Determine Appropriate Action for Each District or School

Minimum Service Standard

Below Standard Above Standard

Better than last performance evaluation

Worse than last performance evaluation

GOOD SCHOOLS/DISTRIC TS GETTING BETTER

BAD SCHOOLS/DISTR IC TS GETTIN G BETTER

BAD SCHOOLS/DISTR IC TS GETTING WOR SE

GOOD SCHOOLS/DISTRIC TS GETTING WORSE

Look for innovation and best practices Eligible for increased funding through block grants Recognize achievement in public forums

Block grant financing Most resourcing through funds (rather than materials or in-kind services) Eligible for special grants to become “service providers”

Close attention from higher authority Earmarked funds Intensive capacity building At risk of losing accreditation

Very common in newly decentralized systems Examine regulatory framework to remove policies that may be inhibing performance (e.g. financing formula) Site visit to determine cause for performance drop and collaborate on remediation


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Ensure Equity in Quality Improvement

Indonesia has an admirable record of adopting pro-poor policies, particularly during the economic crisis of the late 1990s, but these gains could be lost unless a pro-poor agenda is built into the national quality assurance and improvement program. For example, if poor communities are to be expected to share the costs of repairing schools, then there may be a drop in demand for education among the very poor. Also, if district minimum service standards are not pro-poor, then they might have the unintended effect of pushing poor children out of the system unless the worst performing schools are improved, they are merged with stronger schools or closed, or their students are subsidized so they can afford to enroll in better schools.

Stimulate Demand for and Supply of Innovations and Good Practice for Improving Teaching

While projects have helped specific districts and schools to improve their management and teaching practices, there is as yet no systematic way to disseminate successful ideas for improving teaching and learning practices available across the whole education system. Therefore, to encourage the development of ideas for improving the quality of teaching and learning, the central government should set up a national grant-making institution for educational development to provide competitive grants to schools or clusters of schools who come up with innovative proposals. This agency should also encourage schools to implement approaches that have already been proven to improve teaching practices. For example,

the low attendance rate of children at junior secondary schools is generally attributed to a lack of schools of this level, the perceived lack of relevance of secondary education, and economic hardship. However, another possibility is that these schools are not providing instructional programs that are sufficiently challenging and developmentally appropriate for 13- to 15-year-old students.

From Setting Standards to Meeting Standards

Once the standards for minimum service, accreditation, and certification are set, how will they be implemented and what are the incentives for implementation? Local education officials are now accountable for their performance to two higher authorities – the local legislature or executive and the central MoNE. It is still unclear what responsibilities the central government has towards those districts that fail to meet minimum standards over a period of time. If there are no incentives for compliance or consequences for non-compliance, then the standards will not help to assure quality. The critical unresolved issue of what to do about non-compliant schools is a governance issue that should not be left up to the school accreditation body. Whether or not to revoke a non-accredited school’s right to enroll fee-paying students should be decided by a policymaking level of government rather than by an independent body. Similarly, any decision to provide targeted resources to unaccredited and low-performing schools should be backed up by a national commitment to provide districts with these resources.


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Chapter 5: Teacher Management and Performance

The level of school performance and student achievement is the result of several factors but perhaps the single most influential factor is the quality and performance of the teaching force. When schools perform well, it is due to a combination of effective teachers and strong leadership by the school principals. The education and experience of teachers are all important factors in improving student performance, but teachers’ freedom to choose their own methods and books and how much time they spend on tasks such as preparing lessons and marking students’ work are also vital factors.23

As discussed in the previous chapter, minimum service standards and accreditation criteria for schools and teachers are currently being developed. However, it is not yet clear how the information from the accreditation and quality assurance processes will be used to assist schools and teachers to improve their performance. Nor is it clear where the technical capacities would come from to help schools and teachers. The centralized top-down approach to in-service training is no longer appropriate as it is supply-driven and is divorced from the goals and needs of

23 What do we know about teachers in other countries? Researchers in the U.S. have found that teachers’ higher cognitive skills, as demonstrated in standardized tests, are associated with better student outcomes (Strauss and Sawyer, 1986). Recent research has also found that on-the-job teacher training is associated with improved student performance (Angrist and Lavy, 2001). Rewarding teachers for what they actually know and do in the classroom is likely to have a considerable positive impact on student performance (Odden, 2000), but measuring and evaluating what teachers know and do in the classroom is expensive and far from straightforward. Finally, an analysis of junior secondary school data from the Third International Mathematics and Science Study (TIMSS) (Woessman, 2001) showed how institutional characteristics as well as teacher characteristics contribute to students’ academic performance.

individual schools. At the moment, there are several projects in effect that are taking various demand-driven approaches to teachers’ in-service training, but no systematic evaluation has been done of their impact on student learning and teacher performance.

Management Changes under Decentralization

When teacher management systems are changing, this can be a good opportunity to implement new ways to achieve education goals. However, during the period of transition, there can be tensions and opportunistic behavior at the school and district levels in the employment, deployment, and promotion of teachers. The implementation of the school-based management approach and the creation of district education boards are changing the nature of teachers’ accountability and their incentives to perform well. These changes mean that decisions about a school’s resources and goals are made by those who are in the best position to understand the circumstances that prevail at that school, which is highly desirable. However, they also put a heavier burden on teachers, school principals, school committees, and parents to work together to improve students’ achievement levels.

Responsibility for Teacher Employment and Deployment

At the time of decentralization, large numbers of civil servants formerly employed by central government agencies were relocated to district governments along with budget allocations to cover their salaries. The district government became responsible for employing all teachers in public schools except those in madrasahs.These include all civil service teachers


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(pegawai negeri) in public and private schools (mostly secondary schools), as well as honorary teachers (guru honor) who were previously hired and paid for by the central government. Also, some districts are participating in projects that include contract teachers (guru kontrak) paid for by donor loans to the central government. The status of the latter group will be reviewed when these projects close, although attempts to reach agreement with district governments on exit strategies have been pre-empted by the central government’s decision to recruit an additional 190,000 contract teachers, which it is no longer supposed to do.

Although district governments are responsible for hiring teachers and paying their salaries, several ambiguities persist. For example, those madrasah teachers who are civil servants are still managed by the MoRA, not by districts. Districts, through the MoHA, have always been responsible for deploying teachers, but with the establishment of school committees, districtsmight take on a greater role in selecting and appointing teachers. Three districts in Flores, with the support of AusAID, are piloting just such community participation in determining the selection criteria for teachers and head teachers and in the selection process itself. However, district governments are bound by a centrally determined ceiling on the number of additional civil servants they can recruit (for any and all sectors). Hence, if a district government wishes to hire additional teachers above this ceiling, the district must pay for them from its non-salary resources.

The salary levels and promotional and reward systems for civil servants are still set centrally, although many districts provide teachers within their jurisdiction with supplementary benefits and incentives. While the districts have the option to dismiss contract and honorary teachers or not to renew their contracts, it is still not clear whether or not a district government can retrench or dismiss civil service teachers, as they might want to do if they

were to rationalize their teacher/student ratios or to adjust to lower enrollment due to a declining school-age population, or to fire non-performers. Currently, many teachers feel that they cannot apply for vacancies in a different district. But whether this is true in the sense that districts may be constrained by ceilings on civil service budgetary resources or whether they hold this opinion in ignorance of the government’s actual policy on transfers between districts is not clear.

Responsibility for Setting and Monitoring Teacher Performance Standards

As already discussed, the MoHA has been developing minimum service standards, especially as they apply to districts’ obligatory functions, while the MoNE has been developing performance standards that will affect teachers. The Directorate of Higher Education has developed standards that must be met by teachers graduating from the DII teacher education program (a two-year post-secondary school teaching diploma needed to teach in primary schools) and is expecting to extend this exercise for other initial teacher preparation programs under its accreditation control (such as the DIII, which is a three-year diploma required to teach in junior secondary schools, and S1, a four-year university degree). These standards apply to teacher education programs and define in some detail what a graduate teacher should know and be able to do. Complementary to this, the Directorate of Education Personnel is preparing teacher competency standards to be used in assessing teacher performance and identifying their professional development needs. It is expected that these competency standards will be used by quality assurance teams in the provinces acting on behalf of the MoNE.

Besides standards regarding qualification and competency, monitoring is also essential with respect to teacher behavior in school. Teacher absenteeism is one of the reasons why students do not learn. A multi-country

Chapter 5 Teacher Management and Performance

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survey of teacher absences in primary schools found that Indonesian teachers were more likely to be absent from the classroom than five of the eight countries surveyed (Table 5.1).24

Table 5.1 Primary teacher absence rate in public schools, 2002-03

Peru 11

Ecuador 14

Papua New Guinea 15

Bangladesh 16

Zambia 17

Indonesia 19

India 25

Uganda 27Source: Chaudhury et al. (2004)

The role of these quality assurance teams is still being developed and, as yet, no clear guidelines have been developed for district monitoring activities but it is likely that these will be based on criteria related to the obligatory functions and minimum service standards that are also being developed.

24 Primary teacher absence rate is the percentage of full-time teachers who were absent from a random sample of primary schools during surprise visits. Enumerators made two to three rounds of unannounced visits to each school over a period of weeks or months, to get a more accurate estimate of absence and, after verifying workers' schedules, recorded which of them were absent. The data provide the number of teachers who were supposed to be on duty but were in fact absent from the school, without regard to the reasons for absence. Many personnel were absent for valid reasons, such as authorized leave or official duties. Nevertheless, these absence rates are useful for two reasons: first, because the reasons for absence given by facility directors were typically not verifiable; and second, because even authorized absences reduce the quantity and quality of public services in these primary schools. The study covered 147 public and private schools in 10 districts in Indonesia (Chaudhury et al., 2004).

Responsibility for Teachers’ Professional Development and Career Development

Initial teacher preparation programs for upgrading teachers’ qualifications remain the function of universities and teacher training institutes that are accredited by the Directorate of Higher Education. There is an ongoing discussion of how to make both the universities and the associated accrediting board more autonomous and how to make the process of accreditation more competitive so that teacher education programs will become more responsive to the needs of schools around the country. Who has the responsibility for the continuing professional development needs of teachers is more ambiguous. Most school and cluster-based professional development activities have been supported in the past by projects funded by aid agencies or the MoNE. Now districts are responsible for providing in-service training and professional support activities, but few have the resources to do so. Provincial teacher training centers (Balai Pelatihan Guru and Pusat Peninkatan dan Pelatihan Guru) are deconcentrated branches of the MoNE and as such are expected to provide both quality assurance and in-service teacher education support to districts.

The ways in which the lifelong education of teachers relate to teachers’ career, promotion, and incentive structures have not been clearly articulated. Districts now are taking the initiative to link teacher development programs directly to teachers’ classroom behavior as a way of improving school quality and are putting a high priority on providing teachers with adequate skills. Indeed some school committees have been using resources to allow teachers to attend in-service or other professional development programs.

Teacher Employment and Deployment

In 2000, there were over 2 million teachers serving the entire school system in


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Indonesia, with 1.3 million in primary schools and 600,000 in junior secondary schools. It was a relatively young teaching force, the majority of teachers (64 percent) being under 40 years old. More than half were employed in primary schools, and of these, 93.4 percent were civil servants. In comparison, only 62 percent of teachers in junior secondary schools were civil servants. The large number of teachers who are civil servants means that districts have a large wage bill inherited from the centralized era when teacher-to-school allocation norms were extremely, if not extravagantly, defined.

However, Indonesia’s birth rate is falling, its primary enrollment rates already high, and the supply of teachers at the primary level plentiful, so the country is in a position to reduce the size of the teaching force at the district level. This would allow districts to spend more of their resources on quality inputs and to shift resources to the salaries of additional teachers at the secondary level. This does not mean that there are no teacher shortages, but the shortages in the primary sector are primarily problems of distribution rather than supply.

For many districts, the most difficult questions about increasing access and efficiency at the primary and secondary levels are about changing teacher/student ratios (particularly at the primary school level) and recruiting secondary school teachers who are qualified to teach more than one subject. Nationally, teacher/student ratios are generous at all levels, but there are wide differences among districts. At the primary level, based on the total number of teachers including head teachers, religion teachers, sports teachers, and class teachers, the national teacher/ student ratio is 1:22 in public primary schools and 1:14 in religious primary schools. Only 68 percent of teachers are class teachers; of the remainder, 13 percent are religion teachers and 6 percent are sports teachers. Head teachers, religion teachers, and sports teachers rarely have a full

teaching load, regardless of the size of the school where they are employed. Even when the teacher/student ratio is calculated using class teachers only, the national ratio is 1:32, which is comparable with other countries in the region.25 At the junior secondary school level, the teacher/student ratios are 1:16 in public schools and 1:10 in madrasah schools. At present, teachers at this level expect to teach only one subject, and regardless of a school’s enrollment, each school expects to have at least 18 teachers.

To rationalize teacher salaries and teacher/ student ratios, several districts have been merging several small schools into one and redeploying school principals and teachers to understaffed schools and are discussing the relative merits of civil service teachers and contract teachers.26 In cases where schools have been merged and the number of school principal posts have decreased, there is the danger that tensions will arise between those who lose out and those who retain their jobs. As with primary schools, many small junior secondary schools could also be amalgamated to form more efficient units, and many districts are now doing so. This implies that junior secondary school teachers will need to be able to teach more than one subject, which has implications for teacher training and teacher development programs. Some small junior secondary schools are already aiming to recruit teachers who have majors in at least two teaching subjects.

We recommend that districts develop their own formula for calculating teacher requirements that takes into account the number of students enrolled in a school rather than the number of classes. One

25 By comparison, the teacher-student ratio is 1:18 in Malaysia, 1:35 in the Philippines, 1:20 in China, and 1:32 in Korea in 2000 or thereabout (World Bank, 2004).26 These discussions are based on the pilot activities of the District Basic Education Project, and the UnitFasilitasi, the MoNE, and Basic Education Project reports.


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Figure 5.1: Districts Vary in Proportion of Primary Teachers with Minimum Training Qualification,

Percentage of teachers

0 20 40 60 80

JavaKalimantan

Papua & Eastern IsSulawesi Sumatra

Notes: The island categories pertain to all provinces in those islands. Data Source: Ministry of National Education,.

proposal put forward in the past in Indonesia laid out a sliding scale of teacher deployment based on school enrollment (Somerset, 1997). This scale takes into account the needs of children in lower primary school classes (highly dependent learners) that should have fewer students per teacher and in upper primary classes (more independent learners) that should have more students per teacher. Small schools where multi-grade teaching is the norm often have fewer students per teacher. To implement this sliding scale of teacher allocation, district planners will need timely and accurate information on the number of teachers and enrollment rates in each of their schools. Also, the central government will need complete information on districts’ needs as well and on how many students graduates each year from universities and other institutions in order to broker the deployment process efficiently.

The MoNE can assist this process by ensuring that adequate information about the supply and demand for teachers is available to local governments, schools, and teachers themselves. A pilot scheme for identifying those schools with too many and too few teachers as a guide for deploying contract teachers is being implemented as part of the Basic Education Project. Hopefully, lessons from this pilot scheme can be used to inform efforts to deploy regular teachers as well. A teacher deployment scheme in the Philippines also provides valuable experience about how to deploy new teachers (Box 5.1).

Teacher Professional Development

In the past, teacher quality has been measured mainly by the level of certification rather than performance and classroom results. This is now changing, as can be seen in the efforts of different directorates in the MoNE to prepare standards for new graduates from teacher training courses, technical competencies that serving teachers should meet, and minimum service standards and accreditation criteria for

schools. The minimum qualification for primary teachers was set in 1989 as a two-year post-secondary school teaching diploma (DII). Yet in 2002, only one-half of all primary school teachers in Indonesia held this certificate or a higher qualification. The minimum qualification for teaching in junior secondary schools is a three-year diploma (DIII). By 2002, 67 percent of junior secondary school teachers held this or a higher qualification, while the remaining one-third had only a two-year diploma (DII). For many teachers, the opportunity to upgrade to the 1989 standard came through participating in Open University part-time distance education programs. However, there is very little school-based content and practice in either the formal full-time programs or the part-time programs, and what does exist is poorly executed.27

The distribution of those teachers with only the minimum qualification is uneven across districts and provinces (Figure 5.1). Because many districts operate small school systems and because the pool of qualified teachers is likely to come from the province as a whole, these disparities in the distribution of qualified teachers will need to be addressed at the provincial level. Provinces need to find ways to fund and develop programs for upgrading teacher qualifications that are

27 A similar situation prevails in Nigeria where research has shown that little value is added to a teacher’s performance if he or she acquires a higher qualification through full-time or part-time study.


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Box 5.1: A New Teacher Deployment Scheme in the Philippines

The Philippines is conducting a pilot program to improve its system for deploying new teachers. Usingstudent-teacher ratios as the principal indicator, disparities in teacher provision at the regional,provincial and school level were analyzed and the results were displayed in table form, and also throughGIS mapping. A color-coding scheme to identify areas with relatively generous teacher provision andareas with teacher shortages of varying severity and estimates of a statistical measure of equity inaccess to teachers were employed. It was found that while the national distribution of teachers amongregions (clusters of provinces) is fairly equitable, the distribution among provinces within a region andthe distribution within provinces themselves were much less equitable. In fact, there were high-shortage schools even in provinces that, in aggregate, were relatively well supplied with teachers.Older schools, especially those in areas of stable or declining population, tend to be generously staffed,sometimes showing substantial teacher surpluses, while newer schools, many in poor areas, haddeficits.

This scheme was applied in 2002/3 to the deployment process of new teachers that takes place everytwo years. In preparation, provincial teams were required to provide teacher-availability data for allschools under their jurisdiction. These teams attended two-day workshops, conducted by theDepartment of Education staff, to acquaint them with a new-teacher deployment request form and totrain them in using computer software designed to prepare data tables and teacher-deployment maps.All schools complied with requests to provide the necessary data. The color-coded provincial mapsbecame the basis for all deployment negotiations among provinces, at the level of principals and withparliamentary representatives who had a say in how education resources are allocated among schools.

As a result of the new system, of a total of 25,000 new teaching positions, 77 percent of elementaryschool teachers and 71 percent of secondary school teachers were allocated to the teacher-shortageareas. There were still wide variations, however. At the elementary level, one region achieved atargeting proportion of 97 percent, while two others achieved only 31 percent and 54 percent. At thesecondary level, the range was equally wide: between 96 percent in the most effective region and lessthan 50 percent in three less-effective regions. Further steps are to be implemented. In particular, it willbe essential to conduct further training to ensure that at all levels of government and the schools, thereis a critical mass of professional and administrative staff who understand the deployment system, knowhow to apply it, and feel committed to its maintenance.

qualitatively better than those that currently exist and that are compatible with the principles of school-based management. There have been a large number of teacher training projects in Indonesia over the past 30 years (Sweeting, 2001). These projects have had various objectives including to revise the curriculum in pre-service education programs, upgrade the technical capacities of teacher educators and teacher education institutions, and develop in-service training and professional support systems. While there is considerable experience to build on, it is time to consider a new paradigm that takes school performance as the focal point of the career-long professional development of teachers. Indonesia has begun to develop a set of

competency standards for teachers and ways to measure their performance against these standards. However, in line with the new school-based management model, teachers’ professional development needs to be linked much more closely to the context of the actual classrooms in which they work and to the monitoring of school performance and standards. Teachers need to be given opportunities to continue learning for their own self-development, to gain their license to teach (assuming that such a system is put in place) or improve their performance, to enable them to become mentors in induction programs, and to enable them to be promoted to posts of responsibility in schools and/or training programs. This assumes that appropriate reward systems are


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Box 5.2: Mexico’s Carrera Magisterial Program

Mexico’s decade-old teacher incentive program, Carrera Magisterial, is a teacher compensation reformprogram first implemented in 1994. Teachers who voluntarily join the program agree to participate inannual performance evaluations and to have their annual salary increases linked to the results of theseevaluations. These performance evaluations, totaling 100 points, consist of: the performance peerreview (10 points), teacher subject matter knowledge as measured by the teacher’s test score (28points); student examination scores (20 points); teachers’ educational attainment (10 points); theircompletion of accredited courses to update their skills (17 points); and years of teaching experience (15points). The wage bonus associated with the program consists of a percentage of the base wage and canbe quite substantial.

Although the program is voluntary, the number of teachers who have joined the program has increasedsubstantially since 1994—from 39 percent of teachers in its first year, to 49 percent after three years.As a result, the proportion of students whose teachers are enrolled in the program more than doubled inthe period between 1994 and 1996 and is now around 25 percent of all students. In addition, in 1997the percentage of all teaching positions that were filled by an individual participating in the programwas close to 50 percent. Of these, 22 percent have received promotions.

The Carrera Magisterial program appears to be having a significant impact on the Mexican educationsystem as a recent study found that those students whose teachers participate in the program havehigher average test scores than students whose teachers are not in the program.

Source: Lopez-Acevedo, 2001.

in place that recognize teachers’ contributions to school performance. It also assumes that there are institutions available to provide such school-based evaluation programs. An example of such a program in Mexico indicates its potential benefits (Box 5.2).

However, how these teacher development programs are to be financed is an important planning problem. Certainly most districts probably feel that their current education budgets barely cover their salary expenditures and are concerned that teachers they train may be move to other districts. For these reasons, districts should not have to fund teacher development fully. A mixture of teachers’ own contributions (since they are the key beneficiaries) and of proposal-based grants given by the central government to schools and districts to fund specific initiatives to improve teacher and school performance is more appropriate. Resources for these grants need to be built into education expenditure allocations at the district level.

Teacher Compensation and Incentives

Designing teacher salaries and incentive structures that attract and retain the best and the brightest candidates to the teaching profession is a complex enterprise. In Indonesia, low salaries are often seen as the main reason why teachers perform poorly, have low morale, and tend to be poorly qualified. However, studies have found that most primary school teachers and junior secondary school teachers have monthlyearnings equivalent to or higher than those of other workers with an equivalent level of education.28 Although teachers’ salaries in

28 An analysis of labor force data from 2000 (Filmer, 2002) indicated that teachers with qualifications below the diploma level (about one-third of teachers) have monthly earnings that are, on average, 22 percent higher than the monthly earnings of other paid workers with the same qualifications. The differential (in terms of monthly salary) is smaller among those with a first or second level diploma (DI/DII) and then becomes negative. In other words, while less qualified teachers seem to be overpaid relative to others with the same qualifications, the 10 percent of teachers with a third-level diploma (DIII) and the 24 percent with a university degree are underpaid, earning 18 and


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Indonesia may be lower than those in other countries at a similar level of economic development (such as Chile, the Philippines, and Thailand), this is partially offset by the fact that teachers in Indonesia work fewer hours and have smaller classes on average (OECD, 2001). MoNE studies of how much time teachers spend on instructional tasks indicate that teachers spend only about half their time in school actually teaching, perhaps because they are not aware of the number of hours of instruction and school days in a year they are obligated to work. On a per hour basis, teachers earn more than most other workers and have many more days off per year. Indeed, during the 2003 national recruitment of contract teachers, there were two applicants per vacancy, indicating that current salaries do not appear to be a major deterrent to aspiring teachers. However, the situation is not the same for all teachers, so a review of the entire salary scale is warranted. In particular, teachers with a university degree (that is, mostly those who teach senior secondary students) earn slightly less than other workers with an equivalent level of education.

Under decentralization, it is important to ensure mobility in the teacher labor market, even while decentralizing the employment of teachers to, for example, the school level. The best way to set up teachers’ salary scales may be to have a national (or provincial) pay scale or salary grading system that is based on minimum pay levels agreed between the central government and teachers’ unions and professional associations but to allow districts and schools to offer supplemental benefits and allowances to teachers according to their own criteria.29 For this topping-up process

37 percent less respectively than other paid workers with the same levels of education. 29 After determining the base salary level, a study in India (Kingdon, 1996) suggested that salary structures for teachers were inefficient, with teacher characteristics that improve student learning hardly being rewarded while other teacher attributes that have few discernible learning benefits for the students had a significant salary pay-offs. This suggests that it would enhance school efficiency to spend funds on school

to work, the DAU allocations to districts must be disproportionately targeted to poorer districts so they can afford to add sufficient incentives to the basic salaries to ensure that teachers will have an incentive to apply for jobs in those districts, even for vacancies in remote schools. Districts should be responsible for determining appropriate allowances and top-ups for teachers working in remote locations or under difficult conditions. This should not be done centrally because if it were, then all schools would try to be classified as “difficult” so that their teachers would be paid more. An approach like this has been tried in Brazil (Box 5.3).

In most cases, it would be better to offer bonuses to supplement teachers’ remuneration instead of altering their basic pay scales to reward teachers who take on extra responsibilities or duties, to attract better candidates to the teaching profession, and/or to attract teachers to rural locations where there is a scarcity of applications for vacant teaching posts.

Using Teacher Management Systems to Achieve Education Goals

Decentralization in itself does not automatically improve the performance of schools and teachers, but effective teacher management systems can help to do so. Over the longer term, several actions are needed: (i) to devise strategies to strengthen the professional life of teachers (ii) to develop transparent mechanisms for schools to select their own teachers; (iii) to link school performance and teacher performance reviews to teachers’ career development and promotion; and (iv) to

facilities and materials, longer school days, better management practices, and more skilled teachers, but that investing in smaller pupil-teacher ratios (in urban areas where there is no multi-grade teaching), and investing in teacher experience, training, post-graduate education, and higher across-the-board teachers’ salaries may not yield enough benefits to be justifiable in a resource-scarce environment.


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Box 5.3: Brazil’s FUNDEF Program and Teacher Compensation Reform

In 1998, Brazil implemented an education finance reform called the Fund for the Maintenance andDevelopment of Primary Education and Teacher Enhancement (FUNDEF). The main objective of thisfund was to equalize educational opportunities across states and municipalities by guaranteeing aminimum expenditure per pupil in primary schools throughout the country. Embedded in the reformwas a requirement that at least 60 percent of the additional funds provided by FUNDEF to localgovernments must be spent on teachers’ salaries.

The program was expected to improve teacher quality and student outcomes in several ways. First, itwould increase the salaries of existing teachers in regions that, previous to the reform, had hadrelatively low teachers’ salaries. This would make teaching a more attractive profession, particularly inthese regions. As a result, it would increase the number of individuals interested in entering teachingand make teaching an attractive career to more highly skilled individuals, who prior to the reformwould have been likely to choose to enter other professions. Second, local governments could use theincrease in resources for teacher salaries not only to increase the salaries of existing teachers but also tohire additional teachers, thus enabling them to reduce class sizes, which would probably also improvestudent outcomes.

An assessment of the reform in 2002 revealed that regional disparities in teacher pay had been reducedand that the number of teachers who had at least graduated from secondary school had increased. Thestudy also showed that the increase in teachers’ compensation and in the number of teachers with atleast a secondary education were positively associated with better student outcomes such as lowerdropout rates and higher pass rates.

Source: World Bank, 2002.

ensure that teachers’ professional development covers their initial training, induction into the teaching profession, school life, and continuous professional development. Teachers should be entitled to support services and professional development programs. Measures of teachers’ performance need to be based on what they add to the teaching and learning processes in their own classrooms as well as their contribution to the professional education community.

In a decentralized teacher management system, the main role of the central government should be to set minimum teaching standards and salary scales and to develop guidelines for promotions and incentives. The provincial education units should be responsible for ensuring that districts are able to meet their statutory

obligations for providing basic education of high quality. They should be equipped to advise districts on school improvements and teacher development and to ensure that teachers are deployed efficiently across districts. District governments should be responsible for the employment and deployment of teachers across schools and for paying their base salary (the national minimum) and additional benefits and incentives, for monitoring teacher performance, and for ensuring that teachers have regular access to professional development programs linked to their school activities.

Table 5.2 illustrates what might be involved in putting a national policy framework for teacher management in place and suggests who should be responsible for implementing the various actions and strategies.


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Table 5.2: A Proposed National Framework for a Teacher Management System Enabling Policies Actions/Strategies Responsibilities Establishing a transparent teacher appointment process based on efficient deployment norms, school vacancies, advertisements, selection criteria, contractual arrangements, and public information

Teacher registration Teacher deployment norms Posts of responsibility Administrative procedures for districts and school for hiring teachers

School – Identify teachers’ needs, review candidates, and interview short list, select teachers, inform district managersDistrict – Disseminate information on teacher norms and conditions of employment; prepare initial short list of candidates, accept school selection, and advertise resultsNational – Set guidelines for teacher/student ratios, posts of responsibilities, minimum qualifications and experience, conditions of employment; pilot scheme for identifying teacher-deficit and teacher-surplus areas and allocating new teachers accordingly Provincial – Provide quality assurance, facilitate across-district appointments; assist national government in piloting deployment scheme

Establish a school performance evaluation process that is based on teachers’ collective responsibility and opportunity for individual teacher performance reviews on request for career development purposes based on their value added to education processes and outcomes.

Minimum service standards Teacher performance standards Supervisors, evaluators trained in performance review Professional support activities Performance incentives for schools and teachers Evaluation processes Performance review guidelines Feedback loops between evaluators and teachers Accreditation and information system

School – Undertake internal self-evaluation processes, feedback to whom? and incentives, school development program, teacher development needs, access resources for school improvement District – Provide professional support such as mentoring by better teachers, budgetary resources for staff development, information systems on teacher and school performance, disseminate best practices National – Set minimum service standards and teacher performance and accreditation standards Provincial – Provide quality assurance, disseminate information, identify resource pool for professional support

Establish a compensation and rewards system that is clear, transparent, and guided by considerations of qualifications, responsibilities, and motivations for teachers’ continuous development

Compensation system that rewards teacher behavior that improves student achievement

District – Assess practice of top-up allowances and clarify criteria for allocating allowances National – Pilot and evaluate alternative incentive systems for “difficult” areas Provincial – Quantify supply of new teachers

Put in place a teacher professional development system that is school-based and performance-led.

School-based initial teacher preparationInduction to teaching and licensing program that establishes partnerships between districts, schools, and licensing body Teacher classroom performance, value-added opportunities for developing professional interests, pedagogy, subject matter, leadership roles; linked to rewards – recognition, financial, and promotion.

School – Contribute to practicum, provide feedback to training institutions and technical resource groups, participate in action research for school development District – Provide feedback to training institutions and technical resource groups; placement of new teachers, support and evaluate candidates, provide resources for induction and professional development activities Province – Provide quality assurance, technical support resources, disseminate best practicesNational – Establish accreditation of teacher education programs and institutions, respond to employers’ and service providers’ needs..

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Chapter 6: The Way Forward: Making Decentralization Work for Education

This review of Indonesia’s education sector has addressed the familiar issues of quality, efficiency, and equity but through the special lens of the current decentralization reform. It has addressed how the country’s key education goals (reaching universal enrollment in basic education and improving the quality of schooling) are going to be achieved in a system that is supposed to be managed primarily at the district rather than at the central level. The introduction of decentralization three years ago dramatically changed the rules and processes of service provision, and all of the relevant stakeholders are still in the process of understanding, adapting to, and managing the implications of those changes. With this paradigm shift in governance, how education services are going to be delivered cannot be “business as usual” for everyone. The review has identified areas in the regulatory framework and implementation processes of the decentralization reform that need to be clarified, improved, or corrected. Many messages have emerged from the review, but the two overarching messages are:

Improving education quality across the system is the key educational challenge for Indonesia today, and even concerns about equity and serving the poor must be couched in terms of universal access to education of acceptable quality.

Decentralization can potentially help to meet this quality challenge—by spreading the governance and managerial responsibility for improving better education across different stakeholders, by strengthening accountability mechanisms, and by enhancing incentives to innovate. However, any delays in clarifying and rationalizing functions, structures, and financing throughout the education

system and any lack of commitment from the government to confronting some difficult implementation issues could erode the effectiveness of the reform.

Based on the evidence discussed in the previous chapters, this chapter presents a detailed policy agenda that identifies core objectives, specific recommendations for action (with a corresponding assessment of how urgently those actions need to be taken), and suggestions on which agencies should implement each action. This agenda is summarized in a policy matrix at the end of this chapter (Table 6.1). Many district governments and schools urgently need some guidance on the extent of their decentralized responsibilities and assistance on how to carry them out, so the recommendations of this review apply to them as much as to the central government.

A Policy Reform Agenda

The following set of policy recommendations stem from: (i) the observations and conclusions of the team that undertook this review of Indonesia’s education sector, (ii) numerous documents produced by donor-assisted projects, and (iii) discussions (in the form of meetings and interviews) with many stakeholders in the system, including officials in the central agencies, provincial and district officials, teachers, heads teachers, and members of school committees (including some parents), national education experts, and the staff of aid agencies. In addition, in collaboration with the central government, the team launched a much broader consultative process with these various stakeholders in December 2003-January 2004. The team’s recommendations are as follows.


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Establish clear and efficient function assignment within the education system and align this with appropriate governance and management structures and financing arrangements at all levels of the system.

As discussed in previous chapters, the decentralization laws left the assignment of governance, managerial, and financing functions in the education sector vague. Similar functions and roles have been given to different levels of government, which is a recipe for replication, conflict, and chaos. Also, functions and structures are not aligned (for example, a large central Ministry of National Education continues to exist despite the transfer of many of its responsibilities to lower levels of government) and financing arrangements do not conform to functions (as illustrated by the many different sources of financing for capital expenditures at the local level). Moreover, some devolved functions are best left to the national or provincial levels. Some tasks that can most efficiently and effectively be carried out at a level of government higher than the district are: coordinating the strategic direction of the education system, setting education standards, developing technical support systems, assessing best practices, and encouraging the development of markets.

There are some other issues that need to be resolved at a higher level than within the education sector itself because they also pertain to other sectors besides education. Resolving these issues will require bold steps, including reviewing and revising the decentralization laws to clarify the assignment of functions, to correct the misalignments between functions and structures and between functions and financing arrangements, and to follow through with corresponding structural changes. Without these bold changes, education stakeholders will not be able to trust the central government’s commitment to sharing authority and resources, which will dissipate all of the current impetus for reform.

Reform the structure and processes of the central Ministry of Education so that it canfulfill its core functions of developing and harmonizing education policies and designing an implementation program, and an investment and funding plan for those policies, while ensuring that local governments and civil society have a voice in this process.

At the moment, the MoNE is not organized in a way that is consistent with its new core function of quality management and with the spirit of decentralization. Currently, the Ministry is organized by levels of education, which has tended to produce administrative silos and a large, unwieldy bureaucracy. There have been limited initiatives within the Ministry to fulfill its functions given under the decentralization reform, but these initiatives have been assigned mainly to an existing unit (for example, the Decentralization and Facilitation Unit). What is needed instead is a fundamental change in the way the Ministry operates. The MoNE should be reorganized according to its new major functions, consistent with its oversight role in a decentralized education system. In particular, the Ministry should:

Harmonize and link new education policies and programs, and retire any leftover policies and programs that undermine the goals under decentralization. Since decentralization, various simultaneous efforts in, for example, standard setting, teacher certification, and school rehabilitation and repair have been launched, but it is vital to coordinate these initiatives to prevent wasteful duplication and contradictions. In addition, the MoNE should participate in a permanent inter-ministerial forum for resolving any policy conflicts that affect different sectors such as the current civil service regulations that are not appropriate for managing a decentralized teacher service.

Chapter 6 The Way Forward

49

Develop, test, and disseminate new management and operations systems.The central government, local governments, and schools all urgently need new systems in three areas—information, budget and expenditure tracking, and planning, monitoring, and evaluation. The existing system for collecting and reporting information on schools has collapsed since decentralization. Nor is there any effective system for keeping track of district-level education expenditures or for determining and tracking the allocation of funding and resources to schools. There are some local experiments and projects that are addressing these issues, but these efforts are largely sporadic and undocumented. One of the responsibilities of the central government is to encourage local experimentation, identify good practices, and build on these to create management and operations systems that will be effective in a decentralized context.

Foster a national education information system consistent with decentralization. It is worth singling out this function because having an effective information system will be vital for the MoNE to carry out any of its new functions, particularly quality assurance. In order to build an effective information system, the MoNE should decide what kinds of information the database should contain, establish the most effective means for sharing information between levels of government, and design and test a simpler data management system for districts with very little capacity.However, any effective information system requires reliable and timely input, so collaboration between the MoNE and the regional governments is essential because the Ministry’s bureaucratic power alone will not be enough to ensure that local governments and schools collect and report information. Under decentralization, the

central government can facilitate this collaboration by giving financial incentives for information reporting, by reinforcing local pride at being involved in producing a joint product (such as standards and definitions developed collaboratively over time), and by stressing to weaker districts that collaboration will enable them to learn from what the stronger districts are doing.

Develop management and technical capacities at all levels. Running the new management and operations systems will require new skills. The biggest bottleneck to implementing devolved functions is the lack of technical and managerial capacity at the local level. Building this capacity must begin with the MoNE defining performance standards and measures for all decentralized functions and a corresponding checklist of basic competencies needed to carry them out. This checklist can then be used by each level of government to assess their own current capacity, design a program for upgrading that capacity, and fill future staff vacancies. Such a variety of skills will be needed that it is highly unlikely that a single service provider will be able to meet all staff development needs. However, since the current supply is limited, the government should take immediate steps to expand and diversify the supply of service providers.

Develop and disclose a multi-year plan for financial, technical and management assistance to local governments. During the consultation meetings for this report, some local leaders lamented the fact that capital investments in schools are often financed in a fragmented and unplanned way by the central government or by aid agencies, robbing the districts of the ability to manage their education systems. There are an estimated 400 projects currently managed by the MoNE, accounting for the bulk of the


50

APBN allocation for education and controlling the capital and quality improvements investments in the sector.

Require provincial and district governments to prepare and implement multi-year regional investment and financing plans as well as a corresponding assistance plan for each school in accordance with regional goals and with school capacities and needs.

The experience of other countries has revealed that giving transfers to lower levels of governments are more effective when efforts are also made to build local planning skills, to increase transparency in the allocation and use of local funds, and to require accountability in return for the transfers. For Indonesia, this means that the central government should:

Scrap the budgeting process that local governments and schools go through each year and replace it with a multi-year investment plan and an annual spending plan. These plans should specify the level, source, and type of resources needed and whether investment activities would be under the direct management of the local government or of the school committees.

Establish a clear funding mechanism to transfer resources to schools that is easy to implement and to monitor. First and foremost, this means ensuring that schools receive adequate block grants to cover their basic operating expenses, including the costs of teaching and non-teaching staff, instructional supplies, some staff development, the routine activities of the school committee, the maintenance of a school database, the dissemination of information to parents and the community, utilities, and light repair of the school buildings and other maintenance. Second, to increase transparency in the allocation of funds and to enable schools to plan ahead, the size of these grants should be based on a formula-based allocation that is non-

discretionary and that depends on just a few key measurable criteria. Besides these “operational funds,” the government should make additional funds available through a proposal-based grants mechanism to cover the costs of, for example, staff development programs or the construction of a new classroom or laboratory. This funding channel is discussed in greater detail below. Third, to facilitate school-based management, the government should give this assistance to schools in cash rather than in kind.

Disclose publicly the amount of funds and other assistance that districts will be giving to each school well before the beginning of the school year. This will give the school committee in each school a chance to finalize its own spending plan and to raise additional resources if needed. This is complicated by the fact that the district and school budget years do not correspond (January to December for districts, July to June for schools). While it is not necessary to align these budget cycles, local governments should find a solution that alleviates this problem for schools.

Conduct a periodic financial audit of schools as an input into the preparation of the multi-year assistance plan for each school.

Monitor and evaluate the implementation of school investment plans by means of periodic progress reports, field inspections, and evaluations of outcomes. All investment projects should also be audited, and the results of these audits should be made public.

Ensure that routine allocation processes are responsive to the needs of the poorer districts and schools by adopting pro-poor education programs to stimulate demand consistent with the goals of the global Education for All initiative.


51

To achieve these changes, local governments need adequate and timely technical assistance to build their capacity to develop plans and budget processes, arrange financing, operate the local education system efficiently, and assist schools. These technical assistance and training programs do not have to be provided by the central government. In fact, considering the size and diversity of Indonesia’s education system, it would be better to encourage the development of a private supply of technical assistance and training. Specific grants (possibly through the central government’s development budget – the DIP – or through the DAK) could be given to the regions to allow them to procure the services of national and international experts to help them to develop their budgeting and planning skills, to raise their revenues, to track their expenditures, to manage information flows, and to assess school performance. Ultimately, regions will be expected to use their own budgets to maintain their planning and management skills and to purchase these technical services from an organized marketplace of suppliers.

Help schools to make and implement decisions that will improve quality, especially those in poor areas.

Since the mid-1990s, there has been a trend in Indonesia towards school quality improvement projects that are school-planned, school-based, and school-monitored. This trend is consistent with Education Law 20, which has empowered schools to make decisions regarding their governance and management. However, as this review concludes, there is tremendous variation in the capacity of schools to exercise the authority that decentralization has given them. A big challenge over the next few years is to develop a viable strategy for raising the capacity of schools to manage resources and programs. Another challenge is to ensure that schools meet the minimum requirements for accreditation as defined by the central government and that schools receive sufficient funds to cover their basic operating expenses. This means that the first step in improving school quality is to bring the physical and human infrastructure up to minimum standards for accreditation and to

ensure that schools are funded at least to the minimum necessary for operations and maintenance. Other steps that are needed are to:

Begin a periodic audit of schools on the basis of a checklist of standards, produce scorecards on the basis of this audit that rate the overall quality and performance of each school, and develop a protocol for the public disclosure of these scorecards.

Require schools to report their own expenditures in a timely fashion, but this will require switching to a multi-year process in order to give schools enough time to complete their expenditure records before the next planning period.

Establish a proposal-based grants program that would allow schools to request extra resources for specific innovations and experiments. Some schools are going to be much better at preparing proposals than other schools, so this grants program needs to include a training facility to help build this capacity in those schools that lack it. Several ongoing donor-assisted projects (for example, the DSSD and the DBEP) have been building similar capacity in selected areas of the country so some local governments and schools already have the required capability as well as the ability to train school personnel.

Develop a policy for targeting special assistance to those schools that do not meet the with minimum quality standards, especially in poor areas.

As discussed above, one significant challenge for the central and local governments is to make policies related to education quality that embrace all different types of schools. We recommend that the Indonesian government adopt a “one policy roof” for all schools and, as a first step, should assess all religious and private schools according to the same national minimum education quality standards that apply to public schools. This major task would fill the


52

information gap left by the collapse of the national annual school census and would underpin subsequent periodic assessments by local governments. Also, as part of the school registration and accreditation processes, local governments should require these (private and religious) schools to formulate a plan for bringing their quality standards up to the required level and a timetable of the specific actions and the level of resources that they will need to do so. Those plans would become components of a regular accreditation process for these schools, and their progress in achieving its goals could be used as a basis for providing them with targeted assistance in the future.

Establish a teaching service, separate from the civil service, that includes a transparent appointment and deployment process and a professional development system that is school-based and performance-led.

Effective teacher management systems in schools are essential for achieving national education goals. Table 5.1 in the previous chapter lays out a list of appropriate policies, the kind of actions required to implement these policies, and some ideas about who should be responsible for implementing those actions. The most critical recommendation is for the establishment of a separate teaching service with the following characteristics: merit-based appointments, transfers, and promotions; school-based performance evaluations; and professional development that covers all phases of the teachers’ career including their initial training, their induction into the teaching profession, school life, and continuous professional development. This would need to be built up over time.

In a decentralized teacher management system, the main role of the central government is to set minimum teaching standards and minimum salary scales and to develop guidelines for promotions and incentives. The provincial education units are responsible for ensuring that districts are able to meet their statutory obligation to provide high-quality education. District governments are responsible for employing and deploying teachers and for

paying their base salaries (the national minimum) and any additional benefits and incentives, for monitoring teacher performance, and for ensuring that teachers have access to professional development programs. There are also areas where cooperation among the levels of government could be highly beneficial. For example, as discussed in the previous chapter, central and provincial governments could increase the efficiency of teacher deployment by helping districts to develop their own formulas for calculating their teacher requirements that take into account the number of students enrolled in a school rather than the number of classes in the school.

Educators in Indonesia already feel that there is a need for a new paradigm for the teaching profession. Many elements of this new approach are already in place or are being tried out in a number of projects. However, developing an overall framework that defines teachers’ professional development as a lifelong process should be a priority. Many of the elements of this framework could be tested in simultaneous pilot projects by different institutions and in different districts.

Implementing the Policy Agenda

Finally, we return to the question of how best to implement the recommended actions outlined in this chapter.

Supply-side and Demand-led Programs

Both supply-side and demand-side approaches are needed to fill existing policy and technical gaps. Supply-side investments are needed to strengthen the capacity of central education agencies to make policy, to plan, to set standards, and to measure the performance of districts and schools. They are needed also to stimulate the development of new solutions that can be used by local governments. These investments can be made through a national program or through discrete projects managed by the central agencies. Either way, it is vital to link all of the different supply-side investments in one institution-building agenda instead of


53

undertaking them separately with little or no coordination.

However, in the spirit of decentralization and in recognition of the great diversity that exists across Indonesia, demand-side programs that address the specific needs of provinces, districts, and schools should be a cornerstone of education policy. As already mentioned earlier, three measures in particular need to be taken.

The central government must provide adequate block transfers to regional governments, especially for those with limited local revenues. The larger the share of resources that is directed through this channel rather than through specific programs, the more it will support the development of local governance and management.

The central government should establish grants to fund projects initiated by local schools and communities. These grants will have the dual objective of stimulating innovation and experimentation and of reducing inequality of education quality among districts. The law allows districts to collaborate in initiating these projects and applying for these grants so that they can take advantage of economies of scale. To encourage the formation of this kind of association between districts, the grants program could award more money to those proposals that are submitted by an association of districts.

The central government should evaluate and support the education management systems being developed and used in different regions.

Learning from Past and Ongoing Efforts

The government of Indonesia and its partners in the donor community have invested in many pilot initiatives in education over the past two or

three decades. Many of these initiatives have borne fruit and have provided valuable lessons about what kind of programs are effective, but many other initiatives have either failed to produce results or petered out because of a lack of attention from the government or donors. Under decentralization, there is an even greater need to learn from these initiatives. Two immediate steps are needed. The first is to cull lessons from past programs. During the preparation of this review, the team compiled all available documents from or about these programs and concluded that many types of interventions have been implemented but that evidence-based, analytical lessons about their effectiveness or otherwise have seldom been drawn. This review has cited lessons from these past initiatives whenever they have been available. It may be impossible to recover lessons from or most of these programs, but it would be useful for the government and the donor community to try.

The second immediate step is to identify ongoing and planned programs that should be rigorously evaluated. The aim is to build a body of evidence-based lessons about how to deliver education services of good quality in a decentralized setting. It is important to extract not just localized lessons but also broad ones that reflect the wide diversity of contexts in Indonesia. An integral part of this evaluation effort must be to establish a mechanism to ensure that these lessons are widely publicized so that they can be taken into account in national and local policymaking and school-based management. Regional meetings held for this review suggest that the demand for such lessons exists.

54

Tab

le 6

.1.

Pro

pose

d po

licy

agen

da fo

r ed

ucat

iona

l dev

elop

men

t und

er d

ecen

tral

izat

ion

Polic

y ob

ject

ives

( m

eans

“Fo

r im

med

iate

act

ion”

)

Spec

ific

actio

ns

Impl

emen

ting

agen

cy

Com

men

ts

A.

Cor

e po

licy

obje

ctiv

e : T

o im

prov

e go

vern

ance

and

man

agem

ent

Fin

aliz

e PP

s for

Ed

ucat

ion

Law

20

to

prov

ide

deta

iled

assi

gnm

ents

of

gove

rnan

ce a

nd

man

agem

ent f

unct

ions

to

all

leve

ls

Esta

blis

h co

mm

ittee

of t

echn

ical

and

man

agem

ent e

xper

ts to

car

ry o

ut

anal

ysis

and

con

sulta

tions

, to

revi

ew ro

les f

or n

atio

nal l

evel

and

pre

pare

jo

b de

scrip

tions

for n

ew n

atio

nal f

unct

ions

. and

to d

eter

min

e de

gree

to

whi

ch re

sulti

ng a

ssig

nmen

ts c

an b

e m

anda

ted

Impr

ove

gove

rnan

ce st

anda

rds f

or E

duca

tion

Boa

rds a

nd S

choo

l C

omm

ittee

s, an

d de

term

ine

degr

ee o

f nee

d fo

r nat

iona

l reg

ulat

ion.

NG

in

cons

ulta

tion

with

PG

and

DG

See

Cha

pter

2 fo

r dis

cuss

ion.

Espe

cial

ly in

the

next

thre

e ye

ars,

will

nee

d to

ev

alua

te th

e as

sign

men

t con

tinuo

usly

to a

sses

s th

eir a

ppro

pria

tene

ss a

nd e

ffec

tiven

ess

Alig

n st

ruct

ure

of

cent

ral e

duca

tion

auth

ority

to fu

nctio

ns

assi

gned

und

er

dece

ntra

lizat

ion

Res

truct

ure

MoN

E al

ong

func

tion

lines

Laun

ch d

isse

min

atio

n ac

tiviti

es to

info

rm lo

cal g

over

nmen

ts a

nd sc

hool

s ab

out t

his n

ew st

ruct

ure

NG

(MoN

E, w

ith

colla

bora

tion

of

MoH

A)

See

Cha

pter

2, B

ox 2

.5, a

nd V

olum

e 2,

Cha

pter

1

for d

iscu

ssio

n.

Bui

ld a

nat

iona

l ed

ucat

ion

info

rmat

ion

syst

em c

onsi

sten

t with

de

cent

raliz

atio

n

Det

erm

ine

the

info

rmat

iona

l bas

e ne

eded

to im

plem

ent a

nd d

ocum

ent t

he

polic

ies a

t dis

trict

leve

l

Det

erm

ine

the

info

rmat

ion

trans

mis

sion

stan

dard

s bet

wee

n le

vels

of

gove

rnm

ent,

as in

form

atio

n, n

ot a

s sof

twar

e

Stud

y al

read

y-ex

istin

g ca

ses o

f goo

d pr

actic

e of

info

rmat

ion

use

at

scho

ol a

nd d

istri

ct le

vel

Des

ign

a pr

otot

ype

defa

ult s

yste

m in

a fe

w d

istri

cts t

hat a

re w

eak

but

will

ing

to e

xper

imen

t and

impr

ove

Test

syst

em a

nd d

isse

min

ate

key

findi

ngs

NG

in

colla

bora

tion

with

PG

and

DG

Bur

eauc

ratic

pow

er a

lone

is n

ot e

noug

h to

en

forc

e co

mpl

ianc

e on

info

rmat

ion

repo

rting

., so

(a) r

ely

on in

cent

ives

(e.g

. con

ditio

nal

supp

lem

enta

ry g

rant

s to

scho

ols)

; (b)

allo

w lo

cal

offic

ials

to w

ork

with

info

rmat

ion

prof

essi

onal

s at

cen

tral l

evel

to d

evel

op st

anda

rds a

nd te

st

syst

ems;

(c) e

nsur

e th

at p

rodu

ct is

bet

ter t

han

wha

t is r

eadi

ly a

vaila

ble

from

the

mar

ket;

(d)

cust

omiz

e lo

cal s

yste

m to

cap

acity

of d

istri

cts,

whi

le e

nsur

ing

com

para

bilit

y ac

ross

Indo

nesi

a.

55

Polic

y ob

ject

ives

( m

eans

“Fo

r im

med

iate

act

ion”

)

Spec

ific

actio

ns

Impl

emen

ting

agen

cy

Com

men

ts

Dev

elop

man

agem

ent s

tand

ards

that

all

gove

rnm

ent l

evel

s, an

d sc

hool

s sh

ould

mee

t

Bas

ed o

n fu

nctio

n as

sign

men

ts a

nd st

anda

rds,

audi

t cur

rent

man

agem

ent

syst

ems a

nd c

apac

ities

thro

ugho

ut th

e sy

stem

Dev

elop

pla

n to

rest

ruct

ure

orga

niza

tions

and

trai

n st

aff t

o de

velo

p ne

w

syst

ems

Impr

ove

man

agem

ent c

apac

ity

thro

ugho

ut th

e ed

ucat

ion

syst

em

Bas

ed o

n st

anda

rds,

deve

lop

proc

edur

es fo

r loc

al g

over

nmen

ts a

nd

scho

ols t

o as

sess

thei

r ow

n m

anag

emen

t cap

acity

Dev

elop

mon

itorin

g an

d ev

alua

tion

prot

ocol

s for

cap

acity

dev

elop

men

t pr

ogra

ms

All

gove

rnm

ent,

leve

ls, i

n co

ordi

natio

n w

ith

each

oth

er

Scho

ols (

head

te

ache

rs, t

each

ers,

and

Scho

ol

Com

mitt

ees)

Man

y on

goin

g pr

ojec

ts (e

.g.,

DSS

D, D

BEP

) do

this

, so

need

to c

ompi

le le

sson

s, di

ssem

inat

e an

d in

corp

orat

e th

em in

to n

ew sy

stem

s.

Whe

re n

eede

d an

d po

ssib

le, u

se p

rivat

e pr

ovid

ers t

o co

nduc

t aud

it an

d sy

stem

s im

prov

emen

ts

Proc

ess w

ill b

e on

goin

g.

Esta

blis

h po

licy

tow

ards

priv

ate

prov

isio

n, e

spec

ially

at

seco

ndar

y an

d te

rtiar

y ed

ucat

ion

leve

ls

Ass

ess c

ost-b

enef

it of

priv

ate

prov

isio

n as

it c

ompa

res w

ith p

ublic

pr

ovis

ion

A

ll le

vels

of

gove

rnm

ent

Supp

ort c

apac

ity o

f le

gisl

ativ

e bo

dies

to

anal

yze

educ

atio

n po

licy

Cre

ate

fund

ing

and

sele

ctio

n m

echa

nism

to p

rovi

de le

gisl

ator

s with

de

man

d-le

d ac

cess

to a

cade

mic

s or c

onsu

ltant

s to

prov

ide

stud

ies

Con

side

r fun

ding

smal

l tec

hnic

al u

nit o

r pan

el th

at c

an b

e dr

awn

upon

re

peat

edly

DPR

at N

G le

vel,

DPR

Ds a

t LG

le

vel

Legi

slat

ive

bodi

es c

urre

ntly

hav

e to

rely

ent

irely

on

exe

cutiv

e br

anch

for a

naly

sis o

f edu

catio

n po

licy

chan

ges a

nd th

e st

ate

of e

xecu

tion

of

polic

y

Obt

ain

supp

ort f

or

educ

atio

nal g

oals

and

st

rate

gies

from

civ

il so

ciet

y, N

GO

s, an

d th

e m

edia

Ana

lyze

cur

rent

role

of c

ivil

soci

ety

in e

duca

tion,

from

pol

icy

desi

gn to

po

licy

over

sigh

t

Dev

elop

trai

ning

pro

gram

and

mat

eria

ls fo

r gov

ernm

ent o

ffic

ials

on

this

is

sue,

and

trai

n go

vern

men

t off

icia

ls o

n ro

le o

f civ

il so

ciet

y in

pol

icy

over

sigh

t

Impr

ove

capa

city

of t

he m

edia

to a

naly

ze a

nd re

port

on e

duca

tion

issu

es,

by d

evel

opin

g tra

inin

g m

ater

ials

for n

atio

nal a

nd re

gion

al m

edia

and

in

stitu

ting

a ye

arly

aw

ard

for t

he b

est e

duca

tion

repo

rting

NG

and

LG

A

s dem

ocra

tizat

ion

and

civi

l soc

iety

act

ivis

m

are

rela

tivel

y ne

w in

Indo

nesi

a, th

ere

are

dang

ers o

f mis

unde

rsta

ndin

gs a

nd ro

le

conf

usio

n.

Dem

ocra

tizat

ion

and

dece

ntra

lizat

ion

requ

ire a

n in

form

ed c

itize

nry,

idea

lly in

form

ed b

y hi

gh-

qual

ity re

porti

ng.

56

Polic

y ob

ject

ives

( m

eans

“Fo

r im

med

iate

act

ion”

)

Spec

ific

actio

ns

Impl

emen

ting

agen

cy

Com

men

ts

B.

Cor

e po

licy

obje

ctiv

e : T

o en

sure

ade

quat

e re

sour

ces f

or e

duca

tion,

impr

ove

the

impr

ove

the

effic

ienc

y an

d ef

fect

iven

ess o

f res

ourc

e us

e, a

nd a

ddre

ss e

quity

co

ncer

ns

Secu

re a

dequ

ate

oper

atio

nal b

udge

ts fo

r ed

ucat

ion

at p

rovi

ncia

l an

d di

stric

t lev

els a

nd

in sc

hool

s

Dev

elop

and

impl

emen

t per

-stu

dent

fund

ing

form

ula

to d

eter

min

e op

erat

iona

l edu

catio

n bu

dget

at d

istri

ct le

vel

Dev

elop

and

impl

emen

t per

-sch

ool f

undi

ng fo

rmul

a to

det

erm

ine

staf

f de

ploy

men

t

Esta

blis

h tra

ckin

g an

d re

porti

ng sy

stem

s for

regu

lar m

onito

ring

and

anal

ysis

of e

duca

tion

finan

cing

at a

ll le

vels

NG

in

cons

ulta

tion

with

PG

and

DG

The

per-

stud

ent f

undi

ng fo

rmul

a is

to b

e co

st-

inde

xed

with

adj

ustm

ents

for n

eeds

of

disa

dvan

tage

d gr

oups

, usi

ng re

ason

able

cos

t es

timat

e of

enr

ollm

ent a

nd a

gree

d-up

on q

ualit

y st

anda

rds a

nd g

eogr

aphi

c-sp

ecifi

c pr

ices

.

To im

prov

e te

ache

r dep

loym

ent,

base

staf

f de

ploy

men

t on

a pe

r-sc

hool

rath

er th

an p

er-

stud

ent b

asis

, with

indi

cativ

e te

ache

r-st

uden

t pa

ram

eter

s. S

ee se

ctio

n D

bel

ow.

Secu

re a

dequ

ate

deve

lopm

ent r

esou

rces

fo

r edu

catio

n in

regi

ons

and

in sc

hool

s, es

p. fo

r po

or re

gion

s

Eval

uate

less

ons f

rom

cur

rent

dev

elop

men

t pro

ject

s thr

ough

out t

he

syst

em, a

nd d

evel

op a

pla

n fo

r con

solid

atin

g or

link

ing,

and

for s

calin

g up

thos

e th

at a

re e

ffec

tive

and

term

inat

ing

thos

e th

at a

re n

ot

Aud

it in

vest

men

t pro

ject

s for

scho

ols a

nd re

quire

pub

lic d

iscl

osur

e of

re

sults

of a

udit;

dev

elop

mon

itorin

g an

d ev

alua

tion

prot

ocol

s for

cap

acity

de

velo

pmen

t pro

gram

s

Det

erm

ine

whi

ch d

evel

opm

ent p

roje

cts a

re b

est u

nder

take

n at

regi

onal

or

natio

nal l

evel

s

NG

in

cons

ulta

tion

with

PG

and

DG

Whi

le th

is sh

ould

be

initi

ated

imm

edia

tely

, the

pr

oces

s will

take

a fe

w y

ears

to c

ompl

ete.

Impr

ove

the

trans

pare

ncy

and

pred

icta

bilit

y of

as

sist

ance

to lo

cal

gove

rnm

ents

Dev

elop

mul

ti-ye

ar p

lan

of fi

nanc

ial,

tech

nica

l and

man

agem

ent

assi

stan

ce to

dis

trict

gov

ernm

ents

that

is c

onsi

sten

t with

regi

onal

nee

ds

and

goal

s

Publ

ish

plan

so it

is b

road

ly k

now

n, a

nd e

stab

lish

mec

hani

sm fo

r re

porti

ng o

n pe

rfor

man

ce w

ith re

spec

t to

the

plan

.

NG

in

cons

ulta

tion

with

PG

and

DG

Dev

elop

sche

ma

for d

eter

min

ing

leve

l and

na

ture

of n

eede

d as

sist

ance

to re

gion

s:

Cat

egor

ize

dist

ricts

acc

ordi

ng to

per

form

ance

le

vel o

n m

ultip

le e

duca

tion

indi

cato

rs, r

esou

rce

leve

ls, a

nd te

chni

cal a

nd m

anag

emen

t cap

acity

Dat

a re

quire

men

ts: U

p-to

-dat

e di

stric

t-lev

el

info

rmat

ion

on m

ultip

le e

duca

tion

indi

cato

rs,

reso

urce

leve

ls, a

nd c

apac

ity

57

Polic

y ob

ject

ives

( m

eans

“Fo

r im

med

iate

act

ion”

)

Spec

ific

actio

ns

Impl

emen

ting

agen

cy

Com

men

ts

Impr

ove

the

trans

pare

ncy

and

pred

icta

bilit

y of

as

sist

ance

to sc

hool

s

Each

regi

on to

dev

elop

mul

ti-ye

ar p

lan

of fi

nanc

ial,

tech

nica

l and

m

anag

emen

t ass

ista

nce

to sc

hool

s

Publ

iciz

e as

sist

ance

pla

n so

it is

bro

adly

kno

wn;

mee

t with

Sch

ool

Com

mitt

ees t

o di

scus

s pla

ns a

nd to

dis

clos

e ex

pend

iture

s at t

he e

nd o

f ea

ch y

ear

Loca

lgo

vern

men

ts w

ith

Scho

ol C

omm

ittee

in

eac

h sc

hool

Use

form

ula

fund

ing

mec

hani

sms t

hat a

re n

on-

disc

retio

nary

and

that

dep

end

on a

few

key

cr

iteria

; see

abo

ve.

Up-

to-d

ate

scho

ol-le

vel i

nfor

mat

ion

on m

ultip

le

educ

atio

n in

dica

tors

, res

ourc

e le

vels

, and

ca

paci

ty; d

ata

shou

ld b

e co

llect

ed o

n a

regu

lar

basi

s

Est

ablis

h on

-gr

antin

g m

echa

nism

to

supp

ort e

duca

tiona

l de

velo

pmen

t pla

ns o

f re

gion

al g

over

nmen

ts

and

scho

ols

Initi

ate

a tra

nsiti

onal

pro

gram

of a

ssis

tanc

e to

dis

trict

s with

gre

ates

t nee

d of

supp

ort f

or th

eir e

duca

tion

prog

ram

s and

scho

ols b

ut w

ith in

adeq

uate

re

venu

es to

impl

emen

t the

ir m

ulti-

year

edu

catio

nal d

evel

opm

ent p

lan

Invi

te th

ese

dist

ricts

to su

bmit

wel

l-foc

used

pro

posa

ls in

line

with

thei

r, on

con

ditio

n th

at th

ese

dist

ricts

will

use

ove

rsig

ht te

chni

cal s

ervi

ces f

rom

N

G o

r exp

erts

for t

he d

urat

ion

of th

e fu

nded

pro

ject

NG

in

cons

ulta

tion

with

PG

and

DG

Ther

e is

wid

e va

riatio

n in

reve

nue

leve

ls a

mon

g di

stric

ts.

Use

DA

K m

echa

nism

and

/or l

oan

fund

s to

assi

st p

oore

st d

istri

cts a

nd th

eir s

choo

ls

thro

ugh

on-g

rant

ing,

with

mat

chin

g fu

nds t

o en

sure

som

e ad

ditio

nalit

y.

Dev

elop

and

im

plem

ent p

ro-p

oor

educ

atio

n pr

ogra

ms f

or

scho

ols a

nd st

uden

ts

Eval

uate

the

pro-

poor

nat

ure

of e

xpen

ditu

re p

atte

rns a

t all

leve

ls o

f go

vern

men

t as p

art o

f reg

ular

per

form

ance

aud

its

Tran

sitio

n st

ep: E

stab

lish

a sp

ecia

l, fin

ite-te

rm, w

ell-t

arge

ted

pro-

poor

na

tiona

l pro

gram

to su

pple

men

t dis

trict

fina

ncin

g fo

r sch

ools

and

st

uden

ts in

sele

cted

are

as

Dis

trict

s to

laun

ch th

eir o

wn

sim

ilar p

rogr

am o

ver t

he lo

ng-te

rm

Loca

lgo

vern

men

ts a

nd

scho

ols t

o in

form

N

G

Thes

e pr

ogra

ms s

houl

d be

ow

ned

by d

istri

cts

and

prov

ince

s, us

ing

a D

AK

allo

catio

n.

Add

ition

ally

, nat

iona

l gov

ernm

ent m

ight

wan

t to

esta

blis

h a

mec

hani

sm to

rew

ard

dist

ricts

that

ha

ve a

chie

ved

larg

er p

ro-p

oor p

rogr

ess.

Le

sson

s are

ava

ilabl

e fr

om S

GP

and

SIG

P of

ho

w th

ese

mig

ht b

e im

plem

ente

d.

C.

Cor

e po

licy

obje

ctiv

e : T

o im

prov

e ed

ucat

ion

qual

ity

58

Polic

y ob

ject

ives

( m

eans

“Fo

r im

med

iate

act

ion”

)

Spec

ific

actio

ns

Impl

emen

ting

agen

cy

Com

men

ts

Set s

tand

ards

, m

easu

res

and

mon

itorin

g m

echa

nism

s fo

r bot

h in

stitu

tions

and

in

divi

dual

s

Har

mon

ize

and

link

vario

us st

anda

rd-s

ettin

g pr

oces

ses f

or sc

hool

s and

te

ache

rs c

urre

ntly

und

erw

ay

Initi

aliz

e sc

hool

map

ping

and

aud

it of

scho

ols o

n th

e ba

sis o

f che

cklis

t of

stan

dard

s, an

d pr

oduc

e “b

alan

ced

scor

ecar

ds”

to ra

te o

vera

ll qu

ality

and

go

vern

ance

per

form

ance

of s

choo

ls a

nd d

istri

cts.

Dev

elop

pro

toco

l for

pub

lic d

iscl

osur

e of

bal

ance

d sc

orec

ards

Dev

elop

pol

icy

on sc

hool

s bel

ow st

anda

rds o

n m

inim

um a

ccre

dita

tion

Initi

ate

natio

nal m

edia

cam

paig

n to

info

rm p

eopl

e

All

leve

ls o

f go

vern

men

t Se

para

te e

ffor

ts in

MoN

E, C

ivil

Serv

ice,

and

M

oF h

ave

begu

n ef

forts

to d

efin

e st

anda

rds a

nd

mea

sure

s..

Use

ful t

o as

sess

als

o go

od in

tern

atio

nal p

ract

ice

and

Indo

nesi

an e

xper

imen

ts fr

om o

ther

sect

ors.

Som

e co

nsen

sus w

ithin

edu

catio

n ag

enci

es

abou

t def

initi

on o

f min

imum

lear

ning

con

ditio

ns

and

serv

ice

stan

dard

s

Set p

ro-p

oor

perf

orm

ance

stan

dard

s fo

r dis

trict

s, pr

ovin

ces

and

the

cent

ral l

evel

Form

aliz

e m

inim

um se

rvic

e st

anda

rds f

or lo

cal g

over

nmen

ts in

the

area

edu

catio

n in

to a

ppro

pria

te re

gula

tion,

and

har

mon

ize

min

imum

se

rvic

e st

anda

rds d

evel

oped

und

er M

oHA

um

brel

la w

ith st

anda

rd

setti

ng in

itiat

ed u

nder

new

Edu

catio

n La

w

Con

duct

an

audi

t of d

istri

ct p

erfo

rman

ce u

sing

the

resu

lts o

f sch

ool

map

ping

and

scho

ol a

udit

activ

ity p

lus e

duca

tion

prof

iling

of d

istri

ct,

to p

rodu

ce “

bala

nced

scor

ecar

d” fo

r eac

h di

stric

t

Set s

ervi

ce a

nd p

erfo

rman

ce st

anda

rds f

or n

atio

nal l

evel

, and

aud

it pe

rfor

man

ce o

f nat

iona

l lev

el a

gain

st st

anda

rds

NG

in

cons

ulta

tion

with

PG

and

DG

Sepa

rate

eff

orts

in M

oNE

have

to d

efin

e pe

rfor

man

ce a

nd te

chni

cal s

tand

ards

and

m

easu

res.

Dis

trict

cap

aciti

es to

mee

t nat

iona

l sta

ndar

ds

even

with

flex

ible

tim

elin

e is

que

stio

nabl

e

Dis

trict

cap

aciti

es to

man

age

stan

dard

s m

onito

ring

varie

s wid

ely,

Ris

k of

incr

easi

ng in

equi

ty u

nles

s dis

trict

st

anda

rds a

re p

ro-p

oor

Enab

le a

nd

enco

urag

e pr

o-po

or

scho

ol q

ualit

y im

prov

emen

t

Prov

ide

adeq

uate

reso

urce

s for

scho

ol im

prov

emen

t thr

ough

pro

posa

l ba

sed

gran

ts to

scho

ols f

or q

ualit

y im

prov

emen

ts

Cre

ate

regu

latio

ns th

at e

mpo

wer

scho

ols t

o m

ake

deci

sion

s tha

t im

prov

e sc

hool

qua

lity

Loca

te a

nd d

isse

min

ate

pro-

poor

goo

d pr

actic

es, a

nd re

tire

thos

e th

at a

re

inef

fect

ive

Stim

ulat

e th

e su

pply

of p

ro-p

oor s

choo

l im

prov

emen

t ser

vice

s

Scho

ols a

nd a

ll le

vels

of

gove

rnm

ent

Ris

k of

incr

easi

ng in

equi

ty u

nles

s qua

lity

impr

ovem

ent p

rogr

ams a

re p

ro-p

oor

Use

info

rmat

ion

on p

opul

atio

n, st

atus

of

educ

atio

n an

d sc

hool

map

ping

to p

lan

for

scho

ol re

habi

litat

ion,

ratio

naliz

atio

n an

d sy

stem

ex

pans

ion

Initi

ate

crea

tion

of “

one

regu

lato

ry ro

of”

for a

ll U

sing

qua

lity

stan

dard

s for

regu

lar s

choo

ls, u

nder

take

a p

erfo

rman

ce

audi

t of a

ll re

ligio

us a

nd p

rivat

e sc

hool

s PG

and

DG

in

coor

dina

tion

with

Th

e po

ores

t chi

ldre

n ar

e ed

ucat

ed in

smal

l pr

ivat

e sc

hool

s and

Mad

rasa

h.

59

Polic

y ob

ject

ives

( m

eans

“Fo

r im

med

iate

act

ion”

)

Spec

ific

actio

ns

Impl

emen

ting

agen

cy

Com

men

ts

scho

ols

Req

uire

all

thes

e sc

hool

s to

form

ulat

e a

plan

of a

chie

ving

qua

lity

stan

dard

s (pr

ovid

ing

a tim

etab

le o

f spe

cific

act

ions

and

leve

l of r

esou

rces

ne

eded

) as p

art o

f the

regi

stra

tion

and

accr

edita

tion

proc

esse

s

Esta

blis

h a

regu

lar a

ccre

dita

tion

proc

ess f

or th

ese

scho

ols u

sing

the

stan

dard

s, an

d lin

k th

is re

quire

men

t to

assi

stan

ce to

thes

e sc

hool

s

Scho

ol

Com

mitt

ees

D.

Cor

e po

licy

obje

ctiv

e : T

o im

prov

e te

ache

r m

anag

emen

t

Esta

blis

h a

new

sy

stem

for t

each

er

recr

uitm

ent

Prep

are

guid

elin

es o

n op

tiona

l tea

cher

dep

loym

ent p

atte

rns

Esta

blis

h m

echa

nism

s for

dis

trict

s (as

em

ploy

ers)

to h

ave

acce

ss to

dat

a on

gra

duat

es fr

om te

ache

r edu

catio

n pr

ogra

ms t

o as

sist

thei

r tea

cher

su

pply

and

dem

and

plan

ning

NG

to se

t nat

iona

l st

anda

rds

Dis

trict

s to

wor

k cl

osel

y w

ith a

ll le

vels

incl

udin

g sc

hool

s

This

syst

em sh

ould

be

com

patib

le w

ith d

istri

ct

auto

nom

y an

d th

e pr

inci

ples

of s

choo

l-bas

ed

man

agem

ent,

and

base

d on

pro

fess

iona

l pa

rtner

ship

s am

ong

dist

ricts

(as e

mpl

oyer

), sc

hool

s, an

d lic

ensi

ng b

ody

Acc

redi

t tea

cher

edu

catio

n pr

ogra

ms a

nd in

stitu

tions

Mea

sure

scho

ols a

nd te

ache

r per

form

ance

and

link

this

to te

ache

r de

velo

pmen

t pla

ns

Esta

blis

h m

echa

nism

s for

gra

nt sy

stem

s to

scho

ols f

or te

ache

r de

velo

pmen

t lin

ked

to sc

hool

per

form

ance

Esta

blis

h a

teac

her

prof

essi

onal

de

velo

pmen

t sys

tem

th

at is

scho

ol-b

ased

and

pe

rfor

man

ce-le

d.

Esta

blis

h lic

ensi

ng sc

hem

e an

d re

quire

teac

hers

to b

e lic

ense

d to

teac

h,

i.e.,

to h

ave

appr

oved

qua

lific

atio

n, h

ave

com

plet

ed a

n in

duct

ion

perio

d,

and

have

bee

n as

sess

ed a

s fit

to b

e lic

ense

d w

ith p

erio

dic

revi

ew to

re

new

lice

nsin

g

All

leve

ls o

f go

vern

men

t to

set

natio

nal s

tand

ards

DG

to w

ork

clos

ely

with

all

leve

ls in

clud

ing

scho

ols.

Dep

ends

on

the

esta

blis

hmen

t of t

rans

pare

nt

teac

her a

ppoi

ntm

ent p

roce

sses

to b

e su

cces

sful

.

Esta

blis

h a

sepa

rate

te

achi

ng se

rvic

e th

at

inco

rpor

ates

syst

em-

wid

e tr

ansp

aren

t te

ache

r app

oint

men

t an

d de

ploy

men

t

Prep

are

natio

nal l

egal

fram

ewor

k fo

r a te

achi

ng se

rvic

e ca

dre

outs

ide

the

regu

lar c

ivil

serv

ice

that

iden

tifie

s the

lega

l em

ploy

er, d

efin

es th

e co

nditi

ons o

f tea

cher

con

tract

ing,

and

the

optio

nal b

enef

its p

acka

ges t

hat

wou

ld a

ccom

pany

var

ious

hiri

ng a

nd d

eplo

ymen

t stra

tegi

es

Prep

are

min

imum

tea

chin

g se

rvic

e st

anda

rds i

nclu

ding

con

ditio

ns o

f se

rvic

esa

lary

leve

lsgu

idel

ines

forc

aree

rpat

hsan

dco

mpl

ianc

ean

d

NG

in c

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n w

ith D

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he

empl

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s) a

nd

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t fro

m m

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s inc

ludi

ng M

oNE,

MoR

A, M

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, M

oF, B

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pan.

60

Polic

y ob

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ives

( m

eans

“Fo

r im

med

iate

act

ion”

)

Spec

ific

actio

ns

Impl

emen

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lines

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aree

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gal a

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norm

s or s

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loym

ent n

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nd

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ent p

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at in

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that

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lear

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rent

, gui

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by c

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of

qual

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, res

pons

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for c

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uous

dev

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ple

to u

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d, re

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stra

ight

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to

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and

acco

unta

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to th

e co

mm

unity

.

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es:

NG

=Nat

iona

l gov

ernm

ent;

PG=P

rovi

ncia

l gov

ernm

ent;

DG

=Dis

trict

gov

ernm

ent


61

61

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Angrist, Joshua D. and Victor Lavy. 2001. “Does Teacher Training Affect Pupil Learning? Evidence from Matched Comparisons in Jerusalem Public Schools.” Journal of Labor Economics, Vol. 19, No. 2, pp. 343-369.

Aziz, A. 2002. “Madrasah Education in Indonesia: Potential, Problems, and Issues.” Paper presented at the Symposium on Madrasah Education in the Context of a National Education System. Sponsored by the Ministry of Religious Affairs and the Asian Development Bank. Jakarta, 4 November 2002.

Bird, Richard M. and Michael Smart. 2002. “Intergovernmental Fiscal Transfers: Some Lessons from International Experience,” World Development 30(6): 899-912.

Bray, Mark. 1997. “Community Financing of Education: Rationales, Mechanisms, and Policy Implications in Less Developed Countries.” In Christopher Colclough (ed.), MarketizingEducation and Health in Developing Countries: Miracle or Mirage? Oxford: Clarendon Press.

Cameron, Lisa A. 2002. “Impact of the Indonesian Financial Crisis on Children: An Analysis Using the 100 Villages Data.” World Bank and UNICEF.

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Departamen Pendidikan Nasional, Balan Penelitan dan Pengembangan (Balitbang). 2002. “Studi Kesiapan Propinsi dan Kabupaten/Kota Untuk Melaksanakan Desentralisasi Pendidikan” (“Readiness of Provinces and Districts to Implement Education Decentralization.”)

National Summary. Propinsi Kalimantan Timur. Propinsi Nusa Tenggara Barat. Propinsi Sumatera Utara.

Departamen Pendidikan Nasional. 2001. Towards High Quality and Equitable Education.National Education Commission Report Executive Summary.

Duflo, Esther. 2001. “Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment,” American Economic Review 91(4): 795-813.

Economist.com. 2003. “Banking on education to propel a new spurt of growth,” Bangkok: December 11, 2003.

Faiqoh, Dra. Hj. 2002. “The Development of Pondok Pesantrens as a Means of Community Based Education and Poverty Alleviation.”Symposium on Madrasah Education in the Context of a National Education System. Jakarta, Indonesia: November 4, 2002.

Filmer, Deon. 2002. “Teacher Pay in Indonesia.” Washington D.C.: The World Bank. Processed.

Filmer, D., N. Suwaryani, and B. Indriyanto. 2001. “Indonesia’s Primary and Junior Secondary Schools in a post-crisis environment: Findings from a follow-up survey of 600 schools.” The World Bank. Processed.

Gumaraes de Castro, M.H. 2000. “Role and Value of International Education Indicators for National Policy Development.” Fourth General Assembly of the OECD Education Indicators Programme (INES). September. Tokyo, Japan.

Hanson, M. 2000. “Democratization and Educational Decentralization in Spain: A Twenty Year Struggle for Reform.” Country Studies. Education Reform and Management Publication Series. Vol. (3). June 2000.

Hofman, Bert, Kai Kaiser, and Soraya Goga. 2003. Decentralizing Indonesia (A Regional Public Expenditure Review). The World Bank, Jakarta.


62

Hofman, Bert, Kadjatmiko, and Kai Kaiser. 2002. “Evaluating Indonesia’s Fiscal Equalization.” The World Bank, Jakarta. Processed.

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Kingdon, Geeta Gandhi, 1996. “Student Achievement and Teacher Pay: A Case Study of India.” The Development Economics Research Program, London School of Economics and Political Science. DEP No.74 August 1996.

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Smoke (ed.), Intergovernmental Transfers in Asia. Manila, Asian Development Bank.

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National Committee for Education, Sub-Committee III. 2001. Decentralization of Education. Draft Report, June 14. Processed and translated into English.

Odden, Allan. 2000. “New and Better Forms of Teacher Compensation Are Possible.” Phi Delta Kappan, Vol. 81, No. 5, pp. 361-366.

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Report No. 29506

INDONESIA

EDUCATION IN INDONESIA: MANAGING THE TRANSITION TO DECENTRALIZATION(In Three Volumes) Volume 2


1

Chapter 1: Governance and Management under Decentralization

The tools needed for governing and managing a centralized system are relatively simple – that is one of the apparent advantages of cen-tralism. Decentralization has great potential advantages, but it also requires more skill and better systems and can, therefore, be a chal-lenge.

As is the case in most of Indonesia’s public sector, Indonesian education has traditionally been quite centralized. Although there have been some specific moves towards more local management in the past, these have been lim-ited to what might better be termed “decon-centration.” Local offices of the national Ministry of Education were given manage-ment responsibilities, but they were not ac-countable to a local legislature or elected politicians, and their ability to set policy was limited. The ability of local citizenry to hold officials responsible was, both in theory and in practice, circumscribed. Recently, Laws 22/1999 and 25/1999, as well as the 2003 Edu-cation Act, constitute a firm thrust towards decentralization.1 However, the basic decen-tralization laws are vague and the related regu-lations tend to be contradictory and often unrelated to the higher-level Acts. Further-more, according to interviews conducted for this review, some policymakers are discussing the potential benefits of re-centralization. Fi-nally, there are implementation capacity chal-lenges as discussed in Hickling Indonesia (2001b) as well as in Depdiknas (2002), which found uneven capacity across a range of dis-tricts. This uncertainty has created anxiety, which was clearly expressed in a planning document issued by the MoNE in 2003: “[there have been] apathies and confusion in the process of decentralization and autonomy in education as it restructures the ways of

1 Furthermore, planning documents such as MoNE (2003) endorse the basic principle that the: “spirit of de-centralization and regional autonomy will underline the implementation process… the development planning policy of each region will have a different priority.” p.2.

thinking, especially in issues related to school and community based management, dichot-omy between public and private schools… and education management and coordination.” (MoNE, 2003). This chapter addresses the sources of the confusion. It lays out the cur-rent challenges facing Indonesia in implement-ing the governance and management aspects of a decentralized education system. It offers suggestions for how to move forward.

The chapter’s main message is that as imple-mentation of decentralization occurred, in 2001 and 2002, policy as to who does what, why, and with what legitimacy, appeared quite confused. The current policy changes, starting in 2003, are not making things much clearer, and are often technically not the most appro-priate. Finally, as ideas do get clearer anyway (e.g., as practices emerge by default in dis-tricts willing to experiment, in spite of, rather than because of, clear policy), and appropriate ideas do emerge, the systems and skills needed to implement the new, decentralized ways of doing things, are often missing or not opti-mized. Furthermore, there are too few good mechanisms for ensuring the lateral spread of effective practices that emerge in various lo-calities.

To support this basic story-line, the chapter is organized as follows. First, the status of edu-cation governance and management in Indone-sia, and the process of decentralization at its beginning, are analyzed descriptively and in comparative perspective. Second, some of the sources of confusion are analyzed. A few im-portant current policy changes, such as the 2003 Education Act and the process of setting minimum service standards, are discussed. It is explained that these might not improve mat-ters very much, because the basic sources of confusion are untouched. Third, assuming some of the basic policy problems can be im-proved upon, some “technical” or “systems development” challenges facing Indonesia are


2

discussed. Finally, suggestions for improve-ment are made.2

The Situation as Decentralization Gets Under Way Detailed governance and management diagno-ses have already been carried out in the last few years, both by donors (Greene, 2000; Hickling Indonesia, 2001a and 2001b; and World Bank, 1998) and by Indonesian schol-ars (see Sudharto, 2002; Supriyoko, 2002; Widarinata and Mudyahardja, 2002, and oth-ers in the same series). Some of the studies document issues pre-dating the recent laws, while others focus on the challenges presented by decentralization. They generally agree that there is a lack of clarity in the laws and a lack of capacity at the local level. Thus, Indonesia now has to continue its efforts to meet pre-existing goals, such as widening access to education and improving quality, but in the new and complex context of decentralization. Yet, in this section we will show that: a) from an international perspective, Indonesia’s de-centralization process is not yet sufficiently well-embarked; b) based on empirical analyses of data on local governance and management, there appear to be serious problems, and rely-ing on citizen pressure to solve these problems will not be easy or automatic; and c) there has

2 “Community participation” is not addressed in this chapter under that name. However, it is clear that, in discussing effective community-level gov-ernance through school committees or the role of civil society in policy definition, we are addressing the issues normally covered under the rubric of “community participation.”

been, and there still is, widespread confusion as to who does what, and why. This has been the situation as decentralization gets under way.

A Comparative Perspective Table 1.1 presents a list of the most common challenges encountered in those countries that have decentralized their education sectors.3The table lists each challenge, indicates whether the challenge appears to be relevant to the current Indonesian situation, and assesses whether the challenge in question seems to impede Indonesia’s decentralization process, and finally whether Indonesian policymakers appear to be sufficiently aware of this chal-lenge, and how it can be confronted. Whether Indonesia faces these challenges was assessed via a series of interviews conducted specifi-cally for this report with various policymakers and experts on governance and management issues and with representatives from Education Boards and school committees. (See Appendix 1.2 for a complete list of the experts interviewed.)

Judging by this table, Indonesia’s decentralization is not yet well-embarked. The experts running the sector are quite aware of this, but they are often not clear on what to do about it.

3 As captured by the knowledge management tools at http://www1.worldbank.org/education/globaleducationreform/06.GovernanceReform/governace_ref.htm.

Chapter 1 Governance and Management under Decentralization

3

Table 1.1 Diagnosis of Governance, Management, and Related Decentralization Challenges

Generic Challenge Present in Indonesia?

Likeli-hood to impededecen-traliza-tion

Aware-nessamong experts

Clarity among experts on how to solve

1. Unclear or inefficient definition and assignment of roles and responsibili-ties (function assignment)

Yes High Yes No

2. Misalignment of re-sponsibility and authority

Difficult to say because function assignment is not clear but is likely to be a challenge given unclear legislation

High Insuffi-cient

No

3. State/provincial gov-ernment centralism

No. Provinces do not have excessive overall power relative to kabupaten/kota and (poten-tially) schools.

Low NA NA

4. Lack of a) management systems and b) skills (ge-neric and system-based) to implement the reform

Yes, though highly variable. Many kabu-paten/kota do not have the skills needed to implement education decentralization, though some do. No serious (universal) di-agnostic against a complete and detailed function assignment has been done, partly because function assignment is not clear. Some samples have been done. Some kabu-paten/kota are so small it is doubtful they will ever have the skills, or should, since they handle just a few thousand students.

High Insuffi-cient

No

5. Lack of community, parent and private sector participation

Difficult to say because it has not been tested through wide-scale policy. Pilot projects suggest interest could be high.

Medium /untested

Yes No

6. Lack of organizational/ individual accountability

Yes High Yes No

7. Lack of quality information

Yes. Both a lack of information that is of high quality and a relative lack of informa-tion about quality. The former problem is worse than the latter.

High Yes No

8. Lack of effective tech-nical support and guidance

Yes. Most instructions, guidelines and tradi-tion are aimed at control rather than support.

High Insuffi-cient

No

9. Inequity of educational access, opportunities, and quality

Yes. Spending per student varies greatly. See the chapter on finance in this report.

High Insuffi-cient

Some

10. Inefficient/unequal re-source allocation

Yes. Funding formulae are inefficient. See the chapter on finance in this report.

High Insuffi-cient

Some

11. Resistance to decen-tralization and lack of po-litical and legal support

There appears to be some resistance at na-tional level to decentralization of certain functions, e.g., those related to teacher man-agement. Belief that certain functions should be re-centralized is not uncommon.

Medium Some No

12. Project design does not support the decentraliza-tion objectives

Does not appear to be a problem. Decen-tralization pilot projects are ahead of the leg-islation and regulation. Actual problem seems to be rather in making sure the lessons learned from pilot projects are taken into ac-count in legislation and regulation.

NA NA NA

13. Institutional and po-litical unpredictability

This appears to be a problem. Policy varies and is often unclear.

High Yes Some


4

Most of the current challenges in Indonesia stem from two fundamental problems: (i) the lack of a clear and efficient assignment of functions and (ii) a lack of general manage-ment skills and of the specific management skills needed to operate decentralized man-agement systems.4

Almost all other problems derive from these two. For example, the lack of effective tech-nical support and guidance is part of the more generic problem of the absence of manage-ment systems aligned with the new functions and with the lack of operational skills.

Empirical Evidence from the Governance and Decentralization SurveyThe final goal of decentralization is to increase transparency and accountability at the local level, from principals and teachers to parents and community, from Kepala Dinas to the DPRD and the Education Board; to improve information flows about what clients want from schools; and to increase local input into schooling production process and input costs. What is the evidence on the current situation?

The Governance and Decentralization Survey (GDS) carried out by the Center for Popula-tion and Policy Studies (CPPS) at the Univer-sity of Gajah Mada, with World Bank funding, is an opinion survey that was applied to many levels of Indonesian society. The survey was taken in 2002. It contains a few questions per-

4 In Indonesia, there is little historical precedent for a style of governance that emphasizes self-regulation and accountability to citizens at the local level. Historically, Indonesia transited from a po-litical style that could be characterized as feudal before colonization, to colonization under the Dutch, which did not foster accountability to the average person, and, after 1948, to a national lib-eration centralist government typical of 20th Cen-tury post-colonial societies. This explains partly why there is little natural or instinctive understand-ing of how to develop policies and procedures that are clear and lead to local self-governance. How-ever, in this chapter we start with more proximate causes.

taining to education governance. An analysis of this survey is presented in Appendix 1.4. Here we summarize the results of the survey.

Expert opinions of Dinas Pendidikan officials and school officials regarding objective meas-ures, such as the time it takes to procure school books or the time it takes to register a teacher promotion, suggest that the system is slow and poorly managed. According to the opinions of principals, it seems to take about 7.4 months to fulfill a school’s book requisi-tion and 5.8 months to register a teacher pro-motion. Interestingly, the opinions on how long it takes to accomplish these tasks differ significantly between the school level and the Dinas Pendidikan. The former estimate the same tasks to take some 40 percent longer than the latter. This in itself is suggestive of a management problem and serious disconnects in perception.

Both citizens and NGOs perceive education, in general, to be among the most corrupt and poorly executed of services in Indonesia, and DPRD members suggest that they receive more complaints about education than about any other service. This may be a biased view, of course, in the sense that education is a ser-vice that touches citizens’ lives every day and in which perhaps the largest proportion of citi-zens participates on a daily basis. Thus, one may be more likely to complain about educa-tion than about other services. Finally, DPRD members perceived that only in about 28 per-cent of the cases is the sector regulated at dis-trict level—a year after decentralization is supposed to have taken effect.

Yet, if one asks citizens or parents about their subjective satisfaction with their children’s schooling, some 80 percent of parents are sat-isfied on issues such as fees, discipline, and quality of learning.5 The range of satisfaction opinions across districts is extremely narrow: parents seem to respond very uniformly and

5 The phrasing of the question varied between “are you satisfied” and “are you unhappy.” The per-centages were roughly the same in either case.


5

always slightly positively. Furthermore, par-ents’ opinions vary much less than principals’ opinions about management problems, and are uncorrelated with the expert opinions on ob-jective problems. Thus, in districts manage-ment tasks are particularly slow, for example, parents’ opinions of the system are about the same as in other districts.

All of these factors taken together suggest that the sector is indeed poorly managed and gov-erned but that citizens have fairly low expecta-tions and uniformly so. This presents obvious problems for decentralization, in terms of the degree to which one can use citizens’ expecta-tions to pressure for improvements in service provision. Possible solutions might include introducing a public information campaign about the education system or encouraging (or requiring) comparative ranking of schools us-ing systems such as school or district score-cards. Culturally appropriate methods of making citizens aware of their rights and of the level of service they are entitled to expect need to be developed. This is discussed fur-ther below in the context of Minimum Service Standards (SPMs in the Indonesian acronym).

“Who Does What, and Why” UnclearThe various laws, decrees, and guidelines pro-pose conflicting and overlapping functions at the most fundamental level. In one example, a MoNE report (MoNE, 2002) states on page 17 that “Education Boards and School Commit-tees control educational management or out-put.” However, other pages in the same document (as well as in Kepmen 044/U/2002) describe the functions of these bodies as being quite limited and as not really being to control or manage educational output. In another ex-ample, according to PP 39/2001, the education Dinas at the province level is responsible for “providing education and training in Kabu-paten/Kota” (Wiradinata and Mudyahardja, 2002) but this is contradicted by Law 22/1999. Similarly, Keppres No. 165/2000 appears to contradict Law 22/1999 with regard to thelevel of status it accords to the MoNE. It is quite common to find, in the regulations, statements such as that level X is supposed to

“help” with some function that belongs to level Y. For example, according to PP 25/2000, the education Dinas at the province level is supposed to “help” with providing textbooks or to “help manage” higher educa-tion. It is difficult to interpret such regula-tions, and it is possible that such language might exacerbate jealousy and turf battles rather than alleviate them.

Functions are assigned vaguely. For example, “books” (without specifying which aspect) are the responsibility of the province. Some ex-perts advocate that this function should be given to the districts, but nobody specifies precisely how the textbooks should be funded, purchased, and distributed. For example, Wiradinata and Mudhyahardja (2002) recom-mend that: “At least in the medium term, some authorities of the Province (for example, book supply) should be given to Kabupaten/Kota.”Yet even though the law now stipulates that “books” are no longer the responsibility of the central government, DEPDIKNAS still in-cludes the provision of books in its planning.

In fact, most education planning at the na-tional level still includes functions that are (or logically ought to be) assigned to lower gov-ernment levels. However the MoNE seems to spend little on the functions that are logically nationwide functions like those involving standard-setting, policy monitoring, training, and research. Thus, for example, while MoNE (2003) explains that decentralization is being taken into account, most of the activities that it proposes to undertake seem to involve con-struction or materials procurement, which are not appropriate activities for a national minis-try in a country as big as Indonesia, and with a decentralized education system. 6

6 For example, the activities in the basic education area (MoNE, 2003, Table III.4) include: construc-tion of junior high school (SLTP) buildings, con-struction of additional classrooms, renovation of SLTP buildings, construction of laboratory rooms, construction of library rooms, supply of sport and musical instruments, supply of teaching aids for mathematics, supply of teaching aids for pure sci-ence, supply of books for main subjects, and sup-


6

Furthermore, some experts and policymakers are still proposing function assignments that seem to run counter to the spirit of decentrali-zation, as was noted by several of the experts whom we interviewed. This spirit is also evi-dent in occasional proposals to re-centralize (or to keep central) certain aspects of teacher management. “Next to teacher supply, teacher rotation needs to be nationally and intensely managed” (Djohar, 2002, p. vii). As reported by our interviewees, many aspects of teacher management are still centralized, including personnel database management, the registra-tion of personnel actions, and the transmitting of this information to the payroll system, even when many of these aspects are decentralized in theory. For example, personnel manage-ment and the payroll function take place at the district level, but the recording of such actions, in order for the action to trigger the payroll, is still centralized.

No means have yet been found to avoid par-ticularism (meaning, for example, each district wanting its own teacher training institution or wanting to appoint only local teachers) while staying within the spirit of decentralization. Several interviewees gave us evidence of in-creasing particularism. This is a reflection within the education system of a tendency that can be seen in society at large, such as districts creating fisheries rights for themselves and creating local nuisance taxes. Finding a solu-tion to these problems is part of the process of clarifying function assignments. It will re-quire both technical skills and consultations, and it is hard to imagine that this can take

ply of books for libraries. While the MoNE’s Stra-tegic Plan contains a chapter that refers to man-agement development under decentralization, the activities that it proposes are not really activities but are re-statements of goals or of the findings of studies or seem unrealistically limited. For exam-ple, the Plan states as one of its aims: “to develop a system and mechanism of educational planning and budgeting and also to describe the annual targeting and budgeting,” but this receives no more descrip-tion than is contained in this quotation and is scheduled only as one activity (not described) per year in the Plan. However, it does indicate that the MoNE is at least aware of the issues.

place at district level since it involves inter-district spillovers.

Heads of the Education Boards/Councils often do not yet have clear mandates or clear job de-scriptions, even in districts that are, by reputa-tion, well-managed and are embracing decentralization. As became clear in our in-terviews, many heads of Education Boards, while dynamic, curious, and eager to help, seemed unclear about what role they were ex-pected to play in the new decentralized educa-tion system.

Although the central government, in principle, is empowered to set standards, it has been timid about setting governance standards, in particular in defining clear roles for districts’ Education Boards and School Committees. Similarly, there are no national standards for school funding. This can be seen in Kepmen No. 044/U/2002.

On the other hand, the central government has retained those functions whose role and pur-pose in a decentralized system are not clear or, if clear, not ideal. For example, the role of the central inspectorate in the decentralized sys-tem is not clear. In the view of senior Indone-sian analysts, the fact that the central government is holding on to such functions is not necessarily in the public interest and may have more to do with either inertia or personal interest.

There are no clear national standards for han-dling and reporting information or, if they are clear, they are not being followed, since re-porting is very poor. As a result, the education authorities of the central government have in-sufficient information even on basic issues such as enrollment. At this point, for example, it seems as if basic Education Management In-formation System (EMIS) data on some 90 percent of the schools at the primary level are missing from the national computer files, meaning that only about 10 percent of schools are reporting their data (or districts are for-warding the data) to the central government. At the secondary level, it might be as high as 25 percent, but this is still far from ideal.


7

Schools can receive funding (for either recur-rent or capital expenditures), projects, and in-puts from any one of three government levels: the district, the province, and the national gov-ernment. There do not seem to be clear, func-tioning protocols that would prevent a proliferation of procedures and orders and to ensure that funding goes through a simple management chain and is received by local managers as single sources. (Though some local managers have created “virtual” single-source funding by internally consolidating the funding sources. However, this requires con-siderable skill.)

The absence of clear definitions of functions, the vacillation and tendencies to re-centralize, tend to cause widespread anxiety (“apathies and confusion” as expressed in a MoNE document), expressed not only by respected Indonesian education experts but also by in-ternational donors (Wiradinata and Mudya-hardja, 2002, pp. vii-viii; Sudharto, 2002, pp. 2-3; Supriyoko, 2002, pp. vii, 18, 19, 26; and World Bank, 2002b, p. 25).

The Basic Challenge: Clarifying Governance and Management FunctionsThe preceding section provides evidence that the decentralization process is still quite con-fused, and that management and governance of the sector are weak. This section turns to the basic causes of confusion. As noted above, two key challenges need to be ad-dressed before any others: (i) the lack of clar-ity about the different governance “functions” and (ii) the lack of clarity about the manage-ment improvements needed to implement those functions. We now look closely at each of these questions in turn.

Unclear Sectoral Organization for Management and Governance It emerged during our interviews with experts that there is as yet no clear agreement on a ba-sic organizing diagram of the sector (not just in Depdiknas but in the sector as a whole) set-

ting out the highest-order “functional” division of labor: that between governance and man-agement. The distinction between ideal gov-ernance and management roles is not a precise science and the distinctions are often muddled in most societies. But it is clear that the con-fusions in Indonesia are more fundamental than in most other societies with serious growth ambitions. It will be difficult to make much progress unless there is some consensus on such basic organizational issues. Outlining in diagrammatic form how the sector should function, along these two “lines,” may seem risky and too prescriptive. However, the lack of clarity is a real problem. Thus, to achieve clarity, sooner or later such diagrams will need to be created, and it is important that, when they are created, they reflect a clear vision. The fact that there is confusion at present is evident in various documents. For example, a MoNE report (MoNE, 2002b, p. 16) shows an informal diagram of a section of the govern-ance structure that implies that Bupatis are ac-countable to the DPRDs (or vice versa) through the district-level Education Boards. It is not clear that this is what Kepmen 044/U/2002 intended, nor is it clear that this would be a sensible arrangement.

In various proposals it is suggested (or as-sumed) that School Committees be account-able to district-level education boards. Thus, basic confusion around governance and man-agement hierarchies that could work is quite common.

Figure 1.1 represents a best attempt to inter-pret the law and to reflect what is taking place at the district level based on our interviews. It also represents a good organization of func-tions and responsibilities for a country of In-donesia’s size and complexity.7 An advantage of diagramming these basic functions is that this can clarify the differences between the governance functions and the management functions. For now, we present this diagram as merely a work in progress. Clearly, a better

7 Particularly at the school level, since at this level the regulations are still not finished.


8

picture will emerge as a result of the discus-sions that this report will stimulate.

For the sake of simplicity, the diagram skips the provincial and sub-district levels. The fol-lowing aspects should now be clear:

1. There is a clear governance “line” that runs vertically down the left-hand side of the graphic and a clear management “line” running down the right side. Accountabil-

ity is strongly “horizontal” as be-fits a truly decentralized system.

2. The whole notion of a governance “line” is unfamiliar in the Indone-sian context. Given the nature of public sector management in the past, the governance and man-agement lines were essentially one and the same, with governance be-ing largely vertical, hierarchical, and indistinguishable from man-

Figure 1.1 Governance and Managerial Accountability in a Decentralized Indonesia

Depdiknas

Managementor Executive Aspect of

Government:Management Accountability

Governance orRepresentative Aspect of

Government:Governance Accountability

MPR

MoHA

National Level

(Provincial Level)

Kabupaten/KotaLevel

Regents, Mayors(Bupati, Walikota)

Head of DistrictEducation Service

(Kepala DinasPendidikan)

School Level

Principals

DPRD(Regional People's

RepresentativeAssembly)

SchoolCommittees

MoF

President of theRepublic

standard-setting(sets standards of reportingon financial and educational issues)(accountability is around standards)

report onorganization ofregional governmentthrough MoHA,reporting to standards




reporting to standardsEducation

Boards/Councils

DPR


9

agement. In Law 22/1999 passed in 1999, it was stipulated that there should now be a governance line and that it should be non-hierarchical and should have a strong “horizontal” accountability (for example, Bupati to DPRD). Yet, the distinctions between the governance and management lines are not clear in this law or in sub-sequent regulations, nor do they seem to be clear in the minds of officials as reflected in conflicting or confused viewpoints in various official documents and interviews conducted for this review. Further policy dialogue and analyses will be needed to clarify how this change can work in practice.

3. The diagram makes it clear that at each level of government there is one (and ideally only one) gov-ernance entity and one (and ide-ally only one) management entity.

4. The diagram highlights the role of Depdiknas as a national standard-setting body. However, there are other important but non-hierarchical roles that Depdiknas could or should perform, such as disseminating best practices and creating a training facility for up-grading management skills.

5. The governance line represents the political entities that are clos-est to the citizen – the representa-tives of the electorate. This includes the DPR, DPRDs, and School Committees. Note that the Education Boards play an inter-mediate and (for now) ambiguous role and, therefore, straddle the two lines. The diagram makes it clear that the concept of an Educa-tion Board is not entirely clear and that thinking of it as either a gov-ernance or management entity is likely to create problems as there

should ideally be not more than one management and one govern-ance entity per level. Making Education Boards and School Committees play an advisory role – a loose form of governance – might make the most sense. Note that this is quite different from the role suggested for School Com-mittees both in Figure 1.1 and in various policy documents, such as the new Education Act (at least if one interprets it in that direction—interpretation is key, as the Act tends to be vague). The suggested role for School Committees is in-deed a true governance role with respect to schools.

6. Because there are no vertical lines on the governance side, it is clear that there is no hierarchy in the governance of the decentralized education system. It is also clear that those in the management line report to those in the governance line because.

This diagram is not meant to be a prescription. It is a good interpretation of what the basic laws require, and of what best international practice suggests. It also points out the impor-tance of parental voice at the local level, via horizontal accountability of schools to parents. Yet it is meant only to suggest that Indone-sians ought to try to achieve diagrammatic clarity of this type in this area.

The Roles Assigned to the Central Government are not OptimalAside from making clear distinctions between the governance line and the management line, it is also important to make sure that different levels in the management line play roles ap-propriate to a system where governance is horizontal and non-hierarchical. At the top of the system, in Indonesia, this has not yet started to take place. The lack of determina-tion of a clear and appropriate role for the cen-ter of the system blocks the emergence of


10

clear and appropriate roles for other levels, because one of the key roles the center is not performing well is precisely to help determine an appropriate (appropriate to a non-hierarchical governance line) assignment of functions for other levels.

The central government has not yet adapted to being at the apex of a decentralized system rather being than the sole decision-maker as in the past. The impulse of central politicians and civil servants is to make things happen, for example, by building schools or ordering them to be built. It has not become second na-ture to them to steer and support, to set norms and regulate wisely and unobtrusively, to re-search and disseminate, to encourage innova-tion, and to provide technical advice to the rest of the system rather than actually to do the “direct” work of education, such as managing teacher deployment or textbook design and procurement.

This is partly because central government staff do not yet have the skills to perform their new functions, and they are understandably wary of performing functions for which they do not have the requisite skills. It is also possible that there are fewer rent-seeking opportunities for them in their new functions than there were in their old roles, and therefore they are resisting abandoning their old ones, which were more profitable. It is also likely that cen-tral government staff lack the process man-agement and substantive skills not only to do their new jobs well but to finalize the defini-tion of decentralization. (For example, it takes a combination of process management skills and substantive knowledge of public manage-ment to arrive at solutions that are consen-sual—and hence likely to be implemented—as well as technically sound.) This is logical. Since decentralization, at least in initial design aspects, is a one-off event, most staff naturally have not had practice in designing decentrali-zation processes. As an example, the critical issue of teacher management, and which as-pects of this function should be relatively de-centralized or centralized is still unresolved; there is also uncertainty about whether it will be re-centralized, despite the fact that there

has been much discussion on the issue (see Jalal and Musthafa, 2001).

The Current Internal Organization and Size of Depdiknas Should be Improved.

Given that the role or task of Depdiknas is still not truly appropriate, the internal organization, it follows, is also not appropriate. Since the government of Indonesia has not yet arrived at a final and optimal function assignment and since organizational form should follow func-tion, it is difficult to prescribe improvements for Depdiknas in any detail. However, judg-ing by the organizational structures in the na-tional-level education ministries of many countries that are decentralized or effective or both, it can be stated that Indonesia’s Depdi-knas is not optimally organized to provide support and guidance to lower-level govern-ment units and schools.

The national level of modernizing and decen-tralizing ministries is characterized by:

Less focus on traditional “level” line functions such as early child-hood, primary, and secondary, and more focus on “transversal” sup-port functions such as governance improvement, financial equaliza-tion, and quality assurance. The latter functions have more staff and more status, in a decentralized or modern ministry, relative to the “level” functions.

Relatively less focus on support-ing direct execution of projects and hence less staff devoted to in-spection and audit functions, and these functions tend to carry less status.

If there is procurement, focus is on the procurement not so much of goods and construction services but of analytical and developmen-tal services.


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A separation of functions between organizational units supporting narrow issues of human resources or budgeting as they apply to the national ministry itself and to pro-jects run by the national level and support functions that apply to the country as a whole. For example, in a modernized ministry, human resource management, as it ap-plies nationwide to, for example, teacher evaluation, deployment, and development, is quite separate from human resource manage-ment as it applies to the staff of the ministry itself. However, it is important for the ministry units working on policy issues to main-tain practical links with units working on internal issues, be-cause the latter tend to have more experience with practical adminis-trative matters (such as the han-dling of personnel databases). If the units dealing with national policy on, for example, teacher management, do not have experi-ence with the practical issues, they tend to become too theoretical. Thus, it is a good idea for the units making policy on the financ-ing of schools, for example, to collaborate with the units super-vising the financial execution of nationally run projects and to un-derstand the policies and proce-dures used in this execution.

Appendix 1.5 contains a fuller discussion of these issues and presents, for discussion pur-poses, an organigram for Depdiknas that might better suit Indonesia’s needs than the current organigram.

With regard to size, it should be noted that na-tional-level ministries in many decentralized countries have very few staff. One extreme in the developed world is Canada, where the na-tional education level in fact functions with a staff of at most a few dozen, since there is no national ministry but only a council of provin-

cial ministers with a very small secretariat. The United States, a country about 25 percent larger than Indonesia, has around 5,000 educa-tion staff at the federal level. Some develop-ing countries, such as China, Argentina, or South Africa, have as few as a few hundred or not much more than a thousand staff at the federal or national level. However, this is not a problem because the training and capacity of staff matter much more than their numbers. How much time that staff spend on highly lev-eraged task on appropriately assigned func-tions at the national ministry is also key. Staff who are extremely capable and who focus their work on the overall direction of the edu-cation sector, policy, measurement of outputs,and comparisons between schools and be-tween sub-national governments, are much more important than sheer numbers at the apex of a decentralized system. Sheer numbers simply do not make up for a lack of ability in the tasks that are required in a central ministry in the context of a decentralized system. So Indonesia faces the prospect of having too large a staff, most of whom are not trained to operate in the decentralized system. This not only consumes resources needlessly but also creates a built-in interest group that has an in-centive to maintain things as they always have been. This is a serious problem that must be confronted. The size of the central bureauc-racy is not just a technical problem, but one that can politically slow down decentraliza-tion.

Size is also an issue when it comes to spend-ing power. The proportion of the total educa-tion budget spent by the national level in decentralized countries varies but in general is higher than the proportion of staff working at national level. This is because the staff work-ing at national level in decentralized countries, as noted above, have a great deal more lever-age over resources than similar staff in a cen-tralized system or than similar staff at the lower levels of government in a decentralized system. Spending by central education minis-tries as a percentage of total spending at the pre-tertiary level in decentralized countries ranges all the way from less than 10 percent (in China, the US, South Africa, and Hungary)


12

to as high as 20-40 percent (in Australia, Po-land, and Spain).

Are Current Policies Helping? The problems described above were common as Indonesian decentralization got under way in 2002. We have seen that the division of la-bor between levels and branches of govern-ment is not as clear and productive as it could be, and that central government has not re-structured itself, yet, to fully support decen-tralization. But policy-making has not stood still. Are the more current policies likely to fully resolve these problems? In this section we examine two recent policies or policy trends, namely the recent Education Act and the process of setting Minimum Service Stan-dards. We find that the problems are not likely to be fully resolved by these initiatives, at least as they stood as of this writing. How-ever, the currently evolving policies do often point in an appropriate general direction. For example, the Education Act does begin to lay a better legal basis for school-based manage-ment or autonomy. Similarly, the notion of defining standards is, at heart, a good one, even though the specifics are not yet imple-mented as well as they could be.

The Education Act as an Instrument of Governance DesignDuring the course of this Education Sector Review, a new law to shape all of Indonesia’s education system was produced by the Minis-try of Education and passed by the legislative assembly, the DPR. The result is Act No. 20/2003, the Act on the National Education System (English version Gazette No. 78, 2003). An effective education law can be of considerable assistance in clarifying rights and responsibilities (or duties and powers) in an education governance system. Naturally, an effective law is a necessary but far from suffi-cient condition for an effective education sys-tem. Examples of countries with clear education legislation include South Africa, Singapore, and Malaysia. Judging from such examples (and noting that these pointers refer exclusively to process and governance princi-

ple, not to educational substance), effective law should, among other things:

Make the rights and responsibilities of specific actors (as people with the ca-pacity to delegate) clear. For exam-ple, the law should say “The Minister has the responsibility to…” or “par-ents have the responsibility to…” Specify responsibilities in terms of governance procedures (for example, procedures for electing governing bodies to govern schools) as well as substantive tasks (the actual duties of governing bodies). Deal as much as possible with con-crete institutions, such as “schools,” rather than with abstractions, such as “education.”Not give the same responsibilities to more than one actor. Specify processes for resolving con-tradictions and differences between actors.Deal with observable behavior, not at-titudes or beliefs. Be as specific as possible, leaving only truly technical details to be de-fined by subsequent regulations, and no detail should be postponed until regulation merely because it presents a difficult policy problem or social is-sue.Duties and prerogatives as actions that key actors must take, as opposed to those that the actors may take, should be specified. This makes the obliga-tion to act clearer when the action is something that an actor must do (an obligation, responsibility, or duty), but the right to act is also clearer, when it is something the actor may do (a right, or power). Thus, both rights and re-sponsibilities are spelled out. Ensure that definitions are clearly a matter of clarifying a concept and are not mixed with statements of intent or belief or with the specification of ac-tions.


13

As the process of legal drafting proceeded, the bill noticeably improved in several of these dimensions. However, the law that was even-tually signed by the President in July of 2003 is still far from ideal. For example:

There are at least 35 calls for further regulation in areas that require major policy decisions rather than technical details, thus glossing over key matters. All of the further regulations appear to be the duties or rights of the national government. Should there be regula-tions issued by a regional government that contradict the Act, it is not clear which regulation should prevail. Rights and responsibilities too often devolve on more than one actor (as in “the [national] government and the re-gional government must guide and develop educational staff”). This phrase appears about 15 times, often in crucial contexts. The nature of the actors is left vague, so that the Act often specifies that it is “the government” that has a responsi-bility, not the Kepala Dinas, or the Bupati/Walikota, or the national Min-ister.The language used in the law is often quite vague, saying that some level of government will “coordinate” or “fa-cilitate” or “guide” or “assist” or “su-pervise” some function that another level is actually in charge of deliver-ing. Language such as “manage” or “coordinate” or “facilitate” is often used without any apparent substance behind the language or without distin-guishing what might be meant by the different versions of the same concept. The law seems to attempt to take back many functions that one would as-sume to be the prerogative of local government, based on previous gov-ernment legislation and regulations. One example would be the issue of teacher management and employment, and another would be the notion that “the management of national educa-

tion system is the responsibility of the Minister” (article 50). Though again, the word “management” is vague and open to interpretation, because spe-cific rights and duties are not dis-cussed.Key aspects of the way in which the system functions are regulated vaguely on the one hand but over-regulated on the other. Just to take one example, the vital issues of stan-dard-setting, certification, evaluation, and minimum standards is covered in at least five different articles (or more depending on how one interprets the law) that define duties that are likely to seriously overlap or duplicate each other (articles 35, 59, 60, 62, and 66).

It may seem that all these issues can be re-solved in later regulations. This is certainly true in principle and happens in all countries. However, in Indonesia there are two problems with this.

First, the whole legal and regulatory approach has been characterized by a lack of specificity, with the resolution of important problems al-ways being deferred to a later date. Also, once the problem has eventually been specifically addressed, it is often open to a very wide mar-gin of interpretation. Thus, for example, if the law appears to create overlaps (for example, as noted above where five different articles of the Education Act deal with standard-setting and quality control), this will simply not be re-solved during the regulation drafting stage, because those who are drafting the regulation work in separate groups, and thus have often lost sight of the overall context.

A second problem with delaying the resolution of important problems to a subsequent regula-tion is that this regulation is unlikely to be taken as seriously as a fully fledged law passed by the DPR. This means that there are more opportunities for mistakes, uninformed actions, a lack of transparency, and self-interested actions on the part of the executive branch (since it is this branch that drafts regu-lation), and other governance failures is much


14

greater than if the regulation was clearer to begin with. In any case, in drafting the secon-dary regulation, it would be wise to follow the principles of good education regulation, which are similar to the principles of good education legislation as listed above (while bearing in mind that they refer to process and legal prin-ciples, rather than educational substance). In particular, it would be a positive development if the secondary regulation were sufficiently specific not to require a third regulation to clarify its details.

In spite of the above problems with the Act, it is important to note that it does make positive contributions. It, for example, lays out the le-gal basis for notions of school autonomy and school-based management for the first time at this high level. (In practice there are many pi-lot experiments taking place, but they have lit-tle high-level legal basis.)

Minimum Service Standards Minimum Service Standards (Standar Pelaya-nan Minimal–SPM) are a potentially useful tool of management and governance. How-ever, if misapplied, they can be a hindrance or, worse, can actually undermine decentralized governance. This section tackles the issue of whether SPMs in Indonesia, as the situation currently stands, are likely to be more of a help than a hindrance. A more detailed dis-cussion is presented in Appendix 1.6.

The basic decentralization law, No. 22/1999, is silent on the issue of minimum standards. It is Government Regulation No. 25/2000 that calls for the preparation of guidelines for de-termining SPMs that must be “implemented” by local governments. Other recent regula-tions, such as Government Regulation 105 of 2000, have specified that local government budgets should be performance-oriented, based on minimum standards that measure performance. Government Regulation 108 of 2000 also calls for minimum standards in the evaluation of local government performance. In response to these various regulations, Indo-nesia began in 2002 to devise some SPMs with some false starts and some confusion due

in no small measure to a lack of clarity in the legislation, including the definition of termi-nology (see Donor SPM Working Group, 2002, also GTZ-Support for Decentralization Measures et Al, 2003). (This problem is com-pounded by the Education Law, No. 20/2003, as noted in other sections of this chapter.) However, in spite of a rocky start, the process, under a MoHA-led “model-building” exercise, had produced a set of draft minimum stan-dards for the education sector by mid-2003 (Departemen Pendidikan Nasional/Unit Fasili-tasi Desentralisasi Pendidikan, 2003).

In gauging the likely impact of minimum standards on decentralized governance, it is important to note that there is no accepted body of theory or practice that can be used as a solid basis for guidance (see Ferrazzi, 2002). However, minimum standards can also be ap-proached from the point of view of more gen-erally accepted practical and theoretical notions of decentralization and intergovern-mental public finance (see Smoke, 2002 and, for interesting similarities to a very different sector with salutary lessons for education, see Baker and Trémolet, 2000). It also makes sense to anchor the discussion of SPMs in the specific context of the overall process of de-centralization in Indonesia. If one then adds what little international evidence does exist, one has some basis for judging the current state of affairs with regard to education SPMs in Indonesia according to the certain criteria. A detailed analysis (contained in Appendix 1.6) of the current draft education SPMs sug-gests the following:

Numbers: There are too many, nearly 200. This leads to a loss of focus and increases rather than decreases the transaction costs of accountability. Reducing the numbers should be strongly considered. Type: Most of the existing indicators are not true service standards aimed at improving service to citizens, such as the number of days it takes the school to provide a service to parents, or mu-tual accountability between service units, such as the number of weeks it


15

takes the Dinas Pendidikan to supply a school with books or to get a teacher promoted. Serious work should be done to include more true service standards.Motivation and use: The motivation for adopting SPMs is too often the de-sire for bureaucratic reporting along the management line rather than citi-zen accountability along the govern-ance line. There is insufficient realization at the national level of the usefulness of indicators in a decentral-ized and democratic system as tools whereby horizontal accountability can be monitored. There also appears to be a motivation to protect special or sub-sectoral interests (such as sports or teachers’ privileges rather than their rights and responsibilities as profes-sional agents) via the setting of SPMs, with a consequent loss of focus on the most important issues, such as the de-livery of general and basic education. Technical quality: The technical qual-ity of a few of the indicators is low. They are non-measurable, at least as currently specified, either in theory or in practice. Level to be reached: For many of the indicators, it makes little sense to specify an actual level to be reached. Furthermore, the logic of setting up an indicator framework and allowing competition and emulation to deter-mine the actual level to be reached appears not to be understood, or, if understood, utilized in the standard-setting exercise. For some key vari-ables, in a country with as little ex-perience with competitive electoral processes as Indonesia and with poor horizontal accountability mechanisms, the level should be set by the central government (albeit with a locally de-termined speed of approach to the goal), but in other cases there is no theoretical or practical justification for setting a level.

Level at which measured: Too many of the indicators have little practical manifestation at the level of the unit of delivery and/or data on these indica-tors are often not routinely collected and reported upward by the actual service unit (for example, schools or districts). Thus, it requires special ef-fort to collect these data—a special ef-fort that may be in no one’s inherent interest, even under a good system of horizontal accountability. Thus, they will tend not to be collected or re-ported. These sorts of indicators need to be reduced or eliminated. Note that the current system is barely capable of reporting upward even such basic in-dicators as enrollment data, or rather there is a lack of incentive to do so.

It would appear that a large amount of work is still needed on the education SPMs before they can be an effective element of the sec-tor’s governance and management. Standards are necessary, in principle, however, and a start has been made.

Governance and Management Systems Lacking So far this chapter has noted that policies have been confusing and often inappropriate, that there are objective, measurable problems in the governance of the sector. The more recent policies have attempted to clarify, and do help in some ways, but they still need much work. In particular, practical ways to implement cur-rent policies are needed. Furthermore, many progressive districts have proceeded to im-plement in innovative ways, under the flexibil-ity allowed by decentralization. In any case, pilot projects, often donor-funded, have been experimenting with techniques such as school-based management and more transparent school budgeting for many years. However, this experimentation has thus far taken place without the education system as a whole evaluating and learning from these experi-ences, at a central level (but not necessarily by


16

Depdiknas)8, and then spreading them through better norming and standardization around good practices. Also, because experimenta-tion and pilot testing has been largely up to donors and innovative Bupatis, progress has tended to be a hit-or-miss affair. To improve on this, systematization of good practice is needed. As central policy also improves, sys-tems for implementing the improved regula-tion will be needed. This section lays out some of these systems needs, as “technical challenges,” first in governance and then in management.

Technical Challenges in GovernanceThere are several important issues relating specifically to the governance “line.” For ex-ample, the governance bodies at each level have no way to evaluate the educational ap-propriateness of legislation, policies, and regu-lations independently of the executive branch. The lack of access by governance bodies to technical analysis is a reason often given for placing personnel appointed from the execu-tive branch of government in governance or legislative-like bodies. However, it would be far better to develop research and analysis mechanisms for governance bodies or to pro-vide legislatures with research and analysis consultants rather than to continue setting up bodies with both elected and appointed mem-bers from the executive branch.

The current role of Education Boards in the kabupaten/kota is not necessarily efficient. Specifically, the division of labor between Education Boards and DPRDs, between Edu-cation Boards and kepala dinas, and between Education Boards and School Committees does not appear to be effective. Much of the ongoing discussion in Indonesia on this issue is not based on sound principles of decentral-

8 In Brazil’s CONSED, for example, it is the state educa-tion secretaries manage the organization, not the national minister of education. And, as noted elsewhere in this report, Canada does not even have a national Ministry, but this does not mean national functions are not per-formed. There are many ways to perform national func-tions via bottom-up association, delegation to non-governmental entities, etc.

ized management but instead on random ideas, tradition, and the experience of other countries that ignores their different historical and po-litical contexts. For example, some experts are suggesting that the Education Boards should have the same functions as similar boards in other countries, despite the fact that the Indonesian context is very different and that, even in those other countries (such as the US and Japan), the boards are controversial and are still evolving.

Again, this is because of the absence of a management and governance framework within which these roles could be defined. At the moment, it seems that each district is being left to design these roles largely on its own. (There are some donor projects working in these areas, but the lessons provided by these projects do not seem to become part of the mainstream.) This is not a healthy approach to decentralization. It leaves the lower levels of government to wrestle with difficult concep-tual tasks that may be beyond their capacity, while taking away from them some of the ac-tual management tasks, such as teacher man-agement, that they may be more than capable of handling. In a sense, the wrong functions are decentralized.

The duties and powers of School Committees are a crucial matter to define clearly, and with a view to autonomy and real school-based management. Current legislation does not do this. Current viewpoints, both in general and relative to school principals, are not clear or efficient, at least as they are currently defined either in Kepmen 044/U/2002 or in legislation such as the 2003 Education Law. For exam-ple, their roles in finance and teacher man-agement as outlined in existing regulations and legislation are not clear, conflict with each other, and may be too demanding in certain areas and not demanding enough in other ar-eas. The fact that the Committees should, ide-ally, have oversight rights over all financial matters, not just the issues related to parent-raised funds, is not made clear. The relation-ship between the old BP3s and the School Committees, and the question of whether BP3s should even exist after School Committees are


17

in power, is not clear. The separation between the governance and the professional manage-ment of the pedagogical process is not clear. The legal status of the School Committees, relative to their duties, is also not clear. Many of their duties appear to require them to enter into contracts with providers (e.g., for minor physical plant improvements), but it is not clear whether they have the legal right to enter into contracts, and if so, how this will be sup-ported with legal assistance to schools, should they require it. Again, each district could simply be left to determine its own issues and design its own solutions, but this would be in-efficient.

To study such issues and determine optimal solutions would require a considerable degree of technical skill, which is unlikely to be available at the local level. Also, this kind of organizational research is subject to econo-mies of scale, meaning that leaving each one of around 390 district governments to carry out its own research and design would be quite inefficient. Since there is plenty of interna-tional experience on these issues, it would make sense for Indonesia to draw on that ex-pertise at the highest level and for the gov-ernment to ensure that effective norms or at least examples of best practices are developed and made available to districts. Deriving these lessons and making sure that good practice spreads is a central function, but not one that need be performed by Depdiknas.

It is not yet clear how to organize the decen-tralized governance of religious and/or private schools without unduly affecting their inde-pendence. Various interviewees highlighted the need to resolve this issue carefully.

At the moment, many functions have been de-centralized too far, in other words down to a level that does not have the capacity to per-form that function effectively. Having recog-nized this, some districts and provinces are coming together to form agencies that can handle certain of their functions on a collec-tive basis (as suggested in Law 22/1999). For example, various districts in East Java are col-laborating so that each district develops the

exam for one academic subject for madrasahschools and then all of the exams are shared by all of the districts, thus taking advantage of economies of scale. However, no one has yet researched the ideal features of this kind of collaboration, such as what kinds of tasks would most usefully be performed in collabo-ration and how to develop effective collabora-tion agreements.

Technical Challenges in Management In terms of management, it is clear that the systems that are currently in place at lower levels of government are not sufficient to per-form the many functions that are being allo-cated to these levels in the decentralization process. It is also clear that the staff at these levels do not have the necessary skills to carry out their new and expanded roles.

Some districts have conducted interesting ex-periments in improving their budgeting and fi-nance systems. For example, projects such as the DSSD have experimented with setting formulae for district–to–school funding and with simplifying budgeting formats. The ex-perimentation allowed or encouraged by de-centralization will also allow natural variations in practices (e.g., budgeting systems) to emerge. For example, one dynamic Bupati has managed to eliminate certain fees by con-solidating schools and reducing certain types of expenditure, thus making room in the budget to eliminate fees and still cover costs. However, the lessons from these various ex-periments have not been systematically docu-mented at the national level or analyzed to see how applicable they might be to other situa-tions. Also, even in those districts that have been experimenting, it is not always clear that their evolving financial arrangements are ideal. For example, it is not clear how much authority is really being devolved to schools, even in these districts. It emerged during our interviews that personnel at the district level were not always clear about what functions to decentralize to schools and why. Newer dis-trict-to-school funding approaches that were called “block funding” were not really block funding and seemed to be just as cumbersome


18

and intrusive as previous approaches. The current laws and regulations often seem to give away authority with one hand but take it back with the other, leaving the system more complicated than before and no more decen-tralized.

There is a great deal of confusion surrounding the allocation of functions related to teacher management (including training, recruitment, deployment, performance evaluation, human resources databases, payroll, and redeploy-ment). For example, at present, even though responsibility for personnel management is nominally decentralized to the districts, any personnel actions that would result in changes in the payroll database must still be communi-cated to the national level BKN. Because there are still tensions and unresolved issues in the assignment of functions, it is not surprising that districts do not yet have adequate teacher management systems in place. It is vital to re-solve the issue of who is responsible for which teacher management functions because any in-appropriate assignment of these functions (for example, if the assignment is bureaucratically unclear, if it sets up a conflict between bu-reaucracies, or if it is technically unsound) can lead to financial and other problems. A case study is shown in Box 1.1, and in Appendix 1.3, Case 2.

There has not yet been a universal (all dis-tricts, not just a sample) audit of skills at the district level covering all functions that would probably need to be performed at that level under a rational model of decentralization. While districts must be responsible for raising their own skills to the necessary level to carry out their decentralized functions, the national government is responsible for the maintenance of standards. Therefore, it seems appropriate that the national government should be re-sponsible for carrying out a nationwide, dis-trict-level audit of current management skills and standards. At a minimum, the central government should devise an instrument and protocol for carrying out such an audit and for compiling and communicating the results, as having each district devise its own protocol would be a waste of resources. Current infor-mation systems at the district level do not seem to be capable of reporting reliable statis-tics on basic, fundamental issues such as en-rollment to the central level. As is shown in Box 1.2 and in Appendix 1.3, Case 5, this has also been the case in other countries where education functions have been decentralized. This is a problem that needs to be addressed.

Box 1.1 In South Africa, a lack of definition as to who could set minimum standards, combined with sectoral collusion in teacher management, led to the emergence of unfunded mandates and fiscal prob-lems after decentralization.

[After decentralization] all provinces experienced similar over-spending, in large part due to implementing nationally determined policies. This included the nationally negotiated salary agreement and new policies in the education, health, and welfare sectors. Much of this problem was due to the lack of co-ordination be-tween policymaking and budgeting, and the rapid creation of a decentralized system compounded this prob-lem. The implementation of nationally agreed policies was not necessarily an unfunded mandate, however. Such policies (in education, health, and welfare) were implemented with the full support of provincial line function departments, who were also involved in developing the policies.

Sectoral collusion to secure more funds for a sector proved to be a far stronger factor in overspending than unfunded mandates. Intergovernmental forums in education, health, and welfare developed national policy [especially on standards] without taking into account budgetary resources. Many departments adopted an aggressive policy to address backlogs in deprived black areas. For instance, differences in teacher-pupil ra-tios were reduced between black and white schools. The increase in personnel expenditure squeezed out ex-penditure in non-personnel inputs like textbooks, undermining the attainment of the desired outputs.

From: Momoniat, I. No date. “Fiscal Decentralisation in South Africa: A Practitioner’s Perspective” http://www.worldbank.org/wbi/publicfinance/documents/South%20Africa.pdf


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The possible increase in corruption under de-centralization has been brought up in the dis-cussions held as a part of this review. In principle, decentralization has the scope either to increase or to reduce corruption – the key is the actual design of institutions and systems. For example, ensuring that resources flow as per capita grants, ensuring that all actors know the amount of the grants to which they are en-titled and when the funds will arrive, and en-suring that actors have oversight over each other (parents can check what the principal does, and the principal can check what parents do) can all help to limit the scope for corrup-

tion. On the other hand, having too many funding and provisioning channels into schools creates great opportunities for corrup-tion or at least for waste. Funding and provi-sioning that is discretionary and not based on a simple formula also creates opportunities for corruption, waste, and patronage. However, having too many controls could make systems too cumbersome. Therefore, extreme care needs to be taken in the design of such sys-tems. What is crucial is to bear the potential for corruption in mind when designing decen-tralized systems and to create the appropriate

Box 1.2 In Brazil and Spain, devising good management information systems under decentralization was difficult and problematic but was possible with effort and partnership.

Brazil

Until 1995, Brazilian education data were outdated and unsystematic. Since there was no recent information available, directing government policies in that area was a challenge as difficult as flying a plane in the midst of a storm with no guiding instrument on board. Not only did the lack of up-to-date information jeopardize the decision-making process, but it also caused huge waste in the allocation of funds. Furthermore, in the absence of a standard nationwide system of information and indicators, several states had their own data gathering and processing systems, which were not compatible with each other. For this reason, Brazil could not even provide international organizations with consistent data on education.

By the beginning of 1995, the latest school census that was available dated back to 1989, and the last fin-ished survey had been carried out in 1991. Therefore, there was not enough information available to inform the design of actions aimed at improving the education system. From that year on, the Brazilian educational information system has gradually undergone a complete reformulation into an integrated, decentralized and comprehensive structure, which provides all levels and types of education, from early childhood to tertiary education and more advanced programs.

Gumaraes de Castro, M.H. 2000. “Role and Value of International Education Indicators For National Policy Develop-ment.” Fourth General Assembly of the OECD Education Indicators Programme (INES). 11 - 13 September - Tokyo, Japan.http://www.inep.gov.br/download/internacional/idioma/Role%20and%20value%20of%20international%20indicators%20for%20national%20policy%20development.pdf.

Spain

As the decentralization process unfolded in the 1980s, the country needed a planning mechanism that would coordinate the educational policies and programs being developed and executed by the MEC and the decen-tralized autonomous communities (de jure). One reason why such a coordinating mechanism was necessary was that, soon after the decentralization process began, the capacity to gather and reproduce nationwide edu-cational statistics was lost because various regions had begun gathering their own data using formats that were not comparable and thus could not be aggregated at the national level.

From Hanson, M. 2000. “Democratization and Educational Decentralization in Spain: A Twenty Year Struggle for Re-form.” Country Studies. Education Reform and Management Publication Series. Vol. 1, No. 3, June 2000. http://www1.worldbank.org/education/globaleducationreform/pdf/hanson.pdf.


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checks and balances without paralyzing flows of resources.

There is considerable inequality within dis-tricts in terms of both funding and education achievement in Indonesia already, and it is not clear that there are any effective mechanisms for reducing this source of inequality in the education sector. As we noted above, asym-metric decentralization of governance and management, along with funding targeted to-wards the poorest districts and populations within districts, may be one way to reduce ex-cessive inequality.

Governance and Management Development Tasks As this chapter makes clear, certain actions need to be taken to clarify the roles and func-tions of the various levels of government in the governance and management of the new decentralized education system. These actions are listed here, starting with the most impor-tant and urgent. It is important to note that these steps are not equal in costs or in time.

Step 1: Clarify and assign functions. This is the step that must, in principle, be taken before all others because, without a clear assignment of functions, nothing else can be clarified. This can be done through a set of well-guided, specific technical consultations. In other words, it is possible to have a technically in-formed yet consultative process that leads to a solid conclusion; it need not be left up to chance, pure politics, or relatively non-technical “least-common denominator” con-sultations. Furthermore, it is important that the consultation process yields conclusive rec-ommendations on the assignment of fairly de-tailed sub-functions. This consultative process (which should last from about six months to a year) can be seen as a preliminary form of dis-semination of the conclusions reached as a re-sult of the consultations, but true dissemination should be a separate and ongo-ing process. In practice it may not be possible to be fully sequential, and to take this step first. Districts are moving ahead in any case. However, it is still worth doing, because im-

proving and clarifying function definition can be informed by emerging practice, in any case, and because it will help further clarify and validate experimentation.

Step 2: Thoroughly inventory existing man-agement systems, skills stocks, and innovation capacity at the local level. Based on how functions are assigned in step 1, the next step should be to carry out thorough inventory management systems at all levels, particularly in the areas of finance, the management of personnel (particularly teachers), procurement, and information management. This search should be conducted by means of nationwide consultations with both system users and sys-tem developers at all levels or by means of empirical research. An integral aspect of this stocktaking exercise should be to recommend improvements and to develop a time-phased, demand-led plan for improving management systems. Another important aspect of the ex-ercise should be to carry out an audit of the current management skills of personnel at every level of governance and to map the na-tion’s lack of and need for these skills. The exercise should go on to suggest ways to de-velop a system (possibly run by outside pro-viders) for upgrading skills and a facility for continuously assessing both systems develop-ment and the skills upgrading system, includ-ing a yearly or twice yearly repetition of the nationwide consultation process. The proposed approach should constitute a program that is flexible enough to be able to receive funding from a variety of donors without each of these donors having to develop a separate project that would be expensive and time-consuming to design.

Of all the existing systems and skills, perhaps the most crucial one that needs to be further strengthened, documented, and fed into a sys-tem (not necessarily central) of lesson-spreading, is the set of relations of account-ability between schools and parent commu-nity. This will not be an easy task, as many parents themselves may have lowered expecta-tions, conditioned by years of centralism.


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Step 3: Upgrade systems and skills. This step will be the most costly and long-lasting by far. In theory, it could go on forever, but in prac-

tice, it might be wise to set a five-year time-frame for completing the systems development and skills upgrading process.


22

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Appendix 1.1. List of Governance and Management Problems

In a discussion document of limited length, it is not possible to list in detail all of the impor-tant issues that still need to be resolved. For that reason, the following table contains a more comprehensive catalog of such issues than was possible in the main text but without a full discussion of each one. Only a few are discussed in greater detail in the main text to give the reader a sense of the nuances in-volved in some of the most important cases.

In the table below, “national” does not neces-sarily pertain to a bureaucratic or organiza-tional entity. Some of these functions are indeed functions that need to take place at the MoNE, but others can be performed by some other national ministry. Still others could be performed by a national-level organization (or any organization at a level of government higher than the district) but not necessarily in

a ministry. For example, several districts could get together to create a multi-district agency to carry out a certain task. In some in-stances, a ministry or some other agency may have undertaken tasks on behalf of a district, which is why the list for the “national” level is longer than the list of issues at the local level. We are not advocating a large role for the cen-tral government under decentralization. Nev-ertheless, clearly the national or provincial governments could play an important role by taking advantage of economies of scale in helping districts to develop management sys-tems. Finally, note that province-level issues are not fully explained because, in large part, function assignment itself is not finished and, while the roles for the national and district levels are relatively obvious and easy to sug-gest based on logic, this is not so much the case for the province level.

Governance and Management Issues Management “Line” Governance “Line” National level

1. Increase the MoNE’s abil-ity to assess decentralized best practice by improving its monitor-ing and evaluation functions/roles. 2. Change the nature of the Inspectorate towards evaluating whether sub-national levels are fol-lowing general standards. 3. Set up permanent facility for evaluating and improving stan-dards. 4. Assess skills profile needed to carry out assigned func-tions at all system levels. 5. Carry out systematic management and governance skills audit against assigned governance and management functions and the skills required. 6. Create, fund, and manage a facility for upgrading manage-ment and governance capacity and skills at sub-national levels accord-ing to demand. Evaluate feasibility/ requirements of outsourcing if this is an option.

11. Develop clearer sense and acceptance at the MoNE of its national role in a decentral-ized setting. This needs to be done with more technical proficiency and depth than has been done thus far. 12. Finalize implementing rules and pro-cedures for Education Law 13. Resolve governance standards for Education Boards as well as School Committees, while making sure these align with the forthcoming law. Standards should be mandatory. If not, then DEPDIKNAS should offer more than one non-mandatory model with clear reasons for preferring one over another backed up by good research. 14. Develop criteria for asymmetric decen-tralization, since not all schools are likely to be ready to take on new powers at the same time. 15. Resolve issue of decentralization of re-ligious and/or private education. Come up with feasible district-level governance model that is standard across districts. 16. Finalize initial standards and dissemi-nate this information. 17. Convene panel of experts to finalize function assignment in detail.


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Governance and Management Issues Management “Line” Governance “Line”

7. Begin formal and in-depth process of “re-educating” MoNE staff in their roles and func-tions in a decentralized setting. 8. Inventory (in all districts) the existing financial management systems, personnel (teacher) man-agement systems, and educational materials procurement systems. Evaluate problems, assess interest-ing experiments developed under decentralization, develop approach to funding, and develop systems usable by districts according to demand. 9. Assess and reproduce methods whereby lower-level gov-ernments can collaborate to create “agency” bodies to take advantage of economies of scale. 10. Improve management and governance systems to reduce corruption under decentralization.

18. Ensure the DPR has access to good, independent, technical advice. 19. Increase capacity of the media to re-port accurately on education issues for example by training education reporters and instituting a prize for the best education reporter of the year. 20. Produce “map” of civil society, includ-ing NGOs, to educate government officials on this nature of NGOs and civil society. Develop training materials and protocols for government officials on this theme. 21. Develop approach for ensuring sub-stantive discussion of education issues in the 2004 elections. 22. Develop “scorecard” system for rat-ing/ranking districts, Bupatis, etc., in their per-formance of education functions. 23. Develop approach for improving pol-icy dialogue about education in government (ex-ecutive and legislative, at national and possibly district level), in civil society, and between the two. 24. Train staff of lower levels to learn from governance experience elsewhere as a means of raising their own performance to stan-dard.

Districtlevel

25. Require districts to assess their own management and gov-ernance skills against their as-signed functions 26. Start demand-led skills upgrading by creating and using capacity-building facility 27. Require districts to assess their practices against standards and start reporting according to standards, both up the management line (to Bupati/ Walikota) and horizontally to the DPRD 28. Develop or apply nation-ally developed systems for provid-ing team-based, school-oriented (as opposed to problem-oriented all-school)response to schools not coming up to performance stan-dards. 29. Collaborate with each other and with national or provin-cial governments in developing fi-nancial, personnel, procurement, and information systems. 30. Apply systems as devel-oped.

31. Apply processes for determining dis-trict-specific standards as well as socializing na-tional standards. 32. Ensure that DPRDs know how to hold Bupati/Walikota accountable for their education responsibilities. 33. Develop and apply better norms and guidelines to the functioning of Education Boards and School Committees, or apply na-tional ones. 34. Apply system for dissemination and reporting on school-specific performance against standards. Ensure that Education Board/Councils, DPRDs, schools and School Committees know about this system. 35. Train staff of lower levels in the mean-ing of new laws and regulations. Train them to learn from governance experience elsewhere as a means of raising their own performance to stan-dard.


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Governance and Management Issues Management “Line” Governance “Line” School level

36. Require districts to assess their management and governance skills against their assigned func-tions 37. Start demand-led skills upgrading by creating and using capacity-building facility 38. Require districts to assess their performance against stan-dards and start reporting according to standards, both up the manage-ment line and horizontally to the School Committee 39. Apply models for inter-acting with School Committee 40. Apply decentralized fi-nancial, personnel, procurement, and information systems

41. Apply governance guidelines on School Committees. 42. Train staff of lower levels to learn from governance experience elsewhere as a means of raising their own performance to stan-dard. 43. Train School Committees in assessing their own schools. 44. Train School Committees in finances and personnel management. 45. Train School Committees on how to receive and use information about how to raise educational quality up to standard.


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Appendix 1.2. List of Interviewees

Experts and Policymakers on Governance and Management Issues

Asshidiqie, Prof. Dr. Jimly. Faculty of Law, Universitas Indonesia. Center for Electoral Reform.

Azra, Prof. Dr. Azyumardi. Rektor, IAIN Syarif Hidayatullah.

Djemari, Prof. Mardapi. Director, School of Graduate Studies, Universitas Negeri Yogyakarta.

Madjid, Prof. Dr. Nurcholish. Rector, Universitas Paramadina. Lecturer, Post-graduate Faculty, IAIN Syarif Hidayatullah.

Senior researcher, Indonesian Institute of Sciences (LIPI).Sumarno M.A., Ph.D., Drs. Vice-Director, School of Graduate Studies, Universitas Negeri Yogyakarta.

Supriyoko, Prof. Dr. Ki. Majelis Luhur Taman Siswa. National Education Com..

Suyanto, Prof. Rektor, Universitas Negeri Yogyakarta.

Tobing, Drs. Jacob. Member of Parliament. Commission A on Constitutional Ammendments to 1945 Constitution.

Representatives of Education Boards and of School Committees

We selected key members of Education Boards and School Committees in four rural and four urban areas, yielding 34 interviewees.The urban districts chosen were Benkulu City and Mataram City (classified as low income) andYogyakarta City and Banjarmasin City (classified as middle-income). The rural districts included Wonosobo and Lamongan (classified as low income) and Bekasi and Gianyar (classified as middle income).

Interviewees from Education Boards/Councils

District/City Name of Respondent Position

Yogyakarta City H.M. Wasul Widyo Pranoto, B.A. Drs. Asmuni

Member/Chief, Public Relations Section Member, Infrastructure and Facilities Section

District of Bekasi, West Java

H. Hanafi Ali Noupal Al Rasyid H. Rimin.

Vice-Chairman SecretaryMember

District of Gianyar, Bali

Drs. I Made Susila I Wayan Sudamia, SH

Secretary I Secretary II

Mataram City, Nusa Tenggara Barat

H. Adnan Muchsin, Ssi Drs. M. Tajuddin, M.Si

Chairman Secretary

Bengkulu City Drs. Sutrisno, S.A. Djajadi Aliamar, B.A. Drs. Z. Fauzi Hamid

Chairman Vice-Chairman Secretary

Banjarmasin City, South Kalimantan

Drs.H. Sultani Secretary I

District of Wonosobo, Central Java

Slamet Rahardjo Budi Drs. Slamet Witoro

Chairman Secretary II

District of Lamongan, East Java

Drs. Tsalist Fahami, MM K.H. Abdul Fatah Ir. Suhandoyo, SP

Chairman Vice Chairman Secretary


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In addition, we interviewed representatives of the Bupati and the Dinas Pendidikan Office in the Jembrana District.

Interviewees from School Committees

Name of School Name of Respondent Position

SMU Negeri I, Yogyakarta City

Ir. Sagoro Wedy, MM Drs. Helly P. Soetjipto, MA

Chairman Member

SD Negeri Jatimulya 04 Tam-bun, Bekasi West Java

Bambang S. Mirsod

Chairman Member

SLTP Negeri I Gianyar, Bali

SMU Negeri I Gianyar, Bali

I Pande Ketut Sutara

I Dewa Ketut Alit Budiana

Chairman

Chairman

SD Negeri 13 Ampenan, Mataram, NTB

Drs. Sugiyarno Chairman

SLTP Negeri I Bengkulu H. Sukiman, SE Herlina Tobing

Vice Chairman Secretary

SD Negeri Teluk Dalam 4, Banjar-masin, South Kaliman-tan

H. Iskandar Yadi ES Suratno

Chairman Vice Chairman Secretary

SLTP Negeri I, Leksono, Wo-no-sobo, Central Java

H. Pudjonartojo Kidjo DH

Chairman Member

SMK Negeri I Lamongan, East Java

H. Gholib Kastoer Arifin

Chairman Secretary


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Appendix 1.3. Decentralization Case Studies

Case 1. Mexico: broad decentralization success but a lack of definition and top-down implementation has led to insufficient gains in local governance.

Despite erratic policies and political conflicts, the decentralization of education in Mexico is on the move. Whereas it does not represent a complete devolution to the states—having transferred significantly more management functions but not full responsibility for cur-riculum content, academic evaluation, and quality assessment—the states are assuming a large measure of influence over education, and this is getting larger.

[However,] Chapter VII of the General Law of Education (GLE) provided the basis for creat-ing Councils of Social Participation in Educa-tion. These councils were designed to exist at every level of the education system in a pyra-mid fashion from the bottom up, with councils operating in every school, county, and state in the nation including representatives from each state council, plus outstanding teachers and scholars, and other distinguished representa-tives of society. The GLE stated that parent associations should not be involved in the de-tails of school management but instead should concentrate on larger issues.

The SNTE (teacher’s union) leadership did not formally oppose the creation of such councils, but some groups of teacher foresaw the inter-vention of “extraneous” people in school af-fairs, which they considered their exclusive terrain. In their Educational Congress of 1994, foreseeing a threat to weaken the teach-ers’ monopoly in school management, the SNTE’s national leadership ruled that at least half of the members of such councils must be teachers (Sindicato Nacional de Trabajadores de la Educación, 1994). Finally, in September 1999, the SEP (the national Ministry of Edu-cation) organized the national council with many as members but without defining its specific functions. So far, the use of councils as a means of instituting wider participation in

educational governance has not been success-ful.

From: Ornelas, Carlos. No date. “The politics of the educational decentralization in Mexico.” At http://www1.worldbank.org/education/globaleducationreform/pdf/ornelas.pdf.

Case 2. South Africa: minimum standards and sectoral collusion in teacher manage-ment has led to unfunded mandates and fis-cal problems.

[After decentralization], all provinces experi-enced similar over-spending, in large part be-cause they were implementing nationally determined policies. This included the nation-ally negotiated salary agreement and new poli-cies in the education, health, and welfare sectors. Much of this problem was due to the lack of co-ordination between policymaking and budgeting, and the rapid pace of decen-tralization compounded this problem. The implementation of nationally agreed policies was not necessarily an unfunded mandate,however. Such policies (in education, health, and welfare) were implemented with the full support of education departments at the pro-vincial level, who were also involved in de-veloping the policies.

Sectoral collusion to secure more funds proved to be a far stronger factor in over-spending than unfunded mandates. Intergov-ernmental agencies on education, health, and welfare developed national policy [especially on standards] without taking into account budgetary resources. Many departments adopted an aggressive policy to address back-logs in deprived black areas. For instance, in-equities in teacher-pupil ratios were reduced between black and white schools. The increase in personnel expenditure squeezed out expen-diture in non-personnel inputs like textbooks, undermining the attainment of the desired out-puts.


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The national government was forced to inter-vene. It solved the problem of a lack of co-ordination by creating joint intergovernmental forums between the Treasury and the relevant national line ministries. For example, a com-mittee was set up comprising the national Ministers of Finance and Education together with their counterparts in provinces, and this met at least twice a year to co-ordinate poli-cymaking, budgeting, and implementation. These structures are supported by a range of large and small technical forums of officials from national and provincial treasuries and line function departments. These forums en-sure that budgets and national policy are aligned and that provincial departments adhere to their budgets. It has also reduced the budget games played in such sectors.

The implementation of these simple but criti-cal measures helped to turn around provincial finances dramatically. They ran a R500 mil-lion surplus in 1998/99 compared to a R5.5 billion deficit a year earlier. Provinces stabi-lized their personnel expenditures and began shifting funds towards non-personnel budgets and the payment of debts. The implementa-tion of a multi-year budget [MTEF] from 1998 onwards also helped provinces to prepare more realistic budgets. Provinces have run surpluses every year since 1998 and had paid off their debt by the end of the 2000 financial year. This has put them in a strong position to focus on the micro reforms necessary to im-prove the quality of spending in education and health and on increasing their infrastructure budgets.

From: Momoniat, I. No date. “Fiscal Decentralisation in South Africa: A Practitioner’s Perspec-tive,” athttp://www.worldbank.org/wbi/publicf-nance/documents/South%20Africa.pdf

In 1994, gross inequalities in learner: educator ratios were also identified as an important ob-stacle to equity, and plans were made to de-velop national norms for the provision of

educators to schools. These new national guidelines specified a learner: educator ratio of 1:40 in primary schools and 1:35 in secon-dary schools. However, because decisions about educator numbers and salaries were made at national level [in a process led by the education authorities] while implementation took place at provincial level [with budgets determined by financial authorities], these agreements were often unaffordable at provin-cial level.

The national process of educator provisioning was abandoned, and it was decided that each province would have its own target learner: educator ratio [with affordability driven from the budget side determining the number of af-fordable teachers in a province], but a nation-ally negotiated post-provisioning model would guide its application in individual schools. The attempt at equitable distribution of educa-tors has not been ruined, however, since pro-vincial education departments became responsible for the process. The latest statis-tics released by the Department of Education suggest that provinces have moved closer to each other in terms of learner: educator ratios.

Lange, M. 1998. “Opening Re-marks,” Seminar on Democratic Transformation of Education,” Konrad Adenauer Foundation Jo-hannesburg, at http://www.kas.org.za/Publications/Semi-narRports/Democratictransformationofeducation/lange.pdf.

Case 3. USA and Japan: School Boards, an old tradition—but sometimes a controver-sial one.

USA

From San Francisco to New York City, may-ors and state legislatures are contesting local school boards for control over classrooms.

It's a flat-out challenge to one of the deepest traditions in American public education: schools being run by boards that are anchored in the community.


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The United States has long had the strongest system of local control in the industrialized world, and critics of the current takeover trend worry that communities - and especially racial minorities - are being disenfranchised.

But pressure for change, driven by sagging student achievement and education's growing role in state budgets, is formidable. Some 23 states have passed laws authorizing state or city takeovers of school districts in crisis.

"Mayoral control is a new phenomenon in troubled urban school systems, and the early signs in the cities that have moved this way look promising enough for others to follow suit," says Ted Sanders, president of the Den-ver-based Education Commission of the States.

Last week, San Francisco Mayor Willie Brown called for returning that city to a mayor-appointed board, after 30 years with an elected board. The change would result in more qualified people on the board and im-provements in public schools, he said.

Meanwhile, New York City's new mayor, Mi-chael Bloomberg, wants to abandon an ap-pointed board in favor of a commissioner who reports directly to the mayor. And last month, New York Gov. George Pataki (R) called for putting mayors in charge of schools in the state's six largest cities, including Albany and New York City.

But current moves to center more control on City Hall are already generating a backlash from critics. They argue that the shift from elected boards will distance poor and minority voters from decisionmaking.

Cleveland - now starting a $1 billion school-construction project - is gearing up for a vote this fall on whether to return to an elected school board after three years of control by City Hall. Mishandling of a $60 million bond issue was one reason the state turned control of schools over to the mayor in 1998.

While both mayoral candidates in last year's election campaigned to keep control of the schools in City Hall, opinion polls show a ma-jority of voters want to go back to an elected board.

Indeed, the US tradition of local control runs deep. Across the country, some 15,000 local school boards handle everything from repair-ing gutters to setting educational goals. Of the 95,000 people on these boards, 96 percent are elected.

That system is now under siege in many urban centers. Early takeovers in cities like Boston (1991), Chicago (1995), Cleveland (1998), and Detroit (1999) were prompted by a melt-down of school finances or governance. In Baltimore (1993) and Philadelphia (2001), the state engineered the takeovers.

In some cases, elected school boards con-spicuously mismanaged funds - overspending credit cards or bungling millions in funding for school construction. In others, petty squabbles and erratic behavior spilled out onto the front pages of local newspapers, undermin-ing public confidence in the capacity of local boards.

More recently, pressure for change is coming down to the central issue of student achieve-ment.

Most students in urban public schools aren't doing well. And with new state and federal testing regimes, such failures are becoming more and more conspicuous…

"The basic problem is that school boards are a 19th century idea that made sense when most communities were small and self-governing, and people tended to grow up and live and die in the same place.... That has all changed now," says Chester Finn, president of the Thomas B. Fordham Foundation and an ad-viser to GOP presidents…

From Chaddock, G.R. 2002. “Mayors, States, Push School Boards Aside,” Christian Science


33

Monitor, February 26, 2002 at http://www.csmonitor.com/2002/0226/p01s01-ussc.html

Japan: School Boards—an unfinished agenda

Editorial: School Boards Can Work

The forum, properly used, can inspire educa-tion. Many boards of education seem to be lit-tle more than a pipeline for carrying instructions from the education and science ministry to the schools…

Many boards of education seem to be little more than a pipeline for carrying instructions from the education and science ministry to the schools. Education board secretariat officials in many municipalities set the agenda and education board members are just figureheads.

It is not surprising that some critics say boards of education have no value. Some even say they should be eliminated and the mayor should take over the administration of public education. They also say that voters should determine whether the mayor has performed satisfactorily.

Those critics have a point. If the mayor ap-points teachers on political grounds, however, it would cause confusion in schools. A mayor should instead challenge and make better use of a board of education.

But some points require extra attention. Mem-bers of a board of education must be drawn from a wide spectrum, including parents, edu-cation specialists, people in business and young people. Those with an interest in edu-cation should be drawn upon to discuss their perspectives and solicit their suggestions.

It is also useful to have nonprofit organiza-tions as full-time assistants to the board mem-bers and get them involved in policymaking.

And it is important to have cooperation among members of boards of education in neighbor-ing communities. The annual meeting of vil-

lage school superintendents is an example. If boards of education in neighboring villages form liaison committees and share staff and budgets, they would find it easier to pursue bold policies.

The concept of a board of education was origi-nally an organization to solicit opinions from those in a community with children in school and an interest in education. If parents and residents use the forum wisely, the board of education can continue to be very useful.

From The Asahi Shimbun, Nov. 26, 2002), at: http://www.asahi.com/english/op-ed/K2002112700673.html.

Case 4. Brazil, Spain: Decentralization and good management information—difficult and problematic but possible with effort and partnership.

Brazil

The implementation of education reforms in Brazil, where education systems are character-ized by political-institutional decentralization, necessarily requires sound mechanisms for monitoring and following-up on ongoing ac-tions and policies. Such managerial instru-ments help observe how reforms are progressing and, more importantly, help iden-tify the positive points and those needing ad-justments. Those mechanisms also provide unquestionable social gains that may be meas-ured both in terms of greater efficiency and ef-fectiveness, and in terms of the desirable assurance of transparency and equity in gov-ernmental programs.

The use of information in educational man-agement complies, therefore, with two basic principles of democracy: accountability - through the wide dissemination of results ob-tained in surveys and assessments - and per-manent social control. Last, but not least, educational evaluation and information sys-tems play a strategic role in the planning and prospective design of scenarios, for they con-tribute in no small way to the formulation of


34

new policies and programs that may provide answers for new trends. In order to fulfill these multiple purposes, information systems must count on uniform and scientifically based methodologies and survey instruments, up-dated and reliable databases, as well as agile and precise dissemination mechanisms.

[But] until 1995, Brazilian education data were outdated and unsystematic. Since there was no recent information available, directing government policies in that area was a chal-lenge as difficult as flying a plane in the midst of a storm having no guiding instrument on board. Not only did the lack of updated in-formation jeopardize the decisionmaking process, but it also caused a huge waste in the allocation of funds. Furthermore, in the ab-sence of a national standard system of infor-mation and indicators, several states had their own data gathering and processing systems, not compatible to each other. For this very reason Brazil could not even provide interna-tional organizations with consistent data on education.

By the beginning of 1995, the latest school census available dated back to 1989, and the last finished survey was that of 1991. The in-formation available was, therefore, inadequate to provide support for the design of actions di-rected at improving the education system. From that year on, the Brazilian educational information system has gradually undergone a complete reformulation, having acquired an integrated, decentralized and comprehensive structure, which includes now all levels and types, from early childhood to tertiary educa-tion and more advanced programs.

This process was based on government guide-lines for the creation of evaluation mecha-nisms to monitor the country's education systems. As a matter of fact, nowadays all programs and projects carried out by the Min-istry of Education are based on diagnoses and recommendations derived from statistical sur-veys and assessments on basic and higher edu-cation.

Several factors have contributed to the refor-mulation of the educational evaluation, statis-tics and indicators systems in Brazil. In the domestic context, the strong leadership of the Ministry of Education should be pointed out, driving this initiative forward in constant part-nership with sub-national authorities as well as with representatives of the education sector. Growing public opinion support to the sys-tematic evaluations of the educational institu-tions has also been an extremely relevant factor. In the international context, the impor-tance of multilateral cooperation should also be stressed, for the purposes of acquiring knowledge, capacity-building, sharing experi-ences and comparisons with other countries.

Gumaraes de Castro, M.H. 2000. “Role and Value of International Education Indicators For National Policy Development.” Fourth General Assembly of the OECD Education Indicators Programme (INES). 11 - 13 September - To-kyo, Japan, at: http://www.inep.gov.br/download/interna-cional/idioma/Role%20and%20value%20of%20international%20indica-tors%20for%20national%20policy%20development.pdf.

Spain

As the decentralization process unfolded in the 1980s, the country needed a planning mecha-nism that would serve to coordinate the educa-tional policies and programs being developed and executed by the MEC and the decentral-ized autonomous communities (de jure). An early experience signaled why such a coordi-nating mechanism was necessary; soon after the decentralization process began the capacity to gather and reproduce nation-wide educa-tional statistics was lost. Various regions had begun gathering their own data using formats that could not be aggregated at the national level.


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The Education Law of 1985 created the Con-ference of Counselors, with the Minister of Education and the autonomous community Counselors (chief educational officers) of the seven already decentralized regions as mem-bers. Much of the work of the Conference (which meets at least once a year), is carried out by five technical subcommittees each fo-cusing on a specific issue (for example, per-sonnel, curriculum, and statistics).

[It has been pointed out that] de facto the Con-ference is an instrument of cooperation and not coordination because none of the decen-tralized regions is obligated to carry out the decisions of the Conference when they believe their own statutes of autonomy are being vio-lated. Rather, the Conference operates as a mechanism that brings together the chief edu-cators of the decentralized regions and the Ministry of Education and Science to discuss common problems and to search for possible avenues of collective action. Interviews with observers of and participants in the Confer-ence of Counselors reveals two underlying problems that limit its effectiveness as a major integrating force. The first problem is a ge-neric distrust on the part of several autono-mous communities that the Conference may be used by the MEC to control the actions of the decentralized regions. The second prob-lem is that even though issues are brought to the Conference as technical problems, the pro-posed solutions tend to have heavy political overtones. After all, the Minister and the Counselors sitting around the table all re-ceived their appointments as representatives of a particular political party, thus political agen-das are never far from the surface. Having said that, it should be noted that at times the Conference is capable of reaching important agreements and carrying out complex actions.

From Hanson, M. 2000. “Democ-ratization and Educational Decen-tralization in Spain: A Twenty Year Struggle for Reform.” Coun-try Studies. Education Reform and Management Publication Series. Vol. 1, No. 3, June 2000, at: http://www1.worldbank.org/educat

ion/globaleducationreform/pdf/hanson.pdf

Case 5. The United States: Data compli-ance in a large federal republic.

The United States is the second largest federal republic in the world after India. Compared to unitary republics, the federal level in the US has relatively little control over education and relatively little power to enforce or mandate standards. It provides only a small amount of funding, historically considerably under 10 percent of total education funding in the coun-try. However, this does not mean that it is im-possible to develop some uniformity of data at the federal level. (Description of these data can be found at the Web site on the Common Core of Data—CDD—of the National Center for Education Statistics—NCES, http://nces.ed.gov/ccd/aboutCCD.asp.) And, given that control even in unitary republics may be more illusory than real (generating only the illusion of compliance), some of the lessons from the US might be of interest, par-ticularly to large, unitary republics undergoing serious decentralization (to the degree that some call them quasi-federal), such as South Africa or Indonesia.

In the US, uniformity and compliance by states in the submission of data to the federal level has been accomplished via a variety of tactics.

Least important is any form of man-date or obligation: these are the least-used means of ensuring compliance and uniformity. The federal level does rely on the fact that each state (generally, though it varies) does have power to ensure compliance from schools. Thus, the federal level is mostly concerned with communicating with 50 states, not some 18,000 districts, or hundreds of thousands of schools. Some compliance is required in feder-ally funded programs; standard data object definitions are published. But


36

most of the data gathered at federal level does not fall under this category. Another incentive is that, as the qual-ity of data have improved over time, the federal government does use the data in initial planning and indicative resource allocation. The states know this, and thus there is an incentive to improve. A major incentive is maintenance of close professional and personal rela-tions between the data groups at fed-eral level and each of the states. There are technical statistical working groups that are cooperative in nature, but exist on a permanent basis. These groups generate awareness of the need for standards, agree on definitions, etc. The most important example is the National Forum on Education Sta-tistics (http://nces.ed.gov/forum/), which brings together public sector of-ficials from education and other re-lated sectors, but also from teacher unions, and others concerned with education. The forum is funded by the federal government, which gener-ates sustainability, but is not a gov-ernment office. Importantly, the forum provides training, guidebooks on definitions, etc. It meets twice per year, though some sub-committees meet more often.

The federal level tries to make it as easy as possible to submit data, ac-cepting a wide variety of computer formats.The system has evolved. Over the past 15 years, the federal level has emphasized networking, the build-up of professional relations, allowing par-ticular States to show off their best practices to the other states, etc. This has been a great help.

In short, a decentralized system can assure a considerable degree of data compliance. The key lessons are that it takes time, professional-ism, nurturing of relationships, and, of course, some sustainable budgetary allocations to en-sure that the effort does not flag once it starts.

Compiled by Luis Crouch from personal communica-tions with the CDD and NCES.


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Appendix 1.4. Citizen Perception and Educational Reality: Insights from the Governance and Decentralization Survey

The Governance and Decentralization Survey (GDS) was a random sample survey carried out in 2002 in a large number of Indonesian dis-tricts. It asked both citizens and officials for their opinions about the quality of various ser-vices, including the effects of decentralization, their perceptions of corruption, and other impor-tant issues related to the governance and man-agement of service delivery. Most of the questions elicited subjective opinions based on a scale. A few questions asked for objective in-formation such as the number of days required by delivery systems (for example, education) to perform a certain task (for example, to promote a teacher).

Based on the results of the survey, which col-lected data on purely subjective opinions, citi-zens appear to be fairly happy with their education services and seem to believe that these services have improved since decentralization.

This could have two quite opposite interpreta-tions. First, if there was some sort of objective correlate that suggested citizens have reasonably high standards and are good judges of quality, then this result would be a positive thing. Fur-ther improvements would always be possible, of course. However, a second, more negative in-terpretation would be that if there are some ob-jective indications, even within the survey itself, that services leave a good deal to be desired, then the fact that citizens appear somewhat complacent makes the task of improving educa-tion seem even harder than it might otherwise be. This is because in addition to delivering on improvements, it may be necessary to overcome existing complacency. This second interpreta-tion appears the most likely for two reasons.

First, when citizens were asked about their per-ception regarding education, there is some evi-dence that their range of response was very narrow. Citizens seem to have responded in a tight and marginally optimistic fashion, without much deviation towards the negative or the posi-tive.

Second, when the few objective indicators of quality of services that could be found were ana-lyzed, it was found that service standards are ac-tually fairly poor—schools claim it takes some seven months to fulfill book orders, for example. Furthermore, opinion from school-level stake-holders (principals) about these more objective service standards varies a great deal more (some 10 times more) among districts than citizen’s perceptions of quality, confirming that citizens tend to have a range of opinions about quality that is narrower than more objective indicators or that they simply responded positively out of politeness or because they thought this may be what the enumerator wanted to hear. There is also evidence that citizens place more value on physical and business infrastructure than on education, confirming the suggestion that per-haps their standards with regard to education might not be very high.

Third, when “objective” observers were asked about their perceptions of corruption and citi-zens’ general complaints, education regularly fared worse than other sectors.

Finally, less than a third of districts seemed to have had norms regarding education, at least in the opinion of DPRD members, at the time the survey was taken. All of these findings taken together suggest that improving governance and management in the sector will require not just increasing citizens’ capacity and incentives to press for better services but also the harder (and chronologically prior) tasks of a) developing demanding but reasonable standards and em-bodying them in norms, regulations, or guide-lines, b) ensuring that citizens know what standards they have a right to expect, and c) en-suring that, either through some form of man-dates or moral persuasion and dialogue, local areas give education the degree of local prioriti-zation it deserves. These tasks are more in-volved—conceptually—than those involved with simply training citizens to press for better services. They also, as noted, need to be tackled before raising citizens’ expectations, both logi-


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cally and chronologically. However, they are not much more labor-intensive.

Basic Facts about the Survey The Governance and Decentralization Survey (GDS) carried out by the Center for Population and Policy Studies (CPPS) at the University of Gajah Mada, with World Bank funding, was an opinion survey that was applied to many levels of Indonesian society.9 The survey was carried out in 2002. The survey has the following rele-vant characteristics:

1. It is largely an opinion survey, based on scales, with only a few objective indicators or judgments by enumerators trained to evaluate a process or situation. The lack of objective measurements (or judgment of processes by trained enumerators) makes it difficult to assess the objective quality of governance. It also makes it difficult to cor-roborate opinions by seeing whether they are correlated with the objective measurements. Thus, the absolute value of the opinions is not of very much interest. However, opin-ions can be compared with each other a) across sectors and issues, to see whether opinion about governance in some sectors or issues is better or worse than in others and b) for a given sector or issue across localities and actors to see whether these opinions cor-relate with each other.

2. The following actors—numbers of each in the database are shown in parentheses—were interviewed:

a. Officials in Bupati/Walikota’s office and other general local government (741)

b. Members of regional legislature or DPRD (567)

c. Practitioners in the justice system—judges and district attorneys (259)

9 For a fuller description of the survey see: http://lnweb18.worldbank.org/eap/eap.nsf/2500ec5f1a2d9bad852568a3006f557d/f342ce243175816d47256c1a0015a2a0?OpenDocument.

d. Officers of the Dinas Kesehatan (141)

e. Officers of the Dinas Pendidikan (141)

f. Members of NGOs (563) g. Members of the media (422) h. Lawyers (133) i. Officers of Puskesmas j. Officers of schools (857) k. Citizens or households (8579) l. Representatives of private sector

(562)

3. The list of districts where the overall survey was carried out is shown in Table 13 (This table is shown at the end of this appendix as it is quite long.) Sixty households were in-terviewed in each district. (In one or two of these districts both the kota and the kabu-paten were sampled, for a total of 120 inter-views.) It would be tedious to show the geographical distribution of every type of respondent, so only the list of districts is shown.

Initial Results and Puzzles A logical place to begin, given the aim of this appendix, is to see what the most “basic” or “fi-nal” respondents, namely parents and citizens think about the quality of services and govern-ance of the education sector, both at present and over the past few years.

The following observations can be made from the survey. First, the proportions of citizens who thought, at the time of the survey, that ser-vices were at 3 (or 4) or better on a scale of 1 to 5 (where 5 is best) is as shown in Table 1. Given the standard errors, differences between proportions of more than .015 are generally sig-nificant at the 5 percent level. The data have been sorted from the “worst” service to the “best.”


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Generally, education falls in the middle of the range. A very large majority of citizens seems to think services are either “ok” (3) or better, with the numbers thinking services are “better than ok” (4 or higher) being a small majority (except for in the police and sub-district cate-gories). It would be hard to argue that in static terms, and in terms of subjective opinion, edu-cation services are failing, either compared to other services or in purely subjective absolute terms.

Second, citizens seem to think not only that things are not bad, but also that services ap-pear to be improving under decentralization, if one goes just by citizens’ subjective opinions, as shown in Table 2.

10 The source for all tables is our analysis of the GDS itself. The source for each individual table is therefore not listed.

A majority of citizens think that services have not changed, but far more think that services have gotten better than think they have gotten worse (the middle category of “no change” is the rest). Again, differences be-tween services of more than about 0.015 in the “better” column and of more than 0.003 in the “worse” column are statistically significant. It is true that the largest proportion of citizens who think services have gotten worse is in education, but 6.1 percent, while statistically significantly different from the value for the other services, is not striking from a social or economic point of view. It is interesting to note that, regarding education, fewer citizens are in the middle and fewer are without an opinion.

Third, when citizens were asked to say whether they were happy with particular aspects of education, on average, across most sub-aspects, about 80 percent said they were happy, and there is not much variability across sub-aspects.11 This is shown in Table 3.

All this presents a puzzle. The experts seem to think that the Indonesian educa-

tion sector is in trouble, yet citizens appear not to think so. One possible explanation is that

11 The phrasing of the question was altered between “are you satisfied” and “are you unhappy.” The percentages were roughly the same in either case.

Table 1. Proportion of citizens scoring quality of services as “medium” or better (3 or higher on a 1 to 5 scale)10

ServiceProportion scoring the service 3 or better

Proportion scoring the service 4 or better

Std Error of Column 1

Police 0.722 0.324 0.005 Head of Sub-district office 0.844 0.488 0.004 Public Senior High School 0.859 0.574 0.004 Doctor of Puskesmas 0.878 0.542 0.004 Village Midwife 0.884 0.590 0.003 Public Junior High School 0.886 0.592 0.003 Public Elementary School 0.905 0.599 0.003 Puskesmas 0.915 0.508 0.003 Posyandu 0.927 0.649 0.003 Head of Kelurahan/village Office 0.931 0.575 0.003

Table 2. Proportion of citizens who think services have gotten better or worse since decentralization

Service Better Worse Don’t Know

School 0.396 0.061 0.045 Health 0.403 0.030 0.066 Village 0.397 0.026 0.032 Sub-District 0.318 0.017 0.142 District 0.264 0.021 0.298


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the experts are wrong, that they are rent-seeking in promoting a sense that education has problems (because if they promote a sense of crisis, there will be a higher demand for ex-pert services). This may mean that the situa-tion is in fact truly better than subjective

opinions would suggest or there may be at least two other explanations.

One possible explanation is that citizens told the enumerators what they thought they wanted to hear and thus responded fairly posi-tively to most questions even though they may have thought otherwise, or citizens may sim-ply have had very low expectations. If one takes into account noise and randomness, then there is some variation around a generally positive, but somehow “standardized ok” out-look. The lack of many objective correlates to the opinion questions makes it hard to assess whether this is the case.

Another possible explanation is that citizens genuinely perceived things to be going fairly well in education, but there was a gap between what they perceived and what is in the na-tional interest—in other words, the survey as-sessed individual or local satisfaction rather than collective need. Since the effects of edu-cation are perhaps 50 percent external to the family and to a considerable degree external to a village, it makes sense that villagers would tend to under-invest in education and/or over-estimate the degree to which it is provided at a “good-enough” level compared to the national need.

If the first explanation is true, then citizens need to be educated to have higher expecta-tions. However, their expectation must also be

technically reasonable. Thus, this suggests a) the need not only for School Committees and other citizen groups to articulate demands and hold service providers to account but also for ambitious but reasonable standards of per-formance and b) citizens to realize what stan-dards they have a right to expect.

If the second explanation is true, this means that parents and communities will tend to un-der-invest in education, which means that cen-tral budgetary pressure of some sort (some earmarking or even mandates), as well as training and moral persuasion, will be neces-sary to ensure that citizens recognize the na-tion’s needs as well as their own. Again, this is likely to be a difficult task. We now turn to the task of sorting out whether these two hy-potheses might be true.

Sorting out the Puzzle

The first hypothesis, that there is some bias to the positive middle, can be tested in at least one simple way. We took all the responses to the question on the degree of happiness with a variety of services (the question underlying Table 2). The range of judgment as to the quality of services can go from 1 to 5, with 5 being the best. We averaged the valid re-sponses for all services in each district. We then ranked all of the 142 districts. The dis-trict falling at the boundary of the 1st and 2nd

quintiles (the average of the 35th and 36th) had an average of 3.51. The district falling at the boundary of the 4th and 5th quintiles (the aver-age of the 106th and 107th) had an average of 3.69. The very worst district of the 142 had an average rating of 3.23, nearly half-way be-tween “fair” and “good,” and the very best only 3.95, not quite “good.” The total range from 3.23 to 3.95 is 0.72 or only 18 percent of the total range of variation possible (4 points), and the inter-quartile range is only 4.7 percent of the total possible range of variation.

All this strongly suggests a pre-disposition to respond with a bias towards the slightly posi-tive above neutral. It is true that averaging out all services produces an artificial uniformity bias that may not be present in the responses.

Table 3. Percentage of citizens satisfied with various sub-aspects of education

School fees 71 Uniform prices 78 School achievement 82 School discipline 87 School learning process 86 PTA management 83 Extra-curricular activities 81


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Thus, taking specific services one at a time, the actual range of total variation between the worst and best district is, on average, 24 per-cent of the possible range of variation, and the inter-quartile range, service by service, is 6.3 percent of the possible range. Finally, the worst service, policing, got an average rating of 3.1, and the best, Posyandu, got an average of 3.8, with the difference between the two be-ing 16 percent of the possible range. This confirmed the notion of a restricted range of variation that sits right above the average. The idea that this restricted range might be “natural” still has to be dealt with—there is, after all, no reason why citizens’ ratings would have to be uniformly distributed or distributed in any particular way. If the quality of ser-vices really is very tightly controlled by gov-ernment and kept within a certain range, it is entirely possible that the citizens’ reactions might simply reflect this fact. We will return to this when we have a way to test it.

Another way to test the notion of positive bias due to a lack of objective scaling is that there were at least some governance and manage-ment questions that were a) based on an objec-tive scale (though not independently measured) and b) asked of more than one type of respondent. There was a question about how long it took the Dinas Pendidikan office to process a certain type of action. The same question was asked of the Dinas Pendidikan

and of the schools. The services concerned were:

1. Changing the status of a position (promoting a position)

2. Promoting a teacher 3. Approving a student movement 4. Fulfilling the school’s book procure-

ment proposal.

The responses were in ranges (1 to 3 months, 4 to 7, etc.). Giving the middle value of the range to each range, the approximate time in months taken to carry out each of these tasks from the points of view of the Dinas Pendidi-kan and the school is shown in Table 4.

This table is significant for various reasons. First, taking 3.7, or even 3 months, to promote a teacher, or taking 5.7, or even 5 months to fulfill a procurement order, is a very low stan-dard, and yet this is the perception of the Di-nas Pendidikan. The perception of the school is that the tasks take, on average, some 30 to 70 percent longer (44 percent on average), as much as 7 months to fulfill book procurement orders or 5 to 6 months to get a teacher pro-moted. One has to remember that “2” in the table above really means 1 to 3 (months), so one has to interpret the results cautiously. Nonetheless, these are poor performance lev-els. When this is juxtaposed with parental opinion, then, parents seem to have a bias to-wards the positive or to have low expectations.

Second, the difference in perspective between the Dinas Pendidikan and the schools is clear and strong: 44 percent on average. The one exception to this divergence of perception is the time it took to approve a student move-ment. Schools’ estimates of the time required for certain actions is much longer than those of officials.

We can now turn to the issue of whether the range of citizens’ rating of services might be “natural,” in other words, might reflect the true range of objective variation in quality. To check this, we assessed the coefficient of variation between district averages of the time it takes to perform various services as above. These results are shown in Table 5.

Table 4. Time it takes to perform certain tasks (in months)

Task Dinas Pen-

didikan SchoolPercentagedifference

Changing the status of a position (promoting a position) 3.0 5.1 68% Promoting a teacher 3.7 5.8 58% Approving a student movement 2.0 2.2 9% Fulfilling book procurement proposal of the school 5.7 7.4 30%


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Interestingly, the averages as perceived by the Dinas Pendidikan are wider even than those perceived by the schools. However, this is due to the fact that within many districts the Dinas Pendidikan officials answered simply by choosing the lowest possible level (the range 1-3). A few, however, appear to have admitted that things take longer. This yielded a wide range—a range greater than that re-ported by schools, which would otherwise seem unlikely. The hypothesis suggests itself that perhaps Dinas officers have been exag-gerating at the low end. In any case, it is clear that citizens’ range of expressed evaluation of quality is much more restricted—by about four-fifths—than the variation in this one ob-jective indicator of quality of services as re-ported by the schools or—by nine-tenths—by the Dinas Pendidikan.

This strongly suggests that citizens’ range of perceptions of service quality is much more

limited than the “real” range of quality as de-noted by officials’ reported range of variation in a few objective indicators of service quality.

Another way of assessing whether citizens are “right” is to assess the correlation between citizens’ opinion on the subjective scale and the opinions of both Dinas Pendidikan offi-cials and school principals on an objective measure of the time it takes to perform tasks. Some simple correlations between citizens’ opinions on various services were added as a benchmark to allow us to judge whether citi-zens’ opinions, themselves, might be mere noise. The results are shown in Table 6.

Note that citizen’s opinions do not seem to be mere noise. Opinions on the quality of differ-ent levels of schooling are highly correlated to each other and are highly correlated to the opinions of village heads on educational qual-ity (last row, third panel of the table).

While citizens’ opinions may not be mere

Table 5. Coefficient of inter-district variation in time it takes to perform certain tasks and in citizen rating of various services

Task

Dinas Pen-didikan

perceptionSchool per-

ceptionCitizen per-

ceptionChanging the status of a position (promoting a position) 0.68 0.38 NA Promoting a teacher 0.88 0.40 NA Approving a student movement 0 0.12 NA Fulfilling book procurement proposal of the school 0.77 0.42 NA Average across all tasks 0.46 0.24 NA Citizen rating of basic education services NA NA 0.042

Table 6. Simple correlations between household opinions on school quality scale and officials’ opinions on time it takes to carry out basic tasks for schools

Variables Correlation Dinas Pendidikan, Schools Opinions on Task Time 0.23 Households’ Opinion on Primary Schools, Dinas Pendidikan Opinion on Task Time 0.05 Households’ Opinion on Primary Schools, Schools’ Opinion on Task Time -0.08 Households’ Opinion on Junior Secondary Schools’, Dinas Pendidikan Opinion on Task Time 0.03 Households’ Opinion on Junior Secondary Schools’, Schools Opinion on Task Time -0.10 Households’ Opinion on Senior Secondary Schools’, Dinas Pendidikan Opinion on Task Time -0.02 Households’ Opinion on Senior Secondary Schools’, Schools Opinion on Task Time -0.07 Households’ Opinion on Primary Schools and Opinion on Junior Secondary Schools 0.88 Households’ Opinion on Primary Schools and Opinion Senior Secondary Schools 0.86 Households’ Opinion on Junior Secondary and Opinion Senior Secondary Schools 0.94 Households’ Opinion on Primary Education and Opinion on Head of Village 0.74


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noise, they are not very correlated with offi-cials’ opinions regarding the time it takes to perform certain tasks. This suggests that one should be cautious when using task perform-ance time as a measure of quality or taking subjective quality perceptions too seriously.

Interestingly, while the correlation between the Dinas Pendidikan officials’ and the school principals’ opinion on task time is statistically positive, 0.23 is low in substantive terms. Our second hypothesis is that parents’ or citi-

zens’ opinions reflect a private or local view of education that naturally tends to under-estimate its importance and thus overestimate the degree to which delivery is sufficient or of adequate quality.

One possible way to test this is to assess the degree to which citizens would want to invest in education as opposed to other items if their municipality were to receive a fiscal windfall. The results are not an uncommon local priori-tization: invest in economic assets that do not move. The results are as shown in Table 7.

The top responses, if taken together, suggest that citizens tend to want to in-vest in activities of fairly direct economic benefit and that apply to fixed assets. Notably, interest in direct investment in work schemes or in investment projects appears not to be high. In any case, it is

also interesting that education is listed fourth but a fairly distant fourth: the drop from third to fourth place is from 18 to 9 percent. This suggests, but only vaguely, that citizens might be thinking of education in terms of its private and local returns and that therefore they tend to put a relatively low priority on education. Improved health services are also given a rela-tively low priority. It is likely that here too citizens tend to think not so much about public health measures as about measures that apply to themselves as individuals or perhaps as a

village.

What Do More “Objective” Observers Say? One way to assess relative qual-ity of services, even without ob-jective measurements, is to see what other “objective” observers (other than parents since, as we have seen, their range of reactions seems biased towards the posi-tive) might have to say. NGOs are not likely to be truly objec-tive, in that NGOs, as is the case with most policy and service de-livery analysts and advocates,

presumably benefit from the maintenance of a perception that problems and crises exist. (However, it is hard to imagine reasons why they would tend to be more alarmist about one sector than another; it would seem logical that they would be about equally biased in all ar-eas.) The proportion of NGO respondents who said that in each of the areas shown there were few or no complaints against local ser-vice providers is shown in Table 8.

Table 7. Investment priorities of citizens upon receipt of large fiscal windfall for their municipality

Poverty alleviation 23% Local physical development (means/ infrastructure) 19% Increasing existing business capital 18% Improving education service quality 9% Agricultural development 7% Other 5% Improving health service quality 5% Improving other public service quality 4% Distributed to the people 4% Financing manpower intensive projects 2% Developing industrial factories 2% Increasing salary 0% Increasing the number of staff 0%

Table 8. Proportion of NGO respondents who report no com-plaints or hardly any complaints, by sector or office Program and project development and implementation 0.45Education service 0.48Health services 0.54Regulation of informal economy 0.61Land or building disputes 0.64Human rights violations 0.65Discipline violations in public service 0.68Labor conflict 0.77


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The only area “worse” than education appears to be general program and project develop-ment. All services whose low-complaint pro-portions are statistically different from education at the 5 percent level are shown in italics. The number of low complaints in the area of program and project development is not statistically different from education. Thus, education is, in a sense, the sector against which there are most complaints or is equivalent to the worst.

It may well be that there are more complaints against education simply because this is the social service that touches most people on a daily basis. This cannot be tested.

To look at this issue further, we narrowed the focus of management or governance com-plaints down to the issue of corruption. The results are shown in Table 9. Sectors statisti-cally different from education at the 5 percent level are shown in italics.

The absolute numbers above are of some in-terest: if 34 percent of the respondents were reporting little or no corruption, then 66 per-cent were reporting some or more. This has positive implications for the drive towards de-centralization below the district level, as advo-cated in the Education Act, as the village level is seen as the least corrupt.

Similarly, whereas the DPRD might be biased in some general direction, it is hard to hy-pothesize that they would have particularly strong sectoral biases. Thus, their perception of citizens’ complaints is of interest. This is shown in Table 10.

Again, education is at the bottom and indistin-guishably so from program and project devel-opment. Note that the perceptions on this score are similar to NGO perceptions. And, it is noteworthy how different these numbers are from citizens’ own responses about problems and levels of satisfaction. The same idea, with some refinement, is shown in Table 11. The results are the same, placing education at the bottom.

Does Regulation Exist? The DPRD members were asked whether regulation exists, for some key areas and

their opinion of what regulation does exist. The results are shown in Table 12.

This is a somewhat ob-jective meas-urement, and it is of some concern that only 28 per-cent of re-spondents seem to believe that the education sector at the local level has been regulated. This could be mere perception, but nonethe-less it is the perception of the regional legisla-ture, so it should be regarded as an important issue.

Table 9. Proportion of NGO respondents who reportedlow or very low levels of corruption, by sector or officeHead of District Office 0.23 Local Parliament 0.23 Land Certification Agency 0.21 Education Department 0.34 Health Department 0.34 Sub-district 0.4 Village 0.46

Table 10. Proportion of DPRD members or offi-cials who reported no complaints, by sector

Education 0.19 Program and project development 0.21 Health 0.25 Land/building certification 0.37 Identity card 0.61 Amount of land/building tax 0.66

Table 11. Proportion of DPRD members or officials who report few or very few complaints (within those who report somecomplaints), by sector Education 0.23 Program and project development 0.24 Health 0.27 Land/building certification 0.32 Identity card 0.39 Amount of land/building tax 0.41

Table 12. Proportion of DRPD respondents saying regulation ex-ists, by area Poverty alleviation 0.1 Education 0.28 Health 0.53 KKN 0.05


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Table 13 Districts SampledAlor, Nusa Tenggara Timar Ciamis, Jawa Barat Asahan, Sumatera Utara Cilacap, Jawa Tengah Badung, Bali Cirebon, Jawa Barat Balikpapan, Kalimantan Timur Dairi, Sumatera Utara Bandung, Jawa Barat Denpasar, Bali Banggai Kepulauan, Sulawesi Tengah Depok, Jawa Barat Bangkalan, Jawa Timar Donggala, Sulawesi Tengah Banjar, Kalimantan Selatan Dumai, Riau Banjarbaru, Kalimantan Selatan Flores Timur, Nusa Tenggara Timar Bantaeng, Sulawesi Selatan Gianyar, Bali Bantul, D I Yogyakarta Gowa, Sulawesi Selatan Banyuwangi, Jawa Timur Gresik, Jawa Timur Batam, Riau Hulu Sungai Tengah, Kalimantan Selatan Bekasi, Jawa Barat Hulu Sungai Utara, Kalimantan Selatan Bengkalis, Riau Indragiri Hulu, Riau Berau, Kalimantan Timur Indramayu, Jawa Barat Bima, Nusa Tenggara Barat Jember, Jawa Timur Binjai, Sumatera Utara Jepara, Jawa Tengah Blitar, Jawa Timur Kampar, Riau Blora, Jawa Tengah Kapuas Hulu, Kalimantan Barat Bogor, Jawa Barat Karang Asem, Bali Bojonegoro, Jawa Timur Karawang, Jawa Barat Bolaang Mengondow, Sulawesi Utara Karimun, Riau Bone, Sulawesi Selatan Kebumen, Jawa Tengah Boyolali, Jawa Tengah Kediri, Jawa Timur Buton, Sulawesi Tenggara Kendal, Jawa Tengah Kendari, Sulawesi Tenggara Rembang, Jawa Tengah Klaten, Jawa Tengah Rokan Hilir, Riau Klungkung, Bali Rokan Hulu, Riau Kota Baru, Kalimantan Selatan Sambas, Kalimantan Barat Kudus, Jawa Tengah Sampang, Jawa Timur Kutai, Kalimantan Timur Sanggau, Kalimantan Barat Labuhan Batu, Sumatera Utara Sangihe Talaud, Sulawesi Utara Lahat, Sumatera Selatan Semarang, Jawa Tengah Lampung Tengah, Lampung Sidenreng Rappang, Sulawesi Selatan Lampung Utara, Lampung Sinjai, Sulawesi Selatan Landak, Kalimantan Barat Situbondo, Jawa Timur Lima Puluh Koto, Sumatera Barat Sleman, D I Yogyakarta Lombok Timur, Nusa Tenggara Barat Solok, Sumatera Barat Luwu Utara, Sulawesi Selatan Soppeng, Sulawesi Selatan Madiun, Jawa Timur Sukoharjo, Jawa Tengah Magelang, Jawa Tengah Sumba Barat, Nusa Tenggara Timur Majalengka, Jawa Barat Sumbawa, Nusa Tenggara Barat Malang, Jawa Timur Sumedang, Jawa Barat Manado, Sulawesi Utara Tana Toraja, Sulawesi Selatan Manggarai, Nusa Tenggara Timur Tanah Datar, Sumatera Barat Maros, Sulawesi Selatan Tanggamus, Lampung


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Table 13 Districts SampledMataram, Nusa Tenggara Barat Tapanuli Tengah, Sumatera Utara Medan, Sumatera Utara Tapanuli Utara, Sumatera Utara Metro, Lampung Tapin, Kalimantan Selatan Muara Enim, Sumatera Selatan Tarakan, Kalimantan Timur Muna, Sulawesi Tenggara Tegal, Jawa Tengah Ngada, Nusa Tenggara Timur Temanggung, Jawa Tengah Nganjuk, Jawa Timur Timor Tengah Selatan, Nusa Tenggara Tim Nias, Sumatera Utara Timor Tengah Utara, Nusa Tenggara Timur Ogan Komering Ulu, Sumatera Selatan Toba Samosir, Sumatera Utara Pacitan, Jawa Timur Toli-Toli, Sulawesi Tengah Padang Panjang, Sumatera Barat Tuban, Jawa Timur Padang Pariaman, Sumatera Barat Tulungagung, Jawa Timur Palembang, Sumatera Selatan Ujung Pandang, Sulawesi Selatan Palu, Sulawesi Tengah Wajo, Sulawesi Selatan Pangkajene Kepulauan, Sulawesi Selatan Way Kanan, Lampung Pasaman, Sumatera Barat Wonosobo, Jawa Tengah Pasir, Kalimantan Timur Yogyakarta, D I Yogyakarta Payakumbuh, Sumatera Barat Pekalongan, Jawa Tengah Pemalang, Jawa Tengah Pematang Siantar, Sumatera Utara Pesisir Selatan, Sumatera Barat Pinrang, Sulawesi Selatan Ponorogo, Jawa Timur Pontianak, Kalimantan Barat Probolinggo, Jawa Timur


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Appendix 1.5. Organizational Issues for Depdiknas under Decentralization

Since function assignment is still being de-bated and since form should follow function, it is difficult to be exactly prescriptive about bureaucratic form for Depdiknas and other national-level bodies such as MoRA, where the assignment of basic decentralization functions is even less clear. However, based on the logic of decentralization that Indone-sia has set out for itself as embodied in vari-ous laws and based on international experience, a few pointers can be set out. It needs to be noted that there is no necessary correspondence between organizational structure and performance, just as there is no necessary connection between decentraliza-tion and educational performance. How-ever, there are organizational structures for a national ministry that make more sense than others in a decentralized or decentralizing education system. This section covers two issues: a) size (which is subdivided into dis-cussions of personnel and budget) and b) structure.

Size Personnel Size

Judging from international practice, for the national level to have less than one in one thousand of the total pre-tertiary education staff in the country would be too few. At one extreme, Canada has no national Minis-try, so in a sense it has zero staff (though it has a council of provincial Ministers with a secretariat of 40 or so) at the national level. A more realistic illustration might be China, a nation with approximately six to seven times more pre-tertiary students than Indo-nesia, which has only some 700 professional employees at the central ministry level. This is the case even though China has one of the lowest ratios of central to sub-national per-sonnel in the world across all governments and though its education system is not nec-essarily an efficiently decentralized one. South Africa’s national education workforce is still lean but not at the Chinese extreme.

The South African Department of Education employs only some 500 employees in a country with some 350,000 teachers and a little less than one-third as many students as Indonesia. The rest of the country’s educa-tion personnel are employed by the decen-tralized provinces. Argentina has a little less than one-fifth as many students as Indonesia and about 1,200 national employees. Even decentralized countries can have fairly large staffs at the central level if they can afford it and depending on the degree of true decen-tralization.

Spending Size

Spending by central ministries as a percent-age of total spending at the pre-tertiary level in decentralized countries ranges all the way from less than 10 percent (in China, the US, South Africa, and Hungary) to as high as 20-40 percent (in Australia, Poland, and Spain). Spending at the central level is usually higher as a proportion of total spending than staffing at the central level. This is because much national spending in decentralized countries takes the form of grants, transfers, or project support of various types to lower-level governments as opposed to the direct purchase of inputs (including labor) into in-struction or school administration.

Structure

Indonesia’s education system is far from be-ing effectively decentralized yet. Decen-tralization is not only new, but in its early days, it has not been well-defined. Decen-tralization is a process that has taken some 20 years in Spain, and some 15 years in Chile. South Africa started decentralizing in 1994, reached some degree of fiscal stability in 1998 or so, and began reaping some qual-ity improvements in 2001 or so. In a sense, decentralization is never finished, as can be seen in the constant re-design and re-assessment of the systems in the United


48

States after 200 years as a decentralized so-ciety (for example, the ongoing debate as to whether district education boards should be elected or appointed or whether they, or mayors, should control education in a mu-nicipality—see Case 3 in Appendix 1.3). The functions that a ministry in a decentral-izing country should perform are different from those the same ministry might perform in a country that is already effectively de-centralized. Thus, looking at international examples of countries that are already de-centralized (such as the UK, Spain, and the US) is of limited, but some value. Looking at decentralizing cases is more interesting, but there is a danger that one may try to learn lessons from countries that are con-stantly decentralizing but getting there only slowly (Colombia). Chile, South Africa, Argentina, and Hungary are examples of countries that have “achieved” some degree of effective decentralization but are still suf-ficiently dynamic that there is an ongoing decentralization process for the national level to support. Judging by these cases, a central ministry in a decentralizing system should not implement education but instead should:

1. Set standards and measures of performance, ideally outcome measures rather than input ones; ensure that these indicators are measured and reported (includ-ing information systems); set goals and/or minimum service standards, again outcome-oriented.

2. Focus on institutions of delivery (schools, colleges) rather than “levels” (primary, secondary).

3. Ensure competition and emula-tion between decentralized re-gions.

4. Ensure that decentralized units can come up to standard through systems development, training, and by advocating for effective funding.

5. Perform, or ensure performance, of functions with large econo-

mies of scale, perhaps by bro-kering associations between dis-tricts or provinces.

6. Use funding or norms (such as requiring districts to enroll chil-dren from outside the district, and then funding them to do so) to correct spillovers between re-gions, for example, in special-ized areas of education where one institution could serve more than one district.

7. Keep up funding levels and en-courage local levels to pursue equity in outcomes by creating regulation on the internal distri-bution of funding within dis-tricts if possible, and by moral persuasion if direct regulation is deemed too intrusive into dis-trict affairs.

8. Carry out overall system plan-ning, forecasting, and invest-ment prioritization, including forecasting and analyzing teacher supply and demand.

9. Encourage experimentation and disseminate lessons learned from that experimentation.

The organizational structure corresponding to such a “modern” set-up can be seen in the organigrams for two very different Minis-tries of Education: 1) Korea, an Asian uni-tary republic where students score extremely well in international comparative assess-ments (Figure 1), and 2) Argentina, a Latin American federal republic with an education system of medium effectiveness by middle-income country standards (Figure 2).12 It would be possible to produce organograms for strongly decentralizing developed coun-

12 Note that, since the focus of this ESR is pre-tertiary education and education as such rather than culture, science, sports, and other ancillary functions often assigned to Ministries of Educa-tion, we have glossed over the details in the parts of the organigrams that correspond to such func-tions.


49

tries such as Spain or unitary developed countries that are still experimenting such as the UK, as the organizational lessons are almost exactly the same. As noted, it should not be inferred that causality can be ascribed to any particular type of structure. The point is simply that, in modernizing and decentral-izing countries, the bureaucratic structure at the center tends to have certain functions, but it should not be assumed that institu-tional reorganization at the center of the sys-tem will necessarily have a direct and predictable impact on the quality of educa-tion. What ultimately matters is incentives and behavior at the classroom and school levels, but there are ways to organize levels higher than the school so that they are opti-mized to support schools. This is what

most modernizing and/or decentralizing ministries seek to do.

It should also be noted that some countries have quite a good decentralization structure in terms of the relations between schools, districts, or provinces (or some other inter-mediate level) and the national level, but the internal organization of the national-level ministry may still not be as good as it could be. A good example of this is South Africa, where the structure of decentralization, in terms of the relations between national, pro-vincial, and school levels, is well thought-through and very close to international best practice, but the internal organization struc-ture of the national Department of Education is old-fashioned and not optimally suppor-tive of the decentralized structures under it.

50

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Based on these considerations, Depdiknas is not currently optimized to support the decentralization process or a decentralized system. The following are suggestions for ways in which it could be reorganized to make it more supportive of a decentralized education system:

1. In a largely non-implementing min-istry there is no obvious need for a large Inspectorate. This is not to say internal audit functions and the audit of sub-national units in charge of projects should be neglected, but the unit performing internal and special project audit, while strong and well-staffed, need not be very large. The internal audit function should be part of the internal ministry staff function, in other words, organiza-tionally it should be placed in a manner similar to that of Korea.

2. A distinction needs to be made be-tween the “staff” working on func-tions that are internal to the ministry (generally associated with some-thing like a Secretary General), such as human resources, budget, pro-curement, on the one hand and sup-port to decentralized regions carrying out those same functions on the other.

a. The offices performing functions internal to the ministry can be fairly small.

b. The technical focus of these functions will need to change. For example, pro-curement expertise should shift from materials to tech-nical assistance and re-search and development contracts. This will also re-quire better links between technical staff and central staff. It is likely to require the retraining of some staff.

3. Units providing assistance to sub-national governments in functions such as human resources, budgeting, and procurement should be bigger

and more prominent than the units performing such functions internal to the national ministry itself and should be quite separate from them. In a sense, these units should be considered “line function” units just as important as traditional line units such as “basic” or “tertiary” or “vo-cational.” The structure of the Ko-rean ministry is a good example in this regard. At a minimum, such units should be headed by a Director General (and not the Secretary Gen-eral) such as a Director General for Policy and Planning, who would cover not only the traditional policy and planning issues but also these issues related to administrative and governance support to regions.

4. However, incentives should be cre-ated for staff working in such units to work in tandem with the internal Depdiknas staff because the latter often have practical know-how, such as how the personnel databases operate. Without such practical know-how, staff in such a Policy and Planning Directorate General will tend to be seen by their regional counterparts as “mere theoreti-cians.” Some of these key support functions would be:

a. Funding and developing fi-nancial norms, such as model funding norms for districts to fund or provision schools.

b. Developing models and tools for personnel (teacher) management.

c. Improving procurement of, for example, books.

d. Developing information systems.

e. Continuing governance and management development.

5. The Directorate General for Policy and Planning should be divided into two (or more) broad areas, to handle a) these financial, administrative, and governance support functions


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and b) the traditional curriculum, accreditation, and examination func-tions. Alternatively, there could be two Directorate Generals, one for these “systems” issues and another for the more traditional educational ones.

6. Given that the functions of Depdi-knas will be evolving towards pro-viding support and technical assistance to lower levels, most of its job descriptions will have to change. In fact, thinking in terms of describing jobs that exist to support regions in the decentralization proc-ess is a fairly good way to establish the new functions, since the new functions are not to be performed by the institution as an abstraction but by people.

The following aspects of various existing decentralized education systems around the world illustrate the suggestions listed above. There is naturally no perfect system, and all of the systems below are simply compro-mises where the solutions to certain prob-lems have created other problems.

The higher-level organization chart (as specified by decree) for Argen-tina’s national Ministry of Educa-tion, Science, and Technology does not even refer to traditional lines such as “primary” or “secondary.” It has a Sub-Secretariat for Quality, with Directorates for Information and Assessment, Equity Programs, and Curriculum and Teacher train-ing; it also has a Directorate for Technical-Administrative Assis-tance. This is the case in Korea as well. Note that in both cases the emphasis is on supporting functions and institutions, not traditional “lev-els.”In the UK’s Department for Educa-tion and Skills, there are five Direc-tors-General for Schools, Youth, Corporate Services and Develop-ment, Lifelong Learning, and Fi-

nance and Analytical Services.13

Note the focus on Schools (as insti-tutions) rather than on “education” as an abstraction, and note that only one of the DGs, if that, is focused on traditional “line” functions and the others deal with analytical and sup-port functions. This makes sense, given that the goal of the Depart-ment is “only” to: “develop and im-plement policies and programs – by setting the framework of standards, accountability, devolution, and cus-tomer choice for each phase of edu-cation.”South Africa’s Department of Edu-cation has only one Director Gen-eral and four Deputy Directors General: three for line functions (higher, general, and techni-cal/vocational) and one for policy and planning. The latter takes on tasks such as setting norms for how provinces fund their schools and providing technical assistance in the development of school-based gov-ernance and information. The pol-icy and planning “branch” works directly with the provinces when it comes to implementation but also sees the “line” branches as its clients when developing norms or policies. Traditional functions such as cur-riculum development are embedded in the line functions. Staff functions are performed within the policy and planning “branch,” but that has been an uncomfortable compromise. As noted above, this is a relatively old-fashioned approach, and while South Africa has a highly regarded system of inter-governmental rela-tions, it is not clear that the internal structure of the national Department

13 Not shown, but available at http://www.dfes.gov.uk/deptreport2002/pdf/01-Prelims.pdf.


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of Education is optimal.14

Organizational models such as those suggested here are not unique to geographically decentralized coun-tries. Korea’s education system is effective, but it is not decentralized in a geographical manner similar to those of countries discussed above. Nevertheless, Korea’s Ministry of Education is organized entirely without the traditional line functions that usually exist in an “implementation” ministry, similar to those of, say, the UK.

14 In South Africa, the Ministry as such is very small and exists only to support the Minister as a political appointee. The Department, which con-tains most of the employees, runs all of the bu-reaucratic and operational affairs and is headed by a single technical appointee on contract who answers to the Minister.

The main “line” headings in Korea’s organization are: 1) Planning and Management, 2) School Policy, 3) Human Resources Development, 4) Lifelong and Vocational Education, 5) University Affairs, 6) Local Edu-cation Services, and 7) General Af-fairs. The functions such as audit and inspection are to the side of the main headings to the main headings (they are not line functions).

Bearing all of the foregoing in mind, Figure 3 on the following page sketches a possible organizational structure for Depdiknas.

55

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Appendix 1.6. Minimum Service Standards as Management and Governance Tools

Minimum Service Standards (Standar Pelaya-nan Minimal–SPM) are potentially a useful governance and management tool. However, if misapplied, they can be a hindrance or, worse, can actually undermine decentralized governance. This Appendix tackles the issue of whether SPMs in Indonesia, as the situation currently stands, are likely to be more of a help than a hindrance.

The basic decentralization law, No. 22/1999, is silent on the issue of minimum standards. It is Government Regulation No. 25/2000 that calls for the preparation of guidelines for determin-ing SPMs that must be “implemented” by local governments. Other recent regulations, such as Government Regulation 105 of 2000, have specified that local government budgets should be performance-oriented, based on minimum standards that measure performance. Gov-ernment Regulation 108 of 2000 also calls for minimum standards in the evaluation of local government performance. In response to these various regulations, Indonesia began in 2002 to devise some SPMs with some false starts and some confusion due in no small measure to a lack of clarity in the legislation, including the definition of terminology (see Donor SPM Working Group 2002, also GTZ-Support for Decentralization Measures et. al. 2003). (This problem is compounded by the Education Law, No. 20/2003, as noted in other sections of this chapter.) However, in spite of a rocky start, the process, under a MoHA-led “model-building” exercise, had produced a set of draft minimum standards for the education sector by mid-2003 (Departemen Pendidikan Na-sional/Unit Fasilitasi Desentralisasi Pendidi-kan, 2003).

In gauging the likely impact of minimum stan-dards on decentralized governance, it is impor-tant to note that there is no accepted body of theory or practice that can be used as a solid basis for guidance (see Ferrazzi, 2002). How-ever, minimum standards can also be ap-proached from the point of view of more generally accepted practical and theoretical notions of decentralization and intergovern-mental public finance (see Smoke, 2002 and, for interesting similarities to a very different

sector with salutary lessons for education, see Baker and Trémolet, 2002). It also makes sense to anchor the discussion of SPMs in the specific context of the overall process of de-centralization in Indonesia. If one then adds what little international evidence does exist, one has some basis for judging the current state of affairs with regard to education SPMs in Indonesia according to the following crite-ria:

Numbers: Are there too many or too few? Are the numbers, by sub-issue or sub-function, appropriate to the im-portance of the issue or sub-function? Type: True service standard or aggre-gate indicator? Motivation and use: Vertical reporting or horizontal reporting? Accountabil-ity to citizens or to politicians and bu-reaucratic management? Technical quality: Are the SPMs well-specified and measurable? Level to be reached: Are the levels of the indicators to be reached too high or too low? Level at which measured: Are the dis-trict-level indicators based on school-level or unit-level indicators? Are they measurable as a by-product of unit-level managerial needs?

Before applying these criteria to the draft edu-cation SPMs in Indonesia, it is useful to ex-pand a little on these concepts, based on decentralization and public finance theory and practice and on what little international evi-dence does exist. Thus, in each case below, we discuss first a little of the “theory” and then apply the “theory” to the Indonesian education case.

Numbers Certainly, it is better to have few standards than to have none. The usual reason given for the desirability of standards is circular: stan-dards are assumed to be self-evidently good because no one would argue for things to be sub-standard. But the more fundamental rea-son for having standards is that they lower the


57

transaction costs involved when social or eco-nomic agents hold each other accountable. Thus, the criterion by which to judge whether an appropriate number of standards is being used is whether the number of standards really helps agents to hold each other accountable, whether standards are in fact lowering transac-tion costs or increasing them, or whether the transaction costs they avoid are worth the cost entailed in tracking the standards. Further-more, clearly those sectors where policymak-ers believe that accountability is most important (perhaps because they require a higher proportion of the national budget) should have more standards. Having too many standards can actually reduce accountability if the number gets to the point where it is unreal-istic to expect so many to be monitored. Worse, a proliferation of standards, especially if they are set too high or if their numbers are out of proportion to the intrinsic importance of the area in question, can be a signal that spe-cial interest groups are trying to capture budg-etary resources, by mandating, say, that schools or districts must have teachers teach-ing in specialized areas. Finally, the appropri-ate number of standards will also depend on the type of standards in question. (See below for a discussion of types.) If the standards be-ing set are of the consumer-satisfaction or citi-zen-rights type, it is likely that the optimal number may be fairly high. If standards are for purposes of bureaucratic or political ac-countability and diagnosis, the optimal number is likely to be much smaller.

One reason to prefer more, rather than fewer, indicators, is that having a clear set of indica-tors allows local governments to stick to their core mission. If DPRD members are seen as venal or not very capable and local citizens are prey to populist illusions such as “fiscal illu-sion” (the belief that resources that come from a central level are “free”—see Dollery and Wallis 2001), they can easily fall prey to spe-cial interests who try to force local govern-ments to compete with each other in providing non-essential services. By the logic of collec-tive action, it is naturally the less “general” in-terests that are able to steer public funding towards their favorite cause. Hence, it is pos-sible that special interests could start races be-tween local governments in providing services or sub-services that are of more special interest such as sports or music, drawing managers’ at-

tention away from the more central and gen-eral interests, such as basic general education, that have less organized defenders. Setting minimum standards and obligatory functions and maintaining a strong central role in poli-cymaking can prevent this sort of “whip-sawing” of local governments.15 However, as will be seen below (where undue attention is sometimes given to sports education or to teachers in general), at the moment the central government in Indonesia seems more likely to abet special interests than to control them.

In Indonesia, as the draft minimum standards document currently stands, it appears that there are simply too many standards, or, indi-cators, and that they are grossly out of propor-tion to the importance of the areas in question. The draft contains 197 indicators, all with ap-parently equal priority. True, many of them are repetitive, since, for example, the draft re-quires that data on enrollment rates be col-lected at the primary, junior secondary, and senior secondary levels. Nonetheless, to ex-pect managers to agree to be held accountable for 197 indicators, without any real sense of prioritization among them, seems either naïve or cynical. Few competent managers would agree to be truly held politically accountable for that many indicators. Furthermore, the numbers are out of all proportion to their in-trinsic importance. While there are only 18 indicators related to primary schooling, there are 22 indicators related to sports education, and while there is an indicator that induces better reporting of sports statistics, there is no similar indicator inducing the reporting of educational statistics. This is not necessarily to suggest that the latter should be added; it is more to suggest that the former is excessive.

The clear impression is that tracking this many indicators will increase rather than lower the

15 “Whip-sawing” is a style of collective bargaining in which a powerful union negotiates with more than one employer, pitting one employer against another and forcing each employer in turn to meet or exceed the agreement that the union previously made with a different employer. The same applies to special interests pitting local governments against each other and to any sort of negotiation in general. A whip-saw is a saw operated by two people, where the cutting requires a back-and-forth motion.


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transaction costs related to accountability and runs the risk of skewing accountability by forcing managers and governors to concentrate equally on essential and non-essential items. Both the absolute numbers of indicators and proportionality between them needs to be seri-ously revisited.

Type, Motivation, and Use Across the world, the overwhelming majority of “minimum service standards” are con-sumer-level or citizen-level standards of direct service delivery. Some examples of these in-clude citizens being notified more than 24 hours in advance of any planned interruption in service or specifying that parents will be in-formed of their children’s end-of-year test scores within four weeks or that a local educa-tion office will respond to any query from a school within forty-eight hours or that parents have a right to know the average test scores of all the schools in the district. These standards can be set irrespective of political ideology or whether one regards the subject of service as a “client” or “consumer” in a “marketized” ap-proach or as a “citizen” with rights in a “hu-man-rights” approach. Thus, institutions advocating quality improvements from a rights-oriented viewpoint emphasize the indi-vidual-level service standards (see Theis, 2003) as much as traditional corporatist insti-tutions. (For a discussion of the changes in perspective and ideology involved in the “Charterist” or MSP approach in the UK, which applies fairly generally, see Falconer, no date, or Wallis and Dollery, 2002.)

If not at the level of direct service provision, indicators should at least refer as much as pos-sible to outputs of the system rather than in-puts. In cases like governance, where process is in effect the output, it is vital to have proc-ess indicators, such as ensuring that govern-ance bodies (such as School Committees) are working to norm, e.g., have the right number of parents as opposed to teachers, and have followed proper nomination procedures to elect the members.

At present, the draft Indonesian SPMs are de-signed to make schools and districts account-able to the central education ministry rather than to clients or citizens. They are very often input-oriented and tend to cover such aggre-

gated data as the gross or net enrollment ratios that risk being too general to be useful at the local level. Of the indicators that we re-viewed, only one or two would be of any in-terest to a particular parent, such as the proportion of students who pass a given exam. Few parents are likely to care whether the gross enrollment rate is 70 percent or 90 per-cent as long as his or her child is enrolled in school. Nor do the SPMs focus on workers within the system and the accountability of system units to each other. Similarly, they do not contain any service indicators such as the time it would take the Dinas Pendidikan to ful-fill a school’s book order or how long it would take to register a teacher’s promotion and no-tify the payroll system, and for the teacher’s promotion to be reflected in his or her pay. The whole ethos of providing parent-oriented service indicators or indicators of mutual ac-countability is absent from Indonesia’s current draft SPMs.

As noted above, when indicators focus on di-rect service provision, it may optimal to have rather more indicators than when indicators are used for upward accountability or horizontal but political accountability. The reason for this is because each individual client is likely to want to hold service providers accountable ac-cording to the indicator that interests him or her and because indicators bearing on direct service delivery are likely to be more immedi-ate to the actual process and characteristics of service delivery and to the everyday tasks of the service delivery agents. Furthermore, in-dividual clients are less likely than system managers to act as interest groups engaged in rent-seeking; their actions are more likely to be consistent with actual welfare. Thus, if in-dicators are oriented towards making service providers accountable to clients, then there is likely to be little loss of focus from having a few more indicators.

One suggestion would be for Indonesia to con-sider replacing many of its current aggregate, top-down indicators, with citizen-level and unit-level indicators that will enable both hori-zontal and reverse accountability. (Reverse ac-countability means, for example, Dinas Pendidikan being accountable to schools for book delivery, not just schools being account-able to the Dinas Pendidikan for the quality of their education services.) Furthermore, the


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overall number of indicators should be re-duced and those that remain should mostly be indicators of output rather than inputs.

Technical Quality To be useful, it is self-evident that SPMs have to be measurable. Yet, according to the cur-rent draft of the education minimum standards, a minority (but a fairly large minority) of the Indonesian indicators are not measurable or are specified too poorly to be measurable. For example:

There are indicators that specify that systems will exist to allow teachers access to certain levels of training, and the indicator is set at, say, 50 percent, without specifying whether this means that the systems should be 50 percent operational, whether 50 percent of dis-tricts should have operational systems, or whether the systems should reach 50 percent of the teachers.

Similarly, there are indicators for such vague things as the percentage of youths taking part in training that im-proves their character and attitude, without specifying how one might measure whether a program helps im-prove attitude or character, or whether in fact the students’ character and atti-tude have in fact been improved. The issue of self-selection (youths of fairly good character are more likely to join such programs) needs to be taken into account. In principle, one could cer-tify certain courses as being “charac-ter-improving” and then count those, but this would require the onerous task of certifying just about every course of any kind available to students and still avoids the fundamental measurement issue.

On a more important point that refers to basic educational delivery, there is an attempt to measure “teachers’ readiness to teach,” and a standard is set at 90 percent. But the indicator re-fers to a number of extremely complex variables for which there is little em-pirical evidence about their effective-ness in measuring actual readiness to

teach and which are not weighted in any way.

Many districts in Indonesia are quite small. Measurement of such key vari-ables as dropping out or moving up to a higher education level will therefore generally be extremely unreliable. In small and generally under-supplied districts, transition rates will probably appear to be very low. In large, well-supplied districts that are situated next to smaller and less well-supplied ones, the transition rate to higher levels of education (junior or senior secondary) appear to be higher than 100 percent because children are migrating, either on a day-to-day basis, or sent to live with relatives, to take advantage of educational opportunities. This will make indicators such as dropping out and transition rates extremely difficult to measure—in fact impossible, in practice.

It does not do any good to wish these matters away: they are fundamental measurement problems, and attempting to measure the un-measurable creates, rather than reduces, social and bureaucratic tension, and makes citizens lose respect for the state. In short, there are quite a few indicators in the draft document that have simply not been well designed.

In the case of some of the indicators, even though measurement is possible in theory, in practice it will turn out to be very difficult be-cause there are no actual delivery units on whom it makes administrative sense to gather the data. One example would be the proposal to track the number of youths participating in an economically meaningful activity. (See be-low on the importance of data being a by-product of administrative practice.) It would be possible in principle to use random sample surveys to measure this indicator, but note that random sample surveys are no good for track-ing the data needed for accountability except at the very highest and most aggregated level. This is a much more serious problem than the problem of the theoretical inadequacy of the indicator.


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Level at which Indicators are Set, Level to be Reached In a competitive market or in a democracy, government (in the case of markets) or higher-level governments (in the case of governance) need not in principle set the levels of any per-formance standards. The role of the govern-ment, for example, should be limited to establishing the whole system of weights and measures as a standard and ensuring that all merchants sell in kilograms rather than some in kilograms and others in pounds and others in bushels (thus creating transparency for con-sumers). However, the government should not tell merchants how much to sell or at what price. Similarly, in a competitive political en-vironment where local bureaucrats and politi-cians have to compete for votes and taxes, higher levels of government should ensure that lower levels of government can be judged against a common set of standards but need not necessarily set a level for those standards. In either case, competition and emulation will set the optimum level at which transactions take place, in other words, the level that con-sumers want and at which producers can af-ford to produce. This will vary from place to place and from person to person because eve-ryone and every local government has differ-ent needs and different capacities. Setting a fixed level is by definition sub-optimal, unless every citizen has exactly identical preferences and every firm and local government has ex-actly identical technology, natural resources, and capital, which is never the case.

In situations of monopoly, however, the gov-ernment does set the actual level of expected service provision, as is the case in the devel-opment of service standards for either public or private public utilities that are “natural” monopolies. These standards are, or should be, contained in the licensing of new utilities, such as cell phone or cable television licenses. Similarly, in situations where local govern-ments affect each other in non-measurable ways (“externalities,” as in the case where citi-zens with secondary education are likely to migrate from the areas where they were edu-cated, thus benefiting the receiving areas with services they did not pay for) it makes sense for government to mandate certain levels of provision that assure the national interest—otherwise the local area has a disincentive to

invest. Finally, in situations where horizontal accountability mechanisms (accountability of local government to DPRD or citizens, for ex-ample) are still weak, it is justified for higher-level government to set levels of key indica-tors, not just the indicator framework as such.

But the cases where specific levels are stated, in Indonesia, are excessive, as they go beyond the above-stated justifications. Even if, as appears to be the case, the policy is that the in-dicators can be reached at different speeds by different governments, having the same termi-nal point still does not make sense, in many of the indicators. For example, it is not clear why every local government should value sports the same (and it is difficult to argue that sports represent a serious externality) or why the fight against HIV/AIDS or drug abuse should be fought at exactly the same level of intensity in every district, when it is well-known that both HIV/AIDS and drug abuse tend to happen in geographical clusters. Yet the SPMs are ex-tremely detailed regarding sports indicators (for example, something to the effect that 15 percent of athletes in every location should be winning or should be competing at the highest organized level!), yet totally silent on many other areas of education for life, such as art or music. Perhaps some local governments would rather have less sports education and, say, more gamelan education. Yet music or arts education is not at all covered. This is not to say that arts and music education should be covered; it is to say that the current coverage of areas such as sport is extremely excessive. And, this is only one example—there are quite a few other such cases. One could argue that this imbalance already represents a “capture” of local government by special interests, though in this case with the connivance of cen-tral government. It is clear that this is not likely to be the intent, but it is nonetheless the practical effect—hardly an optimal role for central government to be playing.

The level (and the numbers) at which the indi-cators are set might also “set up” local gov-ernment for failure, which would be an excuse for the central level to “re-centralize.” Few central organizations give up the privileges of centralization willingly, so it is logical that they would try to reassert control, and one way to do so is to set the goals very high so that lo-cal governments fail. Even if the motivation


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were not so undesirable, a moment’s reflection will suggest that the national government ap-pears to want to hold local governments ac-countable with a degree of specificity and at a level that it did not hold itself effectively ac-countable to citizens during the period of cen-tralization. The fact that the standards suddenly appear higher when it is someone else (local governments) that is being held ac-countable should be cause of some concern re-garding the sincerity of motivation in the SPMs, and is likely to be noted by local au-thorities as a questionable intention on the part of central government.

Finally, it should be noted that, with only one exception to our knowledge (Lewis, 2003), no one is estimating the costs of the levels at which the indicators are being set. It is not just a matter of financial cost—that is the easy part. In many cases, the financial cost is lower than the opportunity cost of scarce manage-ment talent, because the rationing of labor and the allocation of labor to tasks, and in particu-lar scarce high-level management talent, in the public service is not very efficient and the hu-man resource implications of meeting the lev-els of the various indicators are not being calculated either. This suggests that much more emphasis should be put on using the in-dicators as a framework of accountability in which the level is not determined by fiat but is determined through emulation and competi-tion, for example through the issuance by cen-tral government of comparative score-cards on service performance of local governments.

Level at which Measured Indicators and minimum standards should lower the transaction costs involved in agents’ holding each other accountable, but they should do so without imposing complex bu-reaucratic requirements and measurement cost. One way to do so is to make sure that the indi-cators are measured as much as possible as the by-product of administrative systems that as-sist the actual delivery units (such as schools) in the delivery process. Clearly, indicators that are aimed at ensuring the quality of direct service delivery to the client will accomplish this more or less automatically (which is an-other advantage of such indicators), but that is only one way. In general, the indicators should be measurable as much as possible ad-

ministratively within the delivery units them-selves, and, furthermore, the administrative recording should be such that it directly helps the unit itself do a better job of delivering its services.

One solution that has been proposed to the problem of under-reporting by schools is that schools be supplied with the data that are compiled by the central Education Manage-ment Information System (EMIS), so that they see what is done with the data. But this is not likely to be very motivating, except initially, as a novelty. Another idea that is similarly unlikely to be effective is the idea that schools supply the EMIS with data and that the EMIS somehow makes the information available back to the school for management purposes as a way of creating an incentive for them to continue collecting and reporting data. This is also likely an unworkable proposition, as any data useful for management will be out-of-date by the time it makes the round trip from the school to the EMIS and back to the school. In the end, the most effective means of ensuring adequate reporting from schools and districts is a combination of a) data reporting as a by-product of routine administrative recording by the delivery units and b) sheer bureaucratic pressure from the center within a strengthened administrative system. On the first score, the idea is to make sure schools are directly ac-countable for certain services and feel pressure to be so accountable, to make sure that they understand what data helps them discharge that accountability well, and to make sure that the system for reporting data towards higher levels of government mostly use the same data as are needed at the local level, and which are therefore reported as a by-product of good administrative practice at the school level.

In Indonesia’s draft education SPMs, some of the indicators are indeed a byproduct of good administrative practice. The gross and net en-rollment indicators, for example, are the result of data that good schools should keep and use in management in any case, such as records of student numbers by grade and age (as well as by gender). However, a few are difficult to track because there are no units that currently provide the services being tracked and in whose interest it is to track the variable in question. For example, there is an indicator that refers to activities aimed at increasing


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awareness of the value of education. That is a fine sentiment and lofty goal, but the indicator is set at 80 percent, without specifying what this means. It is not clear what the numerator and denominator should be, nor in whose in-terest it is to track this, nor what classifies as such an activity.

ConclusionIn summary, the education SPM exercise may be a good beginning. However, before these indicators can be activated, very serious work should be done to:

radically shorten the list of indicators. reduce the number of the input indica-tors in particular. not set actual levels for many indica-tors and instead use score-cards and other means of stimulating informed competition so as to allow “natural” levels to be found. keep levels as quantitative goals in a few key output indicators. think through the technical problems and costs of gathering the indicators, including their definition, ways to measure them, and whether local de-

livery units already exist that have an interest in measuring these indicators for their own administrative purposes (if they are well-managed). set more indicators as direct service delivery indicators, both for service delivery to parents and students and service delivery from unit to unit, and set much fewer indicators of upward bureaucratic or political accountabil-ity.limit the use of indicators that are not measurable as an essential element of the administrative capacity of service delivery units.

If this is not done, the indicators are likely to add more to transaction costs than they will save in transaction costs, and on top of that, they are likely to increase measurement and bureaucratic costs. In that case, the natural re-action of local government and delivery units will likely be to ignore the indicators, even if they initially agreed to collect them. This will tend to make enforcement costs very high, and cause the effort to wither.

References For Appendix 1.6

Baker, B. and S. Trémolet. 2000. “Regulation of Quality of Infrastructure Services in Devel-oping Countries.” NERA. Paper given at the conference on Infrastructure for Development: Private Solutions for the Poor, London, UK, 31 May – 2 June. Word processed.

Departemen Pendidikan Nasional/Unit Fasili-tasi Desentralisasi Pendidikan. 2003. “Kewe-nangan Wajib Dan Standar Pelayanan Minimal Bidang Pendidikan, Pemuda dan Olahraga.” Jakarta: Word processed.

Dollery, B. and J. Wallis. 2001. “A Taxo-nomic Analysis of Government Failure in Lo-cal Government.” School of Economics, University of New England, Armidale, Austra-lia. Working Paper Series in Economics No. 2001-7. Word processed.

Donor SPM Working Group. 2002. “Local Government Obligatory Functions and Mini-

mum Service Standards: A Proposal for Con-ceptual Development and Implementation,” Jakarta: Word processed.

Falconer, P. No date. “Public Administration and the New Public Management: Lessons from the UK Experience.” Department of Law and Public Administration, Glasgow Caledo-nian University, Glasgow, Scotland, UK: Word processed.

Ferrazzi, G. 2002. “Obligatory Functions and Minimum Service Standards: A Preliminary Review of the Indonesian Approach,” GTZ-SfDM, Jakarta: Word processed.

GTZ-Support for Decentralization Measures, USAID-Perform, USAID-MSH, ADB-Basic Education, The World Bank-WBDTFID. 2003. “Draft Laporan Sintesa – Kegiatan Model Building Kewenangan Wajib Dan


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Standar Pelayanan” Minimal, Jakarta: Word processed.

Lewis, B. 2003. “Minimum Local Public Service Delivery Standards in Indonesia: Fiscal Implications and Affordability Con-cerns.” Draft version. Research Triangle In-stitute International, Research Triangle Park, North Carolina, USA: Word processed.

Smoke, P. 2002. “Expenditure Assignment under Indonesia’s Emerging Decentralization: A Review of Progress and Issues for the Fu-ture.” Prepared for conference on “Can De-centralization Help Rebuild Indonesia?” Andrew Young School of Policy Studies, Georgia State University, Atlanta, Georgia, USA. May 1-3. Word processed.

Theis, J. 2003. “Rights-based Monitoring and Evaluation.” Save the Children: Word proc-essed.

Wallis, J. and B. Dollery. 2002. “Styles of Policy Leadership and Local Government Re-form.” University of Otago Economics Dis-cussion Papers No. 0206. Dunedin, New Zealand.


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Chapter 2: Financing Education under Decentralization

Indonesia’s decentralization laws have not only profoundly changed the distribution of authority and responsibilities among different levels of governments but also how fiscal re-sources are generated and who controls them. The old transfer system, which was character-ized chiefly by earmarked grants from the cen-tral government budget to provincial and district governments, has been replaced by one that consists largely of general grants from the central government budget to local govern-ments with expanded revenue sharing. Unlike earmarked grants that have to be spent for specified purposes, how the general grants are used is left up to the discretion of the recipient government. Also, the laws now allow re-gional—that is, provincial and district—governments to retain an increasing share of the revenues generated from local economic activity and natural resources. By the time de-centralization has been fully implemented, to-tal regional government expenditures are expected to account for about 10 percent of GDP or more than 40 percent of total govern-ment spending (Hofman, Kaiser, and Goga 2003).

This fiscal and financial restructuring is likely to affect how much public money will be spent on education and also how efficiently those re-sources will be spent, although many of the specifics of these fiscal structures have yet to be defined or clarified. This chapter discusses the implications of these new financial ar-rangements and identifies important issues that should be addressed by policymakers. The chapter begins by briefly contrasting the old and new fiscal structures and the old and new relationships between the central government and the regional governments, and then goes on to discuss the likely consequences of these changes for the financing of education. Be-cause financing education involves not only increasing the amount of resources available but also improving how those resources are spent, the discussion covers both efficiency and equity concerns. One important issue is what happens within districts and within schools. If regional governments fail to allo-cate adequate resources to schools or if those resources somehow do not reach schools and

classrooms, then education outcomes will de-teriorate under the new regime. Finally, the chapter offers policy options for improving al-location mechanisms at all levels of govern-ment, for aligning resources and financial management with the goals of the Indonesian education sector, and for ensuring that schools receive adequate resources.

New Fiscal Structures under Decentralization Prior to decentralization, the national govern-ment transferred public funds to the regional governments through the Autonomous Gov-ernment Subsidy (Subsidi Daerah Otonom or SDO) and through Presidential Instruction grants (Instruksi Presiden or INPRES). For more than 30 years before 2001, the SDO was the basic grant mechanism for recurrent ex-penditures, while general- and special-purpose INPRES transfers were the vehicle for devel-opment grants. The SDO financed almost the whole bill for the salaries and allowances of civil servants in regional governments, includ-ing the pay of primary school teachers. It also covered routine expenditures such as those to fund the operation and maintenance of school buildings and administrative expenditures. Meanwhile, INPRES grants, which began as a simple block grant mechanism in the late 1960s, evolved into a diverse array of grants with at least 15 different specific-purpose transfers, including those for primary schools, primary health care, roads, and agricultural ex-tension among others (Silver, Azis, and Schroeder, 2001 and Lewis, 2002). A lot of the progress made in human development in the regions has been attributed to the INPRES grants,16 but this mechanism is said to have been characterized also by excessive central control, a lack of transparency in its allocation procedures, and a lack of regional autonomy.

16 Duflo (2001) estimates that the INPRES program raised the probability that a child would complete primary school by 12 percent, and thus increased the average years of schooling by 0.25 to 0.40 year for the cohort of children during the period 1974-78.


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Under decentralization, resource transfer ar-rangements have changed. The new transfer system is a combination of two grant chan-nels—the General Purpose Fund (Dana Alo-kasi Umum or DAU) and the Specific Purpose Fund (Dana Alokasi Khusus or DAK)—and shared revenues from natural resources (Sum-ber Daya Alam or SDA) (Figure 2.1).17 Prov-inces receive 10 percent of the total amount of DAU transfers, while district governments re-ceive 90 percent (Hofman, Kaiser, and Goga, 2002). In addition to these grant mechanisms, the central government is able to expand the resources available in the regions directly by channeling funds from its own national budget (anggaran pendapatan dan belanja nasionalor APBN) to public schools (through the MoNE) and to madrasahs (through the MoRA). The regional governments’ routine or recurrent budgets (Daftar Isian Kegiatan or DIK) pay for civil service expenditures, recur-rent materials and the cost of goods, and sub-sidies (such as for fuel and electricity) in schools, while their development budgets (Daftar Isian Projek or DIP) are spent on capi-tal projects such as school construction.

17 By law, the annual DAU allocation is a minimum of 25 percent of the central government’s total do-mestic revenues minus any revenues shared with regional governments.

DAU Allocations In FY2002, DAU grants from the central gov-ernment accounted, on average, for more than 70 percent of the revenues of provincial and district governments. In principle, these grants are allocated according to a formula that takes into account differences in local needs and in local means. In practice, however, the for-mula-based part of the grant is only a fraction of it. The formula continues to evolve, but in 2002 the total allocation to each provincial or district government comprised three parts, namely, a lump sum amount, a fiscal gap amount, and a balancing factor amount (Silver, Azis, and Schroeder, 2001; Lewis, 2002; and Brodjonegoro and Martinez-Vazquez, 2002).

In 2002, the lump sum component for any par-ticular district was 10 percent of the total DAU amount divided by the total number of dis-tricts. The fiscal gap component was allocated to each district based on the size of the dis-trict’s fiscal gap relative to the country’s total fiscal gap, with the fiscal gap being defined as the difference between estimated expenditure needs and fiscal capacity. This component was designed to take the expenditure needs of each district into account when determining the level of its transfer. This formula for the fiscal gap component, which was based on ac-tual expenditure amounts in the previous year as given by the total regional government budget (anggaran pendapatan dan belanja

Figure 2.1 Post-Decentralization Financial Structure

CentralGovernment

Provincialgovernment

District Government

Religious SchoolsPublic Schools

Ministry of Religious

Affairs

Ministry of National

EducationGeneral Flows

Earmarked Flows

DAK

DAU/Shared Revenues

APBN APBN

APBD

DinasEducation Spending

DinasEducation Spending

ABPD

Source: Hoffman, Kaiser and Goga, 2003.

Chapter 2 Financing Education under Decentralization

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daerah or APBD) and an allocation factor, has been criticized for being mechanistic rather than based on the real expenditure needs of re-gional governments.18

The third component, the balancing factor or “hold harmless” factor, was meant to ensure that no district would receive less than it had received the previous year. In FY2001, this amounted to 50 percent of the total DAU allo-cation, and the amount going to each district was a function of the district’s share of the to-tal civil service wage bill for the country. It was supposed to cover the costs incurred by districts in taking on the additional responsibility for paying civil servants as a result of decentralization. In FY2002, this component funded 77 percent of each district’s wage bill on average.

The provincial DAU allocations were derived using a formula similar to the one used for the districts, except that the lump sum and balanc-ing factor components were based on 20 and 30 percent respectively of the total provincial DAU budget (Lewis, 2002). In FY2002, each province received a lump sum allocation of Rp 46.8 billion and funding for 31 percent of their

18 Since about 70 percent of regional expenditures are fi-nanced through intergovernmental transfers, it makes sense to examine the formula according to which these transfers are allocated. The allocation criterion is an ex-penditure needs index for each district that is based on four characteristics of the district – population, area, poverty, and a cost index (Lewis, 2002). The 2002 for-mula for expenditure needs was: EN = APBD [0.4 RPop + 0.1 RArea + 0.1 RPovGap + 0.4 Rcost ], where Rpop, Rarea, RpovGap, and Rcost represent the ratios of a district’s population, land area, poverty gap, and cost index to the total values for the country. These factors were specified in Law 25/99; in 2001, they were given equal weight. Local fiscal capacity is defined as the sum of potential own-source revenues and shared revenues from property taxes, personal income taxes, and natural resource taxes. Of the four factors in the formula, popu-lation size and poverty together measure the potential demands on the public education system. This formula-based allocation is similar to those used in several other countries (Bird and Smart, 2002). For example, Japan, Brazil, Nigeria, and Austria use similar systems in which local governments receive a fixed share of national taxes, and the resulting total is then distributed according to a formula that takes into account such factors as population and community size. In the Philippines, most funds transferred to local governments come from a pre-determined share of national taxes and are allocated ac-cording to population, area, and an equalizing factor.

civil service wage bill. The fiscal gap ac-counted for 50 percent rather than the 40 per-cent that was the case with the allocation to districts.

DAK Allocation The DAK is a special-purpose transfer that is supposed to finance capital expenditures that cannot be predicted or accommodated using the common allocation formula as well as those that are national commitments or priori-ties. By law, this grant cannot be used for ad-ministrative costs or for the training and travel of staff and other such costs. It has two com-ponents: one is based on national reforestation measures, which stipulate that 40 percent of state reforestation levies on forestry companies should be returned to the district of origin for exclusive use in reforestation activities; and a second is the “real” special-purpose grant for financing national priority infrastructure in-vestments that are outside the scope of DAU funding. The latter, designed as a matching grant, requires that a region’s contribution to a project be at least 10 percent of total project expenditures and is designed to provide dis-tricts with incentives to build infrastructure that meets national standards. In the past two years, the DAK allocation has remained mini-mal compared with the DAU allocation. However, the central government has reiter-ated its intention to use targeted DAK grants to districts as a mechanism for ensuring equal-ity among them and transparency in their op-erations (DSEF, 2002). This grant mechanism continued to evolve in 2003.

Raising Own Revenues In Indonesia, Law 34/2000 has given taxing authority to district governments. Districts, but not provinces, are now allowed to generate their own taxes through local by-laws under the condition that the taxes should be author-ized by the national government and that they should be consistent with the principles men-tioned in Law 34/2000.19 Since being given

19 This is not a new phenomenon, however. Law 18/1997, the previous law on local taxes and levies, was intended to stop the practice that then pre-vailed in local government of creating a plethora of local government taxes. Many of these taxes had little revenue potential but imposed high costs on


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this authority, district governments have been creating new taxes aggressively (Lewis, 2002).20 The reality, however, is that district governments have limited capacity to raise taxes from their own resources such as land, buildings, and natural resources, which consti-tute only about 5 percent of their revenues. Provincial governments have a larger own-resource base but must share this with district governments. Moreover, there are large ine-qualities in the revenue bases of the different provinces and of the different districts. For ex-ample, the per capita non-oil and gas GDP of the richest province, Jakarta, is almost nine times larger than that of the poorest province, East Nusa Tenggara (Akita and Alisjahbana, 2002). The DAU allocation formula includes a poverty measure and thus provides a means of targeting those districts that are most in need and for equalizing the potential resources that are available to districts.

A final point on local financial resources is that district governments are allowed to bor-row, although their borrowing is limited by a formula that restricts the extent to which they can go into debt, that requires approval by the MOF in the case of foreign loans, and that cannot be guaranteed by the central govern-ment. Law 25/1999 also restricts these gov-ernments to borrowing only for projects that will generate a financial return, but this clause has been loosened up by the implementing regulations, which explain that this financial return can either be direct or indirect. At the national level, about half of the development budget continues to be financed by donor pro-ject loans, and the national government cur-rently bears the debt servicing burden on these expenditures (Hofman, Kadjatmiko, and Kai-ser, 2002). However, as district governments the taxpayer and the economy. Law 18 restricted regional taxes to a specified list and made any addi-tional taxes conditional upon the approval of the Ministry of Home Affairs with advice from the Ministry of Finance. 20 Property taxes are administered and collected mainly by the national government, although re-gional governments assist with tax collection in ru-ral and urban sectors. Until recently, the national government retained 10 percent of total tax reve-nues for its own use, 9 percent was provided to lo-cal tax offices to assist with collection, 16 percent to provincial governments, and 65 percent to local governments. (Lewis, 2002).

increasingly exercise their right to borrow, it will soon be necessary to improve the frame-work of grants and on-lending mechanisms for the regions.

In the future, provincial and district govern-ments will be increasingly expected to mobi-lize their own resources in addition to their transfers from central government in order to finance their expanded responsibilities.21 This may make public spending more efficient. When people have to spend some of their own money on providing services, they are more likely to want to see the whole allocation spent wisely and frugally. Also, local governments may be able to spend money more effectively than the national government because they have more access to critical information about local needs, inputs, and providers and because they can (and are more motivated to) closely monitor service provision.

Several questions arise with respect to the im-pact of the new fiscal structures on education. Will the district governments’ expanded re-sponsibility for education increase or decrease the amount of resources available for educa-tion? Will the current transfer formula make regions more or less equal in terms of their ability to meet national standards of provision? Are district governments allocating sufficientresources to schools? The next section takes a macro view of these questions.

Public Spending for Education at the National and Local Levels One commonly used method for assessing the level of government spending is to compare numbers across different countries. Based on 1998-2000 data from several countries, Indo-nesia ranked second lowest among its Asian neighbors in terms of its share of education expenditures in GDP (Table 2.1) with only

21 With the transfer of authority and management to regional governments in Indonesia, “it is hoped that the local governments are capable of obtaining more funds in their regions and in managing them more efficiently and effectively. It is expected that the local governments are able to use or exploit the sources of funds in the regions, such as the private sector and other education stakeholders, in funding education” (National Committee for Education, Sub-Committee III, 2001).


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China ranking lower; however, Indonesia was well behind China in regard to per student primary expenditures as a percentage of GDP and education expenditure as a percent of total public spending. Indonesia’s education spend-ing was 2.8 percent of GDP, as compared with 4.7 percent for Thailand and 4.6 percent for Malaysia. As a share of total government spending, Indonesia’s education spending was slightly higher than Vietnam’s 7.4 percent but was far lower than Thailand’s 20 percent. Perhaps because Indonesia maintained its fo-cus on getting more children in primary schools and perhaps because the cost of inputs was relatively low, it was able to raise enroll-ment rates with relatively meager resources.

In FY2001, total government (actual) expendi-ture for education was Rp 41 trillion, of which about one-half was part of the APBD alloca-tion. In FY2002, the APBD expenditures in-creased to Rp 25.5 trillion. In FY2003, total government expenditure was expected to reach Rp 370 trillion, of which nearly Rp 77 trillion will make up the DAU transfer to regions and less than Rp 3 trillion will make up the DAK transfer. The total government budget repre-sents a 13-percent increase over actual expen-ditures in FY2002, and total transfers to regions have increased by 14 percent. If edu-cation expenditures increased by as much, then districts’ spending for education have reached about Rp 50 trillion in FY2003, with about Rp 30 trillion coming from the APBD.

Estimates of the level of transfers that were made to district governments in 2002 suggest that, on average, districts have more resources at their disposal than in the past, and the recent trend in education spending suggests that dis-tricts are spending more of those resources on education. Important questions are whether these higher educational budgets are sustain-able in the future and also whether they are adequate for meeting the current responsibili-ties of districts for delivering services.

The block grant system, which gives district decisionmakers latitude to pursue their local goals with funds that are not restricted to one particular use, offers no guarantees. Local decisionmakers may choose to spend most of their transfers and own revenues on those budget items that are likely to have a quicker and more stimulating effect on the local econ-omy than on education. Indeed, this desire of local politicians to obtain quick returns for public spending, coupled with the inability of districts, being limited labor markets, to cap-ture fully the human capital benefits of educat-ing their children, may make investing in educational development unappealing to them. On the other hand, local leaders may be driven to invest in education by the desire of local voters for more and better schools or by the fact that schools provide local employment or that schools can be a source of prestige for the community and its leaders. In a decentralized setting, the outcome of these factors is uncer-tain, since the allocation is the result of a mix-ture of allocation formulae and procedures

Table 2.1 Public expenditures for education: How does Indonesia compare with other Asian countries?

Education expenditures as percent of GDP [a]

Per student primary ex-penditures as a percent of GDP per capita [b]

Percent of education expenditures in total public spending [c]

China 2.2 6.58 13.0 Indonesia 2.8 4.21 9.6 Vietnam 2.8 7.26 7.4 India 4.1 12.72 13.7 Singapore 3.1 7.00 23.4 Philippines 3.5 12.69 20.6 Japan 3.5 21.41 10.5 South Korea 4.1 12.30 17.5 Thailand 5.4 17.21 20.1 Malaysia 6.2 12.88 25.2 Notes: [a] From EdStats (http://www1.worldbank.org/education/edstats), World Bank; data from 2000 or latest two years, ex-cept for China, 1998, Vietnam, 1997 and Singapore, 1995; data are originally from UNESCO; [b] From EdStats and World Development Indicators, World Bank; data pertain mostly to 2000, except for China, 1998 and Vietnam, 1996, Singapore and Korea, 1997, or latest two years; [c] From EdStats; and UNESCO, 2000.


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and, in very large part, on the willingness of the regions to invest in education.

Recent legislation attempts to secure a greater slice of the country’s revenue pie for educa-tion. Education Law 20/2003 stipulates that a minimum of 20 percent of the central APBN budget, exclusive of salary costs, and 20 per-cent of the districts’ APBD budgets, also ex-clusive of salaries, must be allocated to education. Including salaries, districts now spend on average about 40 percent of their APBD budgets on education. Excluding sala-ries, they spend less than 10 percent (assuming that salaries are a modest 80 percent of educa-tion spending out of APBD resources) or less than one-half of what is stipulated in the Edu-cation Law. To double the share of education spending in APBD net salaries, districts will need to make significant reductions in the shares of other sectors, which may or may not be politically possible.

Earmarking 20 percent of the APBN when the MoNE is supposed to have devolved most of its functions to local governments may be well-intentioned but has disadvantages. It puts pressure on the MoNE to develop its own spending programs in the regions, which would mean that most of the capital invest-ments in education would be outside the con-trol of district governments. The experience of other countries shows that this kind of ear-marking often leads to more spending but not necessarily better outcomes because these cen-trally-initiated interventions guarantee the provision of funds regardless of regional per-formance and creates multiple opportunities for corruption. A big challenge is to ensure that earmarked national and local education budgets are indeed spent on schools and stu-dents, that they cover the basic operating ex-penses of schools besides the costs of teaching and non-teaching staff (such as instructional supplies, the routine activities of the school committee, the maintenance of a school data-base, the dissemination of information to par-ents and the community, utilities, and light repair of the school buildings and other main-tenance) and their career development activi-ties.

It is useful to review some evidence from other countries about what happens to the level of funding for education after decentralization

as a way of anticipating issues that may arise also in Indonesia. In Brazil, the “municipali-zation” of education resulted in a net loss of $2.7 billion in total public education spending. Between 1988 and 1991, spending on educa-tion at the federal level dropped by about one-half, state-level spending remained approxi-mately the same, and spending in municipali-ties rose by one-third but not by enough to compensate for the decline in federal spending (Workman, 1997 cited in Behrman, Deola-likar, and Soon, 2002). In contrast, in Argen-tina, total spending on education increased with decentralization, but in Mexico, it did not. Given the educational challenges facing Indonesia, a reduction in education spending in the next few years, especially in the wake of the financial crisis, would certainly set the country back with respect to educational de-velopment.

So besides the earmarking stipulated by Edu-cation Law 20/2003, what policies would en-courage the regions to keep up education spending? Given that DAU allocations are the dominant means of transferring resources, the key challenge is to encourage provinces and districts to spend these block grants in a par-ticular way (in other words, on education) without relying on earmarking restrictions that can undermine the autonomy of provincial and district governments. Chapter 1 of this volume discussed the intention of the central govern-ment to enter into agreements with provincial and district governments on their obligatory functions and on minimum service standards as a way of influencing the expenditure choices of local leaders. There have been sig-nificant developments and some pilot projects related to these agreements in the past year; within the MoNE, the unit charged with this responsibility is Unit Fasilitasi. But these compacts are not enforceable unless the central government has enough information to moni-tor the financial choices that provincial and district governments make, and such an infor-mation system has not yet been built.

Another option for ensuring that regional gov-ernments spend enough on education is for the central government to make transfers condi-tional on the money being spent on basic edu-cation services. The DAK allocation, which requires matching funds, has a lot of potential for stimulating essential education investments


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if the central government uses it to leveragecapital expenditures that will yield high bene-fits for education.

In sum, legislation has expanded the revenue-raising ability of district governments, and regulations are allowing them to determine their own financial management, accounting, and procurement systems within broad guide-lines. That district-level spending now domi-nates the country’s education expenditures is seen in Figure 2.2. These are reforms that are fully consistent with the goal of devolving de-cisionmaking authority and accountability to regional governments. However, the effects of this new authority are undermined by the fact that the funding system remains too diverse and fragmented, with separate agencies admin-istering the relevant budgets at the national level. During field visits made for this report, regional education officials in Yogyakarta and Central Java expressed some degree of frustra-tion at not having a clear sense of the total level of resources that are actually available for education or of the total amount actually being spent per pupil. Without information and without transparency, it is very difficult to plan ahead, to develop coherent and effective educational programs, and to monitor and as-sess the flow of funds through the system.22

Private Spending for Education Remains Low Households, communities, and private organi-zations spend out of their own pockets to fi-nance education in Indonesia in addition to the resources spent by governments. Schools re-ceive revenues in the form of BP3 contribu-tions and other donations from parents, private foundations, and NGOs. Students pay a vari-ety of school fees, including monthly tuition fees, entrance fees for new students, term and final test fees, and extra-curriculum fees. These fees together constitute a substantial contribution to the income of any school, pri-marily to its non-salary expenditures, which usually account for about one-fifth to one-tenth of a school’s budget. According to one

22 This is not a new phenomenon. It was noted in World Bank, 1998 (Education in Indonesia: From Crisis to Re-covery) that essential information on the budget is “scat-tered among five different ministries,” making the management of the education system a very difficult task.

estimate, fees contribute as much as one-third of total primary school revenues that are not allocated to salaries (McMahon and Suwary-ani, 2002).23

Education expenditures in households that have children of school age, on average, ac-counted for 3.4 percent of these households’ total expenditures and 8.5 percent of their non-food expenditures in 2002 (Table 2.2).24 On average, these households spent Rp 341,654 that year. However, there was a wide differ-ence in such expenditures between poor and non-poor households. Households in the poorest quintile (with young children) spent 1.8 percent of their total expenditures (or 6.4 percent of their non-food expenditures) on education, while those in the richest quintile spent 4.6 percent (or 9.0 of their non-food ex-penditures) on average.

To what extent should school finance depend on students and the local community for sup-port? There are opposing views on this. On the one hand, there is some evidence that those

23 A similar situation prevailed a decade ago when public schools obtained 92 percent of their total (salary and non-salary) funding from government allocations. However, there was considerable diversity among regions. In Ja-karta, public schools depended on government resources for only 70 percent of their total budget, while in other parts of the country, public schools depended on the gov-ernment for more than 90 percent of their budgets (King, 1997). 24 Moreover, this pattern is similar to the situation that prevailed in 2000 when education accounted for 1.9 per-cent of households’ total expenditures and 7.1 percent of their non-food expenditures (SUSENAS data).

Figure 2.2 Education Expenditures, 2001

LG Recurrent Expenditures

(APBD) 60%

LG Capital Expenditures

(APBD) 6%

Central Recurrent

Expenditures (APBN)

12%Central CapitExpenditure(APBN) 18%

Province Capital Expenditures

(APBD)3%

Province Recurrent

Expenditures (APBD) 1%

Source: Ministry of Finance, SIKD data.


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schools that rely more on parental or other lo-cal sources of finance are more likely to oper-ate efficiently (Bray, 1997; Jimenez and Paqueo, 1996; and James, King, and Suryadi, 1996). People who pay at least small amounts of their money directly for services come to value those services more highly than when the services are given away free.

On the other hand, schools produce benefits to society that are wider than the private benefits that accrue to the local community, so there are good reasons for society as a whole to sub-sidize at least some of the costs of local schools. In addition, direct and indirect costs

of education can deter poor households from sending their children to school. During the recent financial crisis, school revenues de-creased in real terms by as much as one-third because of the drop in the real values of fees and government subsidies as well as an in-crease in the non-payment of fees (Jones and Hagul, 2001). In the various sites that were visited for this study, it seemed common forschools to exempt those who could not affordthe fees, even in cases where the fees were quite low.

Table 2.2 Household expenditures on education, by income quintile, 2002

Income quintile Mean annual expenditures

(Rp)

Coefficient of variation

% share in total household consump-

tion

% share in household non-food consumption

All 341 654 1.90 3.4 (1.2) 8.5 (2.5)

Poorest 75 656 4.43 1.8 (2.1) 6.4 (5.8)

2 126 713 1.67 2.1 (2.8) 7.3 (7.5)

3 195 455 1.48 2.5 (3.2) 8.0 (8.4)

4 325 833 1.38 3.0 (3.8) 8.7 (8.9)

Richest 1021 451 1.30 4.6 (5.2) 9.0 (10.1)

Notes: Data from the 2002 SUSENAS; standard deviations in parentheses.

Box 2.1 Unequal Education Spending among Districts

How can an effective and equitable financing system be created within the prevailing legal and regulatory frame-work in Indonesia? A component of the technical assistance project Capacity Building for Decentralized SocialServices Delivery (DSSD) of the Asian Development Bank has been studying alternatives for improving the allo-cation of resources to schools in three pilot districts. In these districts, the project has established a School Opera-tion Fund (Biaya Operasion Sekola or BOS) to consolidate all resources available for financing school operationsfrom the district APBD and from central programs (DSSD, 2002). This is a mechanism for addressing a keyshortcoming of the current grants system—extremely fragmented sources of funds. The project stressed the impor-tance of elaborating a formula to allocate the total BOS funding to schools and to use APBD funds to “balance” allother funds. The rationale behind this approach is that, when schools are funded from national-level programs,there is more likely to be a mismatch between the needs of individual schools and the “one-size-fit-all” approachof the central programs and a lack of coordination that may result in some schools repeatedly receiving resourceswhile others are excluded from all schemes.

The three pilot districts for the project – Magelang, Purworejo, and Lampung Barat – are very diverse with respectto financing, as shown by their per capita education budget using their APBD allocations. Purworejo, which allo-cates 52 percent of its APBD grant to education, has a per capita education budget that is less than one-half of Ma-gelang’s which devotes 37 percent of its APBD grant to education. Lampung Barat, which allocates 41 percent toeducation, has an even lower budget. And since regions do not control civil service pay, it is important to look atthe proportion of their education allocation devoted to development and non-salary routine expenditures overwhich they do have discretion. The disparities among the three districts are even more pronounced in this respect:Purworejo’s discretionary education budget is one-third that of Lampung Barat and only one-fifth that of Mage-lang’s. In all three districts, however, an overwhelming share of the education grant (79 percent to 94 percent) isspent on salaries. Lastly, another critical statistic is the fraction of the non-salary education expenditures thatreaches schools directly. As a share of the total education allocation from APBD, this is miniscule, less than 5 per-cent in Magelang, 6 percent in Lampung Barat, and less than 2 percent in Purworejo.


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Figure 2.3 Enrollment Rates of Children Ages 13-15, By Province

60 70 80 90 100

South Sulawesi Central Sulawesi

N.T. Timur South Kalimantan

N.T. Barat South Sumatera North Sulawesi

West Kalimantan West Java

SE Sulawesi Central Kalimantan

Bengkulu East Java

Jambi Central Java

Lampung Bali

Riau West Sumatera

East Kalimantan North Sumatera

Jakarta Yogyakarta

Source: Susenas 1998 and 2002 Notes: Figure reflects provincial divisions in 1998; the prov-inces of Aceh, Irian Jaya, Maluku and North Maluku havebeen excluded because their sample sizes in 2002 were verymuch smaller and limited than in 1998.

Equitable Financing in an Unequal WorldThe trend towards local resource mobilization, as discussed above, risks widening the dispari-ties between those districts that have a strong revenue base and those that are less prosper-ous. (An example of such wide disparities is given in Box 2.1.) Consider an extreme hypo-thetical case in which district governments must depend entirely on their own revenues and do not receive any intergovernmental transfers. In such a system, there would be no mechanism for the national government to nar-row disparities among districts. Even if dis-tricts themselves were to adopt equalizing policies within their areas, this would elimi-nate only within-district disparities and not be-tween-district disparities. Currently in Indonesia, districts receive twice as many re-sources from intergovernmental transfers as from their own revenues, so if transfers are used judiciously, they can be a powerful mechanism for reducing regional inequali-ties.25

Enrollment rates vary widely across Indone-sia’s provinces, with as much as a 25- percent-age point difference between Yogyakarta and South Sulawesi (Figure 2.3). Yet an even lar-ger variation exists among districts throughout the country. Looking back over data covering the past six years, the source of inequality has shifted towards within-province rather than be-tween-province variation (Table 2.3). Indeed, especially at the basic education levels, there was a notable jump in within-province ine-quality after 1999. In the case of junior sec-ondary education where the coefficient of variation of enrollment rates ranged from 22 to 28 percent, the variation was increasingly due also to differences within provinces. This pat-

25 There are dangers to watch out for, however. Taken to an extreme, a system with intergovernmental transfers (a centralized system being one) creates its own problems in that, if richer regions are taxed high enough and a large proportion of those tax revenues are transferred to poorer regions, it could induce both the rich and the poor to migrate to the more lightly taxed, more highly subsi-dized jurisdictions, thus causing overcrowding in those areas” (Prud’homme, 1995). The conclusion from most analytical and empirical research is that “any reduction in the importance of national budgets relative to those at the subnational level … increases interjurisdictional dispari-ties by reducing the impact of national policies designed to correct regional inequities” (Prud’homme, 1995).

tern of educational inequality suggests that, if the current formula for allocating transfers to districts were able to redress the inequalities among districts, then it would have a major impact on equalizing educational development across the country.

How then are education resources distributed across districts? To illustrate the need for policymakers to devote more attention to eq-uity concerns, Figure 2.4 presents two concen-tration curves for the distribution of APBD and APBN expenditures for education among

Table 2.3 Source of inequality in enrollment rates: Between and within provinces

Source Primary Junior sec-

ondary Senior sec-

ondary

Between 46.0 34.9 27.4 1997

Within 54.0 65.1 72.6

Between 43.0 31.6 25.6 1998

Within 57.0 68.4 74.4

Between 38.5 33.5 28.6 1999

Within 61.5 66.5 71.4

Between 31.8 30.6 25.4 2000

Within 68.2 69.4 74.6

Between 27.1 27.3 27.3 2001

Within 72.9 72.7 72.7 Between 30.5 29.2 27.5

2002 Within 69.5 70.8 72.5

Source: Various years of SUSENAS.


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Figure 2.4 Inequality in the distribution of 2001 education expenditures from APBD and APBN allocations

Expenditure Concentration Curves Districts Sorted by Mean Income

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%Cumulative Percent of Population

Cum

% B

udge

tEducationDevelopment fromAPBD by Kabupaten,2001

EducationDevelopment fromAPBN, 2001

EducationDevelopment fromAPBN, 2001 withoutJakarta

Expenditure Concentration Curves Districts Sorted by 2001 Junior Secondary Enrollment

0%

20%

40%

60%

80%

100%

0% 20% 40% 60% 80% 100%

Cumulative % population

Cum

% B

udge

t

EducationDevelopment fromAPBD by Kabupaten,2001

EducationDevelopment fromAPBN, 2001including Jakarta

EducationDevelopment fromAPBN, 2001

Note: Note that perfect equality would be represented as a 45 degree line.


75

districts in 2001.26 These curves were obtained by ranking districts from lowest to highest ac-cording to their mean income levels and ac-cording to their junior secondary education enrollment rates and then plotting their APBD and APBN education shares against their share of the country’s population. The diagonal line is the line of equality—a line showing that any given proportion of the population receives exactly that share of education resources.

The estimated concentration curves indicate that the district and central education expendi-tures, exclusive of spending in Jakarta, are un-equally allocated with respect to income levels, but that APBN expenditures, exclusive of Jakarta spending, are more equally distrib-uted than APBD expenditures. With respect to enrollment rates, both types of expenditures are fairly equally distributed among districts, with a slight concentration in districts in the middle of the enrollment distribution. When APBN expenditures in Jakarta are taken into account, expenditures are overwhelmingly concentrated in Jakarta, as shown by the curves that are farthest from the diagonal line.

As already mentioned, the DAU transfer for-mula takes into account the fiscal capacities and needs of district governments. Because of

26 Concentration curves plot the proportion of total ex-penditures that is received by a given proportion of the population. The 45-degree line is the line of equality, in-dicating, for example, that 10 percent of total expenditure is received by 10 percent of the population, that 20 per-cent of total expenditure is received by 20 percent of the population, and so on. The farther away a concentration curve is from the 45-degree line, the more unequal is the distribution of expenditure.

this equalization scheme, regardless of which measure of expenditure needs is used, the variation in potential revenues was lower after total DAU allocations were incorporated (Lewis 2001). Those district governments with more land and more poverty tend to re-ceive higher per capita DAU transfers, whereas those with larger populations tend to receive smaller per capita transfers, perhaps because large economies of scale are likely. There is no such formula telling districts how much of their revenues should be allocated to education, only the aforementioned earmark-ing established by legislation. But do district governments nevertheless use similar factors as the central authority to determine their budget allocation for education?

For this report, we estimated a statistical rela-tionship to examine the factors that affect dis-trict-level education spending. Using different measures of education spending (from the 2002 APBD allocation) as the dependent vari-able in a multivariate regression analysis and factors similar to those used in the DAU for-mula, we obtain the following results (Table 2.4): (i) Districts with a larger population tend to have smaller per capita allocations for edu-cation, which suggests also economies of scale in the provision of services; this result is statis-tically significant. (ii) Districts with greater fiscal capacity tend to make larger per-student capital investments in education. (iii) Districts with more (or less) poverty, as measured by the proportion of the population below a cer-tain poverty threshold, do not have larger (or smaller) per-student education allocations than other districts. This result suggests that, al-though poorer districts may receive a higher DAU allocation by virtue of the DAU transfer

Table 2.4 Determinants of Education Expenditures using APBD: Results from Regression Analysis

Variables Total per student expenditures [a]

Per student routine expenditures

Per student devel-opment expenditures

% share of education ex-penditures in total DAU

allocation

Fiscal capacity (Rp tril) 0.798 (1.84) 0.334 (0.77) 0.554 (7.33) 364.19 (1.83)

Population (mil) -0.566 (-4.22) -0.429 (-3.22) -0.143 (-6.77) 60.04 (0.98)

Land area (sq km) -4.169 (-0.88) -7.817 (-1.66) 3.582 ( 4.25) -2189.21 (-1.03)

Poverty [b] 407.43 (1.36) 378.72 (1.27) 22.76 (0.46) -1498.56 (-0.01)

Notes: t-values are in parentheses. [a] Education data used pertain to APBD routine and development expenditures, 2002. A fixed-effects model was estimated to take into account unobserved sources variation within each province. [b] Poverty as measured by the size of the population with incomes below a poverty threshold. Regressions using GDP per capita, 1999, as an indicator of poverty yield similar results.

Source: Population data for 2000 from BPS website.


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formula, the same districts do not necessarily spend a larger proportion of it on education. In a decentralized setting, central mandates be-come less and less effective, and so the central government must turn to powerful incentives to compel local governments to behave in a desired manner. Brazil provides a good ex-ample of this (Box 2.2).

In sum, the inequalities among districts pre-date decentralization, but decentralization could exacerbate them. Transferring fiscal re-sponsibilities to local areas and a growing reli-ance on local resources and expertise is likely to widen educational gaps between those areas that have a strong revenue base and those that are less prosperous, while weakening the cen-tral government’s ability to close education gaps between the richest and poorest areas. Extreme regional differences signal the need to establish an effective equalization mechanism.

Increasing Efficiency under Decentralization

Enhance Local Capacity to Manage Financial Resources While resources are important to sustain the educational progress achieved by Indonesia, higher spending alone does not guarantee bet-ter education outcomes. A critical bottleneck in implementing the decentralized functions of regional governments is often a shortage of sufficient technical and managerial expertise. In addition, the lack of viable and coordinated management systems that link the operations of central agencies to local governments and schools exacerbate the problems that arise from weak local capacity. With the new func-tion assignments under decentralization, all levels of government are effectively mandated to train (or retrain) staff in financial planning and budgeting, personnel management, infor-mation collection and communication, among others. Given the collective inexperience with decentralized management, these skills are likely to be acquired not only through formal training but also through learning-by-doing within an enabling environment. For instance, local capacity for financial management is challenged and stimulated by changing the manner in which funds are provided to the dis-tricts.

What can the central government do to engen-der local capacity? It can: (i) Disclose the amount of funds and other assistance that re-gional governments can expect to receive well before the beginning of each school year to give them a chance to finalize their spending plans and to mobilize additional resources, as needed. (ii) Give local governments more of their resources through block transfers, rather than through centrally-initiated and centrally-managed projects. Indeed, the greater the share of resources that are coursed through this channel rather than through specific programs, the stronger the support for developing local capacity for governance and management. There is some concern that local governments and schools, lacking experience and skills in managing considerable discretionary funds, will use those funds inappropriately.

It is feared that corruption and fraud in the ab-sence of effective controls and audits will waste valuable resources and thus erode past educational gains.27 These problems are exac-erbated by the fact that district governments and schools receive funding from a number of different sources, often too many for them to keep track of, all with different management arrangements.28 Because of the fragmented nature of the funding allocations at the local level in Indonesia, it is almost impossible for the ultimate beneficiary (the school or the stu-dent) to know how much funding they are supposed to receive and whether the funds have been released.

These are legitimate concerns, but the appro-priate response is not to re-centralize financial management. Rather, they call for establish-ing better accountability mechanisms —

27 Focus-group meetings with teachers, principals, and district officials undertaken as part of this report indicate that decentralization, while mostly a positive change, has created more opportunities for bribery and corrupt prac-tices. Bribes in money or kind are said to be more costly, processes often take longer than before, and the distribu-tion of grants, scholarships, and other school funds is particularly vulnerable to corruption.

28 This is not a new phenomenon. It was noted in World Bank’s report “Education in Indonesia: From Crisis to Recovery” (World Bank, 1998) that essential information on the budget is “scattered among five different minis-tries,” making the management of the education system a very difficult task.


77

defining performance standards and measures, developing checklists of basic standards and competencies, auditing current capacity and performance on the basis of those checklists.

Standards and information are very important in increasing transparency and compliance with policies, regulations, and laws and in re-ducing corruption at all levels of the system.

Box 2.2 Brazil’s Experience with Municipalization

During the period of 1996-1998, the Government of Brazil carried out a comprehensive educational policy reform. A new national educational law, enacted in 1996, laid out new roles and responsibilities for all levels of government, and introduced a simple mechanism that links resources to student enrollment, thus creating a powerful incentive for schools to raise enrollments. This financing mechanism, called the Fundo de Manutenção e Desenvolvimento do Ensino Fundamental e de Valorização do Magistério (FUNDEF), revolu-tionized the financing mechanism for sub-national governments by addressing the divergence between re-source needs and revenue availability for education. The 1988 Constitution tied 25 percent of state and municipal government expenditures to education, but a constitutional amendment in 1996 raised this to 60 percent for basic education (grades 1-8). In addition, it created a new mechanism to distribute tax collection among states and municipalities. Each state, then, has its own FUNDEF, which corresponds to 15 percent of revenue collection from specific tax and transfer sources. The total revenue collected within a given state, in-cluding tax revenue from the state and its municipalities, is divided according to the total population of stu-dents enrolled in that State within the previous academic year. The amount per student is then multiplied by the current number of students enrolled within each sub-national government and distributed accordingly. According to this new financing mechanism, each sub-national government contributes a certain amount of resources to FUNDEF based mainly on their tax revenue per student, but receives a different amount based on the current number of students they have enrolled in their respective basic education systems.

State and municipal governments are obligated to contribute a certain earmarked proportion of their revenues to the FUNDEF fund for each state; the resources are then distributed to the state and each of the municipal governments in that state on the basis of the number of primary education students enrolled by the respective education systems managed by the sub-national entities. As each sub-national government contributes to FUNDEF but receives money from the fund only according to its number of enrolled students, the new legis-lation created an incentive for sub-national governments to enroll as many primary education students as pos-sible.

Some municipalities have done much better than others in making use of the additional resources that they have received. These municipalities have invested adequately in upgrading and rationalizing school infra-structure, instituted transportation services for children, improved the quality of teachers, and provided them with greater administrative and pedagogical support. At the same time, some municipalities still lack a coher-ent educational policy, and learning is poor. Municipalities that have received additional resources due to FUNDEF have maintained their own contributions to educational expenditures. The fungibility of resources means that municipalities may reduce their own expenditures when they receive additional transferred re-sources. However, the opportunities for such reductions have been limited because municipalities have faced increased expenditure requirements for pre-school education, which does not benefit from FUNDEF re-sources. Pre-school education suffered a temporary setback as states stopped spending on this level of educa-tion as enjoined by the constitutional amendment of 1996 that established the FUNDEF mechanism. However, municipalities have since picked up the reduction in state enrollments, leading to increase in the coverage of pre-school education.

Among its significant contributions, FUNDEF created new administrative and teaching incentives within the basic education system. Most importantly, it promoted an increase in enrollment pervasive across sub-national governments. “As each sub-national government contributes to FUNDEF, but obtains receipts from the fund only to the extent that is has enrolled students, the new legislation created an incentive to sub-national governments to enroll as many primary education students as possible” (World Bank, 2002). In addi-tion to the administrative incentive to expand access, legislation also specified that states and municipalities spend a minimum of 60 percent of their FUNDEF funds on the payment of salaries of teachers and others in-volved in the provision of educational services. Ultimately, this centrally-driven policy helped improve re-gional disparities in terms of teacher salaries and subsequently of teacher profiles.

Source: World Bank 2002. “Brazil. Municipal Education Resources, Incentives, and Results.”


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Having access to accurate and timely informa-tion helps district governments to plan and manage the system, and sharing the informa-tion with local stakeholders, such as parents, through periodic reports may press district of-ficials to be more transparent and efficient. The government has promulgated several key regulations governing information flows under decentralization. The PP11/2001 on Regional Financial Information provides for a compre-hensive information system to be developed to link national and district decisionmakers. It obliges sub-national governments to submit specified information to both the MoF and the MoHA, thus giving national agencies the nec-essary data to develop a nationwide perform-ance and financial monitoring system. A further regulation is needed to require schools to feed data back to district governments. With improved accountability, it is possible to use the potential ability of district govern-ments and schools to use public funds where they are most needed and where they can have the greatest educational impact.

Spend Productively Improving the efficiency of the education sys-tem requires spending educational resources where they are most productive. This is not in any way a concern that is unique to the decen-tralized reform. However, with responsible parties spending more autonomously than be-fore, it has become more difficult to coordi-nate the balance in the composition of expenditures throughout the education system.

Consider that in the system as a whole, three-quarters of resources are spent on recurrent items, mostly on salaries and benefits and a small amount on operational costs and peda-gogical supplies, and one-quarter is spent on capital outlays (Figure 2.2 above). This pat-tern is more extreme at the district level, where governments spend more than 90 percent of their education budgets on routine expendi-tures; in 2002, 95 percent of their routine budgets was spent on the salaries of teachers at the primary and junior secondary levels and other personnel (McMahon and Suwaryani, 2002 and Clark et al, 1998).29 In contrast, the

29 Article 49 of the new Education Law states that the salaries of teachers and personnel appointed by the cen-

resources that are spent on the actual opera-tions and maintenance of schools tend to be very limited. Often, even the tiny share left over for development expenditures, which is supposed to be devoted to building new class-rooms, repairing school facilities, and teacher training, is used to cover routine expenditures, especially staff salaries.

With such a minute share of education re-sources going to development expenditures, is it possible to achieve needed improvements in the quality of education? Teachers do play the key role in the teaching process, as is dis-cussed in the next two chapters, but adequate resources need to be devoted not only to sala-ries but also to teacher professional develop-ment and classroom supplies.

Spend Locally The impact of the current reform will depend ultimately on how much of the fiscal resources allocated to education actually reach the schools and, within the schools, how those re-sources are put to use. Some issues are:

First, the level of funds available for education within a district needs to be predictable and assured and should be closely linked to educa-tion plans and standards at the national level that have been discussed and negotiated with local stakeholders. It is also important to have clear, well-understood rules for allocating these funds to schools so that schools know the level of funding to expect each year from the government at the beginning of each school year. (Box 2.3) Schools in Indonesia receive funding from a number of sources, of-ten too many for the schools to keep track of them all. These sources include public monies from as many as seven channels, all with dif-ferent management arrangements. During fo-cus-group meetings for this report, school principals complained that the lack of trans-parency about budget allocations at the central and district levels prevents them from predict-ing how much revenue they will receive ex-cept through fees collected at the school level and makes it impossible for them to do any

tral government will be paid out of the national budget, the APBN. Presumably, the teachers and personnel whose salaries were transferred to the districts as part of the decentralization reform will continue to be paid under the local budgets, the APBD.


79

multi-year improvement planning. In several countries, the amount of funds allocated to schools is based on the number of students ex-pected to enroll in the school by means of an agreed-upon cost-indexed per student alloca-tion. This per-student cost is defined on the basis of delivery of an acceptable standard of service, which directly links the subsidies that the school receives to its educational quality and performance. The alternative, allocating equal resources to each school regardless of the number of pupils, gives schools no incen-tive to achieve cost-effective pupil-teacher ra-tios.. A formula-based allocation is equitable in that every student is allocated an equal amount of cost-indexed funds, but does not preclude MoNE or the district governments from establishing mechanisms for mitigating specific inequalities among communities and schools.30 This compensatory or equalizing role is essential since communities are not equal in their ability to mobilize extra re-sources for their schools and schools are not equal in the educational challenges that they have to face every day. District governments should target these additional grants to schools that are unable to mobilize sufficient resources to meet minimum quality standards, but the government should do so only in conjunction with greater supervision of those schools and performance evaluation against agreed-upon indicators of progress.

Second, there must be a free exchange of in-formation between the levels of government and schools, and the data that are exchanged must be accurate. Obviously, accurate enroll-ment numbers are essential. Many students who will drop out tend to do so soon after the start of the school year, so school subsidies must be based not on enrollment at the begin-ning of the year but on average daily atten-

30 In the U.S., under most equalization programs, poor school districts experience increased spending, but some poor school districts actually receive lower per-pupil school spending under equalization programs that at-tempts to level spending down a lot (Hoxby 2001). Hoxby suggests that it is possible to minimize the nega-tive effects of school finance equalization by combining elements of categorical aid with property taxes. This could mean redistributing grants among school districts on the basis of their characteristics such as mean house-hold income, poverty rate, and/or demographic variables, such as the proportion of children who live in single-parent families.

dance later in the year. It is also essential to track how much of each school’s allocation is actually received by the school and how much goes astray. If schools provide appropriate and timely information to the various levels of government, this will help government per-sonnel to plan and administer schools. Schools should also provide this information to local stakeholders such as parents, who can then use this information to press district officials to be more transparent and efficient.

Third, the capacity within schools for devel-opment planning, budget preparation and exe-cution, and accounting also determines how well they are able to use the decentralized fis-cal structure to their advantage and how effi-ciently they are able to spend the resources allocated to them. The largest single subsidy to schools is in the form of teacher and staff salaries, which means that schools’ discretion-ary budgets are often quite limited.

As districts and communities mobilize greater resources to cover non-salary expenditures that improve schools, they will need the skills nec-essary for preparing and implementing school improvement plans. Past studies have sug-gested that the benefits of decentralization are more likely to emerge when school councils are able to exercise some autonomy over ad-ministrative and financial matters related tothe school (Reithwood and Menzies, 1998, Jimenez and Sawada, 1999 and King and Ozler, 2000). School Committees in Indonesia have yet to be given clear functions and have yet to take advantage of their supposed greater autonomy. As school “governors,” these Committees will need to make the hard deci-sions about how to spend school revenues.


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Summary of Implications for PolicyThis chapter began with the proposition that establishing appropriate resource allocation and accountability systems for the manage-ment of those resources in Indonesia’s educa-tion sector is key to increasing its effectiveness and attaining the country’s educational goals. This message would have applied even if In-donesia had not embarked on its “big bang” decentralization, but under decentralization, the ways and forms in which these challenges can be met have changed. Decentralization has shifted the relative roles of different levels of governance, from the central government down to the regional governments and the School Committees. At the same time, the success or failure of the decentralization will rest partly on how well these governance lev-els use their discretion and autonomy over the

generation, allocation, and use of funds. Three key messages on financing education are:

Ensure that total education expenditures are adequate to maintain educational develop-ment and increase the efficiency of resource use.

This task requires strong leadership from the central government, both in crafting an effec-tive funding mechanism that is easy to monitor and to implement and in building political support for that mechanism among provincial and district leaders. Earmarking the central and local budgets for education, as the Consti-tution and the Education Law have done, goes only part of the distance to ensure that ade-quate resources are allocated to the schools where they can make a difference. The real challenge is to ensure that earmarked national

Box 2.3 School Funding – A Gap in Financial Policy

The mechanisms of finance under decentralization are still faulty, confusing, or absent (see McMahon and Boediono, 2001). One critical gap has to do with school funding. The simplest possible school funding sys-tem would disburse all of the resources to each school on a per student basis rather than just providing it with inputs. In such a funding system, as most of the funding would be given on a block basis, the tasks of finan-cial management would be relatively simple, and keeping track of the funding would be relatively easy. However, such a system may not be possible for a long time in Indonesia, at least for all schools. There may be valid reasons not to adopt such a system at this point, and there may also be other reasons that are related to inertia and tradition. A compromise would be to introduce this system on an “asymmetrical” basis, in other words, only in those schools that already have financial planning capacity.

In the absence of such a system, there are likely to be various different sources of funding at the school level, many of them earmarked, and some of the funding will take the form of providing inputs rather than money. In this situation, the main task would be to develop a set of accounting tools and tracking systems at the na-tional level that can follow (both budgeted and actual) expenditures down to the school level and can aggre-gate all forms of expenditure, including inputs, for each school. Two or three months before the beginning of any school year, each district government should inform each school of the school’s total expenditure in the most recent year available (there should be enough time to close the books so that final expenditure figures could be reported), its estimated expenditure in the previous year, and its allotted budget for the current year.

This report should be as detailed as possible and should include a breakdown of items into those that were merely inputs and those that were an actual financial transfer to the school. The report should also inform the school (and its committee) of its per student expenditure and those of similar schools so the school can com-pare its expenditure with that of others. If the school’s per student spending is far above that of its peers, then the district should make it clear that this cannot continue.

The national government can contribute by crafting a set of standards for financial management and then al-lowing various suppliers to develop competing financial management packages for schools and districts to purchase, as long as their software meets the functionality requirements developed by the government. Even if only one-tenth of schools successfully computerize their financial management systems, this would still represent an attractive market that would be difficult for software vendors to ignore. It is unlikely that gov-ernment or donor-based financial software development would be as successful as independent software de-velopment, but the software would be built to specified standards. One of the standards that such packages would have to meet is complete manual-to-machine inter-operability and compatibility. The government could then require schools to hand over the manual to other schools, thus forcing better-off schools to subsi-dize the development of the simpler manual package for the poorer schools and making it easy for schools to change from manual systems to computer systems without having to change their service provider.


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and local education budgets are indeed spent on schools and students, that they cover the basic operating expenses of schools besides the costs of teaching and non-teaching staff (such instructional supplies, the routine activi-ties of the School Committee, maintaining a school database and disseminating information to parents and the community, utilities, and light repairs of the school buildings and other maintenance), and their development activi-ties. Together with efforts to define a mini-mum standard of provision, it is possible to design a formula-based allocation that is non-discretionary and that depends on just a few key measurable criteria.

The Education For All effort is already an at-tempt to estimate the per student level of spending that would be consistent with attain-ing universal enrollment and improving educa-tion quality in Indonesia (McMahon, 2003). What needs to happen is to open the proposed formula to national scrutiny and debate in or-der to validate it and to obtain political support for it. What also needs to happen is to apply the funding formula to the local processes of allocating the DAU rather than the DAK. This formula funding mechanism should become the routine way to allocated education grants in Indonesia and, in the process, it will facili-tate school-based management by allowing schools to manage assistance in cash rather than in kind.

The funding formula mentioned above should apply only to the per student level of routine operational expenditures. However, a per-school rather than per-student funding formula is more appropriate in deploying teachers and other staff to schools. In addition, many schools in Indonesia have urgent development needs, including staff development and the construction of libraries or laboratories. Richer districts will be able to undertake these capital investments themselves, but poorer dis-tricts will not, so a pro-poor investment pro-gram will be needed. In fact, in the short run (that is, until the DAU mechanism is fixed), schools are likely to need direct cash assis-tance, perhaps through a special DAK alloca-tion, to cover even their basic operational costs. This is because the current DAU alloca-tions are not equalizing the distribution of lo-cal resources, which means that poorer districts repeatedly find themselves unable to

fulfill their responsibility to deliver education of acceptable coverage or quality. This is evi-dent in the strikingly wide range of per-capita levels of education expenditures across dis-tricts. However, a “sunset clause” should be included in this special DAK allocation that would ensure that it ended once the DAU mechanism had been improved.

In addition to a national investment plan for education, Indonesia needs a multi-year educa-tion development plan for each region (prov-ince and/or district) that would spell out the education goals and the implied resource re-quirements of those goals for each region. This is not the same as the yearly budgeting process to arrive at an annual budget for the sector. What is needed is a resource plan that is more closely linked to the educational de-velopment goals of the region than is the case with the yearly budgeting process, that is the product of a broad consultation with school stakeholders, that specifies clear performance indicators, that identifies the different intended sources of funds and required management and technical skills, and that is widely publi-cized among the various stakeholder groups in the regions. In turn, there should be a re-gional (provincial and/or district) multi-year resource plan that would specify all planned investments in the improvement of all schools within the control of the regional government, including investments that go beyond the con-struction and repair of facilities. These multi-year assistance plans to schools would not just be expenditure plans but also financial, staff-ing, and management plans. To formulate the assistance plans to schools and, consequently, the regional resource plan, what is needed is a funding allocation formula that is based on a cost-indexed, per-pupil basis and consensual quality standards and region-specific prices.

It is important to have an equivalent and paral-lel process of planning at the level of the cen-tral government. The regional plans can be aggregated to formulate a multi-year plan of assistance for educational development, and this can be achieved using the different in-struments available to the national government in the new decentralized context. Because the sum of regional demands is likely to exceed the resources available to the national gov-ernment, districts should be categorized ac-cording to their performance on multiple


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education indicators, their resource levels (transfers as well as own resources), and their technical and management capacity. This cate-gorization would make it possible for the na-tional government to prioritize the level of assistance that it provides to provinces or dis-tricts. In recognition of the fact that resource levels and technical capacities vary across dis-tricts in Indonesia, adjustments would have to be made in the allocation amounts that are cur-rently given to the disadvantaged areas. Using this categorization, it would be possible to de-termine the notional level and nature of assis-tance for each region. This notional level of assistance could then be the basis for the an-nual transfers to the regions, particularly the DAK allocations.

Another important aspect of using perform-ance-based or results-based funding schemes to ensure that resources are used more effi-ciently is that this holds regional governments and schools ultimately accountable for meas-urable indicators of progress within their juris-dictions. For the central government, this means imposing a hard budget constraint on regional governments, refusing to bail out those that miss their goals because of bad de-cisions or poor implementation. At the same time, the central government should help local governments to build their capacity for effi-cient planning, budgeting, and fiscal manage-ment and to train provincial and district officials to use data to target assistance and to measure impact. There have been several ef-forts in the past at improving the planning and budgeting processes in schools and districts, such as the DSSD program. Although these have been fragmented efforts, and often only pilot programs, some lessons can still be learned from these efforts that can be used to guide a country-wide effort to formulate edu-cation investment and assistance plans at all levels.

Increase the productivity and effectiveness of resources spent on education at the provin-cial, district, and school levels.

There are lessons from the experience of coun-tries around the world about how to increase the effectiveness of transfers that might be useful to Indonesia (Bird and Smart, 2002). First, regional governments should be required to prepare both an adequate investment plan

and an adequate maintenance plan. Second, the communities or schools that receive trans-fers should be selected based on both their needs and their capacity as well as of the eco-nomic viability of the project in question. Third, the central government should make adequate technical assistance available to local governments to help them to develop plans, ar-range financing, and operate the local educa-tion system as efficiently as possible. Fourth, the central government should monitor and evaluate the implementation of the investment plans by requiring periodic progress reports and by making field inspections and formal evaluations of outcomes. Finally, all regional governments that receive a transfer should be required to testify about the condition of the infrastructure on which the resources are to be spent to enable the central government to make an adequate assessment of the future needs of local governments.

Because of the fragmented nature of the fund-ing allocations at the district level in Indone-sia, there are numerous opportunities for corruption and leakage in the current system. Information plays a critical role in improving the quality of decisionmaking by policymak-ers. Information flows are likewise important for improving the implementation of policies and investment programs. They help to in-crease transparency and compliance with poli-cies, regulations and laws and to reduce corruption at all levels of the system. The re-gional education investment plans discussed above should be based on regular, systematic, and purposive collection and analysis of edu-cation data. Local governments are likely to spend transfers for capital investments more effectively if they know in advance how much they are going to receive so they can devise a coherent development strategy.

Similarly, it is important for schools to know accurately and in a timely manner the size and nature of the resources that they will be receiv-ing so they can plan accordingly. This is diffi-cult under the current system in which public resources flow through many different chan-nels, some of which are completely unpredict-able or subject to being diverted by local politicians. A formula-based allocation that is non-discretionary and that depends on a few key—and simple—pieces of information helps to make allocations more transparent. When


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school committees know in advance how much of a subsidy they are due to receive from the regional government, they can compare that amount with what they actually receive, which thus serves as an effective check on cor-ruption in local public spending.

Focus education resources on those who need them most.

In Indonesia, as in many other developing countries, a more pressing concern than effi-ciency is often the inability to meet the de-mand for services, especially the demand from the poor and disadvantaged. Districts that have higher enrollment rates and better quality are frequently those with more resources, whereas districts that have low education indi-cators are typically also the districts with fewer resources. To improve education out-comes in Indonesia, it is imperative to serve the needs of those districts that are in greater need and to tailor the type of assistance pro-vided to the type of need manifested. Under decentralization, whether or not adequate re-sources are allocated to pro-poor services de-pends on the priorities of local leaders and communities. This is one of the dangers of decentralization.

First, as mentioned above, the DAU mecha-nism needs to be improved so that it can help to equalize the wide disparities in educational outcomes across regions. Second, the central education authority should support targeted, pro-poor education programs, perhaps through a DAK allocation. Indonesia’s past experience with its large scholarship and school grants program, launched at the onset of the recent financial crisis, can inform the design of a tar-geted program. To make such a program fi-nancially sustainable, what is needed is the political will to keep it well targeted to those who need it most. There are valuable lessons from around the world (for example, Bangla-desh, Brazil, and Mexico) on how this can be achieved. Third, the national government can use incentives to influence the allocation deci-sions of the better-off districts, for example, by rewarding those districts that are able to make large improvements in the education indicators pertaining to the poorest communities or schools within their jurisdiction and, con-versely, by taxing those with worsening indi-cators. Indonesia is very capable of doing this type of monitoring because of its longstanding experience with fielding large household sur-veys, such as the SUSENAS.


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Akita, Takahiro and Armida S. Alisjahbana. 2002. “Regional Income Inequality in Indo-nesia and the Initial Impact of the Economic Crisis,” Bulletin for Indonesian EconomicStudies 38(2): 201-22.

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Jalal, Fasli and Bachrudin Musthafa. 2001. Education Reform in the Context of Regional Autonomy: The Case of Indonesia. Ministry of National Education and National Devel-opment Planning Agency, Republic of Indo-nesia, and the World Bank.

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Appendix 2.1. Cost Implications of Quality Education for All

The Education for All (EFA) goals are to in-crease net enrollment rates at both primary and junior secondary education levels, reaching out even to the poor and disadvan-taged populations, and to improve the qual-ity of education available. The cost implications of these goals have been calcu-lated by Professor McMahon (McMahon, 2003). A key concept for his costing is ade-quacy, or “what it takes in terms of text-books, teaching materials, teacher abilities and qualifications, school libraries, and so forth to produce an educationally adequate education for each child” (McMahon 2003). McMahon’s estimates, developed on a per-pupil basis, are based on the following as-sumptions, among others:

The EFA goals are to achieve 100 per-cent net enrollment rate by 2008 in pri-mary education and 95 percent in junior secondary education by 2008, and to as-sure that this education is of acceptable quality. A recently conducted survey of schools provide data on what schools are actu-ally spending. These data provide the current or base cost of schools. What the “best practice” schools are cur-rently spending is the measure of what inputs are needed and “most cost effec-tive” to improve learning in schools. The “best practice” schools, those that have experienced increases in EBTANAS test scores, have been found to have more books and teaching materials for every pupil, and salary supplements for teach-ers are larger. For example, in expendi-ture terms, the average schools is estimated to spend Rp 15,000 per pupil on teaching aids while the “best practice schools” spend Rp 21,745 per pupil, on average. The corresponding cost estimate for jun-ior secondary education is 1.5 times the cost above for primary education. To increase the enrollment rate of the poor and disadvantaged population re-quires additional resources, largely for the purpose of eliminating fees. Cur-rently, fees are charged for entrance,

BP3, examinations; procurement of textbooks, notebooks, and school bags; transport; and so on. At the primary level, eliminating fees mean foregone revenues of Rp 13,000 per pupil in 2004 (2003 prices), on average, increasing to Rp 38,000 per pupil in 2008. At the jun-ior secondary level, the amount is about Rp 57,000 per pupil. In addition, a student grant of Rp 290,000 per pupil per year for 18.2 per-cent of all primary school students, which is more than doubling the current grant by the government, will cover the opportunity costs borne by parents and for teacher supplements and BP3. The corresponding grant is Rp 93,000 per pupil per year.

Table 1. Cost estimates for EFA Primary Secondary

2004/5 2008/9 2004/5 2008/9 Per-pupil cost (Rp thousands) Incremental cost of EFA

179 209 509 834

Current cost 966 966 1,449 1,449 Total 1,145 1,175 1,958 2,283 Total cost (=Per-pupil cost x students enrolled) (Rp billions)Incremental cost of EFA

5,061 5,702 5,331 10,245

Current cost 27,255 26,397 15,476 18,049 Total 32,316 32,099 20,807 28,418 Source: McMahon (2003) Note: All estimates are in 2003 prices.

The estimates per pupil for 2004/5 indicate that the incremental costs associated with EFA would be 18 percent of the current (2004) per-pupil cost at the district level for primary education and 35 percent for junior secondary education (Table 1). These repre-sent a significant increase in per-pupil spending. Primary and junior secondary education costs would total Rp 53 trillion in 2004. According to SIKD estimates, educa-tion expenditures in 2002 were 2.4 percent of Indonesia’s GDP at the local level, or to-taling about Rp 43 trillion. This spending may well have increased close to the EFA cost estimates by 2004 if education spending increases by the same percentage as the pro-jected percentage increase in DAU transfers.


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Thus, while the EFA cost implications as es-timated by McMahon (2003) will mean a significant rise in education per-pupil spend-ing, the implied total expenditure is not far off from the total education expenditures al-ready being made at the district level.

Is EFA by 2008 guaranteed then? No, by no means is EFA guaranteed without the neces-sary accompanying changes in the manage-ment of schools and the education system as a whole. Costing EFA is an important step in understanding what is required to fulfill this national commitment, but more re-sources are not enough. The changes for better quality are discussed in Chapter 3 of this volume.

Lastly, there are several ways to improve the existing EFA cost estimates while maintain-ing the basic principles of McMahon’s esti-mation model. Examples are: Improve the reference used for the level of spending per pupil needed to raise quality. The assump-tion used was that the “best practice” schools are not able to reduce their cost per pupil without quality reductions (thus, that they are at optimal efficiency). To what ex-tent this is true would require more studies on the gains and cost of increasing school ef-ficiency. And improve the estimate of what is needed to raise the enrollment of poor youths. Impact evaluations of the national scholarship program initiated in the late 1990s would be able to inform this.


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Chapter 3: Education Quality Assurance and Improvement

The biggest challenge in the development of national education is enhancing the quality and relevance of education (MoNE, 2001a).

Expectations for the basic education system are high. Parents want the system to prepare their children for productive employment and a moral life, while the state wants graduates who can contribute to a growing economy with high productivity, particularly the types of productivity gained through par-ticipation in the knowledge economy (MoNE, 2000). The state also wants the so-cial benefits associated with education – lower birth rates, better health practices, and more active participation of citizens in a democratic civil society (Republic of Indo-nesia, 2003). Achieving these goals requires two things: that children have access to edu-cation, preferably by attending formal schools, and that the education they receive is of acceptable quality. Volume I reports that the net enrollment rates for Indonesia in 2002 were 92.7 percent for primary school-ing and 61.7 percent for junior secondary schooling up from 91.5 and 51.0, respec-tively, in 1995. With these gains in enroll-ment levels, Indonesia is now at the historical point where countries start to em-phasize quality as much as continued growth in access. In Indonesia, two forces shape the quality agenda: the increasing demand for quality improvement from journalists and policymakers and the political pressure of the decentralization agenda.

Most official reports on educational quality in Indonesia, such as the Education for All Situational Analysis (Education for All, 2002a), express dissatisfaction with the cur-rent level of quality and cite as evidence the poor showing of Indonesia in the 1999 Trends in International Mathematics and Science Study. Out of the 38 countries in-cluded in this study, Indonesia ranked 34th in mathematics and 32nd in science. An Indo-nesian report in the mid-1990s stated that the quality of the typical upper secondary graduate declined to a level that was proba-bly equivalent to lower secondary education before the beginning of the rapid expansion

of secondary education beginning in the 1980s (Jones, 2001). Unemployment among high school graduates is also high and re-mained so even during the 1990s, a time of unprecedented growth in the labor market. In 1996, BAPPENAS published data col-lected since 1990 on unemployment rates among general secondary school graduates. At that time, 25.47 percent of high school graduates were unemployed, despite a growth of 13.4 percent in employment op-portunities for people with that level of edu-cation (BAPPENAS quoted in Soedijarto, 2003). Business leaders interviewed as part of the district consultation process for this sector review commented that it takes high school graduates about six months before they are able to complete the most basic workplace functions, such as coming to work on time or following instructions (SAGRIC, 2004).

Furthermore, what quality improvements there have been so far appear to be inequita-ble. In Chapter 2 on finance, we reported that public spending on education barely covers teachers’ salaries and the routine op-erating expenses of public schools. Parents fill this financing gap through various school fees both in public and private schools.31 As pointed out in Chapter 2 on financing, ine-qualities in per-pupil spending are high, both within districts and between districts. In practice, this means that the schools that serve poor children get worse and the schools that serve higher-income children get better (ADB, 2000).

Approach and Rationale The previous chapters discussed the risks and benefits inherent in decentralization and raised general issues about the basic educa-tion governance, management, and finance systems that are currently being debated or put into place in Indonesia. Implicit in those chapters was the notion that the principles of decentralization, if applied to the reform of

31 For affiliated private schools and madrasahs, foun-dations sometimes provide additional support.


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education system management, governance, and finance, will enable Indonesia to meet its goal of providing all children with nine years of high-quality basic education. This favorable result is not expected to derive automatically from decentralization. Some research warns of a decline in general qual-ity or an inequitable rise in quality after de-centralization (Galiani and Schargrodsky, 2001), while other studies report a general improvement in school quality (King and Ozler, 1998).

In this chapter, we propose a break with past approaches to quality management that re-lied on centrally managed projects. Instead, we propose an approach that: (i) links qual-ity assurance and quality improvement, (ii) clearly allocates functions to specific levels of government, (iii) incorporates quality im-provement and assurance into the routine operations of the central government, dis-tricts, and schools, and (iv) uses projects ju-diciously as part of an overall development plan for district education. We then review the quality assurance and quality improve-ment efforts that are already in place or are proposed under the policy framework cur-rently being prepared by the MoNE. At the school level, this is school-based manage-ment, while at the district level, it is per-formance-based budgeting. Details on how school-based management can be modified to address the quality issue more directly appears in Appendix 3.2. Throughout this chapter, we include a few international com-parisons to illustrate how other countries have managed the issue of improving quality under decentralization. The chapter con-cludes with a summary of recommendations for taking a program approach to quality management.

The rationale for this program approach is that the quality of education in Indonesia is not improving for two reasons. First, the lack of political will at the central and dis-trict levels to tackle the quality problem as evidenced by: the low level of public financ-ing of schools and of the sector overall, the absence of formal systems of incentives for improving quality and of consequences for not meeting minimum quality standards, and an organizational structure of the MoNE and personnel policies of local governments that

make it difficult to improve quality in the sector. Second, the lack of technical capac-ity at the district and school levels to imple-ment and sustain quality assurance and quality improvement programs, as evidenced failures to sustain or mainstream the major-ity of good practices developed under pro-jects.

Methodology The methodology for this chapter consisted of a review of documents on educational quality such as newspapers, strategic and annual action plans, laws, decrees, guide-lines, background papers, policy documents, conference presentations, and the text of speeches from the Minister and Directors General of Education to capture a sense of the national government’s strategic inten-tions on the issue of quality management. Interviews with officials in the top two eche-lons of the MoNE provided us with guidance on how policymakers are conceptualizing future quality control and quality improve-ment efforts. In additional interviews with the national staff and consultants responsible for managing the quality improvement pro-jects funded by the central government, we learned about the difficulties that they face in mainstreaming lessons learned from pro-jects.

We conducted two kinds of activities at the school and district levels. On field visits to selected districts and schools, we inter-viewed officials and held group discussions with school committee members and school heads to gain insights into the challenges that they face in trying to raise quality at the local level under decentralization. We also organized a series of focus groups at the school and district levels to provide us with insights into how schools and districts carry out quality control and teacher management. This process included three half-day consul-tations with groups of 8 to 10 bupatis from rural and urban areas in the same province.

Finally, we solicited comments on an earlier draft of this chapter from Indonesian offi-cials at the National Evaluation Center, the Directorate for Junior Secondary Education, the Basic Education Planning Division of the Directorate for Primary and Secondary Edu-


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cation, and from consultants working on project evaluation and management. These inputs have been incorporated into the text.

Basic Terms This chapter uses several terms that are open to interpretation and have no universally ac-cepted definition. These “terms of art” are briefly described below, and more complete explanations are given later in the chapter.

Quality is typically defined in terms of its instrumental value in increasing students’ academic performance. In other words, quality is usually defined as that mix of in-puts, classroom practices, school environ-ment, and school organization that adds value to student learning. This chapter ex-pands that definition to include an additional intrinsic dimension to the definition of qual-ity. We take the position that children have a basic right to attend schools that meet the minimum conditions of learning as stipu-lated in the Education Law and that any in-vestments in improving the quality of unsafe, unhealthy schools staffed by un-qualified teachers to minimum standards are by definition investments in educational quality regardless of their impact on chil-dren’s academic performance. Expanding the definition to include the health, safety, and welfare of students aligns this definition of quality with Indonesia’s Education Law and its commitment to educational quality for all (Education for All, 2002b) as both a basic human right and an instrument for economic and social development.

Quality improvement simply means upgrad-ing inputs, learning environments, teaching practices, school organization, and school performance to bring them closer to the ex-pectations of both the state and parents. In Indonesia, recent quality improvement pro-jects have involved training and managing teachers, revising curricula, providing text-books, rehabilitating classrooms, supporting school-based management, and promoting packaged inputs both on specific subjects (for example, the Science Education Quality Improvement package or SEQIP) and on modern teaching methods (for example, the Creating Learning Communities for Chil-dren’s “joyful learning” package or CLCC). The purpose of quality improvement pro-

grams is to improve school conditions and raise school performance.

Quality assurance refers to processes for guaranteeing that schools and districts meet particular standards. The quality assurance activities in Indonesia have three compatible goals: (i) equivalence – ensuring a basis for comparing the credentials of teachers and school graduates throughout the archipelago through programs that include examinations and certification; (ii) equity – meeting the basic rights of even very poor children to re-ceive basic educational services that meet minimum service standards through a pro-gram that holds districts accountable to na-tional standards for their performance; and (iii) groundwork – ensuring that schools have a basic minimum amount of material and human infrastructure that is both large and equitable enough to improve quality. Under the new Education Law (No. 20/2003), the mechanisms for achieving these ends consist of accrediting schools, certifying teachers, and setting graduation requirements for post-primary students.

Quality Management Quality management means linking quality improvement and quality assurance through a common set of standards and measures. Under this approach, information from peri-odic performance evaluations guide both quality assurance and quality improvement activities, as illustrated in Figure 3.1 and de-scribed in Box 3.1. The new Education Law provides part of the framework for quality assurance by establishing a body that will set national standards and evaluate perform-ance. However, the law does not specify the relationship between national standards and quality improvement at the district or school levels. In this section, we discuss progress and issues in setting national standards and measures and in establishing a nationwide system for reporting on performance.


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Need for Common Ground A quality management approach requires a set of standards and measures to serve as common ground for quality assurance and improve-ment. The standards and measures must be uniform across the education system, although performance targets can vary to take into ac-count differences in conditions between dis-tricts or schools. For example, the standards of teacher competence must be the same in, say, Mataram, East Java and Kupang, NTT. Likewise, the instruments used to measure teacher competence, such as public examina-tions on subject matter plus observed teaching practice, must be the same in both places. However, the scores that teachers must receive to be certified or promoted can vary depending on the needs and resources of each district.

A single, well-considered set of national stan-dards is seminal in several ways. First, these

standards will be the conceptual link between the quality assurance and quality improvement systems, for example, by aligning school per-formance evaluation (quality assurance) with school development planning (quality im-provement) to the same set of national stan-dards. Second, the national standards will coordinate the activities of different agencies operating at the same levels, for example, by focusing independent accreditation bodies and district school inspectors on the same set of is-sues or by focusing public and private provid-ers of teacher training services on the same set of competencies. Finally, as the function of quality management has been allocated to more than one level of government, the na-tional standards will help to ensure that all these different agencies carry out these quality functions towards the same end. For exam-ple, while the central government will be re-sponsible for setting minimum standards for tests of basic student competencies, districts or

Figure 3.1 Diagram of Quality Management System

PERFORMANCE EVALUATION

Uniform Standards Uniform Measures

Correction for Negative Result

Improvement Plan

Milestones

Recognition for Positive Result

QUALITY ASSURANCE COMPONENT

Monitoring Results Information

Based Planning

Negative Positive

Mobilizing Resource, Implementing Plans

QUALITY IMPROVEMENT COMPONENT

Box 3.1 Hypothetical Use of Performance Information in a School

A hypothetical school is evaluated by an accreditation body and is performing just at the minimum standard level. On the quality assurance side, the school receives an incentive for performing up to minimum standards, in this case a certificate of accreditation that carries with it certain privileges. This certificate qualifies the school to send representatives to an annual conference of accredited schools offered by the district. On the quality improvement side, the school uses the performance evaluation to prepare a school improvement plan and at regular interval checks to see if it is on course to achieve these milestones. In this case, the school evaluation shows that many grade 4 students are not able to read at the 4th grade level; so the school introduces a daily program of 30minutes of sustained silent reading for students in grades 2 and 3. Teachers from grades 4 and 5 agree to monitor the progress of the children every two months. If the program works well, the school will make 30minutes of sustained silent reading part of their daily teaching practice.

Chapter 3 Education Quality Assurance and Improvement

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independent bodies will be responsible for de-veloping tests that meet those standards.

Under decentralization, the central government is responsible both for setting national stan-dards and measures and for evaluating the per-formance of the education system overall. The MoNE is currently undertaking several parallel standard-setting activities, and Figure 3.2 on the following page contains a diagram of the standard-setting activities begun in 2003. The most important of these standard-setting exer-cises are the National Education Standards for schools, Minimum Service Standards for dis-tricts, and Teacher Performance and Certifica-tion Standards. Each is being developed by a different working group, and, as yet, there is no standing body to coordinate their activities. The absence of a steering body on standards has two dangers: first, that the cumulative number of standards may be too many to man-age and, second, that the standards being de-veloped may not be compatible and may therefore send different messages to teachers, schools, and districts about what they need to achieve. The Education Law mandates the formation of a standardization and evaluation body that will, among other duties, specify na-tional education standards.32 Among its other duties, this new body will have to coordinate the following standard-setting activities:

32 Law No. 20/2003 Chapter IX, Article 35 and Chapter XIV, Articles 57-59.

1. The school accreditation body (BAS) is setting minimum standards for the ac-creditation of schools and is defining a process for monitoring and improving school quality.

2. The decentralization facilitation unit (UFD) is working under the MoHA um-brella to develop minimum performance standards for the districts.

3. The national evaluation center is devel-oping standards and tests of students’ mastery of basic competencies and the general and subject knowledge of trainee teachers.

4. The national curriculum center is defin-ing basic competencies in all subject ar-eas.

5. The textbook and academic publications center is defining technical standards for print and graphic teaching materials.

6. The teacher training department is de-veloping teacher competency standards.

Until this body is established, we highly rec-ommend forming a steering committee for harmonizing standards.

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Standards Chapter 4 of this report on teacher manage-ment discusses the standards currently being developed for initial teacher certification and their subsequent performance evaluations and how these can be used in a career-long teacher management and development program. In this section, we discuss the National Education Standards for schools and Minimum Service Standards for districts.

Legal and Regulatory BasisThe 2003 Education Law devotes an entire chapter (Chapter IX) to the issue of national education standards. That chapter mandates that standards be developed and codified for educational content, process, graduation com-petencies, teaching force, infrastructure, man-agement, budgeting, and evaluation. It also calls for these national standards to be the ba-sis for developing curricula, the teaching force, educational infrastructure, management, and budgeting. Among the 14 regulations cur-rently being prepared is a draft regulation (RPP) that addresses the articles in the Educa-tion Law on national education standards. The draft RPP does not contain standards per sebut states that national standards should be de-veloped, implemented, reported on, and evalu-ated by an independent educational standardization and assurance body that re-ports to the Minister of Education and this in-dependent body will organize standardization and certification nationwide (RPP, 2003). In the interests of public accountability and transparency, the law requires that citizens be given an opportunity to comment on these draft regulations at public hearings. This process of public hearings will begin in mid-2004, and the independent education stan-dardization and assurance body is not likely to be constituted before 2005. Therefore, there is an ample timeframe for the government to recommend standards and standard-setting processes for consideration.

Education Standards for SchoolsThe independent body mentioned above will set standards for schools and oversee school quality assurance. Under the legal framework, these education standards will be used as the basis for both a school accreditation system and as a sector evaluation system based on

school performance. The national education standards are not at present formally linked to the district minimum service standards that are currently in draft form. The reason for this lack of connection is structural; the Education Standards will be developed by an independ-ent body and formalized as Ministerial Decree, while the Minimum Service Standards are be-ing developed by MoNE technical staff under the auspices of the Ministry of Home Affairs.33

In 2001, a Ministerial Decree34 established a set of standards for kindergartens, primary schools, and junior secondary schools. These standards will be retired when the independent body formulates the new national education standards. The current standards have not been effective for several reasons, principally, because there are too many categories (eight) and indicators (30-40) and because the guid-ance for their implementation is burdensome. Because the central government has not pro-vided schools with adequate funds for training their administrators and teachers in the use of these standards and because the central gov-ernment has no statutory authority to compel districts to use them, the existing national edu-cation standards have not been enforced. It is not clear whether the independent standardiza-tion body that will manage the school stan-dard-setting process will also oversee the district minimum service standards.

Minimum Service Standards for Districts Since decentralization, quality control in Indo-nesia has been moving towards adopting a per-formance-based type of management andestablishing quality control systems that are transparent, equitable, and collaborative and are consistent with the quality improvement agenda. This progress can be seen in the work of a special Decentralization Facilitation Unit (DFU) within the MoNE, which under the guidance of the MoHA, has undertaken a model-building exercise for setting district minimum service standards. The Unit has been conducting pilot studies in three prov-inces (West Java, East Java, and NTB) and

33 Although there will be an umbrella Presidential Decree authorizing Minimum Service Standards for several sec-tors, the standards themselves will be set by the Minister concerned through Ministerial Decrees, in this case the Minister of Education. 34 Ministerial Decree 53/2001.


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five districts (Cianjur, Cirebon, Kota Sura-baya, Kota Malang, and Lombok Timur). The piloting began in the provincial capitals with discussions with local government officials about the concept, function, and types of stan-dards. The process continued at the district level where various interest groups came to-gether to discuss standards for 10 obligatory functions and 24 types of services. This model-building exercise defined about 173 minimum service standards for education (ex-cluding higher education), with each service type having as many as 19 or as few as two performance indicators (Hijmans, 2003). The set of standards that are currently being devel-oped include access, equity, and quality indi-cators such as enrollment rates, dropout and completion rates by gender, students’ aca-demic performance, and the percentage of the APBD directed to the basic education sector excluding teacher salaries. These are a mix of input (technical) and output (performance) standards. The minimum service standards for districts are critiqued in Chapter 1 on govern-ance and management in this volume.

Local Targets – National Standards The national education standards were origi-nally intended to be set in an open process in which the central government and the regions would negotiate region-specific targets on the basis of indicators set by the central govern-ment. However, the MoNE now plans to have national targets but flexible timelines for achieving those education targets. Setting tar-gets at the national level is problematic for several reasons. First, it impinges on the pre-rogative of local governments to chart their own course. Second, it makes local education officials accountable for their performance to two higher authorities, not only the local legis-lature/executive but also the central MoNE. This is less troubling if all of these authorities have the same performance expectations but can be problematic if the national and local performance expectations are very different. Third, it is unclear what responsibilities the central government will have towards those districts that fail to meet minimum standards over a period of time. If there are no incen-tives for compliance or consequences for non-compliance, then the standards do not help to

control quality and put district educational au-thorities in a difficult position.

Lead and Lag Indicators Quality management systems are most effec-tive if they are based on standards that include both “lead” and “lag” indicators.” Lag indica-tors describe what has been accomplished so far. At the school level, for example, the number of qualified teachers is a lag indicator, while the number of teachers sent for special-ized training is a lead indicator. At the district level, the participation rate is an example of a lag indicator, while the number of “at risk” children receiving scholarships is an example of a lead indicator. We recommend that the standards for schools and districts contain a mixture of lag and lead indicators.

Measures Setting standard measures for quality indica-tors is also an important element of a nation-wide quality management system. For quality management systems, the most important per-formance measure is student learning. There are many approaches to measuring student learning, some being appropriate for quality assurance and others for quality improvement. Each approach has specific advantages and disadvantages for Indonesia. For quality as-surance, many countries use standardized tests at the end of an educational cycle as one of the factors that determine whether students have learned enough to qualify for diplomas or cer-tificates of completion. In a large decentral-ized system, equivalence among various private or public providers of examinations can be assured by accrediting the testing insti-tutions based on the rigor of their test devel-opment process, the reliability of the instruments that they prepare, and the validityof their test administration and scoring proto-cols. Another alternative is to use sample-based national assessments early or in the middle of an education cycle to measure stu-dents’ performance against national standards. Table 3.1 below shows how different types of standard learning assessments can be used in a quality management system.


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Table 3.1 Common Uses of National and School-based Tests in Quality Assurance

Norm Referenced Competency Referenced Nationwide or Regional

High Stakes: Determine future oppor-tunities for test takers Tied to performance in-centives/ corrections systems for schools Expensive to develop and implement Prone to corruption

Filtering: Rank students in per-centiles to determine which stu-dents may pass to favored schools at the next level

Formerly used in Indonesia (EBTANAS)

Qualifying: Determine which students obtain diplomas or cer-tificates.

Currently used in Indonesia (UAN)

Middle Stakes Tied to performance in-centives/ corrections system for schools No consequences for test takers Expensive to develop and implement Somewhat prone to cor-ruption

Comparative ranking of schools or districts: Used to rank order schools or districts to determine which schools are eligible for benefits, remediation or correc-tion

Not used in Indonesia in educa-tion sector, (an analogy can be drawn with the Human Resource Index which is used to rank dis-tricts to determine welfare eligi-bility)

Diagnostic: Used to recommend specific quality improvement in-puts for particular schools

Not yet used in Indonesia but can be used in conjunction with ac-creditation system or Provincial Quality Improvement Institutes (LPMP)

Low Stakes Information for plan-ning purposes only Not tied to performance incentives/ corrections system for schools No consequences for test takers Expensive to implement Not prone to corruption

Informational ranking of schools or districts

Not used in Indonesia in educa-tion sector, (an analogy can be drawn with rankings on Human Resource Index

Informational for district or school planning purposes only.

Sample-based Information for plan-ning purposes only Not tied to performance incentives/ corrections system for schools No consequences for test takers Relatively inexpensive to implement Not prone to corruption

International tests, such as TIMSS, used to rank countries for informational purposes

Used in Indonesia

Assessment of overall system ef-fectiveness for policy and pro-gram planning

Not yet used in Indonesia

School-based High Stakes

Expensive to develop

Open to corruption

Competitive ranking of pupils for purposes of screening admissions or awarding prizes or benefits. Entrance exams are used in In-donesia to screen applicants.

Qualifying: Determine which students obtain diplomas or cer-tificates.

Used in Indonesia (UAS)

Low Stakes Not expensive to de-velop or implement Very demanding of teachers

Informational ranking of students

Not used in Indonesia

Information on individual student performance

Used in some classrooms

Note: EBTANAS = Evaluasi Belajar Tahap Akhir Nasional, UAN = Ujian Akhir Nasional, and UAS = Ujian Akhir Sekolah.


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Box 3.2 Information from a National Evaluation System Changed the Focus of Debate in Brazil

Brazil is a large, decentralized country like Indonesia. Its decentralized structures and systems are heterogeneous to the point where there are almost as many different education systems as there are states and cities. In such a system, information is especially critical.

The evaluation system introduced in the 1990s has three components: a school census, a national assessment, and public examinations at the end of the basic education cycle. Brazil has built up a very useful professional expertise on the application of sample-based standardized student assessment tests that bring educational quality into the fore-front of policy formulation and implementation. The active dissemination of test results, together with results about resources and school operating standards, are fuelling competition among municipalities to improve their schools. This practice puts a high value on the importance of establishing feedback mechanisms for ensuring that information is shared across and within sub-national entities and community organizations.

Information derived from the evaluation tools focused the educational debate in Brazil on equity in the distribution ofpublic resources and conditions of instruction, the quality of instruction at various levels and in the various school systems, teacher training, school autonomy, and management models. More specifically, after the census revealed financing inequities among districts, the government redistributed about $10 billion among all public schools in dif-ferent localities, which benefited 30 million students throughout the country. As a result of the national assessment, policymakers introduced accelerated learning programs for students who were at least two grade levels behind their age group and a training and certification program for teachers. Also, introducing a requirement that students had to pass public examinations to graduate from secondary school created a standardized credential that is useful to both higher education institutes and employers.

Source: World Bank, 2002.

Although information from standard tests can be used to devise and implement improve-ments within schools, most systems rely on school-based tests or continuous classroom as-sessment to monitor and upgrade the progress of individual pupils. These methods require a great deal of time and attention from teachers.

Information

We discuss the need for a robust information system in Chapter 1 on governance and man-agement. At its most basic, the information system must collect information relative to the national standards using the standard metrics. One critical function of the information system is to provide reports to all levels schools, districts, provinces, and the central govern-ment. For quality management purposes, in-formation on performance is most useful if it includes three types of information each school or district’s performance relative to na-tional standards, their own past performance, and the performance of other districts or schools. In this way a district or school can monitor changes in its performance over time. Although the results of performance assess-ments can be reported as a single number by using a formulated index, if the results are dis-aggregated by topic, this can help districts and schools to meet specific quality improvement

targets. Brazil has a large, decentralized edu-cation system in which performance informa-tion is used to inform policymakers’ decisions. A brief description of how pupil assessment is managed in Brazil is provided in Box 3.2.

Recommendations We make the following recommendations in the area of quality management.

Under a decentralized program ap-proach to quality management, a permanent capacity for reviewing standards and measures is required. The national Education Law (No, 20/2003) requires the establishment of an independent body reporting to the Minister of Education that is re-sponsible for standardization and evaluation. Until such a body is es-tablished, we recommend that the MoNE appoint a standardization steering committee to oversee the several parallel standard-setting proc-esses that are already underway.

In the interest of imposing discipline and rigor on the standard-setting process, we recommend that staff who are qualified, experienced, and


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empowered to make difficult deci-sions actively participate in or steer the standard-setting body. In Indone-sia, policies are not set by law or even by decree, which are often vague and contradictory. Rather, the policies are embodied within opera-tional guidelines written by mid-ranking professionals or even inde-pendent bodies. In a sense, the diffi-cult job of policymaking has been delegated to a level of staff who are not sufficiently qualified, experi-enced, or empowered to set policies.

We recommend an international peer review through a seminar and follow-up workshops before the national education standards and minimum service standards are finalized. Host-ing international seminars has raised awareness within the MoNE that standard-setting activities are instru-mental to assuring and improving educational quality. The MoNE has recently completed drafts for both kinds of minimum service standards but would benefit from additional in-put before codifying those drafts into regulation.

Quality Assurance This section describes the status of quality as-surance in the education sector using examples from current practices. The link between the quality assurance organizations is not clear, and there is potential for them to produce con-flicting messages and for there to be duplica-tion in their efforts.

Legal and Regulatory Framework The New Education Law (No. 20/2003) de-votes an entire chapter to the issues of evalua-tion, accreditation, and certification (Chapter XIV, Articles 57-59).

The law calls for the evaluation of learners, institutions, and programs. Although the law is vague and some-what contradictory, it seems to stipu-late two kinds of learner evaluation: continuous assessment by teachers and the periodic evaluation of learners, schools, and programs by an inde-

pendent institution. Further, it speci-fies that the community and/or professional organizations can form independent bodies to undertake those evaluations of learning outcomes. The article on accreditation (Chapter XIV, Article 60) stipulates that the government and/or independent bodies will accredit programs and schools in the interests of public accountability. Furthermore, the law states that ac-creditation will be based on “open cri-teria” that are not further explained. The article on certification (Chapter XIV, Article 61) states that certifica-tion will be in the form of “diplomas” (ijazah) and certificates of compe-tency. Diplomas will be awarded to students in acknowledgement of their learning achievement and/or their completion of a level of study after passing an examination organized by an accredited school. Schools and training institutes will give compe-tency certificates to learners and community members in recognition of their competency to undertake specific work after passing competency tests organized by an accredited school or certified institution.

In theory, these stipulations will be clarified through government regulations (RPPs), Min-isterial Decrees, and procedural manuals. The Education Law mandates the preparation of 14 Government Regulations (RPPs), and the drafting of one additional law on the legal status of schools (BHP). As we discussed in the section on standards above, a draft RPP is currently being prepared that addresses both Chapter IX on National Education Standards and Chapter XIV on evaluation, accreditation, and certification summarized above.

Current Practices Currently, there are several quality assurance mechanisms practiced in Indonesia. These can be organized into two groups: mechanisms that apply to individuals (students and teach-ers) and mechanisms that apply to institutions (schools and local government). The mecha-nisms are falling short of expectations due to issues such as tension between the center and districts regarding roles and responsibilities for


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quality assurance and technical matters like the lack of capacity to implement policies pertain-ing to school and district educational quality assurance.

Students and Teachers At the present time, quality assurance pro-grams for students and teachers are examina-tion-based, routine, and structured as part of the normal course of doing business. There are clear incentives for students and teachers to comply with standards, as there are clear consequences for failing (for example, senior secondary students who do not pass the final national examination are not allowed to gradu-ate and candidate teachers who fail knowledge tests are not certified). The standard examina-tions for measuring student achievement and the competency of candidate teachers, though far from ideal, are reasonable. Technical ex-perts at the MoNE acknowledge that students’ final examinations are not yet adequately stan-dardized, although much progress has been made in this direction.

Student Diplomas. In Indonesia, academic quality is monitored through students’ end-of-level examinations. School certificates are granted or withheld on the basis of the stu-dents’ examination scores. These certificates grant, but do not guarantee them access to the next level of study. In the 1980s, the Evaluasi Belajar Tahap Akhir Nasional (EBTANAS) was introduced as a national test. Originally intended as a tool to assess and control the quality of the education system, the tests quickly became high-stakes public examina-tions that determined which students would be able to continue their education and the kind of school to which they could hope to gain admission.35 Due to widespread criticism of expense, corruption and lack of usability of the public examination system, the EBTANAS was abolished by ministerial decree in 2002

35 Although the EBTANAS was a nationwide public ex-amination, it did not meet the standard for a standard-ized test. Provinces were sent alternative questions and could choose easier or harder questions to suit the ability of students in their region. The formula to work out the final score also varied by region to make sure that any differences in final scores between regions were not too great, although in practice the differences in scores be-tween provinces were considerable.

and replaced at the junior and senior secondary levels only with the Ujian Akhir Nasional(UAN) and the Ujian Akhir Sekolah (UAS). The UAN covers three core subjects (Bahasa Indonesia, Mathematics, and English) and draws the multiple-choice items from the same item bank for schools nationwide. The items on the UAN still mostly require only factual recall and rarely measure competencies, espe-cially in subjects like Indonesian in which lan-guage competency is the core of the curriculum. The UAS is the test for all na-tional subjects other than Bahasa Indonesia, Mathematics, and English as well as local con-tent chosen by the districts and can include es-says, portfolios, laboratory work, and other assessment methods. However, at this stage, the UAS also mainly relies on multiple-choice questions. Tests can be, and often are, set by individual schools or, in some cases, as the re-sult of agreements among groups of teachers at the district (junior and senior secondary) or sub-district (primary) level.

The parliament decided to permit the 2004 public examinations to go ahead but stated its intention to discontinue allocating public funds for that specific purpose in the future. As a newly elected parliament will be responsible for appropriations in 2005, it remains to be seen whether the 2004 public examinations are, indeed, the final finals.

Teacher Certification. Teachers are the single most important determinant of students’ performance and school quality, and teacher issues are discussed in depth in the next chapter. Therefore, the management of the supply of this most critical “input” must be the first step in ensuring that the teaching workforce meets the country’s minimum standards of quality through the process of certification. There are currently four types of teachers in Indonesia (see Box 3.3), two of which are certified. Teacher certification is managed by an appointments procedure, which takes into account their performance on standardized tests.

For the last six years, graduates of accredited institutions of higher education who wish to become junior or senior secondary teachers or contract teachers must take a public examination, which tests their general


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Box 3.3 Quality Assurance of the Teaching Force

Public teachers are civil servants and have minimum teaching qualification (for a new SD teacher, D2, two year degree and post SMU, for new SMP/SMU teachers, this is S1, a four year university degree).Contract teachers are fixed term contract teachers, normally engaged as part of education projects but with the same qualifications as public teachers. Permanent teachers are engaged by foundations to teach in private schools. Those in better schools have to have all of the required minimum qualifications described above, but in poorer schools, many have less qualifications. Temporary teachers are employed in all kinds of schools (private and public) to fill shortages and are normally paid by the scholl committee or a foundation. These teachers vary widely in their qualifications, some have only the minimum qualification and many in poorer schools lack even the minimum. Their wages are often very low, sometimes less that Rp. 100,000 per month.

knowledge,36 subject mastery, and scholastic aptitude. As of this year, 2004, primary teachers will also take the examinations. Due to the large numbers of candidates taking the tests each year (in 2003, 500,000 candidates took the examination as part of the application process for advertised junior secondary education positions), a test of teaching competencies has not been included. The results of six years of testing will provide a rich resource for future research into the specific strengths and weaknesses of the current teaching workforce.

Schools and Local Government School Accreditation. In the future, school-level quality will be maintained and improved through an accreditation system established under the new Education Law. This accreditation system will apply to all schools, whether public, private, general, or madrasah.Accredited schools will be ranked into three categories, and the lowest category will include schools that meet the absolute minimum standards. Thus far, the ranking of schools under the new system is not much different from the existing system for ranking schools. A Ministerial Decree (KepMen 087/U/2002)37 has established an independent

36 General knowledge tests include Bahasa Indonesia, civics, public policy, English, and mathematics. 37 Article 60 of the Education Law stipulates that the ac-creditation of schools will be the responsibility of the government and/or an independent body. The KepMen 087/U/2002, which predated the law established an inde-pendent accreditation body (BAS), lists nine school components to be evaluated during accreditation includ-ing: the curriculum and the teaching/learning process; school administration and management; school/institutional organization, equipment and infra-

school accreditation body (BAS), listed the key aspects of accreditation, and stated that the new ranking will be used to provide guidance on quality improvement to schools. The accreditation procedure itself involves seven steps. The first step involves each school doing a self-assessment of whether it meets the national requirements. If the school feels that it is in compliance with the standards, then it requests an audit from the local accreditation body.38 If the school passes the audit, then it receives accreditation for a four-year period. It has not yet been decided what will happen to those schools that do not meet the minimum accreditation requirements over an extended period of time. It is anticipated that many schools, particularly the numerous small private madrasahs that provide educational services to many poor children especially in remote areas, will fall far short of the minimum accreditation standards.

The accreditation system is an interesting ap-proach to quality assurance but tough policy issues remain unresolved. To ensure that dif-ficult policy decisions are aligned with na-tional priorities, policymakers rather than the independent accreditation body need to make some difficult decisions about which incen-tives and sanctions to put in place for those schools that do and do not meet the minimum accreditation standards. As the policy reads now, the purposes of accreditation are twofold: (i) to ensure that even disadvantaged children attend schools that meet the minimum condi-

structure; staffing; budgeting; teachers and students; community participation; and the school environment and culture. 38 Primary and junior secondary schools will apply to the district body for accreditation, while senior secondary schools will apply to the province.


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tions of learning and (ii) to provide continuing guidance to schools to help them to improve their quality. Assigning two technically de-manding functions to bodies that have not yet been established needs further consideration. The guidance concept is appealing, but unless it is accompanied by a serious commitment of financial and technical resources, this guidance will have little effect. The responsibility for schools has clearly been assigned to the dis-tricts, but no legislation or regulation defines how districts can be persuaded to spend scarce resources on programs to ensure that schools meet national minimum accreditation stan-dards. Furthermore, there is no explanation of where the local accreditation bodies will find the human and financial resources required to conduct audits of every school and madrasah every four years and to provide them with con-tinuing guidance.

Districts At present there is confusion about what mechanisms apply for ensuring the quality of education services managed by districts. As mentioned above, minimum service standards for education are being prepared, along with standards for other decentralized sectors. Eventually, these service standards will be-come part of the government’s performance-based budget procedures described in Law 17/2003. This law requires district and na-tional budgets to be prepared based on activi-ties that are justified against performance standards. It is not yet clear how central fi-nancing for districts will be tied to their ac-tions or their performance against standards. Nor is it clear if districts will need to justify funding items in terms of their actions or past performance. The education sector is increas-ingly using the DAK mechanism for financing national education priorities such as the Edu-cation for All initiatives. DAK financing is proposal-based, and the central government could require districts to use service standards as a basis for those proposals. By using per-formance standards to justify both block and earmarked grants, the national government can use financing as a quality assurance tool. Once national policies on district level ac-countability for educational quality are clari-fied, mechanisms for quality assurance at the district level can be refined and coordinated.

Institutional Framework There are several bodies that will be responsi-ble for implementing the new quality assur-ance mechanisms.

National Agencies The task of coordinating the quality assurance system is, under the Education Law, assigned to a quality assurance and standardization body, to be known as the National Standardi-zation Body. As mentioned previously, the government regulations associated with that article of the law are currently being prepared, and the particular institutional framework for managing quality assurance has not yet been formalized.

There is no provision for a national center to set nationwide public examinations as a means for quality assurance under the Education Law. This has opened debate about the future existence of the National Evaluation and Test-ing Center, which until now has been respon-sible for setting, overseeing, and managing the marking of the current high-stakes public ex-aminations at the end of the basic and secon-dary cycles.

Prior to the passage of the Education Law, the Ministry of Education established an Educa-tional Quality Assurance Institution (Provin-cial Lembaga Penjamin Mutu Pendidikan or LPMP) by Ministerial Decree (KepMen 87/O/03). This decree transformed 30 provin-cial teacher training centers into 30 branches of the LPMP. The core functions of these branches are to support school and teacher quality assurance including:

Measuring and evaluating the imple-mentation of basic and secondary edu-cation.Building models, including teach-ing/learning models, that will help schools to meet national quality stan-dards. Assisting teachers in measuring and evaluating the outcomes of learning. Helping teachers to manage educa-tional resources for quality improve-ment.


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The LPMP is not mentioned in the Education Law, and the law assigns most of the 40 tasks included in the LPMP’s terms of reference to the National Standardization Body and to the district governments. It is not clear whether the LPMP will be continued after the accredi-tation bodies and district quality evaluation bodies have been formally established.

Continuing the LPMP and its branches might be beneficial if the institution does not actually set standards but limits its activities to provid-ing performance evaluation services under the direction of the school accreditation body (BAS). The overlap of its functions with those of the districts might be more problematic. The following list highlights a few of the over-lapping tasks:

Assessing the competency of and cer-tifying educational institutions and staff in the provinces. Undertaking EMIS services including data collection and school quality mapping, and maintaining the data-base for and disseminating informa-tion on primary and secondary information to schools. Supervising and evaluating primary and secondary education in the prov-inces. Certifying educational quality in the provinces.

School Inspectors At present, districts still use a system of circuit inspections for quality assurance. Primary school inspectors operate out of sub-district offices, while junior secondary school inspec-tors operate out of district government offices. Although school inspectors are supposed to provide feedback and guidance to schools on teaching practice, most school principals and teachers who participated in our focus groups described the inspections as focusing almost entirely on administrative matters. Inspectors visit schools only infrequently, particularly those schools located far from the sub-district offices. In the past, many school inspectors were retired teachers, but recently younger people have been recruited who have been trained in modern teaching practices and who are physically more able to get to remote schools.

School Committees

The national policy on school-based manage-ment includes the function of quality assur-ance at the school level. The Education Law specifies this function assignment and, in Arti-cle 51, stipulates that school management must be based on minimum service standards and on the principle of school-based management(Law No. 20/2003, Chapter XIV, Article 51, paragraph 1).

The school-level body responsible for evalua-tion and quality assurance is the school com-mittee; these committees are discussed in Chapter 1 on governance and management. Teachers are assigned the responsibility for quality assurance through classroom practices such as continuous assessment.

Recommendations School-level quality control under decentrali-zation is shifting from a system dependent on external inspections against absolute standards to a system reliant on self-assessment against national, local, and school-based standards backed up by occasional external audits. In-deed, there are far too many schools to be monitored entirely through a system of exter-nal inspections. Ideally, the results of both the schools’ self-assessments and occasional ex-ternal audits will serve as inputs to the process of improving school quality, thereby linking the quality control and quality improvement efforts. Towards this end we make the follow-ing recommendations:

We recommend that the MoNE de-velop a model for enabling citizens to participate in preparing and refining regulations. The model-building exer-cise could be implemented by : (i) or-ganizing information campaigns about government regulation aimed at all education sector stakeholders, (ii) conducting public hearings, and (iii) updating and finalizing the govern-ment regulations.

Indonesia lacks a standardized test of learning to provide geographically comparative information on students’ academic performance. While there are one or two internationally compa-rable tests, there are no domestic ones


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that give an accurate picture of the state of learning within Indonesia. We recommend introducing a periodic na-tional assessment of learning, particu-larly at the lower grades, which would yield useful information about the overall performance of the education system.

Although some progress has been made in establishing a system for school accreditation, many difficult is-sues are left unresolved. For example, at present there is no incentive system with rewards and corrections for en-couraging schools and districts to comply with national standards. Nor does the policy include a process for resolving disagreements over accredi-tation or monitoring results. Also lacking is a system for gathering data on quality indicators to be used for quality control and resource allocation purposes. Until the specifics of the compliance and implementation proc-esses are sorted out, the new accredita-tion system is not likely to serve its purposes. We recommend an interna-tional peer review of the proposed ac-creditation system through an international conference and a series of follow-up workshops with policy makers to resolve difficult issues.

Assuring quality in districts and schools through minimum service standards is still in the planning phase. We recommend that quality assurance be linked to annual performance-based budgets prepared by schools and dis-tricts. In this way, the quality assur-ance system will become a routine part of financial planning and performance reviews.

Indonesia is currently planning some comprehensive anti-corruption activities that will include monitoring independent from the government. We recommend that anti-corruption activities be considered part of the quality assurance process. The Social Assessment for the Basic Education IV Project reports that many teachers

claim that the certification process is not transparent and that the extortion of sums of money by officials in exchange for favorable appointments is a common practice. Indeed, the practice is so widespread that poor parents of junior high students feel that the teaching profession is closed to their offspring as they cannot afford the illegal payments (World Bank, 2001). However, once these anti-corruption activities are implemented, the quality of the teaching force will no longer be undermined by corrupt practices like these.

Quality ImprovementThis section places quality improvement in the context of Indonesia’s experiments with qual-ity improvement, the current legal and regula-tory framework governing quality improvement. We then tie failures to improve quality to underlying structural issues such as inadequate sector finance and absence of a system for sustaining quality improvement that is integrated into routine sector management practices.

The Indonesian Experience in School Quality Improvement Indonesia has been experimenting with quality improvement for over 30 years. During this time, public support for quality improvement has been project-based and channeled from the central government while private support has been school-based and channeled through school fees and other household contributions. Remarks made by school committee represen-tatives and school principals during the district consultation process during the preparation of this report revealed that the dynamic that pro-pels schools to improve quality is market-based; better public and private schools can charge higher fees for services. Two factors limit the effectiveness of the market dynamic: the limited supply of quality improvement goods and services and the modest purchasing power of even the most successful schools. Indonesia has been expanding the supply of government-provided goods and services through centrally funded projects for over 30 years. Since the 1990s, Indonesia has been experimenting with giving government grants to schools for quality improvement. Donors


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have been active in the sector guiding and in-vesting in many publicly financed projects that fund school rehabilitation, textbooks, libraries, teacher training, technical advice, and other inputs.39 With all this experience, donor guid-ance, and investment, why has the quality of education overall not improved?

Project Approach The problem is structural in that quality im-provements are project-based and not part of a school’s or a district’s routine operations. Pro-ject-based interventions such as cluster-based in-service training, library construction, or proposal-based grants for quality improvement are sometimes successful during the life span of the project, but nearly all prove to be unsus-tainable in the long run due to high unit or high recurrent costs. In addition to a short life span, quality improvements are seldom evalu-ated in terms of their impact on school per-formance and they rarely spread spontaneously to those schools that were not project benefici-aries. One approach that has not yet been ap-plied in Indonesia is to incorporate quality improvement into the routine operations of schools or districts by: (i) including quality improvement activities in a consolidated budget for school financing that is transferred from districts to schools either as part of the school’s block grant or as earmarked funds depending on the school’s capacity for plan-ning and accounting, and (ii) using a perform-ance-based budgeting system that holds districts accountable for schools’ minimum service standards.

39 A summary of 25 donor-supported projects appears in Appendix 1.

Research Underlying Quality Improvement ProjectsThe quality improvement projects over the last decade have been based on practices derived from two main research areas – school effec-tiveness and school reform.

Researchers have built up a foundation of lon-gitudinal, quantitative, and empirical studies in developed and developing countries about what mix of inputs into “the school climate,” “enabling conditions,” and “the teaching/ learning process” influence students’ cognitive achievements. Unfortunately, the results of these studies have not yielded a sequenced list of investments guaranteed to improve per-formance. School reform research is grounded in management theory, particularly manage-ment for change, and is primarily based on qualitative research and case studies. School reform emphasizes improving the within-school decisionmaking process, enhancing school/community relations, encouraging the generation of ideas from within schools about how to improve quality, and in-house capacity building. Unfortunately, research into the im-pact of school reform on school performance is not conclusive. Indonesia has experimented with projects derived from each of these re-search areas. Table 3.2 compares the attributes of the school effectiveness approach and school reform approach.


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Table 3.2 Comparing the School Effectiveness and School Reform Approaches School Effectiveness School Reform

Research area Cognitive science (theory into practice)

Management science (practice into theory)

Research thrust Teaching and learning process

Classroom teaching practices

Allocation of production func-tions

Managing for quality improve-ment

Managing for change

Research variables Inputs

Classroom processes

Learning achievement

School control over resources

School governance structures

School management processes Research methods Longitudinal, quantitative, and

empirical studies

Rigorously designed sequential studies

Methodologically complex analy-sis using statistical techniques such as multi-level modeling to large data sets

Qualitative studies to explain the highly context-specific nature of quality improvement

Evaluations of individual im-provement initiatives

Examples of projects/programs in Indonesia (Some have elements of both: the projects are categorized by their major thrust and intention)

SPP-CBSA SSEM PEQIP SEQIP PJSE B&R BEP (MoRA) BEP (MoNE) PGSD PGSM CLCC

COPLANER Cosep BOMM REDIP I and II DSSD DBEP CLCC MBE

Major inputs Pre and in-service teacher training

Educational materials

School rehabilitation

School and kecamatan manage-ment capacity building School Improvement Grants

Weaknesses Limited demand for quality im-provement services in non-project schools

Does not explain how to make in-effective schools effective

Defines effectiveness in terms of cognitive and academic outcomes rather than social and effective ones

Limited supply of quality im-provement services

Does not explain how to improve quality of teaching and learning

Key findings from research Influence of student background on performance

Importance of “proximal” factors over “distal” ones

Differential effectiveness within schools

Management of change

Improvement as a process at sys-tem, school, and classroom levels

Descriptive analysis of in-school cultures and power relationships


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School Effectiveness School Reform

Interaction of factors within schools

Interventions Technical and professional Centrally defined, standard pack-age of inputs

External pressure to change prac-tices to meet technical or profes-sional standards

Decentralized decisionmaking

Support for changing practices that can be sustained by the school over the long term

Note: A brief description of each project featured in this table appears in Appendix 3.1.

Current Legal and Regulatory Framework for Quality Improvement

Unlike quality assurance, there is no chapter in the Education Law that specifically addresses the issue of quality improvement. However, quality improvement is mentioned several times, both as a general agenda item and as the specific goal of several statutes. For example, in Article 56 on education boards and school committees, the law stipulates that the role of the community in improving quality in schools should include planning, monitoring, and evaluation. Prior to decentralization, the rou-tine management of the primary school system was assigned to local governments, and re-sponsibility for educational quality improve-ment was assigned to the central government. Under decentralization law 22/1999, these functions were reunited and districts were given responsibility for the education sector overall. A national policy of school-based management through school committees and district education management by education boards was formalized by a Ministerial Decree (KepMen 44/U/02). Under this policy um-brella, schools are responsible for improving the quality of education while districts are re-sponsible for improving the quality of the management of educational services.40

Whether this transfer of authority translates into a transfer of assets or of liabilities de-pends upon two things: (i) the condition of the schools and the capacities of the district and (ii) the amount of the public budget allocated to education.

The legal obligations of the central govern-ment in school financing are limited to paying teachers’ salaries through the wage transfer portion of the DAU formula. Although the constitution and the Education Law (No. 20/2003) stipulate that 20 percent of the na-tional budget and 20 percent of the block grants to districts must be spent on education, there is no regulation that establishes a funding floor for schools. Indeed, there is no national law that regulates within-district transfers of APBD funding to schools. If the government’s appropriation to the education sector does not increase to the level stipulated under the con-stitution and the decentralization laws, quality will not improve equitably. Channeling qual-ity improvements through the DAK mecha-nism could ensure that funds allocated for education are spent for schools and by schools. This chapter on quality recognizes but does not address the issues of the 7 to 15-year-old children who do not attend school. Under the law, they are entitled to receive their fair share of public spending on education, but in prac-tice this already disadvantaged group receives far less than the young citizens who are en-rolled in school.

Project preparation documents for the World Bank’s Basic Education IV project under-scored the need for quality improvement in early childhood and early grade education. Background papers reported that teachers spend most of their classroom time in grades 4 and above on remedial teaching rather than on helping students to master grade-level skills. This pattern will continue unless the govern-ment adopts programs that prepare children for schooling and strengthen the early childhood component of basic education.


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Box 3.4 The New Zealand Equalization Pro-gram

There is a tendency in decentralized educationsystems for differences in quality to increase be-tween wealthier and less wealthy areas unless ex-plicit corrective measures are taken. In NewZealand, the original design of the school-basedmanagement reforms did not include mechanismsto ensure the equitable financing of schools. Inresponse to this absence, the government createdthe Targeted Funding for Educational Achieve-ment (TFEA) as a component of schools’ operat-ing grants. The TFEA is targeted to specificschools to enable them to overcome the barriersto students’ learning that are associated with so-cioeconomic disadvantage. All schools areranked by decile, and per-student funding in-creases as the school’s decile declines.

Financing the Quality Improvement of Schools What kind of value is the Indonesian state and are Indonesian families getting for what they spend on basic education? The Education for All (EFA) task force has estimated that com-pulsory academic fees for primary and junior secondary average about Rps 213,000 per pu-pil. These fees are used to cover schools’ op-erating expenses and improvements in the quality of its physical assets, teachers’ salaries, schoolbooks, learning materials, and equip-ment. This implies that public spending on these basic conditions of learning is inade-quate. At the district level where education personnel constitute over half of all public employees, up to 60 percent of the routine and development district budget (APBD) is spent on education, primarily on routine expenses such as teachers’ salaries. Educational facili-ties constitute more than half of the assets held by many local governments. The central gov-ernment has no formula for equalizing district expenditures on quality improvements and no means to ensure that districts allocate their education resources equitably. The current practice of channeling quality improvement inputs to schools directly through centrally funded projects exceeds the two-year time limit for direct transfer of resources that was set in Law 25/1999.

In Chapter 2 on financing, we pointed out that Indonesia is spending less on education than might be expected given its per capita income level. The introductory chapter showed that Indonesian children perform worse on stan-dardized international tests than children in neighboring countries but better than children in some countries that spend about the same proportion of public money on education. Taken together, the data show that Indonesian parents and the state have been getting reason-able value for their expenditure compared with other countries; in other words, they spend lit-tle and get little. Furthermore, Chapter 2 on financing revealed that spending on education in Indonesia is inequitable, resulting in un-equal access and quality. Box 3.4 describes New Zealand’s approach to equalizing quality in a decentralized system.

Organizational Systems for Sustaining Quality Improvement In this section, we discuss the organizational frameworks for sustaining quality improve-ment, namely school-based management and district development planning. School-based management is not only a policy of the MoNE, but is also mandated under Law 20, article 51(1). District development planning is re-quired under Law No. 17/2003 on perform-ance-based budgeting. Although neither of these systems deals directly with the quality issue, both systems have some potential for sustaining quality improvement. District de-velopment planning is discussed in Chapter 1 on governance and management. In the sec-tion below, we focus on school-based man-agement.

School-based Management In Indonesia, the strategy that has been adopted to improve schools over the long term is school-based management (SBM). The in-tention behind school-based management is to engage the wider local community through school committees in planning, monitoring, and improving school quality (Article 56 Law 20/2003). Very preliminary findings from our consultations with district-level officials indi-cate that school committees have been set up


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but are not yet active in the area of quality im-provement.41

School-based management does not guarantee quality improvement. International research reveals that the link between SBM and quality improvement is inconclusive. According to a recent review of 83 studies of SBM programs around the world, there is no universally posi-tive relationship between school-based man-agement and school performance or school quality improvement (Leithwood and Menzies, 1998). In fact, the authors conclude that SBM fails to improve students’ academic achieve-ment or to reduce dropout and repetition rates, even though SBM does increase parents’ and communities’ say in decisionmaking, teachers’ participation in developing school improve-ment plans, and administrative efficiency in al-locating scarce resources effectively. Other research indicates that it is not school-based decisionmaking per se that improves learning; rather, it is the type of decisions that schools are entitled to make for themselves. Schools’ autonomy in making personnel decisions, teachers’ autonomy in choosing which teach-ing methods to use, and teachers’ involvement in procurement decisions are particularly in-fluential (Woessmann, 2001).

Despite several well-known shortcomings, SBM is the best method available in Indonesia for making quality improvement a part of rou-tine school operations. Thirty years of pro-jects have yielded insights into what methodologies work best in classrooms to in-crease student achievement and to make schooling a pleasant experience for both teachers and students (for example, active and contextual learning). Unfortunately, systemic and structural barriers, such as a lack of ac-countability, insufficient human and technical resources, and widespread corruption, prevent good practices from spreading spontaneously.

41 Focus group discussions with teachers and principals in Lampung and Makasar as well as meetings with school committee members in Central Java and Yogya-karta revealed that many principals have not yet dis-cussed performance standards or improvement planning with school committees. Some focus group members also commented that the performance monitoring pres-ently being conducted by school committees, an essential element in sustaining quality improvement, concentrates only on financial matters.

Background papers on school-based manage-ment written for this report acknowledge that participatory management and adequate school resources are a necessary but not sufficient condition for improving student achievement. They also recognize that schools require, among other elements, performance informa-tion (through both school profile statistics and self-assessments) and accountability systems (Umaedi, 1999). Although the MoNE has dis-seminated guidelines to schools for carrying out performance self-assessments that incorpo-rate these concepts, none of the schools in-cluded in the focus groups mentioned using them.

In response to studies indicating that school ef-fectiveness inputs are not always used and maintained,42 Indonesia has been experiment-ing with pilot programs that require schools to prepare improvement plans designed to im-prove teaching and learning. Since 2000, many quality improvement programs have been pro-viding small grants to schools to implement their school development plans. These plans reveal much about the gap between the priori-ties of education professionals and the priori-ties of school managers. Box 3.5 contains a description of the typical content of most school development plans.

However, there are many steps that can be taken that move beyond the limited scope of most school improvement plans. One such step involves package-based improvement grants. In Indonesia, under the SIGP program of 2001-2002, the central government gave a grant package to all schools that met all of the necessary requirements and conditions. SIGP funds could only be used for seven purposes: buying books and stationery, hiring teachers, purchasing teaching aids, renovating build-ings, repairing classrooms and library furni-ture, installing water and sanitation facilities, and introducing school-based teacher training. Each school received a set amount depending

42 For example, staff from the MBE project in East Java and Central Java reported that several of the libraries in the 36 schools that they visited appeared to be unused judging by the dust on the books and the records. Also, staff from the JBIC team on field visits to recently con-structed junior secondary schools in 2002 reported that over half of the new school stock was not being regularly maintained.


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Box 3.5 School Development Plans and Quality Inputs

There has been no research published yet on thecomparative results of school reform projects.Anecdotal evidence provided by field workersfrom the Managing Basic Education (MBE) Pro-ject indicates that the school development plansfrom participating schools are confined largely tophysical conditions such as rehabilitating build-ings and providing more books. A recent visit byMBE project teams to REDIP sites in CentralJava found little change in teaching as a result ofthe program. Likewise, a review of DBEP schoolimprovement proposals confirmed that schoolstend to request the rehabilitation of their facilitiesand the provision of more library books and othermaterial inputs rather than teacher training. Thefocus on physical inputs is partly the result of thelack of teacher trainers. The demand is there, butthere is no supply to meet it. The CLCC projectis slightly different in that it focuses on SBM inorder to improve teaching and directly tackles thetraining issue by increasing the supply of trainers.

on its level of poverty, the condition of its physical plant, and safety considerations. Dis-trict committees selected the schools and de-termined the amount of the grant. REDIP also used a menu of restricted choices for school grants and required schools to produce simple proposals written to a template. Packaged grants require less planning capacity on the part of schools than SBM but remove respon-sibility from the school and community for self-assessment and program development.

Recommendations If simply providing inputs improved quality and school performance, then district educa-tional planning would simply be a question of channeling inputs to schools. Unfortunately, the link between specific inputs such as teach-ers’ salaries or textbooks and particular out-puts such as better student test scores is not straightforward, and process functions can ei-ther enhance or inhibit progress towards that goal. The use of textbooks, for example, is nearly as important as their availability; nor is the availability of particular teaching materials as significant in raising learning achievement as teachers having a say in which materials are procured (Woessmann, 2001 and Pritchett and Filmer, 1999).

The absence of knowledge and infor-mation about education quality im-provement at the district level is a major inhibiting factor. Projects such as the DBEP that used proposal-based grants in an attempt to enhance dis-tricts’ ability to improve school qual-ity have shown that districts lack the experience and knowledge to develop multi-year programs to improve edu-cation quality. We recommend mak-ing a significant investment in building the technical and managerial capacity of districts to improve qual-ity.

The supply of competent government and private sector trainers and con-sultants is a compounding and binding constraint. Therefore, we recommend making a significant investment in de-veloping the capacity of public and private providers of quality improve-ment services. Indeed, knowledge about how to improve school quality already exists in Indonesia; the bottle-neck is that there are not enough high quality “service providers” (such as competent and informed teacher train-ers) to apply this knowledge in every school. Centrally planned quality im-provement projects are often well-conceived packages that, in their pilot phases, are usually successful in achieving their objectives. In the pilot test phase of such projects, project teams generally provide services to schools directly, but it is impractical to extend this pilot approach to all of the one and a half million teachers in In-donesia’s 180,000 schools. To over-come this challenge, we recommend using some variation of a cascade model, in which the people who best understand the intervention (project designers) train others who then train teachers, which means that there can be as many as three or four layers of training in between the project team and individual teachers. If anyone in the chain does not fully understand the intervention or training methods, this can result in poor performance further down the chain. As a result, there are few examples of improvements lasting


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beyond the life of the project or of good practices spreading spontane-ously to other schools.43

Schools are asymmetrical in their abil-ity to implement quality improvement. Also, school performance can deterio-rate as well as improve under decen-tralization. Therefore, we recommend taking into account the performance of schools relative to national standards and to their own past performance when formulating school or district budgets and education development plans. One such approach, an adapta-tion of the “balanced scorecard” is presented in Appendix 3. 2.

Conclusion and Summary of RecommendationsWe conclude that the reason why the quality of education overall has not improved in re-cent years lies deep within the sector’s struc-tural and financing systems and that quality must be addressed by changing the sector’s organizational structure, financing, and opera-tional systems.

Some of the required changes in the area of sector finance are not under the sole control of the MoNE. To improve quality, Indonesia must first spend more and spend wisely.

43 Several projects have experimented with this system in reverse, with school-based interventions shared among clusters of several local schools, which are also shared with local government school supervisors and so forth up the chain of command via workshops. Occasionally, as with the CBSA, this leads to an adjustment in national policy and the innovation becoming an established part of the education sector.

Whether the expense is borne by parents or by the public is a matter for policymakers. Sec-ond, schools must receive funds based, at least in part, on a transparent, per-student formula that factors in enrollment or attendance rates as recommended in Chapter 2 on financing and in the EFA Summary Report.

Third, schools must receive their share of sec-tor development money in cash rather than in kind, either through an earmarking or pro-posal-based budgeting process. In terms of sustainable improvements, schools must have some discretion to choose the quality im-provement interventions that they are willing and able to implement. This will require that they have a supply of proven quality im-provement packages from which to choose, cadres of competent providers of quality im-provement services, and a flexible system for determining the relative ability of each school to implement independent planning and block grant financing.

Finally, we recommend that the effort to en-sure education quality be seen holistically as an enterprise consisting of both assurance and improvement functions linked by a common set of simple standards and measures.


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Asian Development Bank (ADB). 2003. Sta-tistical Tables compiled for Review of the Madrasah System. Jakarta, Unpublished.

Asian Development Bank (ADB). 2000. Staff Appraisal Report on the Decentralized Basic Education Project.

Aziz, Drs. H. Abdul. 2002. “Madrasah Educa-tion in Indonesia: Potential, Problems, and Is-sues.” Symposium on Madrasah Education in the Context of a National Education System. Jakarta, Indonesia. 4 November 2002.

Berita Indonesia. 2003. “Four Government Regulations on Education will be Finalized Before 2004,” Newspaper article posted on the Internet. In Indonesian.

Bond, Linda. 1996. “Norm and Criterion-referenced Testing.” Retrieved October 2003. http://www.mcg.net/Articles/norm/htm

Bush, Kenneth, and Diana Salterelli. 2000. The Two Faces of Education in Ethnic Con-flict: Towards a Peacebuilding Education for Children. Florence, Italy: UNICEF/Innocenti Research Centre.

Education for All. 2002a. “Situational Analy-sis.” Ministry of National Education (MoNE), Photocopy of draft chapter on quality.

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Faiqoh, Dra. Hj. 2002. “The Development of Pondok Pesantrens as a Means of Commu-nity-based Education and Poverty Allevia-tion.” Symposium on Madrasah Education in the Context of a National Education System. Jakarta, Indonesia. 4 November 2002.

Fasli Jalal and Bachrudin Musthafa. 2001. “Education Reform in the Context of Decen-tralization.” Ministry of National Education (MoNE), the National Development Planning Agency, and the World Bank.

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Galiani and Schargrodsky. 2001. “Evaluating the Impact of Education on School Quality.” http://www.utdt.edu/departamentos/empresarial/cif/pdfs-wp/wpcif-072001.pdf.

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Appendix 3.1. Quality Improvement Projects In Indonesia Since 1990

In Indonesia during the 1990s, the government and donors spent hundreds of millions of dol-lars on over 25 projects to improve the quality of primary and junior secondary education. Various lessons can be learned from these pro-jects, and these are summarized below.

SPP-CBSA/ALPS Active Learning through Professional Support to Teachers (1979-1994). UK Government through Balitbang.

Areas: One district each in West Java, NTB, North Sumatra, South Sulawesi, East Java, Lampung, South Kalimantan, Central Java, South Sumatra, and Jakarta.

The purpose of the SPP-CBSA was to enhance the quality of teaching and learning in primary schools by promoting active learning and a professional development system based on teachers’ working groups. The design used a bottom-up approach that viewed teachers as the main stakeholders of change. The design recognized that teachers do not work in isola-tion from: (i) how they were trained, (ii) the curriculum that they teach, (iii) the financial and administrative conditions under which they work, and (iv) the support that they re-ceive from principals, supervisors, parents, and the local educational administration.

SSEM

Second Secondary Education and Manage-ment Project (1990-1997) World Bank through the MoNE’s Division of Junior Secondary Education.

Areas: National but most activities focused in West Java, Yogyakarta, Central Kalimantan, South Sulawesi, and NTB.

The objectives of the SSEM were to improve the quality of secondary education and to strengthen management capacity in secondary schools.

The project provided teacher training in sci-ence, mathematics, Indonesian, English and social studies, helped districts to initiate clus-ter-based training for teachers, provided fund-ing for science equipment, and helped to develop a national test item bank and provin-cial-level teams to improve the testing of stu-dents.

Management capacity was strengthened by conducting studies to establish EMIS to help the MoNE with school data collection and management training workshops.

Follow-up projects include the JSE and the BEPs.

COPLANERCommunity Participation in Planning and Management of Educational Resources (1991-1995). UNDP/UNESCO. Through the MoNE and BAPPENAS.

Areas: East Java, South Sumatra, North Su-lawesi, and NTT (24 kecamatan total)

The objective of COPLANER was to improve the quality and increase the relevance of edu-cation by piloting a model of community sup-port for and participation in bottom-up education planning and school resources man-agement within a supportive structure at the sub-district (kecamatan) level. COPLANER was built upon a prior UNDP/UNESCO/GoI project that had the same objectives but was implemented only at the province and district levels. COPLANNER was an exploratory pro-ject to discover how to do bottom-up planning at the school, community, and sub-district lev-els.

Follow-up projects have included the REDIP and the CLCC, which have both used kecama-tan-level community participation in planning.

PEQIP Primary Education Quality Improvement Pro-ject (1992-1999). World Bank through the MoNE’s Division of Primary Education.


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Areas: Aceh, West Sumatra, Yogyakarta, and Bali NTT

The project’s objectives were to improve the quality of primary education through improved teaching and learning activities, to increase districts’ capacity to manage a quality im-provement program, and to provide special as-sistance to poor, remote, and under-served schools through block grants. The PEQIP had too many sub-components and relied too much on the cascade model for teacher training. The legacy of the PEQIP is the school cluster ap-proach.

No follow-up projects.

PGSDPrimary School Teacher Development Pro-gram (1992-1999). World Bank through the MoNE’s Division of Higher Education.

Areas: Nationwide through teacher training colleges

The project’s objective was to enhance the teaching/learning process in primary schools through a new higher education teacher di-ploma course (D2) for both pre-service and in-service training.

The new pre-service primary teacher education curriculum for D2 is used by all teacher train-ing colleges.

JSEP Junior Secondary Education Project (1993-1998). Asian Development Bank through the MoNE’s Division of Junior Secondary Educa-tion.

Area: Nationwide but emphasizing un-served and under-served areas and disadvantaged ur-ban areas in Sumatra and Java.

The project’s goals were to support the gov-ernment in the delivery of compulsory educa-tion by improving academic supervision and student assessment processes, implementing Curriculum 1994, and strengthening the insti-tutional capacity of the MoNE and the MoRA.

Activities included giving fellowships in cur-riculum development and teacher training as well as providing some facilities and equip-ment for the MoNE’s national-level curricu-lum center.

The follow-up consists of the SJSE in the five provinces considered to be most in need.

SEQIP Science Education Quality Improvement Pro-ject (1994-ongoing). Germany through the MoNE’s Division of Primary Education.

Areas: Jakarta, Central Java, East Java, South Kalimantan, NTB, South Sulawesi, and West Papua

The SEQIP’s purpose is to improve the quality of science teaching in primary school grades 3 and 6. This is being accomplished through a package of inputs that addresses all factors af-fecting classroom activities simultaneously. The logic is that sustainability at the classroom level is ensured by a package approach. The package includes: in-service training for se-lected teachers in active learning methods, in lesson planning, and in using a SEQIP science kit; training for principals and school supervi-sors so they can support the teachers, science kits for teachers and students, and a system for kit maintenance; teachers’ guides on how to use the kits in lessons and guidelines on using new pupil textbooks; improved end of term test items to match the new emphasis in sci-ence teaching; and a project monitoring sys-tem.

MDLCC Managing the Delivery of Local Content Cur-riculum (1995-1997). UNDP through the MoNE’s Division of Junior Secondary Educa-tion.

Areas: Lampung

The purpose of the project was to develop policies and strategies to enable junior secon-dary schools to attract and retain pupils and to develop links between post-primary education and income-generating opportunities.

Project activities included designing and refin-ing management for local content delivery and


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producing case studies on difficulties encoun-tered in delivering local content to primary levels.

PJSE Private Junior Secondary Education Project (1995-2001). Asian Development Bank through private junior secondary schools.

Areas: Lampung, Jakarta, South Kalimantan, and South Sulawesi.

B&RBook and Reading Development Project (1996-2001). World Bank through Sarana.

Area: National

The objectives of the project were to improve the quality of education by improving the pro-duction and distribution of textbooks and by helping teachers to use textbooks in a more ef-fective way.

The project’s activities included supplying textbooks to all junior secondary schools in all EBTANAS subjects and teachers’ guides in non-examined subjects; establishing the Na-tional Textbook Evaluation Commission in the Book Center to evaluate the quality of private junior secondary books; holding workshops on writing textbooks for publishers: producing guidebooks for teachers; and developing a media campaign to promote reading.

PGSMSecondary School Teacher Development Pro-ject (1996-2001). World Bank through the MoNE’s Division of Higher Education.

Area: National

The project’s objectives were to strengthen pre- and in-service teacher education and the links between teacher training colleges and secondary schools.

The project’s activities included improving the curriculum, procuring science equipment, de-veloping textbooks, establishing student sup-port centers, and providing scholarships to needy teachers to upgrade to S1.

CJ-JSE Central Java Junior Secondary Education Project (1996-2002). World Bank through the MoNE’s Division of Junior Secondary Educa-tion.

Area: Three districts in Central Java and all districts in Yogyakarta

All of the World-Bank-financed JSE projects had the same objectives: to expand access to junior secondary education in a cost-effective and equitable way; to improve the quality of junior secondary education; and to strengthen management capacity at the school level. For each JSE project, priorities and needs were de-fined at the provincial level along with the in-stitutional capacity to implement chosen interventions. All stakeholders at the prov-ince, district, parent association, school, and foundation levels (for private schools) were involved in developing project proposals within each province.

Access was expanded through a school con-struction and furnishing component, the hiring of contract teachers for remote areas, expand-ing the open junior secondary program by supplying books and reference materials and by covering its operating costs, and the provi-sion of scholarships to needy students. Qual-ity was improved through in-service training at the district level, cluster-level teacher support groups, and the supply of teaching materials and libraries to rural schools. Training was provided to province- and district-level staff on managing information systems to enable them to analyze trends and identify problems. At the school level, training was provided in school-based management and professional support to teachers.

The economic crisis and mid-term review caused resources to be redirected to scholar-ships and school grants.

S-JSESumatra Junior Secondary Education Project (1996-2002). World Bank through the MoNE’s Division of Junior Secondary Educa-tion.

Area: Aceh, West Sumatra, Jambi, Lampung, and South Sumatra


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EI JSE Eastern Islands Junior Secondary Education Project (1996-2002). World Bank through the MoNE’s Division of Junior Secondary Educa-tion.

Area: East Java and NTT

COSEPCommunity Participation for Strategic Educa-tion Planning for School Improvement (1997-ongoing). JICA through the MoNE’s Division of Junior Secondary Education.

Areas: North Sulawesi and Central Java

The objective of this project is to improve the quality of education by strengthening bottom-up planning skills and processes to promote community participation and school-based management.

Activities include holding planning meetings and facilitator workshops, establishing an edu-cation planning committee in each participat-ing kecamatan, holding workshops on local-level quality improvement planning, and de-veloping kecamatan basic education im-provement plans.

BEP (MORA)Basic Education Project – Ministry of Reli-gious Affairs. Asian Development Bank (1997-2002).

Areas: West Java, Central Java, East Java, Lampung, NTB, and South Kalimantan

The objective was to upgrade the quality of all madrasahs serving primary and junior secon-dary students to provide better education, par-ticularly to girls and the poor. This was the first donor project to focus solely on ma-drasahs. Previously only about 10 percent of donor resources were channeled to madrasahs through MoNE projects.

This project had three components: improving quality, promoting equitable access, and insti-tutional strengthening. The project was de-signed to help the madrasahs adjust to their new task. Up until 1994, madrasah education had focused solely on religion. After 1994, many madrasahs used both the MoNE curricu-lum and the MoRA curriculum. The project’s

quality improvement activities focused on the subject knowledge and teaching skills in core non-religious subjects of madrasah teachers and introduced a six-month certification proc-ess and in-service program through cluster-based training. Equitable access was increased by rehabilitating schools and funding scholar-ships for the poor, particularly girls. MoRA management was strengthened at all levels. School accreditation, management, and super-vision were improved by the production and provision of training and manuals. The MoRA also used a model approach in which selected schools were upgraded to provide model ma-drasahs that demonstrated good teaching prac-tices and good school management. Upgrading involved the rehabilitation of schools and the provision of materials such as libraries, laboratories, and extra classrooms.

CCPCurriculum Capacity Project (1998-2000). UK through Balitbang.

Area: Central MoNE and Jakarta

The objective of the CCP was to develop staff capacity in the MoNE to manage, develop, and evaluate the curriculum.

Activities included short training courses, both in-country and overseas, research and field studies to improve the curricula in core sub-jects, and the development and implementa-tion of a curriculum evaluation and development cycle.

SJSESecond Junior Secondary Education Project (1997-2003). Asian Development Bank through the MoNE’s Division of Junior Sec-ondary Education.

Areas: East Kalimantan, South Kalimantan, and Central Sulawesi

The objectives of the SJSE were to increase junior high school enrollment, to upgrade gen-eral junior high schools and madrasahs, and to build institutional capacity.

Activities included strengthening school man-agement and supervision by providing block grants (BOMM) to 1,000 junior secondary schools, providing in-service training to teach-


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ers and administrators, and enhancing re-sources such as libraries, science laboratories, textbooks, and teaching materials. The project also trained district and provincial managers to monitor the provision of junior secondary edu-cation.

WJBEP West Java Basic Education Project (1998-2003). World Bank through the MoNE’s Di-rectorate of Primary and Secondary Educa-tion.

Areas: Selected sub-districts within all districts

The goals of the project were to improve the quality of primary education, to expand access to the JSE in poor and remote areas, and to strengthen planning and management of the education system at all levels. The project was the first to focus on decentralization and im-plementation to the district level with support from the province. Primary-level quality im-provement activities focused on rehabilitation, school consolidation, and teacher re-deployment; training for teachers, principals, supervisors, and community leaders; the pro-vision of books, teaching aids, and materials; scholarships for poor students; and fellowships to upgrade teachers’ credentials.

Activities to improve quality in junior secon-dary schools included school construction us-ing a community-managed approach, contract teachers, in-service training for teachers, prin-cipals, supervisors and community leaders, and the provision of books and scholarships to poor children.

Management was strengthened at the district and province level through school mapping, the integration of all ministries’ activities in basic education, an assessment of staff capac-ity, and administrative retraining of staff at the district and province level to enable them to manage the project.

DPAP Development Planning Assistance Project (1998-2001). Policy Studies. CIDA through BAPPENAS.

BEP II Sumatera Basic Education Program (1999-2004). World Bank through the MoNE’s Di-rectorate of Primary and Secondary Education Areas: North Sumatra, Riau, and Bengkulu

The objectives and activities of the BEP II are the same as for the BEP I as described above.

BEP III South Sulawesi and Eastern Islands Basic Education Program (1999-2004). World Bank through the MoNE’s Directorate of Primary and Secondary Education.

Areas: South Sulawesi and Maluku

The objectives and activities of the BEP III are the same as for the BEP I as described above.

REDIPRegional Educational Development and Im-provement Project (1999-2001). JICA through Balitbang.

Areas: Central Java and North Sulawesi (seven districts, 15 sub-districts in the pilot phase)

The objectives of this project are to improve the quality of junior secondary education by building the capacity of local education ad-ministration and schools and by increasing community awareness of and participation in education.

The project’s activities included two compo-nents: (i) the development of the capacity of sub-district committees and (ii) a choice of one from five school-level interventions such as cluster-based training, textbooks, block grants, and parent council development. The school grants that were introduced under the REDIP are managed at the kecamatan level and are the same for all schools in the kecamatan. The sub-district committee plans all kecamatan-level activities and writes and costs proposals for funding with the help of project consult-ants. The committee then provides technical assistance to the grantees to support the im-plementation of grants.

CLCCCreating Learning Communities for Children (1999-ongoing). UNESCO/UNICEF through


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the MoNE’s Directorate of Primary and Sec-ondary Education

Areas: Central Java, East Java, and South Su-lawesi

The objective of the CLCC is to develop mod-els to improve the quality of primary schools through active teaching and learning as well as school-based management and community participation.

Activities include providing models for child-friendly schools, assessing school-based training trainers in active learning, providing packages of training, grants, and other inputs to participating schools, and conducting a community mobilization media campaign to raise awareness of the importance of educating children.

DBEPDecentralized Basic Education Project (2003-ongoing). Asian Development Bank through

the MoNE’s Directorate of Primary and Sec-ondary Education.

Areas: NTB and Bali

The objectives of the DBEP are to create a model for increasing equitable access to nine years of basic education for all children by making proposal-based grants to schools for rehabilitation and quality improvement, mak-ing grants to districts for education develop-ment and improvement, and creating a unit within the MoNE to track the impact of decen-tralization on school quality and on the provi-sion of education services at the district level.


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Appendix 3.2. A Quality Management Model

The balanced scorecard is a concept that helps managers at all levels to monitor results in their key areas of responsibility. An article by Robert Kaplan and David Norton entitled "The Balanced Scorecard - Measures that Drive Per-formance" in the Harvard Business Review in 1992 sparked interest in the method and led to their business best selling book, The Balanced Scorecard: Translating Strategy into Action,published in 1996. Since that time, many businesses, school districts, and schools in the United States, Australia, and England have adapted this method for quality management. Basically, the balanced scorecard is a method of designing, organizing, and communicating performance measures across three to five di-mensions utilizing both short- and long-term time horizons.

For each dimension, there are a set of mini-mum service standards and associated key per-formance measures that include both “lead” and “lag” indicators. In brief, “lag” indicators describe what has been accomplished so far. For example, students’ scores on Indonesian language tests are a lag indicator. “Lead” in-dicators predict future performance. For ex-ample, time spent by students on reading improvement programs such as “sustained si-lent reading” or “writing across the curricu-lum” is a predictor of their improved scores on

the language arts portion of future examina-tions.

The Balanced ScorecardStandards should be set and measured in di-mensions that capture the values and priorities of the education system. For example:

Finance: Including the human, mate-rial, and financial resources that are provided to schools (and districts), the flow of provisions/funds from the point of origin to schools, and public accountability for expenditures. Basic Rights: Minimum conditions of learning to which every child has the right such as safe and healthy school buildings and certified and trained teachers.Stakeholder Satisfaction: Student achievement, parental satisfaction with the results of their children’s school-ing, and the accomplishment of district and national goals and targets. Governance and Management: Proc-esses for making policies/regulations/ rules, transparency in decisionmaking, accountability for decisions, and community participation.


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Table 1 Indicative Indictors for Education System Balanced Scorecard Finance Basic Rights: Stakeholder Satisfaction: Governance and Man-

agement: Lag indi-

cators Lead Indica-tors

Lagindicators

Lead Indica-tors

Lag indica-tors

Lead Indica-tors

Lag indi-cators

Lead Indica-tors

District (ser-vice man-agement)

% APBD actually spent on non-salary education

Proportion of school fi-nance pro-vided by funds

Proportion of schools receiving minimum per student costs

Perform-ance-based budget for district edu-cation ser-vice.

Numbers of class-rooms in-stead of repair

Proportion of unquali-fied teach-ers

Number of community based school rehabilitation efforts

Number of teachers par-ticipating in teacher train-ing programs

Numbers of out-of-school chil-dren

Student per-formance on standardized tests

Numbers of schools ac-credited

Number of community forums to discuss edu-cation con-cerns

Number of “good prac-tices” and local innova-tions identi-fied

Proportion of un-accredited schools with school im-provement plans

Timely deliveryof goods and ser-vices to schools

Leakage of funds intended for edu-cation units

Teachers paid on time and in the correct amount

Number of public ac-count-ability forums

District education service structure appropriate for current functions

Appropriate payroll and teacher management system

School (ser-vice provi-sion)

Proportion of school finance provided by funds

Minimum per stu-dent costs received on time and in full amount

Integrated school budget

Minimum conditionsof learning met

Plans for school im-provement to MCL

Student achievement on tests of basic skills

Numbers of teachers par-ticipating in teacher train-ing

School-based quality improvement program such as “writing across the curriculum” or remedial program for failing stu-dents

School rules en-forced

Teachers and stu-dents provided with needed materials and sup-plies on time

Attendance records by teachers and students

Standards and the Balanced ScorecardMinimum service standards and associated “lag” indicators can be set for each of the four dimensions by the national level. The districts and/or education units themselves should set the “lead” indicators linked to the “lag” indica-tors. Each dimension should have no more than three standards each with one or two key “lag” performance indicators. The service standards, indicators, and measures should be standardized and set by the national govern-

ment. The targets can be set nationally or ne-gotiated with districts.

For each dimension, districts or schools can then be positioned along a continuum based on their performance on the key “lag” indicators. This is the basic concept behind Indonesia’s current school accreditation and district moni-toring programs

.


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Figure 1 The Balanced Scorecard Continuum

By adding a second dimension for perform-ance on lead indicators, each school or district can be described using the grid in Figure 2. Their performance can be reported and veri-fied as part of each funding cycle. Taken to-gether, the two dimensions yield four categories of districts or education units: good

and getting better, good and getting worse, bad and getting better, and bad and getting worse. Different interventions can then be determined for each category of district or education unit, which illustrates how the entire education sys-tem has moved further away from the supply-driven, one-response-for-all model.




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Better than last performance evaluation

Worse than last performance evaluation

GOOD SCHOOLS/DISTRICTS GETTING BETTER

BAD SCHOOLS/DISTRICTS GETTING BETTER

BAD SCHOOLS/DISTRICTS GETTING WORSE

GOOD SCHOOLS/DISTRICTS GETTING WORSE

Look for innovation and best practices Eligible for increased funding through block grants Recognize achievement in public forums

Block grant financing Most resourcing through funds (rather than materials or in-kind services) Eligible for special grants to be-come “service providers”

Close attention from higher au-thority Earmarked funds Intensive capacity building At risk of losing accreditation

Very common in newly decentralized systemsExamine regulatory framework to re-move policies that may be inhibiting per-formance (e.g. financing formula) Site visit to determine cause for per-formance drop and collaborate on remediation

Figure 2 Using the Balanced Scorecard


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Appendix 3.3. A Case Study Of Project-Based School Rehabilitation

Primary schools in Indonesia are not in good condition. According to an inventory of assets conducted by the MoNE in 2000, more than half of all public general school classrooms (530,000) were in fair or bad condition, and about 14 percent of the junior secondary class-rooms (22,600) needed moderate or heavy re-pairs (see Table 1).

The government responded to the findings of the 2000 survey with a two-pronged strategy, which, according to the Education for All draft costing tables, aims to complete the rehabilita-tion of classrooms by 2015 through a series of projects. In 2001, Rp 3.55 trillion44 was spent on the school rehabilitation component of the Bantuan Khusus Sekolah (BKS) program, which also expended a considerable sum on scholarships. In addition, the centrally funded Imbal Swadaya program provided Rp 267 bil-lion in 2003 for both new school construction and classroom rehabilitation (Rp 30,000 in 75 percent matching grants to 8,900 schools). Also in 2003, a significant DAK transfer (Rp 625 billion) was made specifically for school rehabilitation. In addition, a centrally funded program aimed at remote and conflict areas (Daerah Tertinggal Bencana Alam dan

44 Rp1.144 trillion from the oil subsidy money was used in 2001, with another Rp 2.41 trillion coming from other sources in 2003.

Kerusuhan) spent a portion of Rp 241.23 bil-lion on rebuilding and rehabilitating class-rooms. Several donor-financed projects have also included a classroom rehabilitation com-ponent since 2000 (see Table 2).

Taken together these massive efforts have re-habilitated about 30 percent of the classrooms that needed the heaviest repairs or about 13 percent of the classrooms that needed heavy or moderate repairs. According to figures pro-vided by the government and donors, 82 per-cent of the junior secondary classrooms that needed moderate to heavy rehabilitation were repaired. The huge repair bill is due primary to two factors sub-standard construction and no routine maintenance. Future repair bills can be lowered somewhat by including maintenance costs in the formula for calculat-ing a school’s operating budget. Indeed, if minimum maintenance is not carried out, the classrooms will require massive rehabilitation about every 10 years. Sub-standard construc-tion is due in part to a lack of competent con-struction engineers and construction workers and to corruption in various forms, such as contractors billing for materials that meet con-struction specifications but substituting infe-rior materials on site.

Table 1 Number of Classrooms Needing Rehabilitation 2000/2001 Light Moderate Heavy Total Type and Level of school Num % Num % Num % Num %

Primary Level PS public and private 377,198 41.6 316,915 35 212,280 23.4 906,393 100 MI public 6,005 59 2,752 27 1,430 14 10,187 100 MI private 56,348 48.4 38,365 33 21,675 18.6 116,388 100 Total Primary Level 439,551 358,032 235,385 1,032,968 JS Level JS public and private 157,753 87.5 16,415 9.1 6,118 3.4 180,286 100 MTs public 9,360 73.6 2,221 17.5 1,135 8.9 12,716 100 MTs private 28,183 60.8 12,902 27.8 5,280 11.4 46,365 100 Total JS Level 195,296 31,538 12,533 239,367 Source: ADB MESA report (ADB, 2003).


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Transition from Projects to Program The advent of the new planning period pre-sents policymakers with a historically unique opportunity to change the country’s quality improvement strategy from the current series of discrete and disconnected projects into a cogent and comprehensive quality manage-ment program that integrates quality control and quality improvement into the routine op-erations of schools and districts.

Quality improvement projects have accom-plished a great deal in a few areas, but the unit costs and the need for high levels of technical

competence to sustain and propagate the inno-vations have cost more than Indonesian politi-cians have been willing to spend. Projects still have a vital role to play in trying out new ideas for improving teaching, for pilot testing school quality management models on a small scale, for determining the management and technical capacity required to implement par-ticular quality control approaches, and for in-creasing the supply of quality improvement service providers. The projects approach is simply not up to the job of improving the qual-ity of this enormous and varied education sys-tem overall.

Table 2 Classrooms Rehabilitated by Government and Donors, 2000-2003

Donor/Project Primary Classrooms Rehabili-tated

Junior Secondary Classrooms Rehabilitated

GoI Projects BKS (2001,2003) 32,000 18,000 Imbal Swadaya (2003) 8,900 8,900 Pemberdayaan Di Daerah Tertinggal (2001,2002,2003)

6,220 2,775

ADB MoRA (1996-2002) 1,210 920 RNG SIGP I (2001, 2002) 8,865 1,250 SIGP II( (2002) 8,000 1,200 World Bank Basic I, II, III 12,000 JSE (1998-2003) 3,340 TOTALS 77,195 36,385 Sources: ADB Project Completion Report BDP Project, BKS implementation Unit, Ibdal Swadaya Implementation Unit, SIGP Implementation Unit, JSE Implementation Unit, Basic I, II, and III monitoring reports, JBIC Evaluation Re-port, MoNE Proyek Pemberdayaan Pendidikan, Didaerah Tertinggal, Benchana Alam dan Rerusuhan Jakarta year end summary reports.Note: This assumes two primary and two JSS classrooms per school.

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Chapter 4: Teacher Management System

Teachers are the most important asset in Indo-nesia’s education system, both because they are the primary determinant of school per-formance and because their salaries consume most of the public spending on education. In this chapter, we argue that a new paradigm for teacher management is necessary to ensure that Indonesia derives maximum value from its teachers in terms of the academic achieve-ments of their students while adhering to the principles and legal requirements of decen-tralization.

The Indonesian debate about teachers, teach-ing, and teacher management predates decen-tralization by at least three decades and many of the teacher management concerns discussed in this chapter are not new, nor do they all arise directly from the post-decentralization forms of education governance, management, and financing discussed in previous chapters. Some persistent issues that need to be resolved in the era of decentralization include teachers’ remuneration, incentives, career structure and promotion, their recruitment and deployment, their education and competence, their career development and in-service training, and their empowerment in the context of school-based management. Indeed, the empowerment of schools and district governments under decen-tralization provides a welcome opportunity to revisit long-standing issues and to examine how introducing a new paradigm into teacher management can contribute to improving teaching and school performance.

Since decentralization went into effect in 2000, the MoNE has been employing a two-part strategy for improving the quality of teachers and teaching. The first part sets stan-dards for teachers and head teachers and de-velops quality assurance monitoring systems; the second part builds the capacity of provin-cial institutions and district governments to carry out their new roles relating to teacher management. This approach was described in the Government of Indonesia’s Strategic Plan for Education 2002-2004 and relies on “in

creasing the qualifications and technical ca-pacities of teachers and head teachers as a way of increasing the professionalism and improv-ing the welfare of teachers, enabling them to implement a new curriculum that aims to make students more creative and to make teaching more efficient and effective.” In or-der to “achieve the education goals, these strategies are to be supported by evaluation mechanisms that will function as a quality control system and by increased supervision of schools and accountability for school perform-ance.” In 2003, the MoNE began working in collaboration with line agencies (such as the MoHA, the MoF, the BAKN, and the MoRA) to develop a clear regulatory framework for teacher management, including assigning re-sponsibilities for hiring teachers as civil ser-vants or as contract teachers.

We believe that the regulatory framework, standards, and monitoring systems currently being developed by the MoNE, though ambi-tious, do not go far enough. This chapter iden-tifies several key teacher management issues and recommends three systemic actions that need to be taken: (i) setting teacher profes-sional standards and performance monitoring criteria that are based on their classroom and school performance; (ii) developing a new paradigm of career-long teacher professional development that is school-based and class-room performance-led and (iii) de-linking the management of teachers and their conditions of employment from the civil service and cre-ating a teaching service that reflects the needs of the educational system and the development of teaching as a profession. The aim of these recommendations is to encourage the devel-opment of a professional teaching force that is consistent with school-based management and improves school performance, and students’ learning outcomes.

This paper draws heavily on the work of sev-eral teacher policy reform groups that existed from 1999 onwards. The proposals from these groups are reflected in the National Commis-


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sion on Education’s 2001 report called “Edu-cation Reform in the Context of Regional Autonomy: The Case of Indonesia” and in the Government of Indonesia’s Strategic Plan for Education 2002-2004. The analysis of teacher management issues in this chapter uses the principles of decentralization and school-based management systems to review progress to date, to identify areas of concern, and to propose some possible ways forward. It dis-cusses the information, incentives, and ac-countability systems relating to teachers that will be needed to support decentralized man-agement systems and the goals to improve school quality.

The analysis in this chapter is based on: (i) a review of Indonesia’s laws, regulations, policy documents, implementation guidelines, project reports, statistics, and media surveys; (ii) an international literature review; (iii) interviews with key stakeholders and focus group re-search in Jakarta, Bandung, Makassar, and Bandar Lampung (with additional focus groups to be conducted in three rural districts by the end of November); and, (iv) a forum held by the Government of Indonesia and its development partners and feedback on early drafts of this chapter from experts in Indonesia with extensive knowledge and field experience of the education system. The chapter reviews proposed strategies, current practices and rele-vant international experience to construct a ca-reer-long teacher development and management framework. Some elements of this framework are already being discussed by the MoNE and various districts, while others represent a major departure from the current and proposed teacher management systems.

The chapter is organized in the following way. First we look at some key characteristics of schools and teachers in the changing context in Indonesia. Second, we review the main changes in teacher management arising from decentralization and education laws, stake-holders’ perceptions of these changes, and the initiatives being taken by district governments. Third, we discuss the main issues related to teacher management in Indonesia and look at some lessons from international experience.

Finally, we propose some policies and strate-gies and outline the kind of timeframe that is likely to be required to implement the pro-posed policies.

The Changing Context of Teacher Management in Indonesia At the time of the decentralization reform, dis-trict governments inherited a school system that operated according to centrally deter-mined rules governing the employment and deployment of teachers, the curriculum, teach-ers’ education, school inspections, teachers’ performance, and information systems. The system was designed and structured in such a way that districts and provinces fed education-related information upwards to the central government (without receiving any informa-tion in return. In turn, the central governmentmade all decisions pertaining to the procure-ment and distribution of all education inputs such as school buildings, books, teachers, and in-service training.

However, the situation was more complex than this summary might indicate. For exam-ple, public primary schools (sekolah dasar)were managed by the MoHA at the district level; specifically, the local government was responsible for the 3Ms (manpower, money, and materials) for primary schools, while the curriculum and quality issues were managed by the MoNE representative at the district or province level. On the other hand, the MoNE managed public secondary schools. Public schools in the madrasah system were, and continue to be, centrally managed by the MoRA. Public teachers were, and still are, civil servants (pegawai negri) who taught and still teach in public, madrasah, and private schools. In addition, there were contract teachers (mostly employed through central projects financed by donors and “voluntary” teachers who were paid an honorarium (guruhonor) from the parents’ contribution to their children’s school or through the school’s foundation (yayasan). Contract teachers mostly taught in public schools, while volun-tary teachers could be found in both public and private schools.

Chapter 4 Teacher Management System

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Then, as now, there is a wide variation among districts in their capacity to meet national tar-gets and to provide a supportive environment for teachers and for schools. Variations in population density, financial resources, admin-istrative capabilities, and progress in meeting the national education goal (nine years basic education for all) make it impossible for cen-tral policymakers to develop an effective one-size-fits-all formula for teacher development and management. For example, some districts are experiencing periodic civil disturbances (these include not only Aceh but also districts in Central Sulawesi, Maluku, and parts of Papua), thus making it difficult for them to employ and retain teachers. In other districts, where most of the population lives in accessi-ble areas, it is relatively easy to provide enough schools, to staff them adequately, and to give teachers regular professional support. However, many districts have low population densities and limited infrastructure, which makes the task of teacher deployment much more difficult.45

Decentralization provides an opportunity for each district to create a teacher management and development system that meets its unique needs, but few districts have the financial or technical capacity to do so. For example, in the province of East Kalimantan, some dis-tricts are able to equip their schools and to provide teachers with financial incentives and access to professional support systems even in remote areas, but other districts do not have the same level of local resources to draw upon. There are many rural, remote districts such as those in the eastern islands and in mountain-ous environments such as in Papua, Java, Ka-limantan, and Sulawesi that have difficult decisions to make about how best to spend scarce resources, to provide incentives for re-

45 Although four provinces have population densi-ties between 500 to 1000 people per square kilome-ter, more than half of the provinces have population densities of fewer than 100 people per square kilometer. The extremes are Papua with five people and DKI Jakarta with 12,645 people per square kilometer.

cruiting teachers to remote schools, and to de-velop school support systems to meet the needs of small schools in isolated areas or conflict plagued environments. Districts in these situations may not have enough techni-cal and financial resources to meet the needs of large numbers of remote schools, although the districts within any given province often vary considerably in the amount of resources that they have available to provide incentives to teachers (according to provincial economic data from The MoNE’s Research and Devel-opment Center (Balitbang). On the other hand, in other parts of the country, there are large urban districts where land is scarce and past policies created multiple primary schools on a single site, each with its own administra-tive system. Most of these local governments are now streamlining these schools into a sin-gle institution and teacher management sys-tem, thus reducing the numbers of head teachers, administrative staff, and specialist teachers as well as rationalizing the use of various physical resources.

Some districts are beginning to reorganize their teacher management systems to align them with the newly decentralized decision making structure by adopting information sys-tems that are more open to the public by in-volving local communities in education decision making, and by setting staffing and performance targets that are appropriate to their particular circumstances. Now that they have greater control over their budgetary re-sources, district governments are becoming more aware of inefficiencies that were inher-ent in many previous policies. For example, in the past, primary schools were expected to employ a minimum of nine teachers regardless of the number of students that were enrolled, while in junior secondary schools, teachers were often employed to teach only one subject regardless of the school’s size and need. Some districts are already distributing and us-ing teachers more efficiently in their schools.

Indonesia is not alone in struggling with teacher management issues under decentralization. A group of education planners in several Latin American countries assessed the impact of different policies to


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impact of different policies to improve school quality that the governments of these countries had introduced over time (Schieflebein et al, 1998). The education planners ranked the im-pact of these policies on student achievement, taking into account the cost and degree of dif-ficulty of introducing each innovation. Sev-eral of these have implications for teacher management. The results of this exercise are summarized in Box 4.1.

One of the key challenges in teacher manage-ment is estimating the number of teachers that will be needed in the future. Districts may require financial and technical assistance from higher levels of government so that they can build their capacity to gather information about the supply of and demand for teachers in the future. The demographic shift caused by declining birthrates and rising primary and junior secondary school enrollments implies that there is likely to be a decrease in the de-mand for primary school teachers and an in-crease in the need for secondary school teachers in the future. The central and provin-cial governments might consider helping dis-

tricts to produce some school-age population projections (say, for 10-15 years ahead) and then to match these to projections of primary school enrollment rates and to the qualifica-tions and age group profiles of the existing population of certified teachers.

The decentralization legislation clearly allo-cates the responsibility for teacher manage-ment to the districts. Given the vast range of different types of schools and of varying dis-trict capacities, the national and provincial governments will have to continue to play an important role in teacher management and de-velopment in the medium term. For example, the provincial quality assurance institute de-scribed in Chapter 3 on quality can help dis-tricts to build their capacity to monitor teachers’ performance so that this monitoring system can contribute to the lifelong profes-sional development of teachers and head teachers.

Box 4.1 Cost-effective Strategies for Raising Academic Achievement

A group of education planners from a number of Latin American countries examined the cost-effectiveness of about 40 policy interventions that aimed to raise students’ academic achievement. The group measured the cost-effectiveness of the interventions according to the estimated impact of the intervention on academic achievement (as measured by a standardized test of mathematics and reading at the primary grade 6 level), the probability of the intervention being properly implemented, and the estimated cost of implementing the intervention. Of the 40 policy interventions examined, the top five most cost- effective interventions were (starting with the best): (i) assigning the best teachers to the first grade, (ii) enforcing the official length of the school year, (iii) not switching classroom teachers during the school year, (iv) testing 10 percent of grade 4 students annually and distributing the results to teachers, and (v) decentralizing school management. The first three of these interventions are not very costly but greatly increase teachers’ productivity and school per-formance.

The group found that four policy interventions had the greatest possible impact on improving school quality and learning achievement. These were (starting with the most effective): (i) providing teaching and learning materials and training teachers to use them, (ii) providing self-directed learning materials to teachers without any accompanying teacher training, (iii) providing a package of interventions to at-risk schools including self-learning materials, training in active and cooperative learning, hands-on workshops on modern teaching methods community involvement in school decisionmaking, school-based management, formative evaluation of the intervention package, and systematic testing and feedback, of student learning, and (iv) paying teach-ers higher salaries to work in rural areas and assigning the best teachers to the first grade of primary school. All of these interventions have costs attached, and the probability of them being fully implemented is lower than the chance that the five most cost-effective interventions above will be implemented.

Source: Schieflebein et al, 1998.


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Allocation of Teacher Management Functions

When teacher management systems are chang-ing, this can be a good opportunity to imple-ment new ways to achieve education goals. However, during the period of transition there can sometimes be tensions and opportunistic behavior at the school and district levels in the appointment, deployment, and promotion of teachers. Because of the magnitude of the changes that have been taking place since 2001, there is likely to be a certain amount of confusion and upheaval as local governments redefine their roles and relationships, debate how best to allocate and manage resources, and learn to become more democratic and ac-countable to civil society. We look at some of these changes in this sub-section through the lenses of the regulations that govern the man-agement of teachers, the perceptions of stake-holders, and the experiences of district governments.

In a decentralized teacher management sys-tem, the main role of the central government should ideally be to develop a national teach-ing service that sets minimum teaching stan-dards and minimum salary scales and develops guidelines for promotions and incentives. The provincial education units would be responsi-ble for ensuring that districts were able to meet their statutory obligations for providing basic education of a sufficiently high quality.46

They would also be equipped to advise dis-tricts on school improvement and teacher de-velopment and to ensure that teachers could be deployed across districts if and when required. District governments would be responsible for the employment and deployment of teachers and for the payment of their base salary (the national minimum) and any additional benefits and incentives, for monitoring teacher per-formance, and for ensuring that teachers had regular access to professional development programs linked to their school activities.

46 This proposal should be vigorously debated as it does not conform to the principles of decentraliza-tion in Indonesia.

Changes in Teacher Management Systems as a Result of DecentralizationThe implementation of the decentralization laws is changing how civil servants, including teachers, are managed. At the time when de-centralization was introduced, large numbers of civil servants who up until then had been employed by central line agencies, such as the former Department of Education and Culture, were reassigned to district and provincial edu-cation units along with budget allocations to cover their salaries. A freeze and budgetary ceiling on civil service recruitment (including public teachers) have been in place ever since.47 The government has begun to intro-duce civil service reforms in line with the de-centralization of governance and management structures, including revisions to salary scales. It is also reviewing some teacher management systems, especially those relating to perform-ance standards and recruitment and deploy-ment. Because of ambiguities in the decentralization law and regulations regarding the assignment of some key teacher manage-ment functions, there is still some overlap and duplication between the districts and those agencies who were previously responsible for carrying out those functions in the pre-decentralization era.

The implementation of the school-based man-agement of education and the creation of dis-trict education boards is changing the nature of teachers’ accountability and their incentives to perform well. These changes mean that the decisions about a school’s resources and goals are made by those who know are in the best position to understand the circumstances that prevail at that school, which is a highly desir-able outcome. However, they also put a heav-ier burden on teachers, school principals, school committees, and parents to work to-gether to assess the school’s performance and to achieve better student learning outcomes. A number of projects are currently helping

47 However, the recruitment of contract teachers is a special case. This is discussed later in the chap-ter.


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teachers, head teachers, and school supervisors to develop the necessary capacity to meet the requirements of school-based management and to improve school performance. District education managers are receiving technical support and training under ongoing MoNE projects (such as the DBEP, the BSE, the JSE, and the Unit Facilitasi in areas of school map-ping), teacher deployment, and quality im-provement planning to help them to fulfill their new obligatory functions. However, there are over 420 district governments in In-donesia with very different capacities, and not all of these activities are taking place in all districts, which means that progress is very uneven.

Responsibility for the Employment and Deployment of TeachersUnder the decentralization laws, the district government is responsible for employing all public school teachers except those in ma-drasah schools. This includes all the civil ser-vice teachers (pegawai negeri) in public and private schools (mostly secondary schools) who were previously hired and paid for by the central government. Wages for public teach-ers are transferred to the districts’ budgets (APBD) as part of their block grant (DAU) from the central government. There are also districts that have hired contract teachers (guru kontrak) as part of projects funded by loans made by donors to the central govern-ment. The salaries of these teachers do not appear in the district budget but are funded by these MoNE-managed projects through the DIP mechanism. The status of these contract teachers will be reviewed when these donor-funded projects end, although attempts by do-nors to design an exit strategy have been pre-empted by the central government’s decision to recruit an additional 190,000 contract teachers, which it is no longer supposed to do.

The salary levels and promotional and reward systems for civil servants are still set centrally, although many districts provide teachers within their jurisdiction with supplementary

benefits and incentives. While the districts have the option to dismiss contract teachers48

or not to renew their contracts, it is still not clear whether or not district governments can reduce the teaching force by dismissing some civil service teachers, as they might want to do if they were to rationalize their teacher/student ratios or to adjust to lower enrollment due to a declining school-age population. Currently, many teachers are under the impression that they cannot apply for vacancies in a different district, but this may be because districts want to retain the civil servants whom they already employ. Nor are there any good mechanisms by which schools and districts can advertise teaching vacancies beyond district boundaries to recruit those teachers who may be best suited to that particular school.

Although district governments are responsible for hiring teachers and paying their salaries, some ambiguities remain in the system. For example, madrasah teachers who are civil ser-vants are still managed by the MoRA which, unlike the MoNE, has not been decentralized. Districts, through the MoHA, have always been responsible for deploying teachers, but with the establishment of school committees and education boards, schools and districts may take on a bigger role in selecting and ap-pointing teachers, especially head teachers.49

District governments are bound by the central government’s zero recruitment policies for the civil service, which have been implemented over the past few years. This applies as much to teachers as to other civil servants. For ex-ample, if a district government wishes to hire any additional teachers, the district must pay for them from their own resources. The Min-istry of Finance will not grant districts any in-

48 Contract teachers are not civil servants. They are contracted to the MoNE for a period of three years at fixed rates. 49 Three districts in Flores, with the support of AusAID, are piloting just such community partici-pation in determining selection criteria for teachers and head teachers and in participating in the selec-tion of teachers and head teachers.


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creases in their budget allocations to recruit additional civil servants (see Chapter 2).

Responsibility for Setting and Monitoring Teacher Performance StandardsAs discussed in Chapter 3 on quality, the MoNE is developing minimum service stan-dards for districts’ obligatory functions and education standards for schools through sev-eral different parallel processes. Associated with these activities (or independently of them in some cases), different units of the MoNE are developing performance standards that will affect teachers.

The Directorate of Higher Education has de-veloped standards that trainee teachers must meet to be allowed to graduate from the DII teacher education program (a two-year post-secondary school teaching diploma needed to teach in primary schools) and is expecting to continue this exercise for the other teacher preparation programs under its accreditation control (such as the DIII, which is a three-year diploma required to teach in junior secondary schools, and S1 or undergraduate degree). These graduating standards apply to the ac-creditation of teacher education programs and define in some detail what an Indonesian graduate teacher should know and be able to do. Complementary to this, the Directorate of Education Personnel is preparing teacher competency standards for serving teachers to be used in assessing their performance and identifying their professional development needs.

It is expected that these competency standards will be used by quality assurance institutes in the provinces acting on behalf of the MoNE. The role of these quality assurance institutes is still being developed, and, as yet, no clear guidelines have been developed for their monitoring activities, but it is likely that these will be based on criteria related to the obliga-tory functions and minimum service standards that are also being developed.

Responsibility for Teachers’ Professional Development and Career DevelopmentInitial teacher preparation remains the function of universities and teacher training institutes that are accredited by the MoNE’s Directorate of Higher Education. This applies also to pro-grams for upgrading teachers’ qualifications and to further education courses for teachers. There are ongoing discussions about how to make both the universities and the accrediting board more autonomous and how to make the process of accreditation more demanding and competitive so that teacher education pro-grams in universities will become more re-sponsive to the needs of schools (the service providers) and district governments (the em-ployers). Where the responsibility rests for the continuing professional development of teach-ers is more ambiguous. Most school-based and cluster-based professional development activities carried out in Indonesia (for which it has a well-earned reputation) were supported in the past by projects funded by donors or by the MoNE. Now districts are responsible for providing in-service training and professional support activities, but few have the resources or the motivation to do so. Provincial teacher training centers (Balai Pelatihan Guru and Pusat Peninkatan dan Pelatihan Guru) are de-concentrated branches of the MoNE and, as such, are expected to provide both quality as-surance and in-service teacher education sup-port to districts.

The ways in which the lifelong education of teachers relates to their career, promotion, and incentive structures have not been clearly ar-ticulated in the past. This needs to be ad-dressed, especially in the context of decen-tralization. We will look at these issues in more detail later in the chapter.

Table 4.1 summarizes the changes in teacher management functions for public general schools (not madrasahs) resulting from decen-tralization.


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Table 4.1 Teacher Management Functions for Public Schools (except Madrasahs)after Decentralization

Management function Decisionmaker Pre-decentralization

Decisionmaking Process Post-decentralization

Teacher employment, deployment Selection Appointment Deployment Transfer Promotion Conditions of service (salary scales, incentive systems) Dismissal/rehiring

Public teachers: By central authority deconcentrated to provincial government. Process governed by civil service regulations and uses credit point system

Contract teachers: Through centrally funded projects, not subject to civil service regulation

Permanent teachers: By private foundations, not sub-ject to civil service regula-tion

Temporary teachers: By schools, not subject to civil service regulation

Public teachers: By local govern-ment under national civil service guidelines

Contract teachers: Unchanged

Permanent teachers: Unchanged

Temporary teachers: Unchanged

Teacher performance Standards settingPerformance monitoringSanctions and remediation

PrimaryPublic Teachers: By the MoNe and monitored by dis-trict circuit inspectors based in sub-districts

Contract Teachers: By cen-trally funded projects

Permanent teachers: By foundations and foundation inspectors

Temporary teachers: By schools

PrimaryPublic Teachers: By districts and schools

Contract Teachers: Unchanged




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Management function Decisionmaker Pre-decentralization

Decisionmaking Process Post-decentralization

Junior secondary Public Teachers: By the MoNE and monitored by national circuit inspectors working out of the provincial MoNE offices

Contract Teachers: By cen-trally funded projects moni-tored by projects and by circuit inspectors

Permanent teachers: By foundation

Temporary teachers: By school

Junior secondaryPublic Teachers: By districts




Teacher professional development Initial preparation Induction Continued professional develop-ment

Public teachers: By centrally accredited teacher training institutions, through public examinations, by individual opportunity through credit system

Contract teachers: By cen-trally accredited teacher training institutions, through public examinations, by in-dividual opportunity through project

Permanent teachers: By school

Temporary teachers: By school

Public Teachers: Unchanged




Stakeholder Perceptions of Teacher ManagementAs part of the consultative processes of the World Bank’s Education Sector Review, a number of focus group meetings were held to learn about the experiences and perceptions of key stakeholders regarding decentralization and its impact on teacher management issues. Two initial sets of meetings were held in Ban-dar Lampung and in Makassar over the course of a week. Separate focus groups of teachers, head teachers, and school supervisors all dis-cussed the characteristics of good teacher management. In addition, one meeting was

held that brought all teachers, head teachers, and supervisors together. The focus group fa-cilitators then discussed the findings of all of the group sessions with a representative group of district managers. The district education officers in Bandar Lampung and in Makassar chose which teachers and head teachers would participate in the focus groups on the basis of sampling criteria agreed between them and the ESR team. These teachers were representative of primary and junior secondary schools in the public, private, and madrasah sectors and in-cluded both public servants and contract teachers as well as equal numbers of male and female teachers. The district managers were


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represented by local government personnel from the district parliament and education and planning offices (Dinas Pendidkan, DinasAgama, Pemda, and Komisi A).

Here are a few highlights to illustrate the views that emerged from the focus group ex-ercise:

Since decentralization, teaching vacan-cies are advertised in the local media. These advertisements provide the public with information about the position and location of the job and invite interested teachers to apply. However, since de-centralization, it has become more diffi-cult for teachers to apply for transfers or promotions out of their original districts. The teachers and head teachers in the fo-cus groups were concerned about this. They also expressed considerable con-cern about the lack of transparency in-volved in the appointment, transfer, and promotion of teachers under decentrali-zation and about the high cost to indi-viduals arising from the ”fees” (bribes and other payments to facilitate results) that they have to pay to assist these processes. In many cases, these pay-ments (in cash or kind) are beyond the means of teachers who might otherwise be eligible for a position. The teachers claimed that this kind of rent seeking has become worse since decentralization.

Although this is not a specific impact of decentralization, teachers were con-cerned about the infrequency of per-formance evaluations and the poor quality of performance monitoring (by head teachers or district school supervi-sors). They considered supervision to be too focused on administrative aspects and not sufficiently on giving teachers feedback about their teaching methods. However, as the teachers also pointed out, there are few opportunities for pro-motion or any other incentives for either school managers or teachers to justify more frequent performance evaluations. Parents tend to measure a teacher’s suc-

cess by the results of the students’ final examination and by how many children are accepted by the secondary school of their choice. Teachers who have bene-fited from performance monitoring pointed out that at least now this is done at the district level and not far away in Jakarta, which they saw as an advantage. On the other hand, the school supervi-sors, who were formerly accountable for school monitoring, felt that the district government was now taking over this re-sponsibility, leaving them with less of a role in supervising schools and teachers.

Except for teachers in schools that are part of ongoing projects (such as the BSE, the JSE, and the DBEP) funded by the national government, there are few resources or opportunities for teachers to participate in any kind of professional development programs (such as in-service training or workshops). Educa-tion managers themselves said that dis-trict education budgets are not large enough to fund teacher development ac-tivities on a regular basis.

Further focus group meetings of education stakeholders are planned over the next few months in a wider range of districts, including districts in rural and island areas and districts with different levels of prosperity and with different population densities and numbers of schools. As the first two sessions were held in urban districts, it is planned to include rural and remote districts in the next round to get a balanced perspective.

District-led Initiatives Many districts are responding with enthusiasm and initiative to their new responsibilities, which are giving them a much greater incen-tive to examine the quality and efficiency of the education provided within their bounda-ries. Because resources are now allocated by democratically elected district parliaments, the district planning office is taking a greater role in both preparing budget proposals and de-fending the allocation of resources.


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These days, education initiatives often origi-nate within district governments (in other words, within the leadership of the Bupatithrough the Bappeda to the Dinas units), espe-cially as they examine ways to use their re-sources more efficiently. Several districts have been merging several small schools into one, redeploying school principals and teachers to understaffed schools based on more efficient student/teacher ratios, and are discussing the relative merits of civil service teachers and contract teachers.50

In cases where schools have been merged and the number of school principal posts have de-creased, there is a danger that tensions will arise between those who lose out and those who retain their jobs. District governments are finding ways to deal with these situations – for example, school principals who had previ-ously been evaluated and had lost their jobs due to poor performance as administrators have been asked to return to teaching. In some cases, natural attrition by retirement solves the problem; in other cases, school principals may have chosen to retire or to seek other work. School committees in some well-developed areas have been using their re-sources to allow teachers to attend in-service or other professional development programs (as is happening in several districts in East Java under the UNESCO/UNICEF project). In many cases, this builds on practices begun un-der such projects as the Junior Secondary Education and Basic Education projects.

Districts now are taking the initiative to focus directly on teachers’ classroom behavior as a way of improving school quality rather than relying solely on physical inputs such as school buildings. The teacher is seen as being central to this goal, and thus districts are put-ting a high priority on ensuring that they have adequate skill levels. For example, some dis-tricts have put a temporary embargo on fund-ing physical infrastructure programs and

50 Based on the pilot activities of the District Basic Education Project, Unit Facilitasi, the MoNE, and the Basic Education Project.

instead are buying books and learning materi-als.

Need for a New Teacher Management FrameworkGood governance and management require in-formation, accountability, and incentives. From the examples given above, it can be seen that districts and schools now have much greater incentives to make use of information that formerly was only passed up to the central education authorities. For example, many dis-tricts are seeing that the analysis of these data can help them to use their resources more effi-ciently. Now that elected local governments are making decisions about budget allocations and schools have a greater say in how they are managed, there is increasing evidence of both better planning and greater accountability to the community. However, the central gov-ernment still has an important role to play in advertising examples of good practice and in providing incentives and technical support to district governments who wish to try out inno-vative ideas and who need to develop the ca-pacity to do so.

Most of the key issues on the subject of teacher management are the same after decen-tralization as they were before. The relevant question is how these issues have been altered by decentralization and how to create an effec-tive teaching service within the context of autonomous district governments and of school-based management systems. We pro-pose a new teacher management framework consisting of three teacher management sub-systems: teachers’ employment and conditions of service, teaching performance standards and performance monitoring, and teachers’ professional development. These are dis-cussed in the next three sections.

Transparent Employment Processes and Conditions of ServiceAdvocates of decentralization contend that the more that school managers and teachers can participate in making the decisions that affect their schools, the more likely it will be that those decisions will meet the needs of their


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students. Similarly, if school managers (as opposed to higher-level education authorities) can make the decisions regarding the hiring and firing of teachers in their schools, then they will be able to build a strong teaching force. Some of the burning questions being considered at all levels of government revolve around who determines the number of teachers that are required, who determines how much teachers should be paid and why, and what elements should comprise their pay. We have two policy recommendations: (i) establishing a transparent teacher appointment process based on efficient deployment norms, school vacancies, advertisement, selection criteria, contractual arrangements, and public informa-tion and (ii) establishing a compensation and rewards system that is clear, transparent, and guided by considerations of teachers’ qualifi-cations, responsibilities, and motivations for continuous development. Implementing these policies would require a dramatic shift from a focus on numbers of schools to numbers of students and from teachers’ credentials to classroom practices.

Student-based Teacher Allocation FormulaIndonesia uses a formula for teacher allocation and deployment that is based on the number of schools not on the number of students. As a result, nationally, average class sizes and the ratio of students to teachers are both low at all levels of education, although there are differ-ences among districts and between schools in rural areas and those in urban areas. Based on the total number of teachers in primary schools (including head teachers, religion teachers, sports teachers, and class teachers), the national student/teacher ratio is 22:1 in public primary schools (sekolah dasar) and 14:1 in religious primary schools (madrasahibtidaiyah). These low ratios are not an effi-cient use of resources, especially when there are few resources available for other quality inputs (such as textbooks, library books, equipment, and in-service training for teach-ers). However, in public primary schools, only 68.4 percent of teachers are class teach-ers. Of the remainder, 12.9 percent are religion

teachers and 6.2 percent are sports teachers. Head teachers, religion teachers, and sports teachers rarely have a full teaching load, re-gardless of the size of the school where they are employed. When the student/teacher ratio is calculated using class teachers only, the na-tional ratio is 32:1, which is still reasonably low compared with countries at a similar level of economic development.

As in primary schools, the national stu-dent/teacher ratios for junior secondary schools are 16:1 in public schools and 10:1 in madrasahs.51 Junior secondary school teachers expect to teach only one subject52 and, no mat-ter how small the school, each school expects to have at least 18 teachers. The mean en-rollment size of public junior secondary schools (SMP) is 358 students, and in reli-gious junior secondary schools (madrasah tsanawiyah), 182 students. At the primary school level, 93.4 percent of teachers are na-tional civil servants. The remainder are volun-tary teachers (guru honor) or teachers employed by the school. Compared with pri-mary school teachers, only 62 percent of jun-ior secondary school teachers are permanent civil servants (who, like primary school teach-ers, are employed by the district govern-ments), which means that a much higher share of these teachers are employed by the schools or as contract teachers than in primary schools.

The introduction of decentralization has cre-ated an opportunity to link teacher manage-ment to local education priorities. Past policies on teacher recruitment and deploy-ment are being revisited as local governments try to balance their allocations of resources to the budget for teachers’ salaries and to the

51 The MoRA has pointed out that many teachers in madrasahs are part-time teachers, and it is not clear that this estimate is based on full-time teaching equivalents. The Madrasah Education System As-sessment (MESA) team is investigating this fur-ther. 52 Also, in junior secondary schools, there may be differences in the availability of teachers of differ-ent subjects.


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budget for other quality inputs to schools. For many districts, the most difficult questions in-volved in widening secondary school access and increasing efficiency at both the primary and secondary school levels are likely to be about changing student/ teacher ratios (at the primary school level particularly) and recruit-ing secondary school teachers who are quali-fied to teach more than one subject.

For example, at the primary school level, there may be a justification for locating schools as close as possible to where children live. In many districts, this would result in a large number of small schools (sekolah kecil), espe-cially in the eastern islands, Papua, central Ka-limantan, and other rural districts throughout Indonesia. This would mean a policy change in that teachers would have to be recruited on the basis of a school’s enrollment rate rather than its number of classes as is presently the case. Small schools often require teachers who are trained to teach multi-grade classes and need to be supported with learning materi-als that enable students to work in groups. Therefore, there is likely to be a significant need for incentive schemes and professional support services to encourage teachers to ac-quire the necessary skills for teaching in small rural schools.

Many existing small junior secondary schools could also be amalgamated to form more effi-cient units. If this is to happen, then junior secondary school teachers will need to be able to teach more than one subject, which has im-plications for teacher training and teacher de-velopment programs.

We recommend that district planners consider a new formula for calculating teacher re-quirements. This formula should be based on the number of students enrolled in a school rather than the number of classes. In addition, all teachers (including sports and religion teachers) should have a full teaching load and be included in the formula on that basis. Head teachers, especially in small schools, should also be class teachers with amounts of non-teaching time to be calculated on the basis of the school’s size (that is, the total number of

students and total number of teachers to man-age). Planners might consider a sliding scale so that smaller schools have more generous student/teacher ratios than larger schools. In India, each community with 40 children is en-titled to one teacher per school, and schools are allowed one extra teacher with every 40 additional children enrolled.53 The principle behind a sliding scale is that small schools where multi-grade teaching is the norm should have fewer students per class (and thus per teacher) than bigger schools where the teacher only has to teach one grade level.

Teacher Surplus. Up until the 1990s, the struggle was to maintain parity between the supply of teachers and the growing numbers of schools. At this juncture, however, it is neces-sary to re-examine the commonly held as-sumption among policymakers that Indonesia suffers from a shortage of teachers. We con-tend that this assumption is false and that gaps in coverage are due to inefficient teacher dis-tribution rather than to a teacher shortage. This apparent teacher shortage is a result of the allocation formula used to calculate the number of teachers required in each district. Indonesia’s annual population growth is 1.6 percent (compared with 1.1 percent in East Asia and the Pacific as a whole), and the birth rate is falling. Of course, this does not mean that there are no gaps in coverage in Indone-sia, but the gaps in the primary sector are problems of distribution rather than supply. In many parts of the country, there are pockets of teacher shortages alongside pockets of sur-pluses. In one district in West Java, for exam-ple, shortages range from an extreme of 173 in an isolated rural school far from public trans-

53 One proposal put forward in the past in Indone-sia (Somerset, 1997) laid out a sliding scale based on school enrollments for calculating the provision of teachers, which would be more efficient than the present formula. Small schools with fewer than 130 students would be eligible for one teacher for every 30 children, larger schools with between 130 and 200 students would be eligible for one teacher for every 35 children enrolled, and schools with over 200 students would be eligible for one teacher for every 40 children enrolled.


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portation and other services to only 9.4 in a small school in a peri-urban area near the dis-trict’s center. This is not uncommon as will be seen in the discussion below. In the past, the MoNE assumed that all primary schools needed one teacher per grade level plus two additional full-time teachers, one for physical education and health and one for religion as well as a non-teaching head teacher. The MoNE continued to use this formula in its re-cent recruitment drive for contract teachers. This formula substantially overestimates the number of teachers needed in schools, espe-cially in small schools. For example, in one school in a district in Java with a stu-dent/teacher ratio of 9:4, the average class consists of only 11 children, with 66 pupils distributed among only six classes (Weston, 2003). This school currently has seven teach-ers, but according to the MoNE’s teacher for-mula, the school still “needs” an additional teacher, which would give it a student/teacher ratio of 8:3. If the formula is applied to all schools in the district and all these teachers were supplied, the student/teacher ratio for that district would drop to about 13:1, which is even lower than in the most developed coun-tries of the world.

With high enrollment rates and an already plentiful supply of teachers, Indonesia is in a position to rationalize and upgrade the teach-ing force at the primary school level. This would allow districts to channel more of their resources into quality inputs and to fund the salaries of the additional teachers that will be required at the secondary level, which is where the education system will be expanding in the future.

Centrally Recruited Teachers. Despite the de-centralization of education management to the district level, the MoNE is still funding and managing the appointment of contract teachers across the country. The MoNE is testing ap-plicants, determining who can be employed, issuing their contracts, and paying their sala-ries. The MoNE has recruited 190,000 con-tract teachers in 2003 to be deployed across all levels of the school system, 20 percent of whom are to be employed in private schools

throughout the country. There was no short-age of applicants – over 400,000 people ap-plied. Teachers will be contracted to the central government for four years and will re-ceive Rp. 460,000 as monthly base salary from the central government, with any additional benefits expected to be funded by the district governments.

The role of the central government in recruit-ing teachers has become a sore point for many districts, especially those that are themselves in the process of rationalizing schools and re-examining the formula by which teachers are appointed to schools (Weston, 2003). These new teacher appointments have been spread across districts but are not based on actual need. Seven districts in Java and Sulawesi that do not have large shortages of teachers are all due to receive between 300 and 800 con-tract teachers, and another district, which can only be described as having a potential surplus of teachers, is to receive 399 contract teachers.

Donor-funded education projects are also sup-porting the salaries of contract teachers. Un-der project-related agreements between district governments and donors, contract teachers hired under these projects are supposed to be employed by the districts directly while the donors guarantee their salaries. However, the central government has by-passed these ar-rangements by going ahead and recruiting contract teachers directly and paying them from the national budget.

The district governments surveyed by Weston (2003) would like teachers to be selected and employed at the district or even the school level, with the central government having no power to select or employ teachers. This is compatible with the intention of Indonesia’s decentralization laws and the purposes of the general allocation funding to districts. A new system is needed for selecting, appointing, and transferring teachers based on student/ teacher enrollment needs and other criteria related to the need for multi-grade teaching in small schools. Also, the rules governing the em-ployment, deployment, and transfer of teach-ers need to be sufficiently flexible to allow


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schools to hire teachers from outside their own districts and for teachers to be able to transfer to other districts when appropriate.

Performance-based Compensation and RewardsDesigning teacher salaries and incentive struc-tures that attract the best and the brightest to the teaching profession and retain them is a complex enterprise. In Indonesia, low salaries are often seen as being an important contribut-ing factor to poor teacher performance, low teacher morale, and the low quality of entrants into the teaching profession, but is this actu-ally so? Research from Indonesia indicates that teacher salaries are not low compared with other professions and international re-search draws no correlation between teacher salary increases and improvements in teaching performance.

We recommend that under decentralization, teachers’ salary scales should have a national base and then districts should be allowed to top up salaries. This topping-up process would need to be monitored by the central government to ensure that the DAU alloca-tions to districts are made sufficiently pro-poor so poorer districts can afford to add suf-ficient financial incentives to retain teachers, especially if many of these are posted to re-mote schools. Care should be taken not to in-crease teachers’ base salaries to unsustainable levels. Where material incentives seem to be a useful policy tool, it would be better to offer bonuses to supplement teachers’ remuneration instead of altering their basic pay scales. Such bonus systems could also be used to reward teachers who take on extra responsibilities or duties, to attract better candidates to the teach-ing profession, to encourage schools to im-prove their performance, and/or to attract teachers to rural locations where there is a scarcity of applications for vacant teaching posts. Districts should be responsible for de-termining appropriate allowances and top-ups for those teachers who work in remote loca-tions or under difficult conditions. This should not be done centrally because, if it were, then all schools would try to be classified as “diffi-

cult” so that their teachers would be paid more. If each district has the power to set top-up allowances for its own schools in a trans-parent way, then this would be an efficient way to attract teachers to rural areas. Brazil has tried such an approach, and the results are included in Appendix 4.2 on relevant interna-tional experience.

Policy decisions about teacher salaries also need to be informed by research about the most effective way to spend resources on edu-cation inputs. Research on education expendi-ture allocations (Pritchett and Filmer, 1999) has shown that the marginal benefits per dollar of inputs that are not associated with teachers’ salaries are commonly 10 to 100 times higher than those of direct inputs to teachers’ welfare (that is, their salaries and incentives). This implies that too much is generally spent on in-puts that provide direct benefits to educators (like teachers’ wages) relative to the amount spent on other inputs that contribute directly to learning such as books or instructional materi-als.

Recent research shows that most Indonesian primary school teachers and junior secondary school teachers have earnings equivalent to or higher than those of other workers with an equivalent level of education. Teachers with a university degree (that is, mostly those who teach in senior secondary schools) may earn slightly less than other workers with an equivalent level of education. However, teachers earn more per hour than most other workers and have many more days off per year.

An analysis of labor force data from 2000 (Filmer, 2002) indicated that teachers with qualifications below the diploma level (about one-third of teachers) have monthly earnings that are, on average, 22 percent higher than the monthly earnings of other paid workers with the same qualifications. The differential (in terms of monthly salary) is smaller among those with a first or second level diploma and then becomes negative; in other words, the 10 percent of teachers with a third level diploma and the 24 percent with a university degree


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earn 18 and 37 percent less respectively than other paid workers with the same levels of education.

Hourly earnings follow a different profile since teachers tend to work fewer hours but are typically paid more per hour than other workers. Teachers consistently work fewer hours than other workers, regardless of their level of education. Teachers in the study re-ported working about 34 hours per week while other paid workers with similar levels of edu-cation reported working between 43 and 46 hours per week (see Table 4.2). Not only do teachers work a shorter week than other paid workers, but they also have more holidays per year. Thus, teachers with senior secondary

schooling earn 61 percent more per hour, teachers with first and second level diplomas earn 32 percent more, and those with third level diplomas earn 5 percent more than other workers with the same levels of schooling. However, among workers with a university degree, teachers earn 19 percent less than oth-ers.

Hence, after controlling for individual charac-teristics and the respondents’ region of resi-dence, the study found that teachers earn 7.9 percent less per month than other paid work-ers, but at the same time they earn 18.9 per-cent more per hour than other workers. See Table 4.2 for a comparison of the hours worked by different types of teachers.

The above-mentioned labor force study also noted regional differences in teachers’ earn-ings. For example, in West Sumatra, the study found that teachers earn 7.3 percent less per month than teachers in West Java (controlling for age, gender, urban residence, and educa-tional attainment). Other workers in West Su-matra, however, earn 32.3 percent more than workers in West Java do. Other places where the differentials are large are Riau (20.7 per-cent), South Sumatra (19.3 percent), DKI Ja-karta (28.2 percent), and Central and South Kalimantan (24.3 and 35.3 percent). These are provinces where teachers earn substan-tially less than other workers. The same places have large differentials in terms of hourly earnings as well. Conversely, there are two provinces where teachers earn substan-tially more per month than other workers –NTB (35.7 percent) and Central Sulawesi (16.3 percent). In the case of hourly earnings, two additional provinces make the list – Yogyakarta (20.9 percent) and West Kaliman-tan (20.6 percent).

Indonesian primary teachers have salaries that are comparable to those paid to other workers but are lower than the salaries paid to teachers in other countries. However, this is partially offset by the fact that they have smaller classes, although they may work longer hours than teachers in other East Asian countries (OECD, 2002). However, studies by the

Balitbang of time spent on instructional tasks indicate that teachers may spend only about half of their time in school actually teaching.

Table 4.2 Average Number of Hours Worked per Week

Not a Teacher

Teacher

All workers (SAKERNAS 2000) 44.7 (13.1)

34.0 (8.5)

Public school teachers (IFLS 2000)

Primary schools -- 33.6 (7.4)

Junior secondary schools -- 24.1 (7.9)

Private school teachers (IFLS 2000)

Primary schools -- 29.6 (10.3)

Junior secondary schools -- 21.8 (9.8)

Source: Filmer, 2002. Notes: Data derived from SAKERNAS 2000 and from the Indonesia Family Life Survey (IFLS) 2000.

To compensate for this, managers need to be concerned about teachers’ productivity, and teachers need to be aware of the statutory numbers of hours of instruction and school days in a year that they are obligated to work. School managers should be able to hold schools and teachers accountable for their productivity. For example, it is common inmany secondary schools for students to attend


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school only part-time in the last three weeks of the term and to spend the rest of that time on “home study” to prepare for the end-of-term tests. After taking the test, the students might not be required to attend school for up to one week while their teachers mark their test pa-pers. In return, school managers should be able to ensure that teachers are deployed effi-ciently so that no teacher is burdened with very large classes while others have small classes. District governments (and supporting institutions at the national level) need to con-sider these points as they try to balance their expenditures on salaries with their expendi-tures on other valuable and complementary inputs to schools.

The research findings reported in this section raise questions about the relationship between teachers’ productivity and earnings. If the number of applicants for vacancies is anything to go by, the recent national recruiting exer-cise for contract teachers had a ratio of two applicants per vacancy, which seems to indi-cate that teachers’ salaries are not a deterrent to applicants.

The Impact of Corrupt Practices on Teachers and Teaching What Indonesian teachers earn and what wages the teachers actually receive are not al-ways the same. The ESR focus groups in 2003 found that teachers face high transaction costs in the form of bribes during the process of, for example, being employed, transferred, promoted, or selected for in-service training. A recent small survey of 70 schools with 130 teachers in eight provinces (Keluarga Sekolah Indonesia, 2003) indicated that 80 percent of teachers do not receive the full amount of their pay and that 30 percent or more of their pay is unofficially deducted by the education office or by their school principals beforehand.

In some cases, teachers seeking to be pro-moted to a head teacher position have had to pay the equivalent of six to twelve months of their salary to the education officials responsi-ble for appointments in order to win the post. Many teachers use their savings or borrow this

money against their future earnings. The in-centive to meet these payments is, of course, the increased salary and benefits of the promo-tion, but it also has to do with the increased opportunity to generate additional income from, for example, fees for after-school tuition and examinations and commissions on the sale of textbooks and school uniforms. Any study of teachers’ earnings and salaries should take into account the high cost to teachers (and to the credibility of the whole education system) of these kinds of “fees” and other rent-seeking activities.

Transparent teacher management systems need to be put in place, and mechanisms must be developed to address grievances. Indonesia is not alone in recognizing the damage done to the education system by poor teacher man-agement practices. Issues of transparency (in-formation, accountability, and incentives) and what rights teachers have to receive redress for their grievances about poor teacher manage-ment processes are being faced by a number of countries. At the UNESCO International Institute of Education Planning in Paris in 2002, meetings were held on the subject of corruption in education in which several countries admitted to having this problem. For example, in Mexico, the high cost to society of corruption was estimated to be around 15 percent of GNP. In Ghana and Nigeria, corruption abounds in school admis-sions, the payment of teachers’ salaries, and the leak of examination questions to students. In South Africa and Pakistan, public resources were being diverted to fictitious schools, teachers, and pupils as a result of poor data monitoring and mis-reporting.

Hong Kong has been addressing corruption in society in general. It established an anti-corruption commission in 1973, which has a sub-committee on education that deals, in par-ticular with inappropriate allocations of funds and with teachers’ inadequate professional practices. Table 4.3 summarizes some of the main ways in which corrupt practices in teacher management affect quality, equity, and ethical standards in the education sector.


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Table 4.3 The Impact of Corrupt Practices within the Education Sector

Area of management involved Corrupt practices/ opportuni-ties for corrupt practices

Elements of education systems most affected

Recruitment, promotion, and ap-pointment of teachers (including systems of incentives)

Irregular recruitment and unjustified allocations Unjustified promotions Training and scholarship allocation by criteria based on passingPayment of salaries and allocations to ghost teach-ersIgnoring posting and transfer criteria for teach-ers

(arising from favoritism, nepo-tism, bribes and pay-offs, by-passing criteria)

Quality

Conduct of teachers Teaching hours paid for as opposed to the number really delivered Ghost teachers Bribes and pay-offs (for school entrance, for the assessment of children, etc)Use of fees requested from pupils

AccessQuality Equity Ethics

Allocation of specific allowances (compensatory measures, fellow-ships, subsidies to the private sec-tor etc)

Favoritism Nepotism Bribes and pay-offs By-passing criteria

AccessEquity

Examinations and diplomas Selling information Favoritism Nepotism Bribes and pay-offs Academic fraud

Equity Ethics

Supply and distribution of equip-ment, food, and textbooks

Closed processes in public tendering Embezzlement By-passing criteria

Equity

Building of schools Closed processes in public tendering Embezzlement School mapping

AccessEquity

Source: Hallak and Poisson, 2002 (adapted).


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Teacher Motivation and Incentives What motivates teachers to enter and remain in the profession is not solely related to their salary levels. Other aspects of professional life matter as well, including recognition from the local community and from their peers, op-portunities to share their experiences and to learn from others, access to continuous profes-sional development, and pride in their stu-dents’ achievements (see Box 4.2 below).

De-linking Teachers from the Civil Service

The majority of school teachers are civil ser-vants. However, a civil service exists to con-trol and operate a bureaucracy, and it can be argued that school teaching is not a bureau-cratic activity. The teachers’ unions and other professional associations are already discuss-ing how best to establish a separate teaching service. The benefits of having such a service would be that it would better meet the profes-sional needs of teachers by developing spe-cific criteria for teachers’ professional career development and reward systems rather than using administrative criteria as happens now.

We recommend the creation of a teaching ser-vice that links the licensing of teachers, their professional rights and obligations, their con-ditions of employment, and their career incen-tives and promotional paths to the needs of schools and classrooms. Under the new sys-tem, teachers’ unions and associations would protect teachers’ rights and thus empower the members of this hitherto powerless profession.

It is important to preserve a flexible teaching force and a national teacher labor market as much as possible. This would require putting mechanisms in place to allow teachers to ap-ply for vacancies in any district and for schools to have a say in the selection of their teachers. Districts need to be able to meet supply and demand in more flexible ways than is currently possible. The functioning of the teacher labor market may well need a certain degree of central direction and management (in the form of standards and licensing) to en-sure that it stays national, but the responsibil-ity for allocating teachers to vacant posts in schools can be decentralized. This would be the best of both worlds. There should be a na-tional pay scale or salary grading system based on pre-set minimum pay levels, with districts and schools having the option, as discussed

Box 4.2 Permanent or Contract Teachers?

Ibu Guru [the teacher’s real name has been changed] has been a primary school teacher for nine years. She trained as a religion teacher. She was locally hired and is employed and paid directly by the school. Her monthly pay is Rp. 100,000 and she teaches grade 1. She uses up-to-date pedagogic approaches and achieves excellent results with her students. Her outstanding performance as a teacher came to the atten-tion of education managers, and she was recruited to train teachers in other districts and provinces.

Most madrasahs and many primary and junior secondary schools rely on locally hired teachers who may be paid in the range of Rp. 50,000– Rp. 125, 000 per month compared to the Rp. 500,000 and more per month paid to teachers who are civil servants.

District managers (from 30 districts in 10 provinces) have acknowledged their reliance on locally hired teachers and on the professionalism of many of these teachers. However, they have pointed out that, when these teachers become members of the civil service, their performance often deteriorates.

The managers expressed the view that hiring new teachers on limited-term contracts would place them on a similar basis to many private sector employees. Under-performing teachers could be more easily made re-dundant – good teachers need never fear redundancy. It would also mean that teachers could be placed in schools as and when they are needed and the level of their wages tied to working in a particular school.

Source: Weston, 2003.


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above, to provide their teachers with supple-mentary benefits and allowances according to criteria determined at the district or school level. The minimum pay scales and condi-tions of service should emerge from a collec-tive bargaining process between the national government and teachers’ unions and profes-sional associations. Through such a process, a better balance could be struck between na-tional and district priorities and the needs of teachers than is currently the case.

The Indonesian Teachers’ Association (Per-satuan Guru Republik Indonesia or PGRI) represents the vast majority of teachers in In-donesia (1.4 million) and is naturally protec-tive of its members. Since decentralization, it is learning (with the support of the ILO) to act in the interests of its members. The national teachers’ association now has greater freedom to act as a labor union with collective bargain-ing rights. Most teachers would probably re-gard salary increases as a higher priority than other professional issues such as performance monitoring or access to in-service training. The PGRI was founded on November 25, 1945 and for several decades was a New Or-der organization representing teachers as civil servants and Golkar party members rather than a trade union. Newly founded independent teachers’ unions cannot compete in size or match the PGRI’s infrastructure, which it holds from its pre-trade union existence (for example, 17 out of 29 PGRI provincial com-mittees have their own buildings and many have teacher training institutes). The demand for increases in salaries comes mainly from teachers who, with the advent of local democ-racy and their newly unionized teachers’ asso-ciation, are an increasingly powerful lobby. However, teachers and their unions are self-interested and are not always able to see the public interest of the nation and to accept the most efficient use of resources. Teachers tend to assume that the two are the same thing, but they are not.

School-oriented Performance Standards and Monitoring When schools perform well, it is due to a combination of effective teaching and of strong professional leadership by the school principal. Under decentralization, school committees and district governments expect to hold schools and teachers accountable for learning outcomes, but the way in which school performance is currently measured is not always based on the most value-added in-puts, as became clear from the focus group discussions discussed above.

Teaching is a complex operation. As summa-rized by Brophy and Everston (1976), effec-tive teaching requires the ability to implement a very large number of diagnostic, instruc-tional, managerial, and therapeutic skills, with teachers having to tailor their behavior in spe-cific situations to the needs of the moment while still performing effectively in the class-room. Indonesia’s current standards for evaluating teachers rely heavily on their cre-dentials and years of experience, even though research has demonstrated that having a more educated and experienced teacher does not necessarily lead students to learn more or bet-ter (Woessmann, 2001). However, research has also shown that what teachers know and are able to do does improve the academic per-formance of their students. For example, re-searchers in the U.S. have found that the greater a teacher’s cognitive skills as demon-strated in a standardized test, the better his or her students perform academically (Summers and Wolfe, 1977; Strauss and Sawyer, 1986; and Ferguson, 1990). Thus, rewarding teach-ers for what they actually know and do in the classroom is likely to have a much greater im-pact on student performance than rewarding them for their academic credentials and years of experience (see also Darling-Hammond, 1997).


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We recommend that Indonesia should establish a process for evaluating school performance that is based on individual teacher performance reviews that assess their value added to education proc-esses and outcomes.

Furthermore, we recommend that those who define the criteria for effective teaching in Indone-sia (currently the MoNE) should more widely re-present the key stakeholders in education. These recommendations are based on our assessment that current standards and performance assessment practices have failed to improve the quality of tea-ching in Indonesian schools. International best practices provide strong support for this recom-mendation as will be seen in Box 4.4.

The definition of effective teaching in the di-verse environments of Indonesia’s schools is still far from clear in the context of the new decentralized education system. Designing monitoring tools and training inspectors in how to assess the many aspects of teaching in

classrooms also remains to be accomplished. Also, the teacher competencies and the school performance measures that are currently being developed are too centrist in their approach. The OECD has analyzed what teacher charac-teristics have the greatest effect on improving quality (see Box 4.3), and this analysis pro-vides a good example of meaningful teacher performance standards for a decentralized education system. However, Indonesia has begun to develop a career-long set of compe-tency standards for teachers and ways to measure their performance against these stan-dards. Research from elsewhere in the world has indicated which teacher characteristics and behavior contribute the most to improving the academic performance of students. An analy-sis of junior secondary school results from theThird International Mathematics Survey (Woessman, 2001) gave some illustrations of teacher characteristics and behavior at the school level that seem to improve students’

Box 4.3 The Importance of Teacher Quality

A review of the literature indicates that a range of factors relating to teacher quality affects stu-dent performance (see OECD, 2002). However, the literature also reveals the limitations of the information provided by the more measurable characteristics of teachers. Researchers have often found it hard to isolate the effect of characteristics such as knowledge of subject-matter, qualifications, academic ability, pedagogical knowledge, or teaching experience on student outcomes. The evidence predominantly shows that all of these teacher characteristics have a positive impact on student learning but to a lesser extent than might have been expected. One possible explanation is that research studies looking at individual school systems with relatively uniform teacher characteristics have not been able to observe sufficient variation in such factors to be able to measure the difference that they make. In addition, for most of these characteristics, a “threshold effect” is likely to apply; teachers need a certain level of qualifications or experience to be effective, but further attainments beyond those levels may have progressively less of an impact on student performance.

A further possible explanation is that the teacher characteristics that are typically measured in re-search studies may explain less of the variation in teacher quality than other characteristics that are more difficult to measure. Such characteristics may include the ability to convey ideas in clear and convincing ways, to work effectively with colleagues and the school community, to use a wide range of teaching strategies appropriate for students’ needs, and enthusiasm, creativity, and commitment to the students’ success. The literature reviewed in OECD (2001) includes recent studies that point to the importance of such variables in influencing student learning. This sug-gests that policymakers need to take account of the potentially substantial variation in quality that exists among teachers whose easily measured characteristics are similar.

Source: OECD, 2002.


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performance (see Box 4.4). These characteristics are a good place to start in devising ways to meas-ure how teachers perform in terms of meeting teaching and learning standards.

The international literature provides several promis-ing models for setting standards and monitoring teacher performance. The best known of these, the UK school inspection system (Ofsted, 2003), is described in Appendix 4.2. Recently, Chile has been developing new models for evaluating teacher per-formance, although these have been complicated by long negotiations between the municipalities that employ teachers and the teachers’ unions that exist

to protect the interests of teachers. In Indonesia, the processes of democracy are still being devel-oped, and much of the standard-setting of the re-cent past has been centrist and from the top down. Education stakeholders at the local level have not yet had much opportunity to discuss, adapt, or reject the standards and performance monitoring guidelines that are being developed. A study (Avalos, 1998) reviewed the battle for and against the performance evaluation of mu-nicipal teachers in Chile. (A summary of the dif-ference between the proposed evaluation system as it was set out in the government statutes and the final negotiated system is in Table 4.4.)

Box 4.4 International Evidence on Schooling, Resources, Educational Institutions and Student Performance

Students of female teachers score higher than students of male teachers in both mathematics and sci-ence.School autonomy in the purchase of supplies is associated with good academic performance by stu-dents.Students in schools that were responsible for hiring their own teachers performed significantly better in mathematics and science; thus school autonomy in personnel management seems highly conducive to good student performance.When individual teachers can choose which teaching method to use on the basis of what they think would be best for their students, this helps students to learn more. Positive effects on students’ test scores were also observed when individual teachers could influence how the curriculum was taught in the school and when teachers were responsible for the purchase of supplies.The longer the instruction time that students have in school, the better their academic performance. Centralized examinations (that is, tests and examinations set independently of the school) that make students’ learning efforts more visible to external observers were shown to have a positive impact on students’ educational achievement.The more time that class teachers spend outside the formal school day on preparing or grading their students’ work, the higher their students’ test scores in mathematics.It seems that assigning homework less often but on a more ambitious scale is particularly conducive to students’ learning.

Source: Woessmann, 2001.


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There are lessons from Chile that Indonesia might want to consider. Avalos (1998) points out that the most important difference between the two systems lies in the fact that the new system has a well-developed set of criteria or standards against which to compare teaching behavior, which the statutory system did not have. These standards can also form the core competencies for a career-long professional development system.

Career-Long Professional Development There have been a large number of teacher education and training projects in Indonesia over the past 30 years (Sweeting, 2001). These have aimed at revising the curriculum in pre-service education programs, upgrading the technical capacities of teacher educators and teacher education institutions, and developing in-service training and professional support systems based on concepts of school cluster-ing and teacher mentoring. However, there are still many complaints about the fact that most

Table 4.4 Comparing Two Teacher Performance Evaluation Systems in ChileEvaluation System The Statute System The New Agreed System

Purpose To assess teacher’s “functionary” or contractual performance.

Teaching performance, not contractual obliga-tions

Who is to be evalu-ated

All teachers who have been employed for at least six months

Gradually to cover all teachers in municipal schools with one or more years of service, over a period of four years.

Frequency of evalua-tion

Once a year Every four years

Content of the evalua-tion

Professional and contractual responsibility In-service courses taken and evidence of self-improvement (research or publica-tions) Performance indicators including student results according to contexts Exceptional evidence such as design of school or classroom improvement projects.

Specified in the National Set of Criteria: Frame-work for Good Teaching. It covers four domains:

Preparation for teaching Developing an appropriate classroom envi-ronment Classroom teaching Professional responsibilities beyond the classroom

Each domain has four or five standards or crite-ria to guide the assessment.

Procedures Ratings in a “evaluation record” and evidence from the teacher’s “life-history record.”

Portfolio with evidence of teaching and as-sessment materials (may include a video) Self-evaluation sheet Structured interviews Head teacher report form

Rating scheme A point-scheme from 1 (deficient) to 5 (excel-lent)

Four categories based on ratings from examined evidence: outstanding, competent, basic, and un-satisfactory.

Who evaluates A committee composed of the school head or municipal head, a teachers’ representative, and a municipal representative

Experienced teachers who are specifically trained and checked for inter-rater reliability

Who decides The above committee A municipal evaluation committee on the basis of the evaluators’ reports.

Right of appeal A committee including the municipal Mayor, the Head of the Municipal Education Corporation, and a school representative.

Not specified

Effects Teachers deemed “unsatisfactory” in two con-secutive evaluations may be dismissed. Highly rated teachers may be eligible for in-service courses and funding of innovation projects.

Teachers deemed “basic” or “unsatisfactory” will be offered support to improve and will be assessed up to twice more before being dis-missed. Highly rated teachers will be offered ex-tra opportunities for professional growth.

Coordination of the system

Municipalities A national system under the Ministry of Education. A three-party technical committee: the teachers’ union, municipalities, and aca-demic institutions.

Funding Municipal budgets A national fund equivalent to 1% of teacher sala-ries to pay for in-service provision organized by municipalities.

Source: Avalos, 1998.


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in-service training does not improve teacher quality, which reinforces the public’s opinion that the quality of most teachers in Indonesia is low (Sweeting, 2000).

We recommend a new paradigm for teacher training in Indonesia, one that takes as its starting point the career-long professional de-velopment of teachers. This would cover teachers’ initial training, their induction into school life, their professional registration, and their continuing professional development. This continuum of professional development needs to be linked directly to the actual class-rooms and schools in which teachers work. This means that colleges and universities need to be much more responsive to the demands of schools and of the district governments that employ teachers. They also need to be respon-sive to the professional demands of teachers who wish to deepen their experience and knowledge of teaching to add value to what they do in classrooms and in collegial activi-ties with their colleagues (for example, men-toring newly licensed teachers). The notion of teacher preparation is now being redefined to include reflective teaching approaches and classroom-based action research collaboration among teachers, effective communication, and other characteristics that contribute to lifelong professional development (see Appendix 4.1 for a fuller version of what teachers should know and be able to do).

While there is constant discussion about re-quiring higher levels of certification for teach-ers, there are issues that need to be addressed beforehand about the kind of teachers that schools need and the relationship between formal qualifications like the DII or S1 and the actual lives of teachers. These issues include how to organize learning in multi-grade schools, what are the most appropriate meth-ods for teaching literacy to young learners, and how to approach teaching in multilingual environments. There also needs to be more discussion about whether or not resources spent on constantly upgrading teachers’ quali-fications will actually improve their perform-

ance in the classroom or add value to their students’ learning.

Initial Preparation of Teachers The minimum qualification for primary teach-ers was set in 1989 as a two-year post-secondary-school teaching diploma (DII). Yet in 2002, only one-half of all primary school teachers in Indonesia held this certificate or a higher qualification. For junior secondary schools, the minimum teaching qualification is a three-year education degree (S1), and in 2002, only 50.7 percent of teachers held this or a higher qualification. Research consis-tently indicates that the most successful teacher education programs require trainee teachers to spend a high proportion of their time in teaching and other practical and intern-ship experiences in schools (see Box 4.5 be-low).

International research indicates that:

The most competent teachers are those who have a good mastery of the subject to be taught and have also studied Education. Teachers with more training in teaching methodology are more ef-fective than those with less. Teachers who have spent more time studying pedagogy are better teachers, especially when it comes to encouraging higher-order think-ing skills in their students and ca-tering for their individual needs.How well trainee teachers perform in well-assessed practice teaching is the best predictor of their future success in the classroom.

The main implication of these findings for ini-tial teacher preparation and for continuing pro-fessional development programs is that training institutions will need to send trainee teachers to practice in schools in a wide range of different environments.


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Induction of New Teachers into School Life and Classroom TeachingThere is currently no formal school induction process for newly graduated teachers even though this is an important stage in their pro-fessional development. Most professions have internship systems that lead to registration and entry into the profession. It provides an impor-tant link between the employer, the service provider, and those who educate and train pro-fessionals. An induction process also provides a supportive environment for new teachers when they are first being held fully account-able for a class of children and their learning to parents and colleagues. Looking at the OECD’s extended list of what teachers should know and be able to do (see Appendix 4.1), it is obvious that no new graduate could possibly have all of these characteristics at the start of his or her career. The Directorate of Higher Education at the MoNE is currently identify-ing what new graduates are expected to know and be able to do and what beginning teachers should know and be able to do in order to be licensed.

Introducing an induction stage into teacher development in Indonesia would require estab-lishing an internship system that links poten-tial employers, schools, and licensing boards, developing mentoring systems for interns,providing incentives for employers and schools to support interns, and establishing li-

censing boards with responsibility for initial teacher licensing and for performance moni-toring at the renewal stages. In Ireland, for ex-ample, a Department of Education Inspector assesses each new teacher for certification purposes during an initial probationary period following his or her appointment to a full-time teaching post. Most new teachers complete the certification requirements within two and a half years of their graduation. Malaysia and Australia also have systems that require teach-ers to register after completing their initial teacher education programs (Acedo, 1998).

A major unsolved problem in teacher licensing in Indonesia is that no criteria exist for deter-mining when a prospective teacher is fully ready to take responsibility for teaching a classroom full of students. In most countries, teachers simply have to pass all of the courses in an approved teacher education program. However, because Indonesian policymakers did not believe that this route necessarily demonstrated that prospective teachers were fit to practice, they imposed additional tests of basic skills, subject matter, and pedagogy on trainee teachers.

The Indonesian system consists of paper and pencil tests with mainly multiple choice ques-tions in standardized tests of basic skills, sub-ject matter, and pedagogical knowledge as well as classroom observation sessions in which candidate teachers are assessed against

Box 4.5 Teacher Education Programs that Made a Difference

Research on teacher education programs in the USA has shown that the most effective programs have these characteristics:

A common vision is expressed in the coursework and in the clinical experiences or practice teaching sessions.They set well-defined standards of practice and performance.Graduates are expected to know content-specific pedagogy, child development, learning theory, and student assessment methods. They provide extended clinical experiences (lasting a total of 30 weeks in a four-year degree pro-gram).They have strong partnerships with universities and schools. They make extensive use of case methods, teacher research, performance assessments, and portfolio evaluations.

Source: Darling-Hammond, 2000.


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a checklist of designated kinds of teaching be-havior. Neither the standardized tests nor the observations based on the checklist adequately reflect the extent of a candidate’s knowledge base and, thus, improve the quality of candi-dates’ preparation for teaching. Similar tests in the USA were abandoned in the mid-1980s in favor of performance-oriented assessments because of the following problems:

Only 10 percent of the questions actually asked about the candi-dates’ knowledge about teaching and learning. Over 40 percent of the questions were so poorly specified that they either had no clearly defensible right answer or had an answer based solely on ideology rather than on knowledge of research (Darling-Hammond, 1986). The tests did not allow candidates to demonstrate their knowledge, judgment, and skills in the kinds of complex settings that character-ize real teaching. They represented a narrow behav-ioristic view of teaching that over-simplifies the nature of teachers’ decision making. The exceedingly brief statements of professional problems failed to represent the complexity of teach-ers’ decision making processes or the full range of their professional knowledge base. The questions failed to provide sufficient information about the context for and goals of teaching decisions to allow candidates to give sensible answers.

We recommend that Indonesia develop per-formance-oriented assessments for teachers grounded in four assumptions about teaching and learning:

Teaching is a function of both content and pedagogical knowl-edge.Combining support and assess-ment is essential to the evaluation of teachers’ professional compe-tence.The tasks in the assessment must represent authentic exhibitions of teacher-related activities. Professional judgment and exper-tise are key dimensions in assess-ing teacher performance (Pecheone and Carey, 1990).

Continuous Professional Development

In many areas of Indonesia, teachers act as mentors to other less experienced teachers ei-ther in professional development activities at the school or through teachers’ meetings at the school cluster level or in district in-service training workshops. However, reports indicate that in many cases this system breaks down because mentoring does not provide the men-tors with any opportunity to deepen their pro-fessional experience nor are the resources available for them to do so (Nielsen 1996). The main sources of funding for professional development activities in the past have been externally funded projects or the central gov-ernment’s project funding. When these sources are not available, there are only lim-ited resources available to pay for any school-based professional development activities. To date, few district governments have allocated any budgetary resources to in-service training activities. Some teacher training institutions and universities, again with project funding, have established applied research activities in schools in which teachers have been able to participate, and reflect on their practice, and develop ideas for improving teaching prac-tices at their schools. Some schools have used project money to pay for experts to work with them on specific teaching and learning issues, but these examples are not common.


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The existing credit point system that is used to assess whether teachers are ready for promo-tion needs to be revamped to create more in-centives for teachers to upgrade their skills and update their knowledge on a regular basis. Also, universities and other education institu-tions need to be more responsive to teachers’ professional needs by providing them with short vacation courses and flexible modular courses that would allow them to deepen their knowledge and widen their experience without necessarily committing themselves to long-term, full-time academic programs. Teachers’ professional development programs should be linked to school and teacher performance monitoring. There is much work to be done in this area, but there is also a lot of Indonesian experience to build on. Also, other countries, such as Mexico (see Box 4.6 below), have also been experimenting with tying teachers’ com-pensation to their professional development and providing teachers with professional su-port. This professional support can consist of peer mentoring within schools, opportunities to work alongside experienced teachers in their own or other schools, visits to other good practice schools and classrooms, or bringing a teacher-designated “expert” to the classroom to encourage teachers to reflect on their teach-ing behavior and to try new approaches.

Using Teacher Management Systems to Achieve Education GoalsEducators in Indonesia probably already feel that there is a need for a new paradigm for the development of the teaching profession. Many elements of this new approach are in place or are being tried out in a number of project-related activities. However, developing an overall framework that incorporates these ac-tivities into a lifelong perspective on teachers’ professional development should be a priority.

Having effective teacher management systems in place in every school is essential for achiev-ing Indonesia’s national education goals. The policy framework that we are proposing aims to improve schools by creating a professional teaching service with the following character-istics: merit-based appointments, transfers, and promotions; school-based performance evaluations; and career-long professional de-velopment. These characteristics mirror three longer-term policy goals: (i) creating a teach-ing service in which the professional life of teachers is central to the management system and in which schools select their own teachers in a transparent way; (ii) linking the monitor-ing of schools and teachers by adding per-formance reviews as part of teachers’ career development; and (iii) developing the various

Box 4.6 Mexico’s Incentive Scheme for Teacher Development

Mexico’s Carrera Magisterial (CM) Program, first implemented in 1994, ties teachers’ compensation to their professional development. Teachers who voluntarily join the program agree to participate in annual perform-ance evaluations and to have their annual salary increases linked to the results of these evaluations. These per-formance evaluations consist of the following components: teacher performance evaluations (composed of a combination of self-assessments and peer reviews); an annual written examination of the teacher’s professional skills; written student examinations; educational attainment; the completion of accredited courses to update skills; and years of teaching experience.

Although the program is voluntary, the number of teachers enrolled since 1994 has increased substantially, be-ginning with 38 percent of the total number of teachers and rising to 49 percent after just two years. Indeed, the proportion of students whose teachers were enrolled in the program more than doubled during that period, reaching around 25 percent of all students. In addition, in 1997, the percentage of all teaching positions that were filled by teachers who were participating in the CM program was close to 50 percent. A recent study found that students whose teachers are in the CM program have higher average test scores than students whose teachers are not in the program. Thus, after 10 years, the CM program has already had a considerable impact on the Mexican education system.

Source: Lopez-Acevedo, 2001.


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phases of teachers’ professional development including initial preparation, induction into the teaching profession, school life, and continu-ous professional development.

These policy tools are based on some assump-tions about how schools would benefit. For example, under a school-based management system that involves the local community in making decisions about how the school is managed, the school should have the right to choose its teachers. This would result in im-plicit contractual agreements between the school that selected the teacher and the teacher who selected the school. Schools and districts would have specific expectations regarding

their teachers’ performance, which would be evaluated in terms of the value that the teacher adds to student learning in the classroom, to the professional life of the school, and to the wider educational community. These attrib-utes would be the basis of any recognition, promotion, or rewards given to the teacher as well as of the renewal of their contracts and of the provision of assistance in improving their classroom performance. Teachers at the start of their careers would be expected to exhibit these attributes in order to be hired. In return, the school would have an obligation to provide the teacher with professional development op-portunities.

Table 4.5 Potential Policy Tools for Managing the Teaching Workforce Demand-side tools Supply-side tools Matching process tools Class size

Teaching loads

Required learning time for stu-dents

Use of teaching assistants and other support staff

Use of technology and distance learning

Structure of curriculum and edu-cational programmers

Starting and ending age of com-pulsory education

Academic standards defining re-quirements for graduation

Attractiveness of the profession Monetary incentives -relative salaries -career structure and salary scale -other (e.g. merit-based awards, signing bonuses, differentiated pay, housing subsidies, childcare, income tax credits)

Non-monetary incentives -vacation time, flexibility to take leave-working conditions: opportuni-ties for collaboration and decision making, school safety and student discipline, class size, working loads, quality of facilities and in-structional materials

Teacher education and certifi-cation Teacher initial education and pro-fessional development: supply, structure, content, and accredita-tion of teacher education pro-grams; incentives to engage in teacher education; induction and mentoring programs; provision of professional development activi-ties.

Certification of teachers: defini-tion of certification standards; al-ternative certification programs.

Bargaining mechanisms Set of mechanisms for bargain-ing: setting of salaries, pay differ-entiation to account for shortages, opening of profession to interna-tional markets.

Level of centralization of bar-gaining Degree of autonomy of schools regarding recruitment, selection and assignment of teachers; and setting of incentive structure.

Recruitment and selection processes Organization; definition of quali-fication requirements; delegation of authority to recruit; select and assign teachers; methods for screening candidates; emergency recruitment programs.

Source: OECD, 2002.


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The most critical point in our proposals is the establishment of a separate teaching service. This would need to be built up over time. It is also essential to examine how teacher salaries depend upon districts’ budgets and how this affects the degree to which schools can recruit teachers. To illustrate what might be involved

in putting in place such a teacher management framework, we have given some examples in the matrix below of appropriate policies to adopt, the kind of actions required to imple-ment the policies, and some ideas about who should be responsible for implementing them.


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Thair, M. and D.F. Treagust, 2003. “A Brief History of a Science Teacher Professional De-velopment Initiative in Indonesia and the Im-plications for Centralized Teacher Development.” International Journal of Edu-cation Development 23 (2003) 201-213.

Van der Werf, Greetje, Bert Creemers, Rob De Jong, and Elizabeth Claver, 2000. “Evaluation of School Improvements through an Educational Effective Model: The Case of Indonesia’s PEQIP Project.” ComparativeEducation Review 44(3): 329-55.

Vanwel, Helen et al 2003. “Impact of Decen-tralization on Teacher Management: Report on Focus Group Assessments in Bandar Lampung and Makassar.” Report for the World Bank’s Indonesia Education Sector Review.

Vanwel, Helen et al 2001. “Social Assessment Pilot Activity.” Working paper for Indonesia Basic Education IV project preparation. Min-istry of National Education/ The World Bank, December.

Voluntary Service Overseas (VSO), 2002. What Makes Teachers Tick? A Policy Re-search Report on Teachers’ Motivation in De-veloping Countries. London.

Weston, Stuart. 2003. “Exploding Myths.” Background Paper for the World Bank’s Indo-nesia Education Sector Review. Unpublished.

Woessmann, Ludger, 2001. Schooling Re-sources, Educational Institutions and Student Performance: the International Evidence. In-stitute of World Economics, Kiel, Germany. January.

World Bank, 2000a. “Implementation Com-pletion Report. Indonesia Primary Education Quality Improvement Project.” Loan 348-IND.

World Bank, 2000b. “Implementation Com-pletion Report (34960,3496A, 3496S). Pri-mary School Teacher Development Project.”

World Bank, 1999. “Mid-term Review of the Secondary School Teacher Development Pro-ject.” Loan 3979-IND.

Ministerial decrees

Number 034/U/2003 Auxiliary Teachers, The Minister of National Education

Number 013/U/2002 Credit Units in Teacher’s Functional Position, The Minister of Education

Number 123/U/2001 Guidelines for the Ap-pointment of Teachers, The Minister of Education

Number 84/1996 Functional Position of Teacher and its Credit Points, State Minister for Apparatus Reform

The Basic Concept of Determining the Obliga-tory Function and Minimum Service Standard, The Ministry of Home Affairs.

Management and Development of Teaching Staff in the Era of Regional Autonomy (MoNE?)

Presidential decrees

Number 3 Year 2003 Teaching staff allow-ances, President of the Republic of Indonesia Number 9 Year 2003 Authority to appoint, relocate and dismiss civil servants, President of the Republic of Indonesia

Laws

Numbers 22 and 25, 1999 on decentralization.

Number 20, 2003 on National Education System.


160

Appendix 4.1. What Teachers Need to Know and Be Able to Do

Content knowledge:Understanding subject matter deeply and flexibly to help students to create cognitive maps, link ideas, and address misconceptions Seeing how ideas connect across fields of knowledge and to life Making ideas accessible to others and understanding the perspective of the learner

Learner knowledge:Knowledge of child and adolescent development and how to support cognitive, social, physical, and emotional growth, to interpret learners’ statements and actions, and to shape productive learning ex-periencesUnderstanding of and respect for differences in culture, family experience, forms of intelligence, and approaches to learning and the ability to teach in a way that connects with studentsInquiring sensitively, listening carefully, looking thoughtfully at student work, and structuring situa-tions to allow students to express themselves

Motivating students:Understanding what individual students believe about themselves, what they care about, and how to give them encouragement

Knowledge about learning:Deciding which type of learning is most appropriate in specific circumstances and which materials to use when and for what purpose Ability to use different strategies for teaching, evaluating students’ knowledge, and assessing their learningCapacity to understand the strengths of individual students Capacity to work with disabled students Understanding of how students acquire language (the gateway to learning) to build their skills and create accessible learning experiences

Knowledge about curriculum resources and technologies:Allowing students to explore ideas, acquire and synthesize information, and frame and solve prob-lems

Knowledge about collaboration:Structuring student interactions for shared learning Collaborating with other teachers Working with parents to learn more about their children and to shape supportive experiences at school and home

Capacity to reflect:Assessing their own teaching practices and how to refine and improve them Continuously evaluating students’ progress and reshape lesson plans accordingly.

Source: OECD, 2002.


161

Appendix 4.2. Supplementary Information on International Experience

This appendix provides supplementary infor-mation on international experiences in the ar-eas of teacher salaries and teacher performance standards.

Teacher Salaries A number of countries have begun to link teachers’ pay directly to measures of student outcomes, but this has become highly conten-tious in many cases. Chile has the most exten-sive program of performance-based teacher compensation, while other countries such as Colombia and Mexico have smaller, experi-mental programs. However, giving perform-ance-based salary incentives to individual teachers within a school can have negative ef-fects. These can inhibit teamwork among teachers in a school, which is a core principle involved in improving the overall quality of education provided. It can also create unpro-ductive competition between teachers within the same school. Education policymakers in Brazil, India, and Kenya have considered compensation and performance issues. Their experiences are described below.

BrazilIn 1998, Brazil implemented an education fi-nance reform called the Fund for the Mainte-nance and Development of Primary Education and Teacher Enhancement (FUNDEF). The main objective of this fund was to equalize educational opportunities across states and municipalities by guaranteeing a minimum expenditure per pupil in primary schools throughout the country. Embedded in the re-form was a requirement that at least 60 percent of the additional funds provided by FUNDEF must be spent on teachers’ salaries.

The program was expected to improve teacher quality and student outcomes in several ways. First, it would increase the salaries of existing teachers in regions that, previous to the re-form, had had relatively low teachers’ salaries. This would make teaching a more attractive profession, particularly in these regions. As a

result, it would increase the number of indi-viduals interested in teaching and make teach-ing an attractive career to more highly skilled individuals who, prior to the reform, would have been likely to choose to enter other pro-fessions. Second, local governments could use the increase in resources for teacher sala-ries not only to increase the salaries of existing teachers but also to hire additional teachers, thus enabling them to reduce class sizes, which would probably also improve student outcomes.

An assessment of the reform that was carried out in 2002 revealed that regional disparities in teacher pay had been reduced and that the number of teachers who had at least graduated from secondary school had increased. The study also showed that the increase in teach-ers’ compensation and in the number of teach-ers with at least a secondary education were positively associated with better student out-comes such as lower dropout rates and higher pass rates (Gordon and Vegas, 2004).

IndiaA study of teacher salaries in India found that the salary structures for teachers were ineffi-cient, with those teacher characteristics that have few discernible learning benefits for stu-dents being rewarded in salary terms whereas those that improve student learning were not. The study suggested that spending more money on school facilities and materials, longer school days, better management prac-tices, and more skilled teachers would enhance school efficiency but that investing in smaller pupil-teacher ratios (in urban areas where there is no multi-grade teaching), in teacher experience, training, and post-graduate educa-tion, and higher across-the-board teachers’ salaries may not make sense in a resource-scarce environment. Moreover, it suggested that more emphasis should be put on the qual-ity of teachers’ education (in other words, their knowledge of subject matter and their cognitive skills) when selecting and remuner-


162

ating teachers than on their years of schooling, training, and experience, since these inputs were not significant in explaining variations in school outcomes. These findings are also likely to apply to education in Indonesia(Kingdon, 1996).

Kenya

Kenya has pilot-tested a performance-based incentive system that would reward all teach-ers in a given school based on improved stu-dent performance in grades four to eight in that school. There were two ways in which schools could distinguish themselves in this performance-based scheme – either by having the highest test scores of all of the schools in their district or by having the most improved test scores of all of the schools in their district.

The pilot project set out to measure the impact and cost-effectiveness of this performance-based incentive system that rewarded all teachers in schools whose performance had improved. The program was designed to take note of five important criticisms of perform-ance-based incentive systems in which per-formance is judged by student outcomes:

The first objection is that teachers are not solely responsible for the academic performance of their students. In order to produce good student outcomes, teachers in a school need to cooperate with each other, and it is important that they do so rather than competing against each other. The second objection to performance-based incentives is that a teacher’s per-formance is largely unobservable, and, even when it can be observed, it is diffi-cult to verify objectively. What consti-tutes good performance by a teacher is not simple or easily quantifiable; there-fore it is difficult to compensate teachers based on their performance. The third difficulty in establishing per-formance-based incentives is that a teacher’s job involves many different tasks, some of which are easily measur-able and some of which are not. For in-stance, one objective of a teacher is to

ensure that his or her students perform well academically. This is a measurable task – through student test scores, for example. However, another of their ob-jectives is to ensure that students are so-cially and emotionally well adjusted. This objective is not easily measurable. Therefore, if an incentive is based on the measurable objective, teachers will tend to focus on that task above all others and may neglect the other non-measurable but equally important tasks. Fourth, teachers object to being judged based solely on their students’ academic performance if they are teaching a diffi-cult or disadvantaged population, per-haps because the school is located in a poor community where student perform-ance has historically been weak. In this case, it would not be fair to have teach-ers in better-off communities judged by the same criteria as those teaching in disadvantaged communities. Fifth, basing teacher incentives on stu-dents’ test scores can cause teachers to neglect or force out weaker students in order to concentrate on those students who will perform well on the tests (Glewwe et al, 2001).

Teacher Performance Standards

The United KingdomThe United Kingdom (UK) school inspection system sets performance standards and, on school visits, its inspectors ask questions such as: How high are standards in the school (based on the school’s results and achieve-ments)? How well are the pupils taught? How good are the curricular and other oppor-tunities offered to pupils? How well does the school care for its pupils? How well does the school work in partnership with parents? How well is the school led and managed? What should the school do to improve further? The Office of Standards in Education (Ofsted) pre-pares detailed inspection reports and sets pri-orities for school and teacher development programs. The key question asked in review-ing classroom teaching is: How well are pupils


163

taught? The assessment is based on classroom observations of teaching; interviews with par-ents, teachers, school principals, and students; and reviews of teachers’ and students’ portfo-lios of work. The kind of suggestions that in-spectors make are reflected in this extract from a school report (available on the Ofsted web-site, www.ofsted.gov.uk):

Review the curriculum (as taught), ensuring that it has ap-propriate breadth and balance and that the required coverage is provided for subjects other than the core subjects of English, mathematics, and science. Improve and broaden the range of teaching approaches that are often adopted in the non-core subjects, particularly where teachers feel constrained by the detail of the lesson plans. Improve the quality of assess-ment in the non-core subjects. Give more attention to educating pupils for life in a multi-cultural society. Ensure that training is provided for staff in child protection and in health and safety issues (Of-sted, 2003).

IndonesiaManagement at the school level is the most important factor for improving the

quality of education. During the school observations conducted for the Indonesian Primary Education Quality Improvement Project, many management-related prob-lems appeared, such as frequent teacher and student absenteeism, inefficient use of instruction time, and under-qualified or unmotivated teachers. The principals of the project schools focused too much on administrative tasks (for example, keeping records of students’ test results and finan-cial tasks) rather than on educational lead-ership tasks. An evaluation of the project as well as international research into edu-cational effectiveness has shown that ef-fective principals generally undertake the following activities: sitting in on class-rooms to observe the quality of teaching; creating conditions for teachers to improve their teaching skills; selecting high-quality teachers, guiding less able ones, and re-placing those who do not improve; rein-forcing teachers’ motivation; ensuring that school time is used efficiently; preventing teacher and student absenteeism; control-ling the implementation of the curriculum in all grades; promoting an orderly and friendly school climate; and getting par-ents and the community involved effec-tively in school matters. These aspects of effective educational leadership should be included in management training for prin-cipals, which will mean changing current training methods and content(Van der Werf et al, 2002).


164

Report No. 29506

INDONESIA

EDUCATION IN INDONESIA: MANAGING THE TRANSITION TODECENTRALIZATION(In Three Volumes) Volume 3

STATISTICAL ANNEX


1

Tab

le 1

. H

ighe

st L

evel

of E

duca

tion

as a

Per

cent

age

of th

e Po

pula

tion,

by

Loc

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Less

than

Prim

ary

Scho

ol

Prim

ary

Scho

ol

Juni

or S

econ

dary

Sch

ool

19

95

1998

20

00

2002

19

95

1998

20

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2002

19

95

1998

20

00

2002

P

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nce

Urb

an

Rur

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10

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33.1

8 11

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28.4

6

4.

84

24

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38.4

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39.0

9

12

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16

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14.2

3

14

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orth

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21.7

4 43

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15.1

5 29

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11.6

629

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9.77

20

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24.8

331

.79

25.4

537

.65

24.5

3 35

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23.2

138

.42

21.0

413

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19.5

118

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19.9

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22.3

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9)

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2

Tab

le 1

. H

ighe

st L

evel

of E

duca

tion,

con

t. Seni

or S

econ

dary

Sch

ool

Hig

her E

duca

tion

19

95

1998

20

00

2002

19

95

1998

20

00

2002

Pr

ovin

ce

Urb

an

Rur

alU

rban

Rur

alU

rban

Rur

al

Urb

anR

ural

Urb

anR

ural

Urb

anR

ural

Urb

anR

ural

Urb

anR

ural

Aceh

36

.41

12.9

135

.39

14.7

8

44

.99

11

.97

3.29

11

.22

3.45

23

.12

N

orth

Sum

ater

a

25.4

0 9.

54

31.9

9 13

.08

34.7

1 14

.62

35.5

5 16

.77

6.99

1.

18

7.90

1.

49

9.18

1.

74

9.14

2.

18

Wes

t Sum

ater

a 33

.27

12.7

734

.77

14.2

034

.45

15.3

9 34

.79

15.5

711

.87

2.36

13

.57

3.25

15

.01

3.26

15

.89

4.60

R

iau

32.5

4 9.

45

35.2

4 9.

75

36.7

3 11

.14

42.4

1 12

.56

7.55

1.

50

9.16

1.

41

9.70

1.

34

9.68

1.

87

Jam

bi

28.0

0 8.

95

29.9

2 11

.95

31.1

4 10

.68

33.3

9 11

.52

8.56

0.

89

9.42

2.

25

10.6

21.

75

10.5

92.

75

Sout

h Su

mat

era

25

.70

6.82

28

.04

8.84

26

.80

9.98

31

.71

7.68

6.

53

0.82

6.

53

1.37

10

.38

1.19

9.

49

1.06

Be

ngku

lu

34.3

5 13

.20

36.6

6 12

.97

38.2

9 12

.21

37.0

9 12

.70

11.2

51.

74

11.7

71.

43

11.1

42.

16

15.2

42.

15

Lam

pung

24

.36

8.44

26

.10

9.64

30

.39

9.26

28

.48

10.2

59.

74

1.26

10

.74

1.14

8.

72

1.33

10

.54

1.78

Ba

ngka

Bel

itung

24

.14

5.52

5.

34

1.63

Ja

karta

33

.22

37

.36

36

.04

36

.78

10

.73

13

.29

14

.20

17

.10

W

est J

ava

25.6

0 5.

64

27.1

7 6.

49

28.1

2 6.

64

27.3

1 5.

60

7.53

0.

66

8.63

1.

54

8.16

1.

28

9.38

1.

70

Cen

tral J

ava

22

.00

6.92

23

.37

7.43

23

.53

8.19

22

.35

7.44

5.

93

1.25

7.

72

1.72

7.

76

1.74

9.

57

2.24

D

I Yog

yaka

rta

28.6

7 14

.43

29.7

2 14

.85

29.7

3 16

.11

32.1

0 16

.48

10.4

32.

46

13.4

53.

42

11.9

44.

46

15.5

24.

20

East

Jav

a

23.8

8 7.

30

27.6

3 8.

26

27.3

2 9.

15

26.0

7 7.

99

7.28

1.

44

8.16

1.

82

7.90

1.

92

9.19

2.

11

Bant

en

35.0

8 6.

18

14.0

70.

74

Bali

30.8

5 16

.08

32.5

6 16

.65

35.6

1 18

.14

33.0

3 17

.66

9.98

4.

15

13.4

53.

88

12.5

63.

68

14.7

94.

50

Wes

t Nus

a Te

ngga

ra

25.5

4 11

.65

28.2

4 13

.47

26.9

2 15

.45

27.1

1 14

.06

11.4

81.

87

9.38

3.

45

6.88

3.

80

9.47

2.

41

East

Nus

a Te

ngga

ra

28.0

5 9.

73

35.7

4 10

.76

36.5

5 9.

30

36.6

9 9.

08

11.0

92.

31

11.2

42.

03

10.5

81.

92

13.7

02.

16

Wes

t Kal

iman

tan

27

.03

8.62

33

.33

27.7

028

.70

9.64

30

.24

10.2

54.

59

0.76

11

.31

4.31

10

.50

1.23

10

.69

1.70

C

entra

l Kal

iman

tan

29

.05

10.2

629

.92

11.0

629

.61

12.2

7 32

.89

10.6

910

.26

0.91

10

.13

1.47

8.

21

1.23

10

.22

1.77

So

uth

Kalim

anta

n

24.9

4 9.

06

32.5

5 11

.44

29.3

2 10

.49

29.9

5 8.

81

6.55

1.

12

10.9

30.

96

7.82

1.

39

10.0

72.

50

East

Kal

iman

tan

31

.61

14.3

328

.84

11.4

434

.87

13.0

1 36

.83

16.0

09.

59

1.56

8.

81

1.66

9.

24

1.27

9.

77

2.64

N

orth

Sul

awes

i 31

.88

15.0

132

.62

16.6

533

.14

14.1

6 39

.86

17.8

37.

93

2.69

9.

53

2.63

7.

81

2.29

10

.74

2.36

C

entra

l Sul

awes

i 32

.12

11.4

034

.90

14.4

437

.88

14.0

3 38

.15

12.9

013

.13

1.42

9.

84

3.02

13

.43

1.74

13

.39

2.45

So

uth

Sula

wes

i 32

.54

12.7

136

.44

12.9

737

.13

16.3

9 37

.92

14.6

112

.81

2.52

14

.42

2.56

13

.43

3.50

14

.22

3.72

So

uthe

ast S

ulaw

esi

33.8

0 15

.71

34.0

2 15

.30

39.5

4 18

.33

38.1

8 17

.75

15.2

92.

21

13.1

43.

13

14.4

62.

68

16.0

64.

01

Gor

onto

lo

33.3

5 17

.08

29.5

1 7.

73

12.3

12.

93

7.36

2.

24

Mal

uku

36.1

7 9.

20

38.3

2 11

.36

45.3

4 27

.72

9.68

0.

95

9.85

2.

04

16.4

35.

40

Nor

th M

aluk

u

36.8

2 15

.43

9.93

0.

86

Irian

Jay

a 35

.04

12.9

742

.62

14.0

536

.35

10.0

2 50

.37

15.5

612

.47

2.57

10

.33

3.27

8.

93

1.44

16

.19

4.45

IN

DO

NES

IA

27.1

1 8.

5729

.76

9.81

29.7

210

.16

30.0

39.

658.

27

1.42

9.

58

1.94

9.41

1.

8511

.05

2.20

Sour

ce:

SUSE

NAS

, sev

eral

yea

rs

N

ote:

Pop

ulat

ion

defin

ed a

s ov

er 2

4 ye

ars

old.

Mis

sing

val

ues

due

to c

ivil

unre

st o

r gov

ernm

enta

l cha

nges

(as

seve

ral p

rovi

nces

dev

elop

ed p

ost 1

999)

3

Tab

le 2

. Net

and

Gro

ss P

rim

ary

Enr

ollm

ent R

ates

, by

Gen

der

Net

Prim

ary

Enro

llmen

t G

ross

Prim

ary

Enro

llmen

t

1995

19

98

2000

20

02

1995

19

98

2000

20

02

Prov

ince

M

ale

Fe

mal

eM

ale

Fe

mal

e M

ale

Fe

mal

eM

ale

Fem

ale

Mal

e

Fem

ale

Mal

e

Fem

ale

Mal

e

Fem

ale

Mal

e

Fem

ale

Aceh

91

.43

92.5

5 93

.23

93.1

2

91

.49

92.4

2 10

6.25

10

4.53

10

6.72

10

6.09

97

.88

96.6

2 N

orth

Sum

ater

a

93.7

5 93

.90

93.8

7 93

.77

94.4

7 93

.97

93.9

9 93

.59

109.

02

109.

25

111.

32

108.

79

110.

32

108.

99

107.

71

106.

89

Wes

t Sum

ater

a 91

.84

92.6

4 92

.57

92.4

5 92

.86

92.4

4 92

.38

92.2

2 10

7.66

10

7.09

10

7.92

10

7.33

11

0.40

10

7.59

10

4.11

10

3.91

R

iau

95.3

1 93

.15

94.1

2 94

.31

94.1

1 93

.77

94.1

6 94

.29

112.

27

109.

58

108.

19

108.

92

108.

46

107.

40

107.

88

106.

88

Jam

bi

90.8

6 91

.12

91.3

4 90

.61

92.5

2 93

.05

93.7

0 92

.43

106.

75

104.

04

106.

14

104.

66

108.

67

109.

74

108.

79

106.

87

Sout

h Su

mat

era

89

.20

89.7

4 91

.16

91.7

5 92

.48

92.0

7 91

.84

91.1

9 10

4.82

10

4.81

10

7.35

10

5.52

10

8.28

10

5.42

10

8.45

10

7.49

Be

ngku

lu

92.2

0 90

.55

91.9

7 92

.12

91.8

2 91

.20

92.4

4 92

.54

110.

57

106.

55

111.

65

106.

28

109.

14

105.

24

107.

37

107.

50

Lam

pung

91

.25

92.5

7 93

.08

91.9

4 93

.56

92.8

0 92

.91

93.2

6 10

5.88

10

8.54

10

7.03

10

6.84

11

3.45

11

0.15

10

6.54

10

5.42

Ba

ngka

Bel

itung

92

.49

94.3

9

10

8.56

10

7.60

Ja

karta

93

.56

92.7

5 93

.01

92.4

7 91

.28

91.6

2 89

.96

91.6

2 11

0.00

10

7.28

10

8.75

10

8.12

10

5.72

10

8.59

10

2.85

10

5.99

W

est J

ava

90.3

6 91

.37

92.5

3 93

.11

92.3

5 92

.97

93.5

9 94

.07

103.

14

103.

75

105.

22

105.

60

105.

09

104.

39

104.

34

104.

58

Cen

tral J

ava

94

.27

93.6

3 94

.31

94.3

0 93

.98

93.7

4 94

.46

93.7

0 11

1.37

10

9.19

11

0.80

11

0.75

11

1.80

11

0.22

10

8.54

10

7.79

D

I Yog

yaka

rta

95.2

5 95

.75

92.9

1 95

.20

93.4

9 95

.25

93.4

1 93

.03

115.

02

111.

04

110.

32

110.

48

109.

93

110.

69

106.

36

103.

06

East

Jav

a

93.4

4 92

.49

93.0

7 91

.55

92.2

4 92

.43

93.1

5 93

.24

110.

28

107.

80

110.

41

106.

52

108.

32

107.

03

107.

15

107.

30

Bant

en

92.4

9 93

.74

103.

27

105.

26

Bali

93.6

7 93

.33

94.0

3 93

.06

93.6

8 93

.01

93.2

8 90

.98

106.

45

107.

23

110.

77

110.

76

108.

55

109.

50

106.

48

103.

31

Wes

t Nus

a Te

ngga

ra

87.3

8 89

.74

90.6

9 91

.52

88.1

9 91

.65

92.7

0 93

.77

100.

82

102.

38

101.

63

101.

54

102.

10

102.

32

102.

20

104.

72

East

Nus

a Te

ngga

ra

84.7

1 86

.67

86.5

2 88

.74

87.9

6 90

.00

86.5

9 87

.59

104.

97

108.

51

109.

89

111.

34

110.

88

110.

50

106.

45

107.

02

East

Tim

or

72.9

3 70

.64

70.6

8 69

.55

93.8

3 92

.34

90.1

9 90

.21

Wes

t Kal

iman

tan

84

.65

84.5

3 88

.02

89.0

9 90

.02

89.0

4 89

.95

88.9

4 10

6.69

10

8.09

11

2.51

11

1.06

10

7.73

11

1.54

11

0.53

10

7.18

C

entra

l Kal

iman

tan

94

.39

94.3

9 94

.68

93.0

0 93

.77

94.8

3 94

.23

93.7

8 11

0.10

11

4.92

11

6.55

11

3.23

11

1.17

11

3.65

11

0.39

11

2.54

So

uth

Kalim

anta

n

92.0

7 91

.70

93.1

7 92

.12

92.1

5 92

.77

90.9

2 92

.53

109.

22

107.

66

110.

35

107.

23

108.

43

107.

73

103.

58

104.

55

East

Kal

iman

tan

93

.19

91.1

0 92

.93

92.0

9 90

.83

92.1

5 92

.21

91.5

7 11

4.03

11

3.26

11

3.18

11

0.15

10

8.50

11

4.51

10

8.29

10

7.90

N

orth

Sul

awes

i 87

.64

87.9

4 90

.06

90.8

6 90

.04

90.7

9 87

.67

87.7

4 10

5.00

10

5.04

10

9.95

11

1.64

10

9.05

10

7.66

10

1.64

10

5.85

C

entra

l Sul

awes

i 89

.46

92.9

5 90

.04

89.7

4 90

.60

91.5

9 89

.81

90.4

9 10

4.28

11

0.16

10

8.08

10

8.59

10

6.80

11

0.96

10

4.88

10

6.94

So

uth

Sula

wes

i 85

.46

87.7

5 85

.75

88.3

3 88

.13

89.0

8 88

.84

89.1

1 10

0.45

10

0.86

98

.98

103.

08

102.

65

103.

90

100.

60

100.

40

Sout

heas

t Sul

awes

i 88

.74

88.4

3 89

.93

90.4

9 88

.57

90.4

3 90

.60

88.7

7 10

6.64

10

7.04

10

6.22

10

6.65

10

3.90

10

3.00

10

4.20

10

2.83

G

oron

tolo

78

.15

83.8

4

88

.13

98.1

7 M

aluk

u 92

.07

92.3

3 90

.77

91.5

3

87

.42

86.4

2 11

2.84

11

2.95

10

6.88

10

8.25

98

.52

109.

51

Irian

Jay

a

81.1

7 77

.69

79.1

6 79

.77

81.0

3 82

.77

95.4

6 94

.33

103.

35

97.6

1 98

.45

97.5

8 10

4.30

10

1.41

10

6.29

10

7.40

N

orth

Mal

uku

94.5

3 90

.59

116.

07

103.

92

IND

ON

ESIA

91

.38

91.5

3 92

.05

92.1

1 92

.13

92.4

592

.65

92.7

5 10

7.31

10

6.67

107.

9510

7.22

108.

0310

7.30

105.

98

105.

98

Sour

ce:

SUSE

NAS

, sev

eral

yea

rs

Not

e:M

issi

ng v

alue

s du

e to

civ

il un

rest

or g

over

nmen

tal c

hang

es (a

s se

vera

l pro

vinc

es d

evel

oped

pos

t 199

9)

4

Tab

le 3

. N

et a

nd G

ross

Jun

ior

Seco

ndar

y E

nrol

lmen

t Rat

es, b

y G

ende

r

N

et J

unio

r Sec

onda

ry E

nrol

lmen

t G

ross

Jun

ior S

econ

dary

Enr

ollm

ent

19

95

1998

20

00

2002

19

95

1998

20

00

2002

Pr

ovin

ce

Mal

e

Fem

ale

Mal

e Fe

mal

e M

ale

Fe

mal

eM

ale

Fe

mal

e M

ale

Fe

mal

eM

ale

Fe

mal

eM

ale

Fe

mal

eM

ale

Fe

mal

e Ac

eh

53.5

9 50

.85

58.8

957

.65

76.3

7 83

.93

67.6

5 63

.67

74.9

0 69

.68

98.1

7 10

1.81

N

orth

Sum

ater

a

61.8

0 60

.06

61.2

965

.28

66.4

7 68

.02

67.9

4 70

.21

77.8

4 74

.85

83.3

2 82

.51

82.7

8 85

.02

87.1

9 88

.97

Wes

t Sum

ater

a 52

.91

62.1

9 59

.17

65.0

2 59

.47

66.5

9 62

.15

69.7

7 73

.85

79.3

4 77

.37

85.4

0 81

.02

87.1

1 85

.01

93.8

4 R

iau

52.6

9 48

.97

57.0

360

.72

61.0

3 64

.54

63.6

7 64

.07

68.2

0 63

.92

72.5

3 73

.61

80.3

5 85

.94

85.0

2 81

.67

Jam

bi

46.6

8 47

.03

53.3

552

.25

56.0

4 56

.92

61.8

8 60

.18

61.5

4 59

.93

77.1

7 71

.90

80.2

3 77

.08

80.3

6 79

.10

Sout

h Su

mat

era

45

.55

43.2

4 54

.95

54.4

6 58

.34

60.8

5 53

.81

53.3

3 60

.86

57.0

2 73

.46

68.1

6 76

.70

75.4

4 72

.25

72.2

7 Be

ngku

lu

48.5

8 51

.98

46.7

455

.33

55.8

9 58

.87

58.7

2 59

.57

65.6

1 67

.38

64.4

6 71

.37

74.7

8 77

.15

76.5

9 78

.01

Lam

pung

52

.33

54.5

6 56

.22

57.5

5 57

.04

61.8

9 60

.74

64.9

3 69

.27

67.7

8 74

.54

77.0

6 73

.67

82.1

1 79

.88

84.2

0 Ba

ngka

Bel

itung

42

.33

48.2

4

58

.33

61.0

7 Ja

karta

72

.98

71.0

4 76

.86

75.0

1 79

.34

74.9

0 79

.46

75.5

4 97

.62

93.4

3 10

1.57

95

.74

102.

93

93.1

1 10

4.39

96

.76

Wes

t Jav

a 47

.61

47.5

7 53

.01

56.2

1 56

.73

58.7

8 60

.98

60.5

7 61

.64

58.1

6 66

.33

68.3

8 71

.83

72.3

6 75

.87

76.0

9 C

entra

l Jav

a

50.6

3 53

.86

59.5

162

.34

60.6

0 64

.62

62.9

9 66

.50

64.8

5 68

.19

76.2

3 77

.46

79.7

0 81

.30

81.6

8 83

.74

DI Y

ogya

karta

66

.06

72.1

6 69

.72

72.5

6 72

.31

78.7

4 75

.53

77.7

1 86

.83

89.3

6 89

.29

89.7

7 90

.30

93.2

5 10

0.80

10

0.10

Ea

st J

ava

52

.28

52.1

9 58

.78

59.1

5 62

.07

64.6

8 62

.49

64.8

7 68

.11

65.4

3 75

.58

75.2

7 83

.58

83.2

1 83

.38

83.7

7 Ba

nten

61

.20

60.3

0

75

.26

73.5

3 Ba

li 66

.15

58.0

8 71

.22

64.1

8 74

.85

65.5

2 69

.24

67.5

3 87

.22

70.0

9 91

.17

81.9

8 91

.58

78.1

8 90

.28

88.3

6 W

est N

usa

Teng

gara

40

.46

38.7

4 48

.94

50.2

2 58

.63

57.7

7 59

.51

55.8

1 52

.62

48.3

3 61

.99

61.5

5 77

.81

69.3

9 74

.33

69.0

3 Ea

st N

usa

Teng

gara

29

.43

27.2

4 31

.97

34.5

3 32

.02

36.5

9 37

.12

40.2

3 44

.45

38.9

1 47

.84

50.3

0 48

.55

54.6

3 57

.04

61.6

8 Ea

st T

imor

29

.37

24.5

8 33

.50

34.4

1

52

.84

45.8

6 57

.26

52.6

9

W

est K

alim

anta

n

33.9

8 34

.19

39.6

142

.23

49.0

9 44

.95

43.3

3 46

.79

49.5

8 53

.86

61.2

5 60

.37

68.1

0 64

.16

62.8

2 64

.01

Cen

tral K

alim

anta

n

49.9

6 50

.58

46.0

946

.60

59.5

8 62

.07

54.0

7 51

.41

64.9

5 67

.89

64.4

6 63

.89

78.4

8 79

.23

66.8

5 70

.27

Sout

h Ka

liman

tan

44

.64

46.6

6 51

.96

52.6

5 50

.02

53.7

3 56

.33

55.3

9 57

.16

56.5

0 70

.23

69.6

2 63

.61

67.1

6 75

.15

75.3

2 Ea

st K

alim

anta

n

53.9

6 59

.05

60.5

956

.88

62.1

1 58

.56

59.2

6 65

.84

71.0

8 76

.77

76.8

3 77

.14

85.4

2 78

.30

85.6

5 89

.16

Nor

th S

ulaw

esi

47.6

5 54

.26

54.3

856

.15

61.6

8 64

.69

66.2

7 67

.13

62.1

5 72

.31

68.0

2 69

.48

78.8

8 80

.36

87.3

4 87

.84

Cen

tral S

ulaw

esi

44.1

3 42

.50

45.7

950

.86

48.7

0 48

.40

49.2

1 53

.51

55.8

4 50

.65

63.1

4 62

.08

66.3

8 60

.78

69.8

5 72

.11

Sout

h Su

law

esi

43.5

6 45

.52

48.6

948

.20

50.6

2 54

.26

51.4

4 54

.97

56.9

1 57

.01

62.7

5 59

.78

66.1

2 69

.07

65.5

8 71

.95

Sout

heas

t Sul

awes

i 48

.28

48.6

8 55

.22

56.9

9 56

.91

64.6

3 55

.21

61.6

4 60

.66

65.5

2 71

.78

76.0

7 76

.12

81.5

9 74

.37

83.4

7 G

oron

tolo

42

.97

41.8

5

59

.99

56.5

9 M

aluk

u 46

.19

46.0

0 57

.92

56.0

6

70

.94

74.2

9 63

.84

63.0

9 79

.41

73.3

8

95

.95

101.

75

Irian

Jay

a

40.4

3 38

.92

40.7

644

.88

31.4

5 39

.77

82.1

0 83

.20

65.3

2 55

.47

64.5

5 64

.53

50.5

3 59

.35

96.2

4 10

0.53

N

orth

Mal

uku

66.8

8 77

.64

84.7

2 98

.27

IND

ON

ESIA

50

.70

51.2

4 56

.25

58.0

4 59

.06

61.5

6 60

.92

62.5

1 66

.34

64.9

4 73

.31

73.3

8 77

.24

78.0

2 79

.35

80.4

1 So

urce

: SU

SEN

AS, s

ever

al y

ears

Not

e:M

issi

ng v

alue

s du

e to

civ

il un

rest

or g

over

nmen

tal c

hang

es (a

s se

vera

l pro

vinc

es d

evel

oped

pos

t 199

9)

5

Tab

le 4

. N

et a

nd G

ross

Sen

ior

Seco

ndar

y E

nrol

lmen

t Rat

es, b

y G

ende

r

Net

Sen

ior S

econ

dary

Enr

ollm

ent

Gro

ss S

enio

r Sec

onda

ry E

nrol

lmen

t 19

95

1998

20

00

2002

19

95

1998

20

00

2002

Pr

ovin

ce

Mal

e F

emal

e M

ale

Fem

ale

Mal

e Fe

mal

eM

ale

Fem

ale

Mal

e

Fem

ale

Mal

e

Fem

ale

Mal

e

Fem

ale

Mal

e

Fem

ale

Aceh

32

.01

29.2

0 37

.19

35.9

0

77

.39

76.7

7 44

.05

37.0

4 46

.94

45.1

6

90

.48

94.1

2 N

orth

Sum

ater

a

43.0

5 41

.86

45.2

0 49

.40

49.5

852

.98

49.3

1 48

.88

57.2

0 53

.61

57.5

4 62

.08

65.0

0 65

.91

60.8

7 61

.30

Wes

t Sum

ater

a 36

.05

44.8

9 44

.37

51.0

544

.36

53.3

3 45

.60

51.8

9 47

.95

56.4

4 54

.18

64.6

5 61

.82

68.2

4 59

.39

66.0

2 R

iau

27.3

7 27

.05

32.9

4 34

.24

38.8

040

.33

39.2

8 42

.10

36.9

1 35

.09

42.4

0 43

.32

53.3

5 50

.92

52.4

4 51

.26

Jam

bi

24.9

1 26

.90

26.4

3 31

.14

36.1

335

.99

36.4

2 35

.00

36.2

4 34

.41

34.6

5 40

.42

44.6

1 43

.80

44.8

1 44

.39

Sout

h Su

mat

era

23

.34

28.0

9 32

.29

33.2

635

.43

39.6

3 33

.88

34.7

6 32

.11

36.6

1 41

.54

41.7

9 46

.06

51.2

5 46

.15

45.5

6 Be

ngku

lu

29.0

1 38

.15

34.7

7 40

.37

35.0

144

.63

29.7

7 43

.95

40.8

6 47

.70

45.3

9 50

.57

48.0

4 57

.31

38.6

6 57

.93

Lam

pung

29

.92

30.7

1 30

.31

28.7

631

.79

30.7

4 30

.55

31.4

9 38

.70

38.1

4 38

.80

40.4

2 42

.99

40.0

1 38

.20

39.1

3 Ba

ngka

Bel

itung

36

.92

33.8

2

50

.06

45.9

0 Ja

karta

60

.99

47.9

9 67

.96

60.8

060

.85

56.9

3 65

.39

50.5

6 83

.12

62.5

4 88

.36

76.4

3 81

.04

72.7

7 79

.37

62.1

8 W

est J

ava

28.8

0 25

.69

34.9

7 33

.71

35.9

336

.05

35.2

4 30

.66

37.5

2 32

.24

44.8

1 41

.26

45.8

3 42

.65

44.0

7 36

.00

Cen

tral J

ava

34

.12

30.2

1 35

.05

35.6

038

.09

38.6

3 38

.97

37.3

6 43

.57

36.7

3 43

.96

42.7

9 49

.79

47.0

9 49

.65

47.1

9 D

I Yog

yaka

rta

52.4

8 56

.79

56.8

2 57

.46

58.9

163

.09

56.4

5 60

.85

76.9

9 70

.42

75.3

6 69

.71

76.5

4 75

.46

72.9

0 78

.41

East

Jav

a

35.1

1 30

.67

38.2

2 36

.82

39.6

541

.41

39.0

3 38

.80

45.6

2 38

.45

48.2

3 45

.46

51.4

9 50

.59

50.7

7 48

.30

Bant

en

38.1

7 37

.36

46.7

5 46

.07

Bali

49.7

2 40

.88

53.4

0 47

.33

53.0

054

.82

55.2

7 46

.09

63.7

7 52

.44

64.4

4 57

.99

66.4

1 69

.56

68.9

3 57

.21

Wes

t Nus

a Te

ngga

ra

27.7

8 24

.02

30.5

4 24

.12

33.8

036

.64

36.4

4 35

.37

39.3

6 29

.44

36.1

0 29

.64

45.0

3 49

.29

41.8

5 40

.43

East

Nus

a Te

ngga

ra

17.7

6 16

.12

23.1

8 21

.51

20.5

720

.39

20.1

0 23

.50

30.6

5 24

.60

36.1

8 29

.77

30.9

2 29

.07

30.7

8 31

.74

East

Tim

or

18.2

6 17

.86

19.4

8 23

.65

43.3

8 36

.70

41.4

2 37

.45

Wes

t Kal

iman

tan

21

.15

18.7

5 24

.90

26.1

120

.75

26.5

0 23

.22

26.1

8 30

.68

26.0

4 35

.99

35.0

2 28

.37

37.4

0 31

.86

34.6

6 C

entra

l Kal

iman

tan

31

.30

32.2

7 23

.57

29.9

534

.25

33.3

6 30

.11

30.5

6 38

.90

38.8

0 30

.73

40.5

8 43

.86

42.2

2 40

.10

41.6

4 So

uth

Kalim

anta

n

24.0

7 26

.91

30.8

3 30

.26

30.5

331

.57

28.7

6 27

.21

33.7

4 34

.03

38.6

2 37

.70

40.2

0 37

.02

35.6

5 33

.30

East

Kal

iman

tan

39

.08

39.7

1 44

.39

42.6

644

.92

39.5

7 41

.57

48.3

0 51

.45

48.8

4 57

.74

58.0

5 67

.89

55.0

2 59

.40

63.6

5 N

orth

Sul

awes

i 28

.94

32.8

8 35

.85

38.7

641

.15

38.2

0 39

.50

47.9

8 38

.82

44.7

1 46

.88

49.7

0 50

.86

49.4

4 51

.24

63.0

6 C

entra

l Sul

awes

i 26

.40

29.1

0 24

.88

30.5

629

.43

31.6

8 25

.49

28.3

1 33

.98

37.6

2 34

.93

37.9

8 39

.72

38.5

4 35

.97

38.5

5 So

uth

Sula

wes

i 28

.19

32.8

6 33

.59

32.3

734

.60

35.4

4 35

.88

33.2

8 40

.16

41.3

3 43

.89

40.2

7 46

.01

47.0

5 44

.62

41.2

6 So

uthe

ast S

ulaw

esi

35.2

1 35

.32

36.9

3 36

.96

35.6

041

.14

32.5

0 39

.61

46.6

0 44

.70

47.5

3 49

.87

44.4

6 53

.33

44.8

3 44

.78

Gor

onto

lo

19.3

1 27

.01

27.2

1 39

.31

Mal

uku

34.2

8 36

.53

39.2

5 44

.23

71.6

9 63

.78

44.6

7 51

.26

52.7

3 54

.95

93.6

3 83

.92

Irian

Jay

a

23.7

5 26

.75

29.7

3 32

.92

28.6

131

.93

74.8

1 78

.28

38.3

5 38

.00

45.0

4 42

.82

45.4

7 39

.80

95.1

0 95

.09

Nor

th M

aluk

u

70

.94

69.6

6

88

.24

88.8

9 IN

DO

NES

IA

33.4

7 31

.70

37.4

6 37

.45

38.6

340

.07

38.7

937

.68

44.6

0 40

.21

48.0

8 46

.78

50.6

6 49

.76

49.3

9 46

.89

Sour

ce:

SUSE

NAS

N

ote:

Mis

sing

val

ues

due

to c

ivil

unre

st o

r gov

ernm

enta

l cha

nges

(as

seve

ral p

rovi

nces

dev

elop

ed p

ost 1

999)

6

Tab

le 5

. N

et a

nd G

ross

Pri

mar

y E

nrol

lmen

t Rat

es, b

y lo

catio

n

Net

Prim

ary

Enro

llmen

t G

ross

Prim

ary

Enro

llmen

t

1995

19

98

2000

20

02

1995

19

98

2000

20

02

Prov

ince

U

rban

R

ural

Urb

anR

ural

Urb

anR

ural

Urb

anR

ural

U

rban

R

ural

U

rban

R

ural

U

rban

R

ural

U

rban

R

ural

Ac

eh

92.3

8 91

.90

92.2

393

.43

91.9

1

105.

42

105.

39

108.

02

105.

99

97.3

0

Nor

th S

umat

era

94

.06

93.6

992

.60

94.6

293

.86

94.4

793

.31

94.1

1 10

7.12

11

0.27

10

9.88

11

0.25

10

7.57

11

1.05

10

6.12

10

8.10

W

est S

umat

era

92.0

4 92

.27

93.1

092

.33

91.8

592

.92

90.8

2 92

.92

109.

12

106.

92

109.

08

107.

19

107.

10

109.

69

101.

89

104.

89

Ria

u 96

.23

93.3

993

.58

94.5

093

.99

93.9

294

.31

94.1

7 11

2.21

11

0.40

10

9.45

10

8.11

10

6.89

10

8.59

10

7.10

10

7.61

Ja

mbi

91

.72

90.7

691

.69

90.7

489

.33

93.7

490

.38

94.1

4 10

7.31

10

4.85

10

7.35

10

4.75

10

5.12

11

0.32

10

3.78

10

9.46

So

uth

Sum

ater

a

89.4

2 89

.49

91.2

291

.53

90.4

393

.10

89.7

0 92

.43

106.

40

104.

25

109.

68

105.

31

106.

04

107.

24

106.

62

108.

65

Beng

kulu

92

.50

91.1

090

.67

92.4

893

.24

90.8

989

.84

93.5

7 10

9.21

10

8.44

10

7.25

10

9.60

10

6.30

10

7.48

10

3.49

10

9.05

La

mpu

ng

92.5

8 91

.77

92.4

592

.54

93.8

693

.05

94.2

1 92

.79

109.

81

106.

72

108.

39

106.

69

108.

19

112.

75

104.

64

106.

34

Bang

ka B

elitu

ng

89.8

8 95

.35

103.

34

110.

68

Jaka

rta

93.1

7

92.7

5

91.4

5

90.7

3

108.

69

10

8.45

107.

13

10

4.31

Wes

t Jav

a 91

.45

90.4

693

.60

92.2

092

.74

92.5

893

.15

94.5

3 10

4.82

10

2.55

10

7.52

10

3.80

10

5.90

10

3.76

10

4.92

10

3.96

C

entra

l Jav

a

93.9

2 93

.98

94.2

694

.33

93.2

594

.21

93.2

7 94

.67

110.

47

110.

24

110.

23

111.

02

109.

80

111.

73

106.

79

109.

13

DI Y

ogya

karta

96

.48

94.5

492

.47

95.5

994

.50

94.1

693

.31

93.1

4 11

4.17

11

1.99

10

6.25

11

4.72

10

9.09

11

1.52

10

4.48

10

5.10

Ea

st J

ava

93

.89

92.6

193

.36

91.8

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Kal

iman

tan

56

.37

20.7

059

.80

24.3

257

.10

19.7

756

.09

29.0

672

.26

25.6

2 78

.26

33.8

6 80

.52

32.7

2 75

.60

41.5

5 N

orth

Sul

awes

i 50

.05

24.8

250

.33

31.2

252

.85

34.1

356

.58

34.5

965

.55

34.1

9 69

.47

38.5

0 66

.76

43.0

5 76

.97

43.0

7 C

entra

l Sul

awes

i 60

.76

16.3

960

.13

14.5

858

.06

20.6

158

.52

18.0

277

.28

21.5

2 77

.75

19.9

3 77

.59

25.2

8 80

.65

25.1

1 So

uth

Sula

wes

i 54

.80

19.8

254

.87

21.7

653

.61

26.3

453

.49

25.2

173

.99

25.9

4 71

.23

27.0

7 73

.95

33.7

2 66

.91

31.0

7 So

uthe

ast S

ulaw

esi

63.7

1 23

.02

61.1

9 25

.31

66.6

2 27

.03

65.4

8 27

.14

82.4

5 29

.76

77.8

9 34

.65

81.7

6 35

.63

80.9

8 33

.41

Gor

onto

lo

44.8

5 13

.42

65.1

6 18

.92

Mal

uku

65.7

9 21

.25

73.4

2 24

.54

73.8

5 43

.84

90.0

9 28

.35

91.8

7 33

.13

98.2

0 51

.80

Irian

Jay

a

54.9

1 12

.61

60.6

5 15

.09

58.4

8 14

.82

79.5

5 37

.39

82.5

7 19

.62

83.3

6 22

.00

83.7

1 20

.08

98.4

6 49

.85

Nor

th M

aluk

u

73

.48

44.6

4

93

.19

50.2

2 IN

DO

NES

IA

50.0

1 20

.86

55.4

824

.20

55.1

526

.36

52.9

525

.41

65.1

2 27

.13

70.6

5 30

.36

71.0

5 33

.15

67.1

0 31

.64

Sour

ce:

SUSE

NAS

, sev

eral

yea

rs

Not

e:M

issi

ng v

alue

s du

e to

civ

il un

rest

or g

over

nmen

tal c

hang

es

9

Tab

le 8

. Pe

rcen

t of P

rim

ary

Stud

ents

Enr

olle

d, b

y T

ype

of S

choo

l

Prim

ary

Scho

ol S

tude

nts

Enro

lled

Prim

ary

Scho

ol S

tude

nts

Enro

lled

Pu

blic

Sch

ool

Priv

ate

Scho

ol

Publ

ic M

adra

sah

Priv

ate

Mad

rasa

h Pr

ovin

ce

1995

19

98

2000

20

02

1995

1998

2000

2002

1995

1998

200

020

0219

9519

9820

0020

02Ac

eh

87.4

791

.16

76.7

00.

911.

78

4.73

10.1

86.

02

18.5

81.

441.

04

0.00

Nor

th S

umat

era

86

.25

86.3

985

.40

87.2

211

.21

11.8

513

.55

11.5

00.

970.

91

0.57

0.94

1.58

0.85

0.48

0.33

Wes

t Sum

ater

a 96

.14

96.5

796

.51

96.0

02.

022.

542.

902.

961.

030.

54

0.39

0.88

0.82

0.35

0.20

0.15

Ria

u 95

.92

91.6

091

.34

92.7

92.

015.

247.

285.

250.

610.

94

0.28

1.45

1.46

2.22

1.10

0.51

Jam

bi

97.3

095

.56

96.6

496

.09

1.57

2.13

1.91

1.99

0.97

1.20

0.

961.

360.

161.

100.

480.

57So

uth

Sum

ater

a

93.1

093

.82

93.4

992

.27

2.47

4.44

4.38

5.72

1.26

0.59

0.

411.

183.

171.

151.

730.

83Be

ngku

lu

96.1

998

.20

97.2

696

.23

0.39

1.00

1.78

1.29

1.00

0.63

0.

812.

202.

420.

170.

150.

28La

mpu

ng

91.7

493

.97

91.2

590

.55

1.65

3.25

3.49

4.56

2.51

0.79

0.

661.

274.

091.

994.

613.

62Ba

ngka

Bel

itung

91.5

4

4.

35

3.92

0.

19Ja

karta

79

.13

78.1

679

.49

80.6

913

.11

17.0

917

.54

16.3

12.

040.

99

0.65

1.27

5.72

3.76

2.32

1.73

Wes

t Jav

a 91

.40

90.6

592

.38

91.6

12.

223.

793.

093.

031.

991.

04

0.83

1.32

4.39

4.52

3.70

4.03

Cen

tral J

ava

87

.41

87.0

387

.22

87.4

71.

683.

563.

573.

512.

920.

99

1.23

1.53

7.99

8.43

7.99

7.48

DI Y

ogya

karta

81

.60

83.8

082

.73

85.3

14.

5914

.73

16.5

513

.08

2.32

0.82

0.

300.

8211

.49

0.65

0.42

0.79

East

Jav

a

81.6

780

.56

82.7

681

.52

3.14

5.54

4.61

4.96

3.09

0.94

1.

361.

6312

.09

12.9

611

.27

11.8

9Ba

nten

89.2

2

6.

03

1.36

3.

39Ba

li 94

.53

96.1

594

.65

94.4

93.

723.

264.

104.

090.

850.

24

0.91

0.65

0.90

0.36

0.34

0.78

Wes

t Nus

a Te

ngga

ra

91.8

992

.96

91.7

295

.53

0.30

1.14

0.96

1.33

1.87

0.55

0.

980.

905.

945.

356.

352.

24Ea

st N

usa

Teng

gara

56

.24

57.7

661

.08

59.8

415

.16

40.1

038

.15

38.1

93.

110.

43

0.21

0.91

25.4

91.

720.

561.

06Ea

st T

imor

89

.34

85.9

4

3.39

13.4

0

2.90

0.27

4.37

0.39

Wes

t Kal

iman

tan

93

.12

89.6

890

.95

89.8

33.

915.

256.

396.

341.

050.

64

0.58

1.06

1.91

4.43

2.08

2.76

Cen

tral K

alim

anta

n

94.7

792

.40

93.8

395

.98

1.96

2.51

2.40

1.21

1.26

1.10

0.

511.

222.

023.

993.

271.

59So

uth

Kalim

anta

n

85.0

685

.20

88.2

288

.30

1.47

3.75

2.42

2.25

4.13

3.60

3.

954.

259.

357.

455.

415.

21Ea

st K

alim

anta

n

91.9

593

.08

93.7

793

.78

5.88

5.57

5.05

4.29

0.54

0.86

0.

361.

121.

630.

490.

820.

80N

orth

Sul

awes

i 82

.86

78.3

379

.78

74.5

55.

5420

.72

19.5

823

.65

2.70

0.33

0.

381.

288.

900.

620.

260.

52C

entra

l Sul

awes

i 95

.14

94.8

496

.82

94.8

42.

354.

392.

383.

830.

700.

57

0.49

0.87

1.81

0.20

0.32

0.46

Sout

h Su

law

esi

95.1

595

.23

95.0

996

.17

1.61

2.52

2.22

1.82

1.91

0.94

0.

820.

731.

331.

321.

871.

28So

uthe

ast S

ulaw

esi

97.2

097

.76

98.1

597

.15

1.12

0.82

0.80

0.88

1.27

0.86

0.

911.

220.

420.

570.

140.

75G

oron

tolo

95.7

7

1.09

1.

51

1.63

Mal

uku

81.4

578

.74

89.6

714

.23

19.1

4 7.

011.

340.

56

1.85

2.97

1.56

1.

47Iri

an J

aya

66

.12

63.4

368

.36

84.4

419

.42

35.8

130

.94

13.2

95.

430.

63

0.49

0.65

9.04

0.13

0.21

1.63

Nor

th M

aluk

u

90.7

5

8.

54

0.71

0.

00

IND

ON

ESIA

87

.73

87.3

888

.23

88.4

33.

916.

596.

305.

812.

341.

04 0

.90

1.37

6.02

5.00

4.56

4.39

Sour

ce:

SUSE

NAS

, sev

eral

yea

rs

N

ote:

Mis

sing

val

ues

due

to c

ivil

unre

st o

r gov

ernm

enta

l cha

nges

10

Tab

le 9

. Pe

rcen

t of J

unio

r Se

cond

ary

Stud

ents

Enr

olle

d, b

y T

ype

of S

choo

l

Juni

or S

econ

dary

Sch

ool S

tude

nts

Enro

lled

Ju

nior

Sec

onda

ry S

choo

l Stu

dent

s En

rolle

d

Pu

blic

Sch

ool

Priv

ate

Scho

ol

Publ

ic M

adra

sah

Priv

ate

Mad

rasa

h Pr

ovin

ce

1995

19

98

2000

20

02

1995

19

98

2000

20

02

1995

1998

20

0020

0219

95

1998

2000

2002

Aceh

80

.59

89.2

1 89

.22

4.03

3.94

0.

9011

.14

6.04

8.

984.

250.

81

0.90

Nor

th S

umat

era

54

.36

53.8

159

.13

58.6

233

.02

37.0

831

.37

31.6

02.

671.

451.

921.

799.

957.

667.

587.

99W

est S

umat

era

75.4

078

.62

80.1

779

.51

4.26

5.13

4.69

3.81

13.2

611

.84

10.8

812

.21

7.07

4.42

4.26

4.47

Ria

u 72

.35

68.7

667

.97

74.9

99.

2515

.24

18.3

212

.10

7.88

5.11

4.26

3.81

10.5

210

.90

9.44

9.10

Jam

bi

76.0

974

.22

72.1

370

.08

8.27

8.42

7.63

10.2

49.

7713

.54

12.5

210

.80

5.87

3.83

7.72

8.89

Sout

h Su

mat

era

63

.57

62.9

269

.07

71.5

621

.99

28.8

821

.76

20.5

05.

092.

333.

033.

609.

345.

866.

154.

34Be

ngku

lu

90.3

691

.83

89.5

387

.41

3.16

4.10

5.42

4.31

4.51

2.61

4.13

6.09

1.97

1.45

0.92

2.20

Lam

pung

50

.34

49.6

552

.33

60.2

929

.69

35.3

030

.59

26.6

26.

564.

073.

703.

2613

.40

10.9

713

.39

9.84

Bang

ka B

elitu

ng

71

.11

19.9

0

0.

79

8.20

Jaka

rta

64.0

063

.03

65.5

764

.20

27.6

532

.32

31.3

532

.13

2.96

0.55

0.98

1.27

5.39

4.11

2.11

2.41

Wes

t Jav

a 62

.78

61.9

465

.14

66.0

419

.64

23.5

420

.61

21.0

56.

552.

753.

053.

1211

.03

11.7

711

.20

9.78

Cen

tral J

ava

62

.30

62.1

165

.15

63.8

514

.74

21.7

419

.29

19.4

77.

013.

323.

493.

5815

.95

12.8

312

.08

13.1

0D

I Yog

yaka

rta

51.5

063

.02

69.0

477

.32

22.8

230

.98

26.3

120

.15

7.54

4.44

4.22

1.75

18.1

41.

550.

440.

78Ea

st J

ava

54

.93

54.5

260

.13

60.5

720

.30

25.8

720

.57

19.0

47.

204.

385.

335.

0117

.57

15.2

313

.97

15.3

7Ba

nten

58.1

4

24

.05

3.25

14

.57

Bali

75.3

274

.82

79.7

478

.20

21.3

423

.61

19.1

721

.02

0.87

1.45

1.02

0.62

2.47

0.11

0.07

0.16

Wes

t Nus

a Te

ngga

ra

65.9

670

.80

72.2

176

.12

4.17

3.49

2.96

4.85

6.64

4.36

3.58

5.10

23.2

321

.36

21.2

413

.93

East

Nus

a Te

ngga

ra

53.5

763

.84

63.7

665

.97

21.6

134

.91

34.2

431

.54

7.95

0.77

1.10

1.51

16.8

80.

480.

900.

98Ea

st T

imor

84

.77

84.0

0

6.69

16.0

0

3.62

0.00

4.92

0.00

Wes

t Kal

iman

tan

67

.62

65.6

161

.95

69.5

221

.07

24.2

927

.80

23.4

34.

682.

814.

781.

686.

637.

295.

465.

38C

entra

l Kal

iman

tan

81

.22

71.6

182

.87

85.5

18.

4210

.70

8.08

5.04

7.60

7.31

3.59

3.08

2.77

10.3

75.

466.

37So

uth

Kalim

anta

n

52.1

253

.11

58.2

259

.85

7.83

8.66

6.37

4.49

18.5

520

.96

21.2

120

.42

21.5

117

.27

14.2

015

.25

East

Kal

iman

tan

68

.97

70.9

974

.19

80.7

518

.99

19.6

717

.04

14.0

34.

263.

333.

051.

547.

776.

015.

723.

68N

orth

Sul

awes

i 81

.39

78.4

981

.80

82.4

67.

9718

.85

16.0

416

.54

4.32

1.20

1.05

0.48

6.32

1.46

1.11

0.52

Cen

tral S

ulaw

esi

75.5

583

.21

83.7

984

.48

8.34

6.33

5.61

6.92

5.19

3.68

4.13

3.65

10.9

26.

796.

474.

95So

uth

Sula

wes

i 76

.27

80.5

983

.04

85.3

59.

4211

.43

9.33

8.48

7.07

3.17

2.88

2.35

7.24

4.82

4.75

3.82

Sout

heas

t Sul

awes

i 84

.46

88.4

990

.63

88.9

14.

972.

023.

802.

265.

673.

633.

445.

284.

905.

872.

123.

55G

oron

tolo

91.0

1

0.00

5.

85

3.14

Mal

uku

77.6

477

.47

93.2

714

.79

15.5

3 5.

885.

012.

47

0.85

2.56

4.53

0.

00Iri

an J

aya

83

.07

82.6

386

.20

94.2

77.

3216

.32

12.4

35.

733.

950.

331.

010.

005.

660.

720.

360.

00N

orth

Mal

uku

92

.39

5.95

1.

67

0.00

IND

ON

ESIA

63

.37

63.5

466

.29

67.0

518

.42

22.9

920

.22

19.5

56.

463.

693.

913.

8411

.76

9.77

9.58

9.56

Sour

ce:

SUSE

NAS

, sev

eral

yea

rs

N

ote:

Mis

sing

val

ues

due

to c

ivil

unre

st o

r gov

ernm

enta

l cha

nges

11

Tab

le 1

0. P

erce

nt o

f Sen

ior

Seco

ndar

y St

uden

ts E

nrol

led,

by

Typ

e of

Sch

ool

Seni

or S

econ

dary

Stu

dent

s En

rolle

d Se

nior

Sec

onda

ry S

tude

nts

Enro

lled

Pu

blic

Sch

ool

Priv

ate

Scho

ol

Publ

ic M

adra

sah

Priv

ate

Mad

rasa

h Pr

ovin

ce

1995

19

98

2000

20

02

1995

19

98

2000

20

02

1995

1998

20

0020

0219

9519

9820

0020

02Ac

eh

83.0

187

.12

86.0

87.

215.

96

4.64

7.71

5.72

8.

512.

071.

20

0.77

Nor

th S

umat

era

42

.39

45.9

948

.95

45.5

847

.38

46.4

344

.26

46.8

82.

161.

67

1.87

1.80

8.06

5.90

4.92

5.74

Wes

t Sum

ater

a 75

.06

71.9

477

.05

76.5

314

.39

16.0

714

.26

11.6

16.

148.

65

5.44

8.08

4.41

3.34

3.24

3.79

Ria

u 70

.36

66.0

772

.27

77.0

718

.26

18.0

419

.38

15.2

57.

927.

24

3.66

4.46

3.47

8.65

4.69

3.22

Jam

bi

70.7

870

.63

70.7

862

.47

15.3

915

.55

13.9

620

.15

10.5

47.

99

9.55

9.63

3.29

5.84

5.71

7.75

Sout

h Su

mat

era

51

.43

48.1

445

.75

54.3

637

.97

48.0

247

.83

41.9

63.

081.

40

3.08

1.32

7.52

2.44

3.35

2.36

Beng

kulu

78

.46

81.0

581

.98

81.7

313

.34

14.5

711

.14

12.3

53.

583.

34

6.43

5.92

4.62

1.05

0.45

0.00

Lam

pung

53

.27

45.8

253

.60

53.5

436

.50

43.1

539

.38

37.3

83.

794.

98

2.18

2.70

6.44

6.05

4.85

6.37

Bang

ka B

elitu

ng

53

.01

37.8

8

1.

99

7.12

Jaka

rta

52.1

847

.17

45.5

848

.58

41.3

350

.66

52.1

448

.06

1.93

0.71

0.

471.

054.

571.

461.

802.

30W

est J

ava

52.7

551

.56

56.7

055

.75

38.7

838

.83

36.7

534

.44

2.70

3.33

2.

263.

775.

776.

284.

296.

04C

entra

l Jav

a

49.5

852

.70

51.7

952

.41

33.0

937

.06

38.1

035

.89

4.41

3.64

3.

674.

1612

.92

6.59

6.44

7.55

DI Y

ogya

karta

44

.75

51.9

250

.36

57.7

330

.56

43.2

742

.72

36.9

33.

864.

29

6.03

3.65

20.8

20.

520.

891.

69Ea

st J

ava

42

.68

45.2

245

.23

43.8

341

.90

41.9

438

.81

38.4

24.

074.

06

6.31

5.34

11.3

58.

789.

6512

.42

Bant

en

41

.72

40.3

7

7.

17

10.7

4Ba

li 51

.47

56.0

656

.38

57.1

747

.25

43.4

542

.15

42.3

60.

110.

48

1.12

0.47

1.17

0.00

0.35

0.00

Wes

t Nus

a Te

ngga

ra

68.2

161

.34

59.7

365

.30

8.91

13.6

213

.44

12.9

67.

966.

92

9.52

9.22

14.9

218

.12

17.3

112

.52

East

Nus

a Te

ngga

ra

49.3

362

.01

61.9

258

.83

25.6

137

.41

36.8

840

.31

6.18

0.46

1.

200.

8618

.88

0.12

0.00

0.00

East

Tim

or

81.3

080

.68

12

.18

19.1

7

1.79

0.00

4.73

0.15

Wes

t Kal

iman

tan

58

.85

59.2

956

.61

56.4

036

.05

36.0

736

.53

36.1

21.

942.

13

2.34

3.12

3.16

2.51

4.52

4.36

Cen

tral K

alim

anta

n

78.1

179

.76

85.1

582

.25

14.1

113

.15

8.73

9.65

4.52

3.74

4.

634.

723.

263.

341.

503.

39So

uth

Kalim

anta

n

55.8

452

.15

64.3

555

.58

20.4

018

.33

9.56

13.9

513

.39

16.5

9 17

.57

19.1

310

.38

12.9

38.

5211

.34

East

Kal

iman

tan

59

.61

60.8

168

.03

70.0

332

.70

32.7

623

.72

25.6

82.

153.

36

5.10

2.18

5.55

3.07

3.15

2.11

Nor

th S

ulaw

esi

83.5

783

.22

90.7

577

.54

6.49

14.7

57.

5521

.87

4.81

1.90

1.

620.

125.

130.

130.

080.

47C

entra

l Sul

awes

i 80

.21

82.5

686

.16

84.6

011

.00

10.4

85.

706.

995.

362.

78

3.66

2.82

3.44

4.18

4.48

5.59

Sout

h Su

law

esi

71.0

776

.85

75.2

279

.45

21.0

616

.66

19.1

114

.44

4.05

3.60

2.

543.

753.

822.

883.

132.

36So

uthe

ast S

ulaw

esi

89.3

089

.09

86.9

687

.40

5.45

4.41

8.99

5.51

3.51

1.87

2.

493.

301.

744.

631.

563.

79G

oron

tolo

78.9

6

0.47

10

.96

9.

60M

aluk

u 76

.92

72.9

5 84

.59

15.7

321

.67

13.3

74.

523.

40

2.03

2.83

1.98

0.

00Iri

an J

aya

74

.59

72.0

877

.45

91.6

811

.30

27.5

022

.33

8.32

2.33

0.22

0.

220.

0011

.78

0.20

0.00

0.00

Nor

th M

aluk

u

88.1

3

6.

78

2.54

2.

54IN

DO

NES

IA

54.6

755

.45

56.3

855

.96

33.6

535

.84

34.8

533

.58

3.79

3.48

3.

644.

117.

905.

235.

136.

35So

urce

: SU

SEN

AS, s

ever

al y

ears

Not

e:M

issi

ng v

alue

s du

e to

civ

il un

rest

or g

over

nmen

tal c

hang

es

12

Tab

le 1

1. A

dult

Lite

racy

Rat

es

19

95

1998

20

00

2002

Prov

ince

Ag

es

15-2

4Ag

es

25-5

4 O

ver 5

5O

vera

llAg

es

15-2

4Ag

es

25-5

4O

ver

55

Ove

rall

Ages

15

-24

Ages

25

-54

Ove

r 55

O

vera

llAg

es

15-2

4Ag

es

25-5

4O

ver

55

Ove

rall

Aceh

97

.70

89.5

6 64

.74

89.0

3 98

.54

92.8

671

.58

91.9

7

99

.79

98.4

784

.05

97.3

4 N

orth

Sum

ater

a

99.0

2 95

.68

74.9

2 93

.93

99.1

497

.33

80.5

995

.65

99.4

1 97

.51

83.2

396

.21

99.1

5 97

.66

82.5

696

.11

Wes

t Sum

ater

a 98

.18

93.1

0 74

.14

91.2

7 98

.84

95.4

880

.86

93.8

1 98

.93

96.8

683

.19

94.9

9 98

.77

96.5

584

.67

95.1

5 R

iau

97.5

4 92

.31

72.7

5 92

.11

99.0

095

.89

81.2

195

.36

99.3

3 96

.45

81.3

495

.80

99.0

7 96

.79

85.4

296

.56

Jam

bi

97.8

7 89

.43

65.2

7 89

.59

98.6

093

.09

76.6

392

.77

99.3

8 95

.74

74.8

494

.43

98.9

6 95

.88

77.6

594

.71

Sout

h Su

mat

era

97

.92

91.7

5 65

.14

90.4

2 98

.53

94.5

972

.93

93.0

6 98

.49

95.6

176

.46

93.9

8 98

.85

95.6

975

.40

94.1

1 Be

ngku

lu

98.3

3 91

.62

65.7

8 90

.77

98.5

593

.76

71.3

892

.55

98.7

9 93

.06

65.3

391

.54

98.5

9 95

.07

68.9

393

.04

Lam

pung

98

.55

90.9

7 56

.27

89.0

7 99

.09

93.5

259

.18

90.5

1 99

.05

93.6

762

.25

90.9

1 98

.91

94.9

970

.81

93.0

0 Ba

ngka

Bel

itung

97

.52

94.4

066

.88

91.7

4 Ja

karta

99

.67

96.8

1 82

.19

96.4

1 99

.57

98.4

290

.23

97.9

9 99

.75

98.2

087

.74

97.5

6 99

.57

98.7

490

.89

98.2

3 W

est J

ava

98.4

6 89

.28

60.1

5 87

.85

99.2

193

.53

70.9

592

.09

99.2

5 94

.25

70.6

592

.49

99.4

5 95

.28

72.6

493

.11

Cen

tral J

ava

98

.33

84.3

7 43

.41

80.2

3 98

.87

89.0

951

.19

84.2

3 99

.04

90.3

453

.26

85.6

3 99

.17

91.1

951

.33

85.6

6 D

I Yog

yaka

rta

99.0

6 87

.21

41.6

3 80

.37

99.0

590

.18

41.7

481

.17

98.5

0 90

.82

41.6

980

.51

99.3

6 92

.84

48.1

383

.81

East

Jav

a

96.7

8 79

.02

39.3

6 75

.75

97.4

084

.63

48.2

480

.78

97.9

7 86

.17

47.9

081

.74

98.4

6 87

.83

49.8

083

.19

Bant

en

98.8

1 94

.73

73.5

393

.84

Bali

97.4

5 81

.49

36.9

0 78

.31

98.2

287

.59

47.4

983

.33

98.4

9 88

.93

49.3

684

.23

97.6

5 89

.29

50.4

484

.19

Wes

t Nus

a Te

ngga

ra

91.3

8 61

.73

30.3

0 65

.81

93.5

471

.88

39.0

473

.72

94.9

1 75

.15

42.7

076

.32

95.7

2 76

.73

45.3

177

.87

East

Nus

a Te

ngga

ra

93.5

4 77

.70

42.1

1 76

.90

95.1

184

.08

48.4

581

.57

95.2

5 85

.76

50.3

982

.83

95.8

6 88

.04

51.0

484

.13

East

Tim

or

74.1

3 37

.29

9.42

45

.56

76.5

842

.31

9.39

47

.29

Wes

t Kal

iman

tan

94

.48

75.1

4 41

.42

77.4

4 97

.47

83.1

353

.82

84.1

4 97

.12

85.2

653

.57

85.2

4 97

.12

87.5

356

.77

86.7

5 C

entra

l Kal

iman

tan

98

.64

93.9

8 74

.18

93.4

8 98

.98

95.6

180

.83

95.1

1 98

.97

96.1

981

.17

95.6

8 99

.47

97.3

379

.99

96.3

2 So

uth

Kalim

anta

n

97.9

1 90

.26

66.0

5 89

.77

98.4

793

.90

71.1

392

.45

98.9

8 93

.37

71.7

792

.21

98.4

7 94

.65

73.7

793

.29

East

Kal

iman

tan

98

.31

91.1

8 62

.60

90.9

2 99

.10

93.1

869

.80

92.8

7 98

.99

94.5

868

.93

93.7

3 99

.23

96.1

774

.78

95.1

9 N

orth

Sul

awes

i 98

.07

97.0

3 90

.00

96.3

7 98

.95

98.0

793

.37

97.6

4 99

.00

98.5

794

.65

98.1

0 99

.40

99.0

296

.96

98.7

9 C

entra

l Sul

awes

i 97

.03

90.9

6 63

.55

89.9

0 98

.30

93.3

572

.46

92.7

1 98

.37

93.7

474

.56

92.8

9 98

.57

94.5

273

.39

93.3

2 So

uth

Sula

wes

i 94

.96

78.6

4 42

.63

78.3

5 95

.71

84.5

950

.92

82.5

6 96

.10

86.2

751

.96

83.6

4 95

.29

86.5

751

.96

83.4

7 So

uthe

ast S

ulaw

esi

96.5

3 83

.17

44.2

9 83

.01

97.3

488

.12

55.2

987

.35

98.0

3 89

.81

56.8

188

.76

96.9

9 90

.31

54.3

688

.24

Gor

onto

lo

96.8

1 96

.25

86.4

995

.21

Mal

uku

97.5

2 94

.60

75.7

3 93

.13

98.8

495

.94

80.5

394

.74

99.3

0 99

.62

99.4

899

.50

Irian

Jay

a

85.0

7 65

.45

53.1

4 70

.24

82.8

567

.31

60.8

971

.47

80.1

3 66

.59

61.3

770

.11

100.

0098

.81

87.0

097

.93

Nor

th M

aluk

u

99

.80

97.1

393

.73

97.7

4

IND

ON

ESIA

95

.83

84.1

855

.94

83.7

296

.81

88.5

764

.08

87.3

797

.59

90.9

566

.05

89.1

598

.47

93.9

471

.94

92.0

5So

urce

: SU

SEN

AS, s

ever

al y

ears

Not

e:M

issi

ng v

alue

s du

e to

civ

il un

rest

or g

over

nmen

tal c

hang

es

13

Tab

le 1

2. P

rim

ary

Scho

ol C

lass

room

s and

Tea

cher

Pro

files

C

lass

room

s Te

ache

rs

Deg

ree

Hel

d by

Tea

cher

s

Prov

ince

N

umbe

r of

clas

ses

Goo

d co

nditi

onFa

irco

nditi

onPo

orco

nditi

onTo

tal

Num

ber

Civ

il N

on-C

ivil

SLTP

SL

TPte

achi

ngSM

Ute

achi

ng

SMU

non

te

achi

ngD

II D

III

Abov

e D

III

Jaka

rta

27,4

94

18,4

26

3,26

8 82

1 36

,597

73

.1%

26

.9%

1.

4%

2.9%

61

.4%

2.

2%

18.5

%

5.1%

8.

6%

Wes

t Jav

a 20

7,61

8 58

,370

63

,698

43

,204

19

0,63

3 90

.8%

9.

2%

0.8%

1.

1%

63.2

%

2.6%

26

.6%

2.

0%

3.8%

C

entra

l Jav

a 16

3,50

6 72

,779

59

,164

20

,554

19

4,26

1 92

.6%

7.

4%

1.5%

2.

4%

72.4

%

2.6%

15

.8%

2.

2%

3.1%

D

I Yog

yaka

rta

16,2

89

7,24

3 6,

626

1,96

9 21

,276

97

.4%

2.

6%

1.8%

2.

0%

59.8

%

0.1%

26

.9%

4.

8%

4.6%

Ea

st J

ava

172,

542

81,3

19

56,5

68

22,0

21

210,

017

82.1

%

17.9

%

3.6%

3.

1%

58.5

%

6.7%

13

.2%

4.

7%

10.3

%

Aceh

25

,972

11

,741

7,

330

3,60

8 28

,832

96

.1%

3.

9%

0.8%

2.

0%

75.2

%

1.0%

16

.8%

1.

6%

2.7%

N

orth

Sum

ater

a 69

,864

30

,566

22

,491

8,

926

80,1

76

90.7

%

9.3%

1.

4%

2.0%

87

.8%

1.

9%

3.4%

1.

5%

2.1%

W

est S

umat

era

29,1

83

11,6

96

10,2

63

3,62

8 31

,852

96

.8%

3.

2%

0.5%

1.

3%

73.4

%

1.0%

20

.3%

1.

4%

2.1%

R

iau

28,6

47

9,42

1 7,

589

4,69

0 30

,486

87

.4%

12

.6%

1.

3%

1.5%

76

.7%

4.

6%

12.1

%

1.2%

2.

6%

Jam

bi

20,1

73

7,92

2 5,

925

3,13

4 22

,504

86

.4%

13

.6%

2.

1%

1.3%

78

.5%

1.

3%

14.1

%

1.1%

1.

7%

Sout

h Su

mat

era

44,8

73

16,2

36

11,6

20

7,09

3 50

,649

87

.4%

12

.6%

3.

4%

3.0%

76

.0%

3.

8%

11.0

%

1.0%

1.

9%

Lam

pung

42

,132

15

,493

11

,102

5,

579

48,4

31

87.3

%

12.7

%

1.8%

3.

3%

71.4

%

3.1%

14

.0%

2.

1%

4.2%

W

est K

alim

anta

n

27,1

57

7,07

0 8,

419

5,07

6 29

,055

95

.9%

4.

1%

1.2%

0.

5%

86.4

%

1.0%

8.

1%

1.6%

1.

3%

Cen

tral K

alim

anta

n

11,9

41

3,53

1 3,

085

3,49

9 13

,315

93

.2%

6.

8%

0.7%

1.

2%

80.4

%

2.3%

13

.1%

1.

2%

1.1%

N

orth

Kal

iman

tan

22

,172

7,

950

7,86

2 4,

506

26,5

53

88.6

%

11.4

%

1.5%

1.

6%

69.4

%

3.4%

21

.3%

0.

9%

2.0%

Ea

st K

alim

anta

n

16,6

08

5,83

6 4,

881

2,55

8 19

,129

95

.4%

4.

6%

0.7%

2.

1%

76.0

%

1.7%

13

.6%

1.

2%

4.8%

N

orth

Sul

awes

i 20

,107

10

,705

6,

169

2,72

8 25

,255

97

.8%

2.

2%

0.8%

0.

6%

90.6

%

0.3%

5.

5%

0.7%

1.

4%

Cen

tral S

ulaw

esi

18,0

94

5,20

4 5,

453

4,44

7 18

,044

97

.9%

2.

1%

1.1%

0.

4%

85.6

%

0.9%

10

.0%

0.

4%

1.5%

So

uth

Sula

wes

i 53

,964

22

,464

15

,772

7,

908

59,1

17

98.2

%

1.8%

0.

7%

1.1%

78

.6%

0.

7%

10.8

%

3.1%

5.

0%

Sout

heas

t Sul

awes

i 12

,482

3,

965

3,85

4 2,

714

13,6

05

99.4

%

0.6%

0.

6%

2.9%

81

.0%

0.

5%

12.4

%

0.4%

2.

2%

Mal

uku

17,0

67

5,18

1 4,

155

4,64

2 16

,152

96

.4%

3.

6%

0.5%

2.

0%

84.7

%

1.0%

10

.4%

0.

4%

0.8%

Ba

li 16

,882

8,

710

5,73

9 2,

722

22,7

56

97.3

%

2.7%

0.

1%

2.5%

69

.5%

0.

4%

18.0

%

1.4%

8.

1%

Wes

t Nus

a Te

ngga

ra

22,5

44

10,2

84

6,29

6 2,

431

27,1

33

90.4

%

9.6%

0.

3%

1.6%

73

.6%

4.

6%

12.9

%

2.6%

4.

5%

East

Nus

a Te

ngga

ra

28,5

96

8,79

7 8,

559

9,28

4 28

,247

94

.7%

5.

3%

1.3%

5.

3%

83.7

%

0.7%

7.

4%

1.1%

0.

5%

Irian

Jay

a 15

,915

6,

708

3,11

3 2,

835

16,6

49

95.7

%

4.3%

0.

9%

0.8%

93

.7%

0.

9%

2.0%

0.

5%

1.2%

Be

ngku

lu

10,3

39

3,87

3 3,

387

1,71

3 12

,362

97

.6%

2.

4%

0.7%

1.

5%

74.9

%

0.6%

19

.6%

1.

0%

1.7%

IND

ON

ESIA

1,

142,

161

451,

490

352,

388

182,

290

1,28

0,79

890

.36%

9.64

%

1.60

%2.

10%

71

.71%

2.86

%

15.0

4%

2.34

%4.

36%

So

urce

: 19

99 M

oNE

Scho

ol S

urve

y

Sam

ple

Size

: 17

2,45

7 sc

hool

s

14

Tab

le 1

3. T

each

er P

rofil

e in

Jun

ior

Seco

ndar

y Sc

hool

s

Year

s of

Tea

cher

Wor

k Ex

perie

nce

Prov

ince

To

tal

Teac

hers

C

ivil

Serv

ants

N

on-C

ivil

Serv

ants

U

nder

5

5 - 9

10

- 14

15

- 19

20

- 24

O

ver 2

5 Ja

karta

2,

413

3%

97%

11

%

11%

17

%

34%

19

%

7%

Wes

t Jav

a 7,

613

5%

95%

24

%

16%

23

%

22%

8%

7%

C

entra

l Jav

a 6,

900

4%

96%

19

%

10%

25

%

26%

10

%

10%

D

I Yog

yaka

rta

580

7%

93%

13

%

7%

16%

30

%

18%

17

%

East

Jav

a 8,

446

3%

97%

22

%

12%

29

%

24%

7%

6%

Ac

eh

1,24

9 2%

98

%

14%

10

%

25%

36

%

12%

3%

N

orth

Sum

ater

a 1,

050

2%

98%

18

%

13%

25

%

28%

10

%

6%

Wes

t Sum

ater

a 58

2 1%

99

%

9%

12%

30

%

32%

11

%

6%

Ria

u 77

6 4%

96

%

21%

15

%

24%

27

%

10%

3%

Ja

mbi

53

3 2%

98

%

21%

13

%

32%

23

%

8%

3%

Sout

h Su

mat

era

2,28

4 2%

98

%

27%

18

%

25%

20

%

7%

4%

Lam

pung

98

4 5%

95

%

20%

20

%

28%

20

%

9%

2%

Wes

t Kal

iman

tan

754

4%

96%

27

%

12%

27

%

24%

9%

2%

C

entra

l Kal

iman

tan

57

2%

98%

48

%

18%

23

%

10%

1%

0%

N

orth

Kal

iman

tan

147

6%

94%

15

%

10%

28

%

35%

8%

3%

Ea

st K

alim

anta

n 25

2 13

%

87%

26

%

20%

33

%

16%

3%

2%

N

orth

Sul

awes

i 31

8 25

%

75%

16

%

8%

23%

34

%

14%

5%

C

entra

l Sul

awes

i 15

2 5%

95

%

21%

19

%

26%

25

%

6%

2%

Sout

h Su

law

esi

473

21%

79

%

18%

14

%

25%

27

%

9%

7%

Sout

heas

t Sul

awes

i 50

16

%

84%

21

%

21%

22

%

24%

9%

3%

Ba

li 33

0 4%

96

%

12%

9%

23

%

35%

15

%

6%

Wes

t Nus

a Te

ngga

ra

1,22

6 8%

92

%

21%

21

%

23%

25

%

8%

3%

East

Nus

a Te

ngga

ra

570

4%

96%

26

%

12%

23

%

26%

12

%

1%

Irian

Jay

a

287

16%

84

%

25%

27

%

28%

12

%

5%

3%

Beng

kulu

26

4 2%

98

%

24%

22

%

26%

21

%

1%

2%

Sour

ce:

1999

MoN

E Sc

hool

Sur

vey

Sa

mpl

e si

ze: 8

793

publ

ic s

choo

ls

15

Tab

le 1

4. T

each

er P

rofil

e in

Sen

ior

Seco

ndar

y Sc

hool

s

Year

s of

Tea

cher

Wor

k Ex

perie

nce

Prov

ince

To

tal

Teac

hers

C

ivil

Serv

ants

N

on-C

ivil

Serv

ants

U

nder

5

5 - 9

10

- 14

15

- 19

20

- 24

O

ver 2

5 Ja

karta

1,

480

3%

97%

5%

15

%

29%

27

%

17%

7%

W

est J

ava

1,85

3 14

%

86%

7%

22

%

36%

23

%

7%

6%

Cen

tral J

ava

2,82

9 6%

94

%

9%

14%

36

%

21%

13

%

7%

DI Y

ogya

karta

52

3 10

%

90%

24

%

12%

22

%

17%

13

%

12%

Ea

st J

ava

3,34

1 4%

96

%

6%

14%

40

%

25%

10

%

5%

Aceh

51

9 10

%

90%

15

%

17%

34

%

22%

9%

4%

N

orth

Sum

ater

a 57

1 10

%

90%

14

%

18%

29

%

21%

12

%

6%

Wes

t Sum

ater

a 39

6 2%

98

%

10%

18

%

34%

23

%

10%

4%

R

iau

264

4%

96%

24

%

24%

28

%

15%

6%

3%

Ja

mbi

20

9 3%

97

%

58%

13

%

15%

9%

4%

1%

So

uth

Sum

ater

a 82

6 4%

96

%

34%

22

%

25%

11

%

5%

3%

Lam

pung

22

5 11

%

89%

40

%

25%

22

%

8%

4%

1%

Wes

t Kal

iman

tan

201

12%

88

%

53%

15

%

19%

6%

4%

2%

C

entra

l Kal

iman

tan

6 0%

10

0%

96%

2%

2%

0%

0%

0%

N

orth

Kal

iman

tan

136

22%

78

%

62%

9%

17

%

7%

4%

2%

East

Kal

iman

tan

139

8%

92%

59

%

19%

13

%

7%

2%

0%

Nor

th S

ulaw

esi

160

11%

89

%

27%

17

%

29%

13

%

8%

5%

Cen

tral S

ulaw

esi

26

4%

96%

47

%

18%

21

%

9%

3%

2%

Sout

h Su

law

esi

171

19%

81

%

11%

18

%

39%

18

%

9%

6%

Bali

168

7%

93%

22

%

13%

31

%

17%

10

%

7%

Wes

t Nus

a Te

ngga

ra

472

9%

91%

35

%

27%

22

%

9%

5%

2%

East

Nus

a Te

ngga

ra

171

10%

90

%

50%

17

%

19%

10

%

3%

1%

Irian

Jay

a

86

9%

91%

67

%

20%

9%

2%

1%

1%

Be

ngku

lu

76

9%

91%

55

%

18%

17

%

7%

2%

0%

Sour

ce:

1999

MoN

E Sc

hool

Sur

vey

Sa

mpl

e si

ze: 2

385

publ

ic s

choo

ls

16

Tab

le 1

5. T

est S

core

s of J

unio

r Se

cond

ary

Stud

ents

MAT

H

LAN

GU

AGE

TOTA

L SC

OR

E

Prov

ince

To

tal S

tude

nts

25th

perc

entil

e75

thpe

rcen

tile

Mea

n25

thpe

rcen

tile

75th

perc

entil

eM

ean

25th

perc

entil

e 75

thpe

rcen

tile

Mea

nJa

karta

13

5,22

14.

37

5.13

4.

87

4.8

5.77

5.

30

27.8

4 32

.6

30.5

7 W

est J

ava

446,

250

4.48

4.

93

4.77

4.

72

5.28

5.

01

28.1

5 30

.8

29.6

7 C

entra

l Jav

a 48

4,63

64.

5 5.

02

4.83

4.

96

5.72

5.

34

28.7

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.01

30.5

8 D

I Yog

yaka

rta

48,3

464.

49

5.25

5 4.

94

4.93

5.

73

5.33

28

.945

33

.1

31.2

3 Ea

st J

ava

465,

770

4.53

4.

97

4.82

4.

8 5.

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28

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31.2

30

.00

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62,8

884.

78

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5.

01

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09

5.85

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9 33

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Nor

th S

umat

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217,

434

4.46

4.

89

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31

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4.55

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96

4.79

4.

59

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88

27.9

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29

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Jam

bi34

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4.42

4.

83

4.58

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4.95

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27.9

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uth

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91

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pung

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017

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4.91

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orth

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tan

35

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4.66

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94

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28.1

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29.2

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alim

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Nor

th S

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25,1

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Sout

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103,

330

4.51

5.

45

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91

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Wes

t Nus

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East

Nus

a Te

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43,9

432.

93

4.47

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87

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Irian

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a

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55

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Nor

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896

4.62

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27

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94

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ka B

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ng

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58

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28

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31.7

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IND

ON

ESIA

2,

802,

523

4.65

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69

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99

28.5

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: EB

TAN

AS 2

001/

2002

sch

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ear

Not

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ndiv

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pos

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; tot

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pos

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poi

nts;

mis

sing

figu

res

due

to la

ck o

f rep

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g

Sa

mpl

e Si

ze:

2,80

2,52

3 st

uden

ts

17

Tab

le 1

6. T

est S

core

s of S

enio

r Se

cond

ary

Stud

ents

N

atur

al S

cien

ces

Trac

k La

ngua

ge T

rack

So

cial

Sci

ence

s Tr

ack

Prov

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#

of s

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sc

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# of

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scor

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scor

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vera

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of

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scor

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karta

28

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Sum

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.63

9,47

9 16

.17

32.7

8 23

.69

East

Kal

iman

tan

5,

371

20.8

7 34

.89

26.8

0 23

8 19

.69

33.5

5 26

.70

9,17

1 16

.12

30.2

7 22

.39

Nor

th S

ulaw

esi

4,39

0 21

.34

32.9

9 26

.88

1,78

2 18

.04

31.3

2 24

.35

6,39

2 17

.04

29.3

4 22

.88

Cen

tral S

ulaw

esi

3,42

0 24

.09

35.3

7 29

.07

807

19.4

1 35

.02

26.1

9 7,

131

17.5

1 29

.60

22.9

4 So

uth

Sula

wes

i 19

,349

31

.83

2,21

4 20

.88

32.9

9 26

.81

25,0

87

18.2

3 31

.43

24.6

6 So

uthe

ast S

ulaw

esi

38,9

24

21.4

3 34

.07

28.2

1 7,

095

19.0

2 33

.58

25.8

9 62

,559

16

.63

30.2

7 22

.87

Bali

6,88

4 24

.61

39.9

5 31

.70

4,94

2 21

.47

37.2

8 29

.37

10,4

33

17.6

7 33

.90

25.3

9 W

est N

usa

Teng

gara

6,

838

18.5

7 33

.72

24.8

7 3,

534

17.0

0 32

.06

23.8

9 15

,715

13

.91

29.9

0 20

.74

East

Nus

a Te

ngga

ra

3,43

0 17

.07

26.1

5 21

.03

2,42

0 15

.76

27.1

5 20

.99

11,6

59

13.5

7 24

.87

18.4

5 Be

ngku

lu

26

.82

26

.11

24

.07

Nor

th M

aluk

u 2,

304

23.1

0 43

.26

29.5

9 35

0 19

.85

33.3

4 25

.51

3,39

6 18

.81

37.3

3 24

.87

Gor

onta

lo

974

23.0

2 34

.66

28.2

6 47

0 18

.21

30.6

0 24

.32

1,90

1 17

.39

31.4

2 23

.81

Bant

en

20,4

30

21.2

8 35

.55

27.0

4 11

,716

18

.45

32.0

9 25

.03

43,1

04

16.2

7 31

.48

22.8

9 Ba

ngka

Bel

itung

1,

594

22.7

3 39

.22

29.9

8

3,

841

17.9

3 32

.57

24.7

4

IND

ON

ESIA

44

6,34

2 17

.07

43.2

628

.27

55,8

80

17.5

39

.58

26.8

7 76

1,54

5 13

.57

37.3

323

.78

Sour

ce:

EBTA

NAS

200

1/20

02 s

choo

l yea

r

N

ote:

Tot

al S

core

s ou

t of a

pos

sibl

e 60

poi

nts,

Mis

sing

figu

res

due

to la

ck o

f rep

ortin

g

Sam

ple

Size

: 1,2

63,7

67 s

tude

nts

18

Tab

le 1

7. A

vera

ge M

onth

ly H

ouse

hold

Inco

me

(R

upia

h)

19

95

1998

20

00

2002

Prov

ince

U

rban

R

ural

U

rban

R

ural

U

rban

R

ural

U

rban

R

ural

Aceh

30

7,00

0 18

6,00

0 42

4,00

0 27

8,00

0

1,

161,

000

Nor

th S

umat

era

29

9,00

0 18

5,00

0 42

2,00

0 28

6,00

0 70

1,00

0 46

6,00

0 1,

049,

000

634,

000

W

est S

umat

era

311,

000

203,

000

460,

000

297,

000

768,

000

546,

000

1,08

1,00

070

7,00

0

Ria

u 34

6,00

0 23

6,00

0 58

3,00

0 34

9,00

0 96

1,00

0 58

4,00

0 1,

395,

000

781,

000

Ja

mbi

29

0,00

0 18

9,00

0 44

4,00

0 26

7,00

0 65

4,00

0 44

9,00

0 86

8,00

0 59

2,00

0

Sout

h Su

mat

era

28

8,00

0 17

7,00

0 37

0,00

0 24

5,00

0 69

1,00

0 44

0,00

0 98

4,00

0 50

6,00

0

Beng

kulu

26

7,00

0 18

0,00

0 39

4,00

0 25

1,00

0 63

6,00

0 44

5,00

0 86

3,00

0 55

3,00

0

Lam

pung

27

6,00

0 17

0,00

0 40

1,00

0 21

3,00

0 59

9,00

0 38

2,00

0 79

3,00

0 52

1,00

0

Bang

ka B

elitu

ng

968,

000

766,

000

Ja

karta

45

6,00

0

738,

000

1,

050,

000

1,

998,

000

Wes

t Jav

a 32

3,00

0 18

5,00

0 44

5,00

0 26

9,00

0 65

6,00

0 41

4,00

0 97

0,00

0 53

7,00

0

Cen

tral J

ava

21

8,00

0 14

2,00

0 31

5,00

0 21

3,00

0 50

7,00

0 35

8,00

0 75

6,00

0 50

5,00

0

DI Y

ogya

karta

23

9,00

0 15

6,00

0 36

1,00

0 24

8,00

0 50

8,00

0 36

0,00

0 92

2,00

0 55

5,00

0

East

Jav

a

269,

000

142,

000

350,

000

204,

000

520,

000

340,

000

798,

000

494,

000

Ba

nten

1,

272,

000

635,

000

Ba

li 31

0,00

0 21

8,00

0 48

4,00

0 31

6,00

0 76

8,00

0 58

2,00

0 1,

244,

000

812,

000

W

est N

usa

Teng

gara

20

5,00

0 14

5,00

0 32

3,00

0 21

3,00

0 49

3,00

0 39

7,00

0 67

7,00

0 49

7,00

0

East

Nus

a Te

ngga

ra

295,

000

145,

000

392,

000

215,

000

703,

000

373,

000

889,

000

462,

000

Ea

st T

imor

26

7,00

0 16

3,00

0 39

3,00

0 21

2,00

0

Wes

t Kal

iman

tan

36

0,00

0 21

1,00

0 52

7,00

0 28

1,00

0 87

8,00

0 48

0,00

0 1,

219,

000

621,

000

C

entra

l Kal

iman

tan

31

3,00

0 21

0,00

0 45

8,00

0 31

7,00

0 70

8,00

0 51

0,00

0 94

4,00

0 69

8,00

0

Sout

h Ka

liman

tan

30

0,00

0 17

4,28

2 44

4,00

0 27

8,00

0 70

5,00

0 44

1,00

0 97

3,00

0 61

0,00

0

East

Kal

iman

tan

39

0,00

0 22

7,00

0 53

7,00

0 33

7,00

0 80

3,00

0 51

2,00

0 1,

231,

000

758,

000

N

orth

Sul

awes

i 25

1,00

0 16

3,00

0 36

6,00

0 24

0,00

0 63

2,00

0 41

8,00

0 95

4,00

0 64

6,00

0

Cen

tral S

ulaw

esi

303,

000

177,

000

442,

000

233,

000

716,

000

445,

000

977,

000

588,

000

So

uth

Sula

wes

i 27

5,00

0 16

1,00

0 40

2,00

0 24

7,00

0 69

8,00

0 43

4,00

0 95

0,00

0 56

4,00

0

Sout

heas

t Sul

awes

i 30

5,00

0 15

8,00

0 31

5,00

0 25

1,00

0 67

9,00

0 43

5,00

0 94

8,00

0 59

0,00

0

Gor

onto

lo

659,

000

409,

000

M

aluk

u 30

9,00

0 17

0,00

0 42

4,00

0 24

3,00

0

1,

103,

000

754,

000

Iri

an J

aya

36

4,00

0 15

1,00

0 50

4,00

0 23

1,00

0 73

3,00

0 31

4,00

0 1,

076,

000

1,11

6,00

0

Nor

th M

aluk

u

1,

104,

000

721,

000

IND

ON

ESIA

30

8,00

016

7,00

044

1,00

024

3,00

066

6,00

040

5,00

01,

043,

000

554,

000

Sour

ce:

SUSE

NAS

, sev

eral

yea

rs

Not

es:

Figu

res

roun

ded

to n

eare

st th

ousa

nd

Mis

sing

val

ues

due

to c

ivil

unre

st o

r gov

ernm

enta

l cha

nges

(as

seve

ral p

rovi

nces

dev

elop

ed p

ost 1

999)

S

ampl

e si

ze fo

r all

hous

ehol

d SU

SEN

AS d

ata:

199

5 - 2

01,4

21 h

ouse

hold

s; 1

998

- 207

,645

; 200

0 –

189,

339;

200

2 –

212,

646

19

Tab

le 1

8. E

duca

tion

Exp

endi

ture

as a

Pro

port

ion

of T

otal

Hou

seho

ld E

xpen

ditu

re

19

95

1998

20

00

2002

Prov

ince

M

ean

Std

dev

Mea

n St

d de

v M

ean

Std

dev

Mea

n St

d de

v Ac

eh

3.79

9.

39

2.57

5.

09

4.08

12

.61

Nor

th S

umat

era

4.

37

9.23

3.

46

7.48

2.

82

7.08

2.

24

4.96

W

est S

umat

era

3.61

7.

54

3.29

8.

42

2.59

8.

05

2.11

6.

53

Ria

u 2.

28

6.46

2.

63

5.36

2.

08

4.96

2.

00

5.74

Ja

mbi

2.

81

8.07

2.

37

5.36

2.

00

6.89

1.

51

4.71

So

uth

Sum

ater

a

3.08

6.

46

2.64

6.

05

2.70

9.

26

1.98

6.

46

Beng

kulu

2.

98

6.48

2.

99

8.88

2.

52

7.82

2.

04

6.61

La

mpu

ng

4.18

11

.49

2.54

6.

15

1.97

5.

54

1.61

3.

67

Bang

ka B

elitu

ng

1.31

2.

84

Jaka

rta

6.17

13

.60

7.34

18

.57

4.86

10

.87

2.91

5.

52

Wes

t Jav

a 3.

99

9.48

3.

41

9.42

2.

43

6.66

1.

80

5.25

C

entra

l Jav

a

3.53

7.

28

3.33

7.

47

2.53

6.

07

2.32

6.

59

DI Y

ogya

karta

8.

15

16.2

4 7.

32

15.4

8 8.

50

23.5

2 4.

99

14.1

0 Ea

st J

ava

3.

16

7.48

2.

94

7.06

2.

41

5.78

2.

01

5.08

Ba

nten

1.

74

3.76

Ba

li 3.

35

9.22

2.

98

6.31

2.

17

4.91

1.

90

5.87

W

est N

usa

Teng

gara

2.

58

5.76

1.

67

4.17

1.

68

4.80

1.

12

3.17

Ea

st N

usa

Teng

gara

2.

79

7.37

2.

25

7.41

1.

43

4.18

1.

48

4.99

Ea

st T

imor

1.

53

3.73

1.

40

3.29

W

est K

alim

anta

n

2.20

4.

92

1.97

4.

70

1.86

4.

91

1.31

4.

19

Cen

tral K

alim

anta

n

2.21

5.

66

1.78

4.

71

1.23

3.

43

1.24

3.

78

Sout

h Ka

liman

tan

3.

01

6.82

2.

07

9.15

1.

51

5.18

1.

09

3.23

Ea

st K

alim

anta

n

2.87

5.

77

2.96

6.

12

2.22

4.

99

2.38

6.

78

Nor

th S

ulaw

esi

2.32

5.

83

2.19

7.

97

1.38

4.

44

1.83

5.

71

Cen

tral S

ulaw

esi

2.43

7.

78

2.35

5.

21

1.61

5.

96

1.16

4.

72

Sout

h Su

law

esi

3.38

8.

70

2.56

6.

20

1.79

6.

34

1.72

4.

76

Sout

heas

t Sul

awes

i 2.

53

7.20

1.

94

6.26

1.

57

4.98

1.

52

7.23

G

oron

tolo

0.

99

2.30

M

aluk

u 2.

57

5.09

2.

51

4.62

2.

32

5.83

Iri

an J

aya

1.

83

5.06

1.

64

3.82

1.

24

3.47

2.

27

6.40

N

orth

Mal

uku

3.70

12

.33

IND

ON

ESIA

3.

25

7.71

2.

85

7.06

2.

38

6.67

2.

02

5.86

So

urce

: SU

SEN

AS, s

ever

al y

ears

N

ote:

Mis

sing

val

ues

due

to c

ivil

unre

st o

r gov

ernm

enta

l cha

nges

20

Tab

le 1

9. N

atio

nal E

duca

tion

Dev

elop

men

t Exp

endi

ture

, 200

1

Prov

ince

To

tal D

evel

opm

ent

Expe

nditu

re R

p ('0

00,0

00)

% o

f tot

alN

orth

Mal

uku

16,5

00

0.23

%

Mal

uku

37

,500

0.

51%

Ea

st K

alim

anta

n

47,0

00

0.64

%

Bali

49,2

00

0.67

%

Beng

kulu

51

,600

0.

71%

Ja

mbi

52

,700

0.

72%

W

est N

usa

Teng

gara

54

,700

0.

75%

Iri

an J

aya

59,9

00

0.82

%

Wes

t Kal

iman

tan

60,3

00

0.82

%

East

Nus

a Te

ngga

ra

63,2

00

0.86

%

Sout

heas

t Sul

awes

i 64

,000

0.

88%

R

iau

76,6

00

1.05

%

Lam

pung

80

,100

1.

10%

C

entra

l Sul

awes

i 89

,300

1.

22%

W

est S

umat

era

95,2

00

1.30

%

Nor

th S

ulaw

esi

104,

000

1.42

%

Sout

h Su

mat

era

10

8,00

0 1.

48%

D

I Yog

yaka

rta

127,

000

1.74

%

Aceh

13

6,00

0 1.

86%

So

uth

Sula

wes

i 14

2,00

0 1.

94%

C

entra

l Kal

iman

tan

14

6,00

0 2.

00%

N

orth

Sum

ater

a

153,

000

2.09

%

Cen

tral J

ava

188,

000

2.57

%

Nor

th K

alim

anta

n

192,

000

2.63

%

East

Jav

a 25

3,00

0 3.

46%

W

est J

ava

442,

000

6.05

%

Jaka

rta

4,42

0,00

0 60

.47%

IND

ON

ESIA

7,

310,

000

100%

So

urce

: 20

01 A

PBN

21

Tab

le 2

0. G

ross

Reg

iona

l Dom

estic

Pro

duct

at C

urre

nt M

arke

t Pri

ces,

1998

-200

0

1998

20

00

Prov

ince

G

RD

P(B

illion

Rps

) G

RD

P pe

r ca

pita

(Rp)

% o

f tot

al

GR

DP

(Billi

on

Rps

)G

RD

P pe

r ca

pita

(Rp)

%

of t

otal

Aceh

24

,957

6,

348,

920

2.81

%

28,6

26

7,28

2,29

3 2.

45%

N

orth

Sum

ater

a

50,7

06

4,35

2,57

5 5.

70%

68

,212

5,

855,

281

5.85

%

Wes

t Sum

ater

a 17

,643

4,

152,

339

1.98

%

22,3

68

5,26

4,38

3 1.

92%

R

iau

17,6

43

3,55

8,75

9 1.

98%

55

,430

11

,180

,752

4.

75%

Ja

mbi

42

,838

17

,746

,783

4.82

%

55,4

30

22,9

63,3

54

4.75

%

Sout

h Su

mat

era

6,

859

994,

105

0.77

%

9,06

1 1,

313,

250

0.78

%

Beng

kulu

33

,072

21

,099

,480

3.72

%

45,6

69

29,1

36,1

92

3.92

%

Lam

pung

18

,482

2,

741,

551

2.08

%

23,2

53

3,44

9,26

4 1.

99%

Ja

karta

13

8,56

4 16

,516

,472

15.5

8%

188,

036

22,4

13,4

07

16.1

2%

Wes

t Jav

a 14

2,76

4 3,

995,

686

16.0

5%

181,

630

5,08

3,46

9 15

.57%

C

entra

l Jav

a

84,6

10

2,70

9,34

6 9.

51%

11

8,40

5 3,

791,

515

10.1

5%

DI Y

ogya

karta

9,

864

3,15

9,24

2 1.

11%

12

,965

4,

152,

430

1.11

%

East

Jav

a

135,

753

3,90

2,78

3 15

.26%

17

7,27

4 5,

096,

476

15.2

0%

Bali

13,5

26

4,29

2,38

5 1.

52%

16

,510

5,

239,

337

1.42

%

Wes

t Nus

a Te

ngga

ra

7,54

9 1,

882,

891

0.85

%

11,9

37

2,97

7,35

7 1.

02%

Ea

st N

usa

Teng

gara

4,

868

1,23

1,69

4 0.

55%

6,

329

1,60

1,35

5 0.

54%

W

est K

alim

anta

n

14,6

35

3,62

7,73

5 1.

65%

17

,863

4,

427,

894

1.53

%

Cen

tral K

alim

anta

n

8,61

0 4,

636,

511

0.97

%

10,8

71

5,85

4,06

6 0.

93%

So

uth

Kalim

anta

n

12,2

45

4,10

1,84

8 1.

38%

17

,688

5,

925,

152

1.52

%

East

Kal

iman

tan

51

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20

,978

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5.79

%

72,1

78

29,3

98,9

70

6.19

%

Nor

th S

ulaw

esi

9,44

9 4,

696,

093

1.06

%

11,7

62

5,84

5,64

0 1.

01%

C

entra

l Sul

awes

i 6,

630

2,98

8,59

3 0.

75%

8,

240

3,71

4,33

0 0.

71%

So

uth

Sula

wes

i 21

,951

2,

723,

575

2.47

%

26,5

96

3,29

9,90

5 2.

28%

So

uthe

ast S

ulaw

esi

4,37

7 2,

403,

250

0.49

%

5,73

0 3,

146,

132

0.49

%

Mal

uku

5,22

6 4,

334,

990

0.59

%

4,53

1 3,

758,

485

0.39

%

Irian

Jay

a

19,0

53

8,57

8,82

3 2.

14%

20

,714

9,

326,

707

1.78

%

IND

ON

ESIA

95

5,75

3 4,

633,

626

100%

1,

290,

684

6,25

7,41

9 10

0%

Sour

ce:

Indo

nesi

an B

urea

u of

Sta

tistic

s, w

ww

.bps

.go.

id

Not

e:D

iscr

epan

cies

due

to ro

undi

ng

22

Tab

le 2

1. P

er C

apita

Pro

vinc

ial R

even

ues,

2001

Prov

ince

O

wn

sour

ce

reve

nue

Shar

e no

n-ta

x fr

om n

atur

al

reso

urce

s Sh

are

tax

DAU

200

1 +

cont

inge

ncy

Aceh

23

,000

27

6,00

0 28

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53

8,00

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orth

Sum

ater

a

31,0

00

6,00

0 27

,000

29

9,00

0 W

est S

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31,0

00

8,00

0 20

,000

44

2,00

0 R

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66,0

00

863,

000

88,0

00

479,

000

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bi

33,0

00

32,0

00

33,0

00

451,

000

Sout

h Su

mat

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22

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97

,000

24

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24

7,00

0 Be

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lu

22,0

00

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0 19

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49

4,00

0 La

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00

32,0

00

13,0

00

272,

000

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ka B

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00

25,0

00

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00

351,

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202,

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11,0

00

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92,0

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00

179,

000

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tral J

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27

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2,

000

12,0

00

266,

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00

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0 21

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2,00

0 33

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0 W

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usa

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16

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14,0

00

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t Kal

iman

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23

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10

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21

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42

1,00

0 C

entra

l Kal

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33

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10

2,00

0 52

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58

9,00

0 So

uth

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n

40,0

00

72,0

00

38,0

00

399,

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67

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1,

657,

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136,

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761,

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Nor

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00

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0 19

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i 38

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11

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54

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0 So

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23,0

00

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i 22

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000

14,0

00

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00

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0 14

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u 25

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315,

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48,0

00

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00

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Sour

ce:

MO

F B

udge

t Dep

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ent,

SIKD

, and

Sta

ff Es

timat

es

Hof

man

, Ber

t, Ka

i Kai

ser,

and

Sora

ya G

oga.

200

3. D

ecen

traliz

ing

Indo

nesi

a. T

he W

orld

Ban

k, J

akar

ta.

Not

e: F

igur

es ro

unde

d to

nea

rest

1,0

00

analisis kebijakan pendidikan ace suryadi

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