Performance-based Public Management Reforms: Experience and Emerging Lessons from Service Delivery

Improvement in Indonesia

Derick W. Brinkerhoff

and

Anna Wetterberg

RTI International

DRAFT: NOT FOR CITATION

WITHOUT AUTHORS’ PERMISSION

Paper presented at the panel on

―Public sector reform in developing and transitional countries:

What have we learnt and where should we go?‖

International Research Society on Public Management

16th Annual Conference

University of Rome Tor Vergata

Rome, Italy

April 11-13, 2012

1

From both practical and theoretical perspectives, improved public sector performance has

been a major preoccupation of policymakers, managers, and analysts in countries around the

world. Performance improvement initiatives have a long history as elements of public sector

reform in industrialized countries, and a large literature has examined performance-based

reforms, measurement, and management (see, for example, Bouckaert 1992, Kettl et al. 2006).

Beyond the industrialized world, such reforms have been promoted by international donor

agencies both as remedies for weak public sector performance in developing countries (OECD

2005), and more recently as mechanisms to assure concrete results from development assistance

(Savedoff 2011).

Performance-based initiatives are commonly advocated as a remedy for service delivery

failures, including weaknesses in service quantity and quality, responsiveness, and

accountability. While there is enthusiasm in many quarters for such initiatives, definitions that

clarify their conceptual boundaries are often vague, and the empirical evidence base for their

effectiveness is mixed. This paper briefly reviews current thinking regarding service delivery

improvement, and identifies several pathways to improved performance. We explore how these

performance improvement pathways seek to increase service quantity and quality, raise

utilization and access, and improve provider responsiveness and accountability (Brinkerhoff

2005). We examine the pathways Indonesia, a country with a rich experience with public sector

reforms and service delivery improvement, has pursued. We then summarize the most recent

donor-funded initiative aimed at service delivery improvement, the Kinerja project. Indonesia’s

experience sheds particular light on the institutional and political complexities of performance-

based initiatives. We close with a discussion of the lessons and implications of the Indonesian

experience for service delivery performance improvement in other settings.

2

Diagnosing service provision problems Political science, public policy, and public administration discourses are replete with

diagnoses of public sector service provision problems and recommendations for solving them,

far too numerous and diverse to summarize here. All of these discourses are fundamentally

concerned with the nature of the relationships among politicians and policymakers, service

managers and providers, and citizens and service users. The classic politics-administration

dichotomy saw public managers and service providers as faithful translators of policies crafted

by politicians into programs and outputs to achieve policy objectives desired by voters. Over a

century of academic analysis, normative discussion, and empirical investigation has fed debates

on the validity and the reality of the dichotomy as representing an oversimplified and/or mythical

vision of public administration (see Svara 2001). According to some, its inherent principal-agent

model of mutual high trust led in practice to the rise of the administrative state, bloated

government, and unaccountable public sector employees.

The predominant perspective on these relationships today is most clearly represented in

the New Public Management (now no longer new, having emerged in the 1980s), which

proposes a view of public management and service delivery organizations as ―a chain of low-

trust principal-agent relationships…, a network of contracts linking incentives to performance‖

(Dunleavy and Hood 1994, 9). NPM embodies both an ideology that values limited government

and a practical reform agenda intended to transform public sector performance through the

application of market mechanisms (see, for example, Ferlie et al. 1996). NPM principles and

practices have been extensively prescribed and implemented as remedies for public sector

performance weaknesses in developing countries, both as accompaniments to IMF and World

Bank structural adjustment and as other donor-supported public sector reforms (see Batley and

Larbi 2004, Manning 2001, OECD 2005).

3

Directly targeting service delivery, the World Bank applied the principal-agent

framework to pro-poor service delivery in a widely cited report that elaborates an accountability

triangle connecting citizens/clients to politicians and policymakers, politicians/policymakers to

service providers, and service providers to citizens/clients (World Bank 2004). The three sides of

the accountability triangle represent interlocking and complementary principal-agent relations

that constitute a service delivery accountability chain. A direct service delivery chain between

citizens/clients and providers, where the former exercise power through transactions and

monitoring over the latter, constitutes the short accountability route. When the chain involves

state actors—politicians and policymakers respond to citizens/clients’ voice by designing and

implementing management and oversight systems to signal and control providers—this is the

long route to accountable service delivery. When these chains function effectively,

citizens/clients receive the services they want and need, and both providers and

politicians/policymakers are accountable and responsive. The report offers a review of service

delivery experience, exploring each principal-agent relationship, much of which applies NPM

approaches and tool.

Current pathways to improved service delivery reflect the legacy of NPM and the

predominant impact of the principal-agent perspective on diagnosing performance issues and

designing measures to addressing them. Today’s global economic crisis has renewed the drive

for public performance improvement and NPM-inspired reforms not just in the developing

world, but in industrialized countries as well. Our brief, and of necessity oversimplified, review

below highlights how this perspective and the accountability triangle shape pathways to

improved performance.

4

Pathways to improved service delivery Improved service delivery is the ultimate aim of the various pathways. However, defining

what constitutes service-delivery performance and measuring improvements are major

challenges. The dimensions of performance can be roughly divided into two categories: a)

features of the outputs of the service-delivery activity, and b) features related to the use of those

outputs and to the outcomes achieved. The former include: quantity, quality, cost, efficiency, and

effectiveness. The latter include: utilization rates, availability, access, responsiveness,

accountability, and distribution (e.g., equity and poverty-focus), to name the most common.

Performance metrics seek to identify appropriate and feasible measures for these performance

dimensions, which can vary considerably depending upon the type of service-delivery activity,

the difficulty of measurement, the availability of proxies, and the timeframe within which

performance assessment takes place (see, for example, Heinrich 2002, Kopczynski and

Lombardo 1999). Performance improvement and measurement also need to take account of

external factors beyond the control of the particular service-delivery activity (Camm and Stecher

2010). Such factors can be relatively straightforward, such as the availability of funding in a

given budget cycle; or they can be more complex and systemic, such as the extent of patronage

and elite power in state-society relations.

The pathways discussed here begin with decentralization, a key structural route to service

delivery improvement. We next consider pathways that employ mechanisms and procedural

tools intended to align the interests of principals and agents to better achieve desired

performance, on both the supply and demand sides. On the supply side, these comprise:

standard-setting, results-based management, performance-based payment, and increased

information flows and transparency. On the demand side, the participation pathway includes

tools and processes that engage citizens, and extends to empowered collective action and service

5

co-production. This latter pathway can include performance-based payment to service users

intended to stimulate demand, for example, in the form of vouchers.

Several caveats are in order. First, we make no claim that our list of pathways is

exhaustive. Second, real-world applications incorporate multiple pathways. Rarely is there

simply a single route to improved service delivery, although international donor assistance may

concentrate on one or another pathway more than others. Third, an important question, beyond

the scope of this paper, is which combinations of pathways work best and are cost-effective

under which circumstances to improve service delivery?

Decentralization Decentralization is a major pathway to improved service delivery, widely argued to

enable performance gains by moving government closer to the people it serves.1 In terms of the

principal-agent accountability triangle, decentralization creates additional subnational nodes of

state actors, and devolves service delivery to local entities (public, non-profit, or private) thereby

shortening the long route to accountability.2

Major analytic streams in the extensive literature focus on how decentralization improves

allocative efficiency through matching services with citizen preferences, increases service

production efficiency and cost recovery, and aligns resources with service delivery

responsibilities through various combinations of intergovernmental transfers and own-source

revenues (see, for example, the review in Birner and von Braun 2009). Related streams explore

decentralization’s impacts on service providers’ incentives for accountability, innovation, and

equitable distribution, and issues of local elite capture and of corruption (e.g., Bardhan and

Mookherjee 2000, Crook and Manor 1998, Dillinger 1994).

1 Decentralization can serve more purposes than just better service delivery; see Eaton et al. (2011).

2 Some definitions of decentralization include privatization as an explicit variant (see Rondinelli 1981).

6

Much analysis has addressed gaps in translating decentralization into practice, and has

identified contextual factors that constrain the achievement of decentralization’s theorized

benefits in developing countries. For example, Azfar et al. (2001) examined the preference

matching argument and found that public officials at the intermediate level (districts in Uganda

and provinces in the Philippines) showed no evidence of having better knowledge of the

preferences of local residents, and that local officials at lower levels of government (subcounties

in Uganda and municipalities in the Philippines) had only weak knowledge of what citizens

wanted. Devarajan et al. (2009) assess the negative effects of what they call ―partial

decentralization‖ on service delivery, where perverse incentives, capacity weaknesses, and

limited accountability are created when central government entities fail to transfer full

authorities, responsibilities, and resources to lower levels.

A subset of the decentralization path is granting autonomy to individual service

provision facilities. This path has been extensively pursued in health and education, where

hospital and school autonomy reforms have devolved responsibility, authority, and revenue

generation and expenditure. In some cases, this has meant privatization of public facilities.

Standard-setting The setting of service-delivery standards, translated into regulations and/or specified in

performance contracts, is one route to addressing a common problem with service delivery: lack

of clarity regarding the constituent elements of acceptable quality services. Poor quality connects

directly to underutilization of services and failure to achieve outcomes. The development of

minimum performance standards, or of so-called ―best practice‖ standards (i.e., benchmarking)

serves to establish clearer depictions of the elements of performance along with metrics.

Principals can use these to frame expectations and targets for agents, which can be incorporated

7

into administrative and/or legal requirements for service delivery and into specifications for

performance contracting. Standards become the metrics that create incentives for agents to

improve services (e.g., Rowan 1996).

Studies offer several caveats regarding this pathway to improved services. These include

the temptation for agents to select those service recipients most likely to contribute to achieving

the standards for which agents are held accountable (―creaming‖), and the difficulty in crafting

short-term measurable standards that are reliably associated with desired long-term outcomes

(e.g., Heckman et al. 2002). Such problems notwithstanding, in most developing countries

standard-setting is a commonly employed route to service delivery improvement, frequently

driven by planning and/or monitoring and evaluation systems, many of them donor-supported.

A common standard-setting item in the NPM toolkit is the citizen charter, a frequently

employed means of clarifying service delivery expectations and specifying standards. Charters

can be developed at various levels; for example, for sectoral ministries and departments, or for

individual facilities, such as schools or health clinics. In many developing countries, such

charters are posted in the public areas of ministries or facilities, thus contributing to the

information-flow and transparency pathway discussed below.

Results-based management This route to improved service delivery involves public organizational systems and

procedures that formally combine target-setting, budgeting that links targets to funding,

performance measurement and monitoring against targets, and accountability for results. Internal

to the organization, managers use the information generated by these systems and procedures to

make decisions that lead to improved performance. External to the organization, principals use

the information for purposes of oversight, accountability, and directives for reforms. In

8

industrialized countries, results-based management has a long history, beginning with such tools

as zero-based and performance-based budgeting, and a variety of legislatively mandated

accountability programs (see Dubnick and Frederickson 2011). NPM-inspired public sector

reforms in developing countries have tackled organizational change with the aim of injecting

performance-oriented management into the civil service, with mixed results (see Lodge and

Kalitowski 2007).

In South Africa, for example, where citizens have been frustrated by poor public service

delivery, the Zuma administration created a Ministry of Performance Monitoring and Evaluation

in 2009 to respond to the problem. The new ministry established a system that set policy goals

and measurable targets for sectoral ministries, and tracked their performance annually against the

targets. The targets served as the basis for performance agreements signed between ministers

and President Zuma. The terms of the agreements were not required to be made public, though

several ministers opted to do so (Friedman 2011).

Rwanda has pursued a similar results-based management pathway. Rebuilding service

delivery capacity of the state was a key objective of the government following the genocide. The

Kagame administration introduced performance-based agreements that reference a traditional

Rwandan rite where groups or individuals would make public commitments to particular actions

and then strive to live up to their pledges, with failure being associated with shame and dishonor.

This customary practice is called imihigo. Since 2006, mayors and President Kagame have

signed annual imihigo agreements that are tracked and publicly reported on quarterly, with an

annual ranking of districts (Brinkerhoff et al. 2009).

9

Performance-based payment NPM led to major attention to contracting as a means to increase performance and

accountability and to motivate agents to fulfill the objectives of their principals. This path to

service delivery performance improvement has also proven increasingly popular in developing

countries, where it has long been used in the infrastructure sectors. For services, donors have

supported experimentation with contractual mechanisms that link payment to the achievement of

specified service outputs and/or outcomes. These mechanisms are known variously as PBP

(performance-based payment), P4P (pay for performance), RBF (results-based financing), among

other labels.

PBP seeks to solve the principal-agent problems inherent in service delivery. By creating

positive incentives for performance, such schemes can more closely align the interests of agents

(service providers) with those of their principals. As Eichler et al. note regarding their use in the

health sector, ―performance-based payment establishes indicators of performance that make clear

what principals want and give agents financial incentives for achieving defined performance

targets‖ (2007, 3). The design of performance verification measures, which trigger the

distribution of rewards (monetary and/or other), aims to address the information asymmetry

problem.

PBP mechanisms vary in terms of: a) which entities are making payments and which are

receiving them, b) how performance targets are specified and the extent to which payment is

based on performance, and c) which entities are involved in monitoring and verification and how

those functions are carried out (see, for example, Eldridge and Palmer 2009). Within the public

sector, PBP can operate between different levels of government, for example, intergovernmental

transfers for service delivery purposes with funds releases contingent upon reaching specified

targets. A well known example from the US is in the education sector, where the No Child Left

10

Behind legislation mandates public schools to achieve improvements in student test scores or

risk losing federal funding. In the health sector, Rwanda experimented with a District Incentive

Fund that rewarded district governments with grants for achieving a combination of increased

capacity and service delivery targets (Brinkerhoff et al. 2009). PBP can take the form of

performance contracts between public sector entities (sometimes referred to as contracting in),

for instance between health financing agencies and facilities (see the examples in Eichler and

Levine 2009).

There are numerous examples of PBP mechanisms between the public sector and non-

state providers (contracting out) for health, education, infrastructure, and municipal services. The

extent to which performance targets constitute contractual elements in PBP mechanisms varies

considerably, as does the percentage of contract value placed at risk. Some schemes with local

NGO providers use bonus payments on top of a base level of grant funding, with pay-outs

triggered according to phased achievement of targets (see Eldridge and Palmer 2008, Eichler and

Levine 2009).

Arrangements for monitoring and verification of the achievement of performance targets

vary as well. Public audit agencies, contracting out to private audit entities, internal review

units, legislative review committees, professional associations and boards, citizen/community

and NGO monitors are all common means of tracking and verifying performance. These are

often found in combination. In principal-agent terms, they all share the common challenge of

seeking sufficient information from agents to assure that the intended performance that principals

want to achieve is realized. Without reliable and accurate verification of performance, the

benefits of PBP will not be realized.

11

Information flows and transparency The availability and dissemination of information regarding policies, programs, resource

allocations, and results relative to services are the core elements of another pathway to improved

service delivery. The good governance agenda prioritizes information flows and transparency as

hallmarks of increased accountability and improved governance (Brinkerhoff 2005). In terms of

governance, the state’s legal and institutional structures play a role both in creating and

supporting this pathway. These include laws and procedures that make information available

and transparent, such as freedom of information acts (FOIAs), so-called sunshine legislation that

mandates government to disseminate budget and program documents, and procedural

requirements for open hearings on matters of concern to citizens.

In terms of improved service delivery, expanded information flows address first the

technical dimensions of service delivery by generating the data and knowledge on need, demand,

quantity, quality, distribution, and outcomes and impacts required by policymakers, program

designers, and service providers. This pathway contributes to better service forecasting, resource

allocation, and utilization through mechanisms such as management information systems, results

reporting frameworks, and/or participatory planning and budgeting exercises. When applied to

service users, the provision of information, for example through targeted social marketing and

communication campaigns, can enhance service uptake and utilization rates.

Second, this pathway addresses the information asymmetry problem in principal-agent

interactions, which enables increased accountability and better incentives on the part of

providers. Expanded information availability and dissemination feed into performance

monitoring and the enforcement of standards, whether for contract purposes or for more general

oversight. For example, the information in citizen charters helps to clarify what service users can

expect from providers, and sets the benchmarks for judging performance. In Rwanda, local

12

governments hold Open House and Accountability days (Journées des Portes Ouvertes), where

local officials provide information to citizens, and citizens have a regular opportunity to question

them and become informed about district development plans and sectoral services (Brinkerhoff

et al. 2009). Information availability and dissemination are key to giving effect to the citizen

participation pathway.

Citizen participation This pathway concentrates on the demand-side of service delivery, incorporating voice

and demand aggregation (citizen satisfaction surveys), empowerment and collective action

(citizen/community monitoring), market power (e.g., vouchers), and service co-production.

Among the best-known examples is Tendler’s (1997) widely cited study of participatory health

service delivery in the Brazilian state of Ceará, where state health officials set and enforced the

standards for hiring and performance of community health workers (which avoided clientelism in

hiring), while establishing local structures and procedures that engaged local health service users

as active participants in assessing health worker performance. However, citizens’ ability to judge

performance can limit their contribution to motivating service providers. For example, Banerjee

et al. (2006), in a study in India, find that parents’ ability to assess the educational achievements

of their children was low.

Citizen report cards and user satisfaction surveys are another mechanism that can serve to

generate information on what kinds of services communities want, and what quality levels they

expect. When used as input to results-based management and/or performance contracting, such

citizen-based evaluations can provide incentives for responsive and accountable service delivery.

Citizen satisfaction is often taken at face value to directly approximate the objective quality of

services, using tools such as citizen report cards and user satisfaction surveys. Research has

13

shown, however, that perceptions of service quality are influenced by a range of factors,

including the overall quality of governance, prior expectations, how equitably services are made

available, and the type of service evaluated (Deichmann & Lall 2007, Van Ryzin 2007).

The extent to which citizens perceive their local governments to be transparent and

responsive to their needs can significantly influence their views on service delivery. In their

analysis of citizen responses to dissatisfaction, Lyons and Lowery (1989) show that service-

users’ with low levels of political efficacy – defined as feeling that one can influence

government and have officials care about one’s opinions – are significantly more likely to

respond to unsatisfactory services by disengaging with government (―neglect‖ in their model),

rather than actively expressing their dissatisfaction.

Another intervening factor is citizens’ prior experiences with services. Through

expectancy confirmation, the degree to which current outcomes exceed or fall short of those

expectations has been shown to influence current satisfaction (James 2009, Van Ryzin 2007). If

current service delivery exceeds expectations (positive disconfirmation), citizens’ satisfaction

will be higher than if the same objective quality were delivered in a context with raised

expectations. A study looking at satisfaction with services and trust in government in Iraq noted

the effects of citizens’ expectations, based on prior service experience, on satisfaction levels with

current services (Brinkerhoff et al. 2012).

Finally, the correlation between users’ satisfaction and objective service quality has been

shown to vary with the specific service under consideration. User satisfaction may therefore be a

more reliable measure of performance for some services than for others. In the United States,

empirical analysis has shown close correspondence between citizen satisfaction and objective

measures of urban sanitation services, such as street and public space maintenance (Van Ryzin

14

2007). In a study in India, Deichmann and Lall (2007) demonstrate that a generally positive

relationship holds between household satisfaction with water service and daily duration of water

availability in Bangalore. Israel (1987) offers an explanation of which services are more likely

to be accurately judged by users: those that have high degrees of specificity. He defines

specificity in terms of ―the degree to which it is possible to specify the objectives of a particular

[service delivery] activity, the methods for achieving them, and the ways of controlling

achievement‖ (1987, 48) along with the extent to which the results of the activity have

immediate, identifiable, and targeted effects on service users.

The use of community empowerment mechanisms is a well-recognized means to align

service delivery to local needs and preferences. Parents’ associations, health committees, and

community-based natural resources management arrangements bring communities into

partnership with public providers precisely for the purpose of assuring that services meet user

needs. The literature on state-society synergies for co-production of services highlights this

outcome, as well as the benefits for efficiency and effectiveness (see, for example, Evans 1996).

The empowerment aspect of these co-production partnerships emerges most strongly when the

information provision on needs and preferences that feeds into alignment is joined with oversight

and accountability.

For example, in the Philippines, a demonstration project on the island of Mindanao

established Quality Assurance Partnership Committees in local health facilities explicitly to

serve both service quality assurance and citizen empowerment functions (Brinkerhoff 2011). On

the service side, the QAPCs offered facilities feedback on client satisfaction. On the

empowerment side, the QAPCs aimed to channel community voice to enhance health service

provider responsiveness, oversight, and accountability. Through collaboration and consensus, the

15

QAPCs sought to provide review and problem-solving to identify actions to improve facility

services.

Such empowerment mechanisms, in the ideal, lead service providers to pay attention to

performance. They serve as sources of demand and capacity not just for efficient service

provision but also for performance that is accountable and responsive. Several constraints limit

whether citizens can, in practice, fulfill these functions. First is technical expertise; particularly

in situations where engaging with service providers calls for technical competence, citizens may

face information asymmetries and knowledge barriers. Second, there is some degree of role

conflict between citizens as co-producers of services in partnership with providers and as

accountability monitors.

Summary Our rapid review of pathways to improved service delivery has demonstrated the

hypothesized benefits of each pathway, noted the major constraints and limitations they face, and

provided some country examples. Table 1 offers a summary. The discussion also revealed the

connections among the pathways. The decentralization pathway shapes in many cases the

institutional and structural landscape upon which other pathways are pursued. Similarly,

information flows and transparency support the other pathways, as well as constituting a reform

route that is often taken up by reformers in its own right. We now turn to an exploration of

Indonesia’s experience with these pathways.

INSERT TABLE 1 HERE

Pathways experience in Indonesia When the Soeharto regime was swept from power in 1998 due to the combined effects of

the 1997-98 Asian financial crisis and widespread public dissatisfaction spearheaded by student

16

groups and civil society organizations, Indonesia entered a transition period of intense reform

(referred to as the era of reformasi ). The first two post-Suharto administrations, the Habibie and

Wahid governments, loosened controls on the press, paved the way for independence in East

Timor, initiated an ambitious program of decentralization, established special autonomy

packages for Aceh and Papua, began reforming the electoral system, and took important first

steps to reduce the role of the military in politics and the economy. Free and fair general

elections were held in 1999 and 2004. Reforms continued, though at a slower pace, under the

Sukarnoputri government (2001-2004), and subsequently under President Susilo Bambang

Yudhoyono, who won a decisive electoral victory in 2004, and was re-elected in 2009.

The international donor community mobilized to support Indonesia’s transition to

democracy and good governance. Public sector reform programs aimed to support the country’s

ambitious decentralization program, increase administrative efficiency and effectiveness, and

reorient the public administration toward responsiveness to its citizens. Numerous initiatives

targeted performance improvement in key sectors, such as health and education. The following

discussion reviews a selected set of these reforms.

Decentralization Indonesia embarked on a rapid decentralization program beginning in 1999. Through a

series of reforms, the bulk of authority for fiscal and legislative decisions, as well as service

delivery, were transferred to the district level.3 Decentralization has had a significant impact on

subnational public expenditure. The World Bank (2006) estimates that 40 percent of public

3 Subnational administrative levels of government in Indonesia include the propinsi (province), kabupaten/kota

(regency/municipality, both considered districts), and desa (village). Since 2004, the kecamatan (sub-district) has

been subsumed under the kabupaten, but this level retains important functions in some of the country’s largest

development programs, including the Program Nasional Pemberdayaan Masyarkat (PNPM, National Community

Empowerment Program) discussed below. See Rapp et al. (2006) for a comprehensive review of Indonesia’s

decentralization.

17

spending is currently the responsibility of subnational governments. As the majority of these

resources come from central transfers, the efficiency and effectiveness of the intergovernmental

transfer system are critical. While the central government has retained the potential to use budget

transfers as incentives for performance, these possible channels for influencing the quality and

orientation of service delivery at more local levels have not been used effectively (Buehler 2011,

Ferrazzi 2005, Lewis & Smoke 2011).

Fiscal incentives are weak, and their effectiveness is not maximized by national

policymakers. For example, general revenue allocations (Dana Alokasi Umum or DAU) cover

over a third of provincial budgets and two thirds of district budgets, on average, and even larger

proportions in some districts, as Table 2 shows. The size of the DAU is partly determined using

a fiscal equalization formula and partly calculated to cover the subnational wage bill, without

taking into account past years’ utilization or existing reserves. In spite of surpluses in many

districts, the central government has refrained from varying DAU allocations to encourage

districts to invest in service improvements (Lewis & Smoke 2011). The central government’s

coverage of the district wage bill4 also discourages districts from experimenting with different

models of service delivery, as overhauling staffing patterns and streamlining wage structures

would produce no gains to district budgets (Heywood & Choi 2010). The smaller specific

purpose grants (Dana Alokasi Khusus, or DAK) have been structured to include a matching grant

to encourage capital investment, but these funds have been shown to crowd out capital spending

from other sources, diluting their effect (Lewis and Smoke 2011).

INSERT TABLE 2 HERE

Further, the central government has not provided reliable information on the amounts and

timing of transfers. A recent study in Aceh (Morgan et al. 2012), confirmed that district

4Table 2 shows the proportion of the wage bill relative to the DAU in a selection of districts.

18

governments are not always aware of the amounts of central and provincial transfers they can

count on receiving, and during a given fiscal year, transfers are often delayed (World Bank

2006).

Because the central government imposes few controls on intergovernmental transfers,

local officials have wide leeway to decide on spending targets. In health, local discretion on

spending targets has resulted in some degree of sub-optimal resource allocation in terms of

health priorities. Spending does not always target the health needs of the poor, and local

parliamentarians have in some cases favored investment in visible infrastructure in support of

increased curative care rather than in prevention (Heywood & Choi 2010). In Aceh, such

spending patterns are reinforced by the power of well-off former members of the armed

resistance movement (GAM) who head construction firms to influence budgeting votes in local

parliaments, as well as by the desire of local politicians to be associated with visible results of

their budgeting decisions (Morgan et al. 2012).

After transfers are made, district use of sectoral budgets is also largely unmonitored. For

example, a study of health services in four districts found that no data were available on how

health budgets had been spent. Interviewed doctors reported that although budget allocations

had increased since decentralization, the promised funds had failed to materialize. The lack of

financial transparency and accountability was evident across the districts studied (Kristiansen &

Santoso 2006). A range of efforts are underway to increase the transparency of district budget

allocations, some involving citizen participation through participatory budgeting, budget analysis

software, and tools that clarify allocations to service providers (as discussed below regarding the

information transparency pathway).

19

Standard-setting The Indonesian legal framework for decentralization incorporates minimum

service standards (MSS). A year after the launch of its aggressive decentralization program in

1999, the central government introduced MSS for nine sectors: public works, health, education

and culture, agriculture, industry and trade, investment, environmental affairs, land affairs,

cooperatives and labor affairs. Because the MSS were ill-defined and complex, and the roles of

central and local agencies in their implementation conflicted, however, they were often ignored

by district service providers who found them overwhelming and confusing (Ferrazzi 2005,

World Bank 2008, 2010).

In spite of subsequent laws to clarify content and implementation (Law 32/2004 and

Government Regulation 65/2005) and to enhance the role of citizens in holding service providers

accountable (Law 25/2009), meeting MSS remains a challenge for service providers. Some of

the obstacles are linked to budget planning processes, which remain divorced from MSS (APiH

2008). For political reasons, the central government has also refrained from directing portions of

the DAU to meeting MSS, as the general purpose block grant has become popular with districts

(Ferrazzi 2005). Because of the poor definition of standards, districts rarely apply them as local

budget or program criteria. It is also unclear how progress on MSS is monitored, and what

incentives subnational governments have to implement them (Lewis and Smoke 2011). A

review of Indonesia’s progress towards Millennium Development Goals 4 (reducing child

mortality) and 5 (improving maternal health), found that ―the shortcomings of the health

information system cast serious doubt on the extent to which the MSS can effectively be used to

monitor and evaluate the performance of local governments‖ (Trisnantoro et al. 2009, 15). As a

combined result, inadequate funding prevents civil servants from delivering adequate and

appropriate services (Buehler 2011), local health officials are often unaware of MSS

20

requirements (Morgan et al. 2012), and higher-level offices have little information on where the

bottlenecks lie.

In the education sector, recent efforts have aimed to improve providers’ understanding of

MSS and the real costs of achieving them. After new standards were approved in 2010, the

Ministry of National Education calculated aggregate costs of achieving standards, but did not

break costs down for individual districts. Efforts are underway to help district officials calculate

the locally relevant cost to meet standards. A tool entitled, Calculation of Costs to Achieve

Minimum Service Standards and Universal Access (Penghitungan Biaya Pencapaian Standar

dan Akses Pendidikan, or PBPSAP), relies on data collected through the ministry’s management

information system. It provides analysis and guidance for local governments to determine policy

alternatives to meet standards and targets most efficiently. By September 2011, the PBPSAP had

been applied in 26 districts (RTI International 2011a).

Results-based management In Indonesia, the results-based management pathway has been pursued on several fronts.

Performance-based budgeting regulations for subnational governments were instituted in 2000

and 2002 to improve the links between planning, budgeting and levels of services (ADB 2004,

78). The results orientation is also reflected in efforts to improve accountability and transparency

of DAK funds by subdistricts. By shifting the central government’s orientation from financing

inputs to reimbursing for independently verified outputs, the World Bank’s Local Government

and Decentralization Project seeks to hold kabupaten governments responsible for meeting their

planned expenditures on irrigation, roads, and water and sanitation. It also puts more pressure on

all levels of government to complete necessary steps for timely DAK transfers, as delays could

jeopardize reimbursements. Transparency will be improved as reimbursement of DAK grants

21

are tied to completion of outputs verified by the State Finance and Development Auditing

Agency (Badan Pengawasan Keuangan dan Pembangunan, BPKP) (Ellis et al. 2011).

As the project has been operational only since January 2011, the results of the first

verification are not expected until April 2012. A critical element of the project is BPKP’s

independent verification, given the ubiquitous weak information systems that present challenges

to all pathways for improving service delivery and enhancing accountability of local

governments. Project data also indicate, however, that substantial bottlenecks persist in the

accountability of central agencies for providing promised funding. While 63 of 78 participating

kabupaten had passed budgets on time (by Feb. 28, 2011) to ensure receipt of DAK transfers by

March 31, only 44 of the participating districts received transfers by this deadline (World Bank

2011).

Performance-based payment In Indonesia, several experiments with performance-based payment schemes have

focused on the health sector. From 2000 to 2003, the Ministry of Health, the National Family

Planning Coordination Board (BKKBN), and the World Bank collaborated on a pilot program in

Central and East Java that gave poor women vouchers to encourage visits to private village

midwives for maternal and child health, and family planning services. Although a full and

rigorous evaluation was not feasible for the pilot, the available evidence indicated that 74% of

poor women in Central and East Java who received the vouchers (in 2000) used them for skilled

deliveries, compared to 26.1% of poor women who had skilled deliveries at baseline (December

1999) in Central Java (World Bank 2005, 5-6). The increased demand expressed through poor

women’s use of vouchers doubled the number of midwives in the pilot districts, with midwife

coverage increasing to 95% of villages (Hopkins & Nachuk 2006).

22

During its short implementation period, the voucher pilot demonstrated ―that demand-

side incentive payment mechanisms using government funding‖ are a logistically feasible way to

improve service delivery to the poor in Indonesia (World Bank 2005, 12, 15).5 However, the

pilot also highlighted the challenges of sustaining performance-based payment, given weak

district-level capacity for implementation and weak support at the provincial level (Brenzel et al.

2009). The pilot also raised concerns that the increased demand could exceed health system

capacity, resulting in overcrowded hospital delivery facilities (Gorter et al. 2003).

A more recent performance-based financing experiment was carried out by the Dutch

non-governmental organization, CORDAID, which has implemented similar programs in

Rwanda (Soeters et al. 2006). Working in two remote, predominantly poor districts on the island

of Flores, the project collaborated with provincial, district, and local health officials (as well as

with a Jakarta-based private firm) to identify a series of service quantity and quality indicators

(Schoffelen et al. 2011). Starting in 2009, local health facilities and district hospitals were given

financial rewards for increases in the number of new consultations, referrals, complete

immunizations, new and cured TB cases, safe deliveries, and treatment of low birth weights,

among other quantity indicators (fifteen for health facilities, eleven for district hospitals).

Quantity indicators were verified monthly, through inspections of a sample of health facility

records, and visits to patients to verify that treatment had taken place. Quality was gauged

quarterly, using an extensive list of indicators of hygiene and sanitation, regular consultation,

emergency service, delivery care, etc.

As of August 2010, project records showed that the number of patients accessing medical

services had increased in both districts. Compared to a June 2009 baseline survey, quality

5 According to World Bank (2005, 6-13), there has been additional experimentation with vouchers based on the pilot

in both health and education, the Bank’s Support for Poor and Disadvantaged Areas (SPADA) Project in Aceh and

Nias , and a USAID Aceh reconstruction project.

23

indicators in the project districts had increased by an average of 18%, compared to 1% in a

neighboring control district (Schoffelen et al. 2011). Although these results are impressive, it

should be noted that inspections of both quantity and quality were carried out by teams trained

and funded by CORDAID. Concerns about sustaining the performance-based incentives, given a

prior lack of record-keeping and supervision by district and provincial health authorities

(Schoffelen et al. 2011) are thus similar to those for the voucher pilot implemented through the

Safe Motherhood project.

Information flows and transparency Over the past decade, significant advances have been made in information transparency

and dissemination as a means of improving service delivery, particularly in combination with

citizen participation. While these achievements have often been limited to specific jurisdictions,

rather than changes across Indonesia, their importance should not be discounted in a context

where, until very recently, citizens had no information on, or say in, how services were delivered

and budgets spent (see, among others, Hopkins & Nachuk 2006, MacLaren et al. 2011, RTI

International 2009).

One prominent development has been the emerging budget analysis movement in

Indonesia, led by Sekretariat Nasional Forum Indonesia Untuk Transparansi Anggaran

(National Secretariat of the Indonesian Forum for Budget Transparency, abbreviated SekNas

FITRA). Since 2000, SekNas FITRA and its civil society and donor partners have worked to

analyze budget allocations, availability of budget information, and, in some cases,

correspondence between local budgets and citizen priorities (Antlöv & Wetterberg 2011). The

organization has developed budget analysis software that can be widely applied to gauge the pro-

poor orientation of district and provincial budgets (PSF Local Governance Team 2011), and has

24

complemented these efforts with collection of a range of indicators of the quality of district

governance (including indicators for accountability, participation, gender equality, and

transparency). This work has garnered widespread support6 and has been used as input to citizen

prioritization of budgets, benchmarking for district governments and as baselines for service

delivery interventions.7

Notably, it is not only citizens that require more information on the funding and

administrative arrangements for service delivery. After decentralization, the level of funding for

education increased at the district and school levels. However, local education officials did not

know what resources they could expect to receive as the information on transfers was dispersed

across a range of sectoral budgets and financing mechanisms, making planning difficult. To

make the decentralization of funds effective, local officials needed financial analysis tools to

clarify available resources. For instance, USAID’s Decentralized Basic Education program’s

District Education Financial Analysis (Analisa Keuangan Pendidikan Kabupaten/Kota, or

AKPK) condenses and reworks information from various government budget documents into a

transparent picture of where funding comes from and on what the money is spent. The analysis

helps to inform decision-making, set priorities among district development sectors and within the

education sector, and assess fairness of funding allocations (through per-student expenditure by

level of education). The information can also be applied to compare performance among

districts, match expenditures to key performance indicators, link results to inputs, and

disseminate clear information for use in public policy debate. AKPK has been used in more

6 See

http://www.seknasfitra.org/index.php?option=com_content&view=category&layout=blog&id=76&Itemid=151&lan

g=in for a current listing of projects and sponsors. 7 Budget analysis for the Kinerja-provided data presented in Table 2.

25

than 70 districts and has been transferred by USAID to other education projects (RTI

International 2010a).

Citizen participation Involving citizens in service improvements can take many forms. One way is to invite

users to assess services through satisfaction surveys and citizen report cards, but as noted above

satisfaction ratings can have tenuous relationships with objective indicators of service delivery,

as user satisfaction may be colored by a range of factors. In Indonesia, the correlation between

indicators of facility quality and satisfaction has been found to vary across services and is much

weaker for public schools than for public health facilities (Dasgupta et al. 2009, 27). In line with

these findings, Lewis and Pattinasarany (2008) find that objective indicators are significant

predictors of satisfaction with education in 89 districts, but that their overall contribution is small

relative to governance and control variables.8 In particular, transparency in local budget matters

and school administrations’ responsiveness to stated problems significantly improved

satisfaction, while awareness of corruption in the school administration reduced satisfaction (p.

16). Though objective indicators (such as student-teacher ratios and classroom conditions) were

also important to users’ perceptions, satisfaction was clearly colored by more general

experiences with local government.

Rather than asking only about satisfaction, surveys that ask citizens to identify

bottlenecks in service provision have been used to identify locally relevant areas for

improvements and benchmark provider performance. Antlöv and Wetterberg (2011) recount use

of such a survey in Gowa, South Sulawesi where the reform-minded mayor took up the results of

the 2008 survey to resolve problems with health service delivery and repeated the survey in

8 Both Dasgupta et al. (2009) and Lewis and Pattinasarany (2008) rely on the same data set (Governance and

Decentralization Survey 2, carried out in 2006), so similar findings are not unexpected.

26

subsequent years to measure progress against the established benchmarks. As Deichmann and

Lall (2007) note, setting such benchmarks can substantially improve the utility of satisfaction

surveys. However, the effectiveness of citizen-determined benchmarks is crucially reliant on the

willingness of local officials to use them to monitor and improve service quality.

Going beyond the intermittent surveys of user service assessments, one government

program, supported by the World Bank, involves communities directly in monitoring standards

(transparency) and rewards them for improvements in health and education indicators (results-

based management): PNPM Generasi (Program Nasional Pemberdayaan Masyarkat - Generasi

Sehat dan Cerdas, or National Community Empowerment Program – Healthy and Smart

Generation). PNPM Generasi is oriented around twelve indicators of maternal and child health9,

as well as educational behavior.10

The indicators were chosen because they were directly within

the community’s control, but also corresponded to stated national priorities. In the multi-year

program, communities are given first-year block grants that they can use for any purpose to

improve these indicators. To select interventions, they identify problems and bottlenecks and

consult with program facilitators, health and education service providers for information,

technical assistance, and coordination between villages for shared services and investments. In

subsequent years, villagers are awarded additional funding if they show performance

improvements on the twelve specified indicators.11

An evaluation has shown that performance incentives in the form of community block

grants can drive improvements in health service provision. Comparing performance with a

―non-incentivized‖ control group revealed that performance-based incentives led to statistically

9 Four prenatal care visits, iron tablets during pregnancy, professionally assisted delivery, two postnatal care visits,

complete childhood immunizations, monthly weight increases for infants, weight checks for children under five,

biannual vitamin A pills for children under five. 10

Primary and middle school enrollment, monthly primary and middle school attendance ≥ 85%. 11

For program details, see Olken et al. (2011) and http://pnpm-psf.ning.com/page/pnpm-rural .

27

significant, improved outcomes on the eight health indicators. Encouragingly, performance

improvements were larger in villages with low baselines for service delivery (Olken et al. 2011).

Many performance-based incentive programs reward providers directly for reaching

targets, and some rely on consumers to provide feedback on quality (often through satisfaction

surveys) (Meessen et al. 2011). Given the weaknesses of district financing mechanisms and

information systems, and the numerous influences on user satisfaction reports, the standard

model is unlikely to work effectively in Indonesia. PNPM Generasi circumvents these obstacles

by holding neither providers nor individual households’ (and their reports of service quality)

responsible for driving performance improvements. Instead, the program relies on villagers

collectively, represented by an eleven-member team and village facilitators, to work with

providers to improve delivery. Accountability is thus enforced through two sets of relationships.

First, the community holds providers to account for providing additional services that improve

the selected indicators. Second, the PNPM program holds the community accountable for

improvements, by only rewarding communities that show enhanced outcomes.

In spite of the program’s demonstrated effectiveness, it is not a model that can

necessarily be applied more generally as it is unlikely to work for all services. In fact, the PNPM

Generasi evaluation showed no effect on the selected education indicators (Olken et al. 2011).

The specific allocations of responsibility for performance improvements set up for PNPM

Generasi proved effective for improving selected health service targets, but the distinct

institutional constellations and output/outcome characteristics of other services will likely require

different arrangements.

In the case of Indonesian public schools, Pradhan et al. (2011) found that community

participation could significantly increase test scores through linking school committees with

28

village councils, and also in combination with democratic election of committees.12

These

authors posit that linkages improve outcomes by raising village leaders’ and community

members’ awareness of the school committee and engagement with students by ―engender[ing]

respect for the school committee in the eyes of the teachers, increas[ing] time household

members help their children with homework, and prompt[ing] greater effort by teachers, largely

spent outside the classroom‖(Pradhan et al. 2011, 4).

At the co-production end of the participation pathway’s spectrum, school committees that

incorporate parents and other community members are one avenue for citizens to directly

contribute to the production of improved educational services. Although the roles and

responsibilities of school committees were set out in a 2002 decree,13

these bodies have not taken

on the envisioned tasks of supporting, monitoring, advising, and mediating in schools, instead

only signing off on school officials’ decisions. One component of the Decentralized Basic

Education Project (DBE1) was to strengthen school committee involvement in planning and

management, with a long-term goal of improving educational outcomes. After school committee

training through DBE1, the proportion of school committee members reporting that they were

―active‖ in preparing and implementing school development plans rose to 84% by the end of the

project in July 2008 (compared to 13% on average at baseline in December 2005) (Heyward et

al. 2011, 8).14

At the same time as school committees became more active, financial information

was shared much more frequently; over 50% of schools disseminated financial reports in two or

12

In contrast, neither grants to, nor training for, school committees improved learning outcomes. 13

Keputusan Menteri Pendidikan Nasional (Decree of minister for national education) No. 044/8/2002) 14

Level of activity was evaluated based on participation in planning, community consultation, collating information,

problem-solving, program set-up, informing parents, and posting the plan for public viewing.

29

more venues and the quality of school development plans improved (RTI International 2010b,

26).15

As part of this process of engaging the school committees, community funding for school

activities increased substantially, from Rp 6.7 trillion in 2006/07 to Rp 8 trillion in 2008/09 at

DBE1 Cohort 2 schools. As community members became more aware of planned school

activities and the limited financial resources available, they contributed monetary and in-kind

support for service delivery by schools (RTI International 2010b, 51). In this way, citizens not

only participated in planning school programs and monitoring their performance, but directly

supported production of education services.

As these programs demonstrate, linking the pathways for citizen participation with

transparency through community monitoring (sometimes of specific standards) can improve

service delivery. However, the mechanisms chosen for specific forms of service delivery matter

greatly for effectiveness. Another concern is about sustainability of improvements. For example,

in the DBE1 project, analysis revealed that as school committee activities declined in intensity,

so did school officials’ efforts at transparency. However, the quality of school development

plans has been consistently high over the life of the project, which provides some encouragement

that introduced patterns of behavior may persist.

Addressing performance improvement: the Kinerja project Donor partners continue to work with Indonesian counterparts at both national and

subnational levels to pursue the pathways to improved service delivery discussed above.16

15

In 2005, 2% of schools had development plans that met quality expectations. By 2008, 98% of schools met these

criteria (RTI International 2010b, 24). 16

These include USAID’s Strengthening Integrity & Accountability Program II, AusAID’s Indonesia-Australia

Partnership for Decentralization, CIDA’s Better Approaches to Service Provision through Integrated Capacities in

Sulawesi, and GIZ’s Decentralization as Support for Good Governance. See PSF-Local Governance Team (2011)

for details.

30

Among the recent donor-funded projects to focus directly on service delivery performance is the

USAID-funded Kinerja project, the latest in a long series of USAID projects that have supported

local government and decentralization (see RTI International 2009). Currently in its second

year, Kinerja works in 20 districts (both kota and kabupaten) in four provinces (Aceh, East Java,

South Sulawesi, and West Kalimantan) to ―solidify the links between stimulation of demand for

good services through active civil society engagement and improved local government response‖

(RTI International 2010c, 2). The executive in each district (mayor/walikota or regent/bupati)

leads a consultative process to select a set of services to target for improvement. Service options

included health, education, and local economic development, as these are the most commonly

identified for improvement by Indonesian citizens (RTI International 2011b).

Within each sector, the project works with local governments, civil society, and service

providers on specific interventions, chosen for their alignment with national policy priorities

and/or demonstrated effectiveness. Kinerja also includes a series of cross-sectoral interventions

designed to create incentives for improved local service delivery performance, by giving citizens

a more effective voice in public service delivery, supporting performance management systems

in local governments, and increasing competition, through benchmarking, competitive awards,

and public information (RTI International 2011b).

As summarized in Table 3, Kinerja interventions focus on a selection of the pathways to

improved service delivery. The majority of interventions combine citizen participation,

information transparency and dissemination, with a subset also emphasizing standard-setting and

results-based management. The selection of pathways reflects the institutional orientation of the

project, with its focus on interactions between district government, citizens, and service

providers.

31

INSERT TABLE 3 HERE

One of the project’s challenges, however, is to work with district governments of varying

capacity and interest in improving service delivery. All projects face this hurdle, but it is

exacerbated by Kinerja’s design, which emphasizes quasi-experimental evaluation; project sites

were selected at random to enable rigorous comparisons of impact. While this approach has

methodological advantages, it has created tensions and delays as provincial government were

reluctant to agree to randomized selection of sites. The current quality of governance also varies

widely in the selected districts (see Annex). Further, some randomly selected districts have very

little interest in improving service delivery (for a host of local political and personal reasons),

which directly impedes project implementation. Other districts are interested, but are newly

established and have yet to develop the institutional capacity to absorb Kinerja’s packages of

interventions. These complications may increase the reliance on the citizen participation

pathway, in spite of the clear need to strengthen relations between district officials and service

providers.

It is also worth noting that Kinerja largely abstains from addressing the larger issue of

national-subnational relations that are critical to improving service delivery. Aside from the

MSS project component, strengthening the decentralization pathway is beyond the scope of the

already broad project. However, as the project progresses, we anticipate that analysis of the

Kinerja experience with the other service improvement pathways will yield useful lessons on

utility of the pathways as routes to better services and on the conditions under which these

pathways lead in that direction.

32

Implications This rapid overview of Indonesia’s experience with service delivery improvement

pathways reveals several emerging lessons regarding the questions of what has been learned

about public sector reform, and of where reformers should go, moving forward. We review these

according to the performance pathways previously discussed.

Decentralization: performance “superhighway?” First and foremost is the primacy of the decentralization pathway for service delivery.

Decentralization is perhaps primus inter pares relative to the other pathways in that it strongly

influences the prospects for success of the other pathways discussed here. Without decentralized

local governments, it is difficult to drive performance reforms top-down from the center when

the long route to accountable performance is stretched so far.

As the above discussion highlights, the problematic elements of Indonesia’s

decentralization, such as the lack of clarity on amounts and timing of intergovernmental

transfers, delineation of expectations and responsibilities for services, and information flows

detracts from its ability to contribute positively to better services. These problems also impede

the workings of other pathways. They are symptomatic of the disconnects in the principal-agent

relationships among various levels of government and service providers.

Numerous analyses have warned of the difficulties of ―getting it right‖ with

decentralization and the dangers of ―getting it wrong‖ (e.g. Crook and Manor 1998, Shah and

Thompson 2004, Devarajan et al. 2009). The ambitious nature of Indonesia’s decentralization

has inevitably led to some missteps along the way, although significant progress has been made.

However, to improve Indonesian services, more must be done to overcome financial,

administrative, and political hurdles resulting from the continuing lack of clarity over transfers,

33

responsibilities, and accountabilities between national and sub-national levels of government, as

well as with service providers.

Indonesia’s experience with the decentralization pathway demonstrates the tension that

Ahmad and Brosio (2009) note between local government autonomy and accountability for

service delivery in the public interest, which includes delivery in conformance with technical

standards. For example, the Indonesian state has a history of delivering free or highly subsidized

basic health services through a system of district-level hospitals, complemented by clinics at the

sub-district and village levels that focus on preventive care and maternal and child health. With

decentralization, however, these services have suffered substantial decline (World Bank 2008,

2010). As local officials allocate resources to other uses than health, those basic services are

starved into atrophy. Private providers (often state-employed healthcare workers supplementing

their meager salaries) have taken on an increasing share of care, particularly to better-off

Indonesians who can afford to pay higher fees for improved access and service (Heywood &

Choi 2010, Kristiansen & Santoso 2006). In the absence of policy clarity regarding national

priorities and standards, and effective oversight mechanisms, the service-delivery performance

enhancing potential of decentralization is at risk.

Standard-setting: promising but potential unfulfilled The basic lesson regarding the use of standards for service delivery performance is the

need to design them in formats that are understandable for the stakeholders that will employ

them and to communicate the standards effectively. The findings of several of the Indonesia

studies reviewed converge around the gaps in implementing MSS as an effective pathway to

service improvement. The use of standards depends critically upon information systems that

enable tracking of the extent to which they are applied. As the education sector experience with

34

the standards cost calculation tool (PBPSAP), the ability to assess costs associated with tracking

and meeting standards is important for feasibility and sustainability. Finally, principals need

both the capacity and the will to use performance results compared to standards as a criterion, for

example, for accreditation, certification, staff promotion, and/or resource allocation. Otherwise,

the extent to which this pathway can offer incentives to performance is limited. The Indonesia

case highlights the institutional and political constraints to employing this pathway (Ferrazzi

2005, Buehler 2011).

Results-based management and performance-based payment: islands of effectiveness

Indonesia has several examples of innovative experiments with results-based

management and PBP. The World Bank-supported pilot maternal and child health program that

provided vouchers for poor women to access skilled birth attendants, and the CORDAID PBP

experiment are just two cases where the benefits of performance incentives for service delivery

have been documented. The PNPM stands out as a donor-initiated innovation that has been

expanded to become a national program; Generasi is the latest innovation under that program.

One lesson is that it is indeed possible to align principal-agent relationships in ways that

contribute to better service delivery. Thus, Indonesia’s experience confirms what a variety of

analyses have found regarding results-based management and PBP (e.g., Eichler and Levine

2009, Brenzel et al. 2009).

However, a critical issue for broader impact and sustainability is how to move from these

―islands of effectiveness‖ to institutionalization (see Leonard 2010, McCourt and Bebbington

2007). PNPM Generasi’s results focus at the lowest local level (sub-district and village)

bypasses the weaker accountability relationships at higher levels of governments. While this is

an important element of the program’s effectiveness in the short term, it means that the

35

community-based model may not be sustainable in the future. Central government control of

the program may be politically difficult to justify in the long term, but unless accountabilities

between districts and both providers and communities are strengthened it is unlikely that the

performance incentives that PNPM Generasi puts in place will operate as intended. This points

to the importance of addressing capacity weaknesses at higher levels of government and of

recognizing the political economy dimension, which affects public sector reforms of all stripes

(see the concluding remarks below).

Information flows: input to the other pathways Measuring, monitoring, and enhancing performance all depend upon information. This

information needs to be available not simply to service providers and their principals, but to

service users as well. The selected examples from Indonesia of efforts to place more information

in the hands of local officials and citizens reinforce this lesson. Basic resource tracking and

budget analysis tools enable performance comparisons on dimensions such as planned versus

actual allocations, planned versus actual spending, distribution/equity of spending, and so on.

Such financial information, along with service delivery output/outcome data, feed into

benchmarking, target setting, and monitoring for MSS.

Citizen participation: institutionalizing the benefits, confronting barriers A lesson emerging from Indonesia regarding citizen participation in improving service

delivery performance is that ―one size does not fit all.‖ As the various studies summarized above

reveal, different approaches to performance-based management reforms are required for different

services, depending on citizen capacity to monitor, visibility of service delivery performance,

institutional arrangements for service delivery, and other factors (Dasgupta et al. 2009, Lewis

and Pattinasarany 2008, Olken et al. 2011). For example, in linking service users to providers, it

36

may make sense to differentiate in terms of where satisfaction surveys have been shown to

related to service quality: communities would monitor providers in partnership with sectoral

oversight agencies through committees for meeting health targets and similar services where

performance is poorly correlated with satisfaction; while satisfaction surveys would be employed

for policing and infrastructure, where correlation with performance is high. The PNPM Generasi

program is a particularly interesting example of community-based PBP, but as noted above, it

has largely bypassed local governments, calling into question its broader institutionalization as

part of a national policy to improve service delivery performance.

As many observers have remarked, Indonesia’s transition to democratic governance

remains a work in progress. Some significant advances have been achieved in engaging citizens

in the workings of the state; for example, in some jurisdictions re-energizing the often moribund

participatory local planning system of musrenbang, the establishment of local parliaments or

DPRDs, and incorporating citizen input into regulations and laws (Antlöv and Wetterberg 2011,

Antlöv et al. 2008, MacLaren et al. 2011). However, the Indonesian public administration

retains much of its pre-reformasi orientation that views citizen participation as unwelcome

intrusion into the affairs of government (e.g., ADB 2004, Buehler 2011). Thus despite evidence

that citizen participation can make a difference in service delivery improvement and in

increasing government responsiveness and accountability, moving from pilot experiments to

policy and routine practice is a long-term reform challenge.

Concluding remarks In spite of the progress with democratic reforms, Indonesia retains many core features of

a fundamentally neopatrimonial state, where entrenched political and economic elites exercise

control while operating within an ostensibly Weberian public administration. The case of

37

Indonesia is far from an anomaly. The international good governance agenda notwithstanding,

clientelism and patronage are integral to the societal pacts that support state-society relations in

most developing countries (Brinkerhoff and Goldsmith 2004). Various observers have noted the

enduring power in Indonesia of old ingrained patterns of elite-dominated patronage politics and

pervasive corruption (e.g., Blunt et al. 2012), and the shallow roots of reformist civil society and

the forces for change, which some have referred to as the problem of ―floating democrats‖

(Törnquist et al. 2003).

The effects of Indonesia’s political economy on progress and prospects for the pathways

to service delivery performance have been noted throughout the above discussion. The tendency

of the current donor fashion for methodologically rigorous evaluation of the outcomes of

performance-enhancing interventions has reinforced a focus on the technical components of the

interventions divorced from their institutional context. Yet, political economic factors strongly

condition whether the experiments supported by international donors will be institutionalized,

and indeed whether commitment to better performance is more than simply lip service to the

donor-driven good governance agenda. They are of major import for the future of the most

significant performance pathway: decentralization (see Lewis and Smoke 2011).

However, to argue for attention to political economy in considering the prospects for

pursuing the pathways to improved service delivery is not automatically to succumb to political

economic determinism. Within almost any institutional context, committed leaders can create

and/or expand space for change so that reform progress can be advanced (Andrews et al. 2010,

Leonard 2010). One study of local government performance reforms in Indonesia supports this

point; it found that the presence of management commitment was the strongest factor influencing

the use by local governments of performance indicators (Akbar 2010).

38

We conclude this overview of performance-based public management reforms not with

pessimism for Indonesia’s prospects, but with realism in recognition of the fact that as there are

forces in favor of political patronage and elite dominance, so there are also forces that continue

to push for change. For service delivery improvement, we see the most effective level to work at

being subnational, to support service provider incentive creation directly and to use citizen

participation to push for better monitoring and more responsiveness. Tackling information

systems and transparency to generate usable data to link to performance accountability can

contribute to the building blocks for service delivery improvement, while reinforcing citizen

capacity for voice and empowerment (e.g., SekNas FITRA). Projects like Kinerja are pursuing

these routes, and can contribute to building the kind of knowledge that will help to answer not

just the question of what works to enhance performance, but also to clarify under what

conditions service delivery performance can be improved and sustained.

References ADB (Asian Development Bank) (2004) Country governance assessment report: Republic of

Indonesia. Manila: ADB.

Ahmad E, Brosio G, (2009) Does decentralization enhance service delivery and poverty

reduction? In Ahmad E, Brosio G, eds. Does Decentralization Enhance Service Delivery

and Poverty Reduction? Cheltenham, UK: Edward Elgar Publishing, 1-21.

Akbar R, Pilcher R, Perrin B (2010) Performance measurement in Indonesia: the case of local

government. Paper presented at Accounting and Finance Association of Australia and

New Zealand, Annual Conference, Christchurch, NZ, July 4-6.

Andrews M, McConnell J, Wescott A (2010) Development as leadership-led change: a report for

the Global Leadership Initiative. Washington, DC: World Bank.

Antlöv H, Wetterberg A (2011) Citizen engagement, deliberative spaces and the consolidation of

a post-authoritarian democracy: the case of Indonesia. ICLD Working Paper. Visby,

Sweden: Swedish International Center for Local Democracy.

Antlöv H, Brinkerhoff DW, Rapp E (2010) Civil society capacity building for democratic

reform: experience and lessons from Indonesia. Voluntas: International Journal of

Voluntary and Nonprofit Organizations 21(3): 417-439.

APiH (2008) Aceh Partnerships in Health summary report of health finance study (Phase 1 and

2). Melbourne, Australia: Nossal Institute for Global Health.

39

Azfar O, Kahkonen S, Meagher P (2001) Conditions for effective decentralized governance: a

synthesis of research findings. College Park: University of Maryland, IRIS Center,

Working Paper No. 256, March.

Banerjee A, Banerji R, Duflo E, Glennerster R, Khemani S (2006) Can information campaigns

spark local participation and improve outcomes? A study of primary education in Uttar

Pradesh, India. Washington, DC: World Bank, Policy Research Working Paper No. 3967.

Bardhan P and Mookherjee D (2000) Relative capture of government at local and national levels.

American Economic Review 90(2): 135-139.

Batley R, Larbi G (2004) The Changing Role of Government: The Reform of Public Services in

Developing Countries. Basingstoke, UK: Palgrave Macmillan.

Birner R, von Braun J (2009) Decentralization and public service provision--a framework for

pro-poor institutional design. In Ahmad E, Brosio G, eds. Does Decentralization

Enhance Service Delivery and Poverty Reduction? Cheltenham, UK: Edward Elgar

Publishing, 287-316.

Blunt P, Turner M, Lindroth H (2012) Patronage's progress in post-Soeharto Indonesia. Public

Administration and Development 32(1): 64-82.

Bouckaert G (1992) Public productivity in retrospective. In Holzer M, ed. The Public

Productivity Handbook. New York: Marcel Dekker, 5-46.

Brenzel L, Measham A, Naimoli J, Batson A, Bredenkamp C, Skolnik R (2009) Taking stock:

World Bank experience with results-based financing (RBF) for health. Washington, DC:

World Bank.

Brinkerhoff DW (2011) Community engagement in facility-based quality improvement in the

Philippines: lessons for service delivery and governance. Washington, DC: U.S. Agency

for International Development, Health Systems 20/20, Policy Brief, December.

Brinkerhoff DW (2005) Accountability and good governance: concepts and issues. In Huque AS,

Zafarullah H, eds. International Development and Governance. New York: CRC Press,

269-289.

Brinkerhoff DW, Goldsmith AG (2004) Good governance, clientelism and patrimonialism: new

perspectives on old problems. International Public Management Journal 7(2):163-185.

Brinkerhoff DW, Fort C, Stratton S (2009) Good governance and health: assessing progress in

Rwanda. Kigali: US Agency for International Development, Twubakane Decentralization

and Health Program, April.

Brinkerhoff DW, Wetterberg A, Dunn S (2012) Service delivery and legitimacy in fragile and

conflict-affected states: evidence from water services in Iraq. Public Management Review

14(2): 273-293.

Buehler M (2011) Indonesia's Law on Public Services: changing state-society relations or

continuing politics as usual? Bulletin of Indonesian Economic Studies 47(1): 65-86.

Camm F, Stecher BM (2010) Analyzing the operation of performance-based accountability

systems for public services. Santa Monica, CA: RAND Corporation, Technical Report.

Crook RC and Manor J (1998) Democracy and Decentralization in South Asia and West Africa:

Participation, Accountability and Performance. Cambridge, UK: Cambridge University

Press.

Dasgupta B, Narayan A, Skoufias E, Bank W (2009) Measuring the quality of education and

health services: the use of perception data from Indonesia. Washington, DC: World Bank,

Policy Research Working Paper No. 5033.

40

Deichman U, Lall SV (2007) Citizen feedback and delivery of urban services. World

Development 35(4): 649-662.

Devarajan S, Khemani S, Shah S (2009) The politics of partial decentralization. In Ahmad E,

Brosio G, eds. Does Decentralization Enhance Service Delivery and Poverty Reduction?

Cheltenham, UK: Edward Elgar Publishing, 102-121.

Dillinger W (1994) Decentralization and its implications for service delivery. Washington, DC:

World Bank and United Nations Development Programme, Urban Management

Programme.

Dubnick MJ, Frederickson HG (2011) Public accountability: performance measurement, the

extended state, and the search for trust. Washington, DC: National Academy of Public

Administration and the Charles F. Kettering Foundation.

Dunleavy P, Hood C (1994) From old public administration to new public management. Public

Management and Money 14(3): 9-16.

Eaton K, Kaiser K, Smoke PJ (2011) The political economy of decentralization reforms.

Washington, DC: World Bank Publications.

Eichler R, Auxila P, Antoine U, Desmangles B (2007) Performance-based incentives for health:

six years of results from supply-side programs in Haiti. Washington, DC: Center for

Global Development, Working Paper No. 121, April.

Eichler R, Levine R, eds. (2009) Performance Incentives for Global Health: Potential and

Pitfalls. Washington, DC: Center for Global Development.

Eldridge C, Palmer N (2009) Performance-based payment: some reflections on the discourse,

evidence and unanswered questions. Health Policy and Planning 24: 160-166.

Ellis P, Mandri-Perrott C, Tineo L (2011) Strengthening fiscal transfers in Indonesia using an

output-based approach. Washington, DC: World Bank, OBApproaches, Vol. 40.

Evans P (1996) Government action, social capital and development: reviewing the evidence on

synergy. World Development 24(6): 1119-1132.

Ferlie E, Ashburner L, Fitzgerald L, Pettigrew A (1996) The New Public Management in Action.

Oxford, UK: Oxford University Press.

Ferrazzi G (2005) Obligatory functions and minimum service standards for Indonesian regional

government: searching for a model. Public Administration and Development 25(3): 227-

238.

Friedman J (2011) Sticking to the numbers: performance monitoring in South Africa, 2009-2011.

Princeton, NJ: Princeton University, Woodrow Wilson School of Public and

International Affairs and Bobst Center for Peace and Justice, Innovations for Successful

Societies, Case Study, August, www.princeton.edu/successfulsocieties.

Gorter A, Sandiford P, Rojas Z, Salvetto M (2003) Competitive voucher schemes for health.

Managua, Nicaragua: Central American Institute for Health (ICAS).

Heckman JJ, Heinrich C, Smith J (2002) The performance of performance standards. Journal of

Human Resources 37(4): 778-811.

Heinrich CJ (2002) Outcomes-based performance management in the public sector: implications

for government accountability and effectiveness. Public Administration Review 62(6):

712-726.

Heyward M, Cannon RA, Sarjono (2011) Implementing school-based management in Indonesia.

Research Triangle Park, NC: RTI Press, Research Report.

Heywood P, Choi Y (2010) Health system performance at the district level in Indonesia after

decentralization. BMC International Health and Human Rights 10(3).

41

Hopkins SL, Nachuk S (2006) Making services work for the poor: a synthesis of nine case

studies from Indonesia. Jakarta: World Bank, March.

Israel A (1987) Institutional Development: Incentives to Performance. Baltimore, MD: Johns

Hopkins University Press, for the World Bank.

James O (2009) Evaluating the expectations disconfirmation and expectations anchoring

approaches to citizen satisfaction with local public services. Journal of Public

Administration Research and Theory 19(1): 107-123.

Kettl DF, Fanaras W, Lieb J, and Michael E (2006) Managing for Performance: A Report on

Strategies for Improving the Results of Government. Washington, DC: Brookings

Institution Press.

Kopczynski M, Lombardo M (1999) Comparative performance measurement: insights and

lessons learned from a consortium effort. Public Administration Review 59(2): 124-134.

KPPOD (Regional Autonomy Watch) and Asia Foundation (2012) 2012 local economic

governance survey. Jakarta: Asia Foundation and KPPOD.

Kristiansen S, Santoso P (2006) Surviving decentralization? Impacts of regional autonomy on

health service provision in Indonesia. Health Policy 77(3): 247-259.

Leonard DK (2010) "Pockets" of effective agencies in weak governance states: where are they

likely and why does it matter? Public Administration and Development 30(2): 91-101.

Lewis BD, Pattinasarany D (2008) Determining citizen satisfaction with local public education

in Indonesia: the significance of actual service quality and governance conditions.

Jakarta: World Bank, Decentralization Support Facility.

Lewis BD, Smoke P (2011) Incentives and other mechanisms for achieving better local service

delivery: international experience and potential relevance for Indonesia. Paper presented

at the International Conference on Fiscal Decentralization in Indonesia a decade after the

Big Bang: Indonesian and International Perspectives on Best Practice for Fiscal

Decentralization and its Impact on Economic Development and Social Welfare. Ministry

of Finance, Jakarta, September 13-14.

Lodge G, Kalitowski S (2007) Innovations in government: international perspectives on civil

service reform. London: Institute for Public Policy Research.

Lyons WE, Lowery D (1989) Citizen responses to dissatisfaction in urban communities: a partial

test of a general model. Journal of Politics 51(4): 841-869.

MacLaren L, Putra AS, Rahman E (2011) How civil society organizations work politically to

promote pro-poor policies in decentralized Indonesian cities. Occasional Paper No. 6.

Jakarta: The Asia Foundation.

Manning N (2001) The legacy of the New Public Management in developing countries.

International Review of Administrative Sciences 67: 297-312.

McCourt W, Bebbington A (2007) Introduction: a framework for understanding development

success. In Bebbington A, McCourt W, eds. Development Success: Statecraft in the

South. Basingstoke, UK: Palgrave Macmillan, 1-29.

Meessen B, Soucat A, Sekabaraga C (2011) Performance-based financing: just a donor fad or a

catalyst towards comprehensive health-care reform? Bulletin of the World Health

Organization 89(2): 153-156.

Morgan L, Brinkerhoff DW, Najib M (2012) Strengthening social accountability in the health

sector: performance-based incentives in Aceh, Indonesia. Washington, DC: US Agency

for International Development, Health Systems 20/20 Project.

42

OECD (Organisation for Economic Co-operation and Development) (2005) Modernising

Government: The Way Forward. Paris: OECD.

Olken BA, Onishi J, Wong S (2011) Should aid reward performance? Evidence from a field

experiment on health and education in Indonesia. Washington, DC: World Bank.

Pradhan M, Suryadarma D, Beatty A et al. (2011) Improving education quality through

enhancing community participation: results from a randomized field experiment in

Indonesia. Policy Research Working Paper No. 5795. Washington, DC: World Bank,

September.

PSF-Local Governance Team (2011) Social accountability and community-based monitoring for

improved public service delivery. Technical Discussion Note No. 2. Jakarta: World Bank,

PNPM Support Facility, September.

Rapp E, Ferrazzi G, Eckhart S, Kluysens J, Feulner F (2006) Decentralization 2006: stocktaking

on Indonesia’s recent decentralization reforms. Main Report. Jakarta: Democratic Reform

Support Program, for the Donor Working Group on Decentralization, August.

Rondinelli D (1981) Government decentralization in comparative perspective: theory and

practice in developing countries. International Review of Administrative Sciences 47(2):

133-145.

Rowan B (1996) Standards as incentives for instructional reform. In Fuhrman S, O'Day JA, eds.

Rewards and Reform: Creating Educational Incentives That Work. San Francisco, CA:

Jossey-Bass, 195-225.

RTI International (2009) Final report: Local Governance Support Program, Contract No. 497-M-

00-05-0017-00. Research Triangle Park, NC: RTI International.

RTI International (2010a) Good practice in implementing Indonesian decentralized basic

education policies: Improved Quality of Decentralized Basic Education Program. Jakarta:

RTI International.

RTI International (2010b) Implementing school-based management in Indonesian: the DBE1

experience. Jakarta: RTI International.

RTI International (2010c) Kinerja Program annual work plan for year 1: October 1, 2010-

September 30, 2011. Jakarta: RTI International.

RTI International (2011a) Evaluation of DBE1 district interventions. The DBE1 experience:

2005-2011. Improved quality of Decentralized Basic Education Program. Jakarta: RTI

International.

RTI International (2011b) Kinerja annual work plan year 2: October 2011-September 2012.

Jakarta: RTI International.

Savedoff WD (2011) Incentive proliferation? Making sense of a new wave of development

programs. Center for Global Development, Washington, DC, August.

SekNas FITRA (2012) 2011 local budget index for 20 districts. Jakarta: Kinerja Program.

Schoffelen EPLM, Haryoko, Tacoy JPM (2011) Performance based financing can help to

increase coverage in remote areas. The Hague: CORDAID.

Soeters R, Habineza C, Peerenboom PB (2006) Performance-based financing and changing the

district health system: experience from Rwanda. Bulletin of the World Health

Organization 84(11): 884-889.

Shah A, Thompson T (2004) Implementing decentralized local governance: a treacherous road

with potholes, detours, and road closures. Washington, DC: World Bank, Policy Research

Working Paper No. 3353, June.

43

Svara JH (2001) The myth of the dichotomy: complementarity of politics and administration in

the past and future of public administration. Public Administration Review 61(2): 176-

183.

Tendler J (1997) Good Government in the Tropics. Baltimore, MD: Johns Hopkins University

Press.

Törnquist O, Prasetyo SA, Priyono AE (2003) Floating democrats. In Prasetyo SA, Priyono AE,

Törnquist O, eds. Indonesia’s Post-Soeharto Democracy Movement. Jakarta: Center for

Democracy and Human Rights Studies (DEMOS), 3-49.

Trisnantoro L, Kosen S, Soto EJ, Firth S, Hollingsworth S (2009) Indonesia: developing an

investment case for financing equitable progress towards MDGs 4 and 5 in the Asia

Pacific region. Phase 1: mapping report. Brisbane: University of Queensland.

Van Ryzin GG (2007) Pieces of a puzzle: linking government performance, citizen satisfaction,

and trust. Public Performance and Management Review 30(4): 521-535.

World Bank (2004) Making services work for poor people. World Development Report.

Washington, DC: World Bank.

World Bank (2005) Implementation completion report (SCL-42070 TF-29455) on a loan in the

amount of US$42.5 million to the Republic of Indonesia for a safe motherhood project.

Washington, DC: World Bank.

World Bank (2006) Making the new Indonesia work for the poor. Washington, DC: World Bank,

Poverty Reduction and Economic Management Sector Unit, East Asia and Pacific

Region.

World Bank (2008) Health public expenditure review. Jakarta: World Bank.

World Bank (2010) Indonesia maternal health assessment. Jakarta: World Bank.

World Bank (2011) Implementation status and results: Indonesia local government and

decentralization project (P111577) (Vol. IS1478). Washington, DC: World Bank.

44

Table 1. Pathways to service delivery improvement

Pathway Theorized service delivery

improvement impacts

Constraints and risks

Decentralization Increases accountability &

responsiveness (shortens long route

of service accountability)

Matches services to users’ needs &

preferences

Increases allocative & technical

efficiency of service delivery

Creates positive incentives for

performance

Partial decentralization creates

perverse incentives

Unclear delegation of

responsibilities, authorities &

resources generates conflicts,

ambiguities & service gaps

Subnational preferences may

undermine national priorities

Requires local capacity

Local elite capture

Standard-setting Clarifies performance

quantity/quality

Reinforces professionalism

Establishes metrics & measurement

criteria

Provides input to RBM & PBP

systems

Dependent upon accurate

specification of standards

May confront measurement

problems

Utility connected to effective

communication and dissemination

Professional bodies may use

standards to exclude new entrants,

& self-protection

Results-based

management

(RBM)

Integrates planning, budgeting,

performance monitoring

Creates accountability incentives for

results

Connects managerial effort to

service outcomes

Technical constraints on specifying

results & tasks, determining and

costing task components, observing

& measuring performance

Multi-actor networks muddy

accountability & encourage blame-

shifting

May create incentives for risk

aversion and pro forma fulfillment

of targets

Performance-

based payment

(PBP)

Creates financial incentives for

service delivery performance

Clarifies accountability for service

provision

Increases resource utilization

efficiency & effectiveness

Empowers consumers

Dependent upon effective target-

setting, measurement & verification

Some aspects of performance are

hard to specify & measure

Potentially vulnerable to provider

―gaming‖ (e.g., adverse selection,

moral hazard)

Requires management capacity to

operate effectively

Information

flows and

transparency

Mitigates knowledge/information

asymmetries among policymakers,

providers & service users

Enables accountability

May be susceptible to manipulation,

misinterpretation & misuse

Political & bureaucratic barriers can

impede flows, undermine

45

Pathway Theorized service delivery

improvement impacts

Constraints and risks

Provides empirical base for RBM

and PBP; evidence-based decision-

making

Enables citizen participation

transparency

Capacity gaps may limit collection,

analysis, dissemination

Citizen

participation:

Satisfaction

surveys

Community

oversight

Service co-

production

Communicates user needs &

demands to providers &

policymakers

Enhances preference matching

Increases accountability

Empowers citizens & communities

Promotes service delivery synergies

& mobilization of multiple sources

of expertise/knowledge

Accuracy of citizen surveys

influenced by past experience,

expectations, & observability of

performance

Citizen/community capacity to

monitor & co-produce may be

limited, variable

Better-off citizens/communities

may benefit more or dominate

Power/social distance may

discourage citizen input & provider

acceptance

Political & bureaucratic barriers

may limit participation

opportunities & motivations

Source: Authors

46

Table 2. Local budget analysis for 20 districts (included in Kinerja project)

Wage bill

Dana

Bagi Hasil

Dana

Alokasi

Umum

Dana

Alokasi

Khusus

Special

Auto-

nomy

Adjust-

ment

Fund

TOTAL

2010

Allocation

as portion

of DAU

2010

revenues

2009

expenditures

2009

pro-poor budget

orientation (if

LBA data become

available)

Kab.  Aceh  Singkil 12 73 12 0 4 100 77% 100% 96%

Kab.  Aceh  Tenggara 8 70 8 0 15 100 83% n.a. n.a.

Kab.  Bener  Meriah 10 67 8 0 15 100 77% 88% 89%

Kab.  Simeulue 11 76 12 0 2 100 75% n.a. n.a.

Kota  Banda  Aceh 11 69 4 0 16 100 120% 100% 97%

Kab.  Tulungagung 8 78 6 0 8 100 112% 101% 94%

Kab.  Jember 7 82 7 0 4 100 101% 101% 92%

Kab.  Bondowoso 7 76 9 0 8 100 101% 104% 92%

Kab.  Probolinggo 9 83 6 0 2 100 94% 105% 93%

Kota  Probolinggo 11 72 5 0 13 100 96% 102% 91%

Kab.  Bengkayang 8 79 10 0 3 100 74% n.a. n.a.

Kab.  Sambas 6 73 9 0 11 100 87% 101% 97%

Kab.  Sekadau 12 63 9 0 16 100 54% n.a. n.a.

Kab.  Melawi 10 76 8 0 6 100 65% 98% 94%

Kota  Singkawang 6 71 6 0 16 100 87% 99% 92%

Kab.  Bulukumba 6 73 9 0 12 100 95% 93% 87%

Kab.  Barru 7 69 8 0 16 100 84% 97% 80%

Kab.  Luwu 6 73 10 0 12 100 83% 100% 94%

Kab.  Luwu  Utara 8 75 9 0 9 100 75% 98% 93%

Kota  Makassar 16 69 4 0 10 100 127% 100% 90%

Average for 20 districts 9 73 8 0 10 100 88% 79% 74%

Ave. all Kabupaten 20 66 8 0 6 100

Ave. all Kota 24 64 4 0 7 100

Ave. all districts 21 66 7 0 6 100

Ave. all provinces 46 35 1 16 2 100

Per cent contribution of components to total funds Ratio of actual vs. planned

Note: Dana Bagi Hasil are shared tax revenues, a portion of which are returned to the source.

Source: KPPOD/TAF (2012)

47

Table 3. Summary of Kinerja Year 2 project components and performance pathways

Sector Project component Performance Pathway(s)

Health 1. Strengthening district health policies through

multi-stakeholder input and citizen advocacy

2. Revitalization of independent intermediary

institutions (health center boards and councils)

for service monitoring, citizen advocacy, and

mediation

3. Enhance health center management through

trainings for midwives and traditional birth

attendants, improved data collection and

dissemination, and increased customer

orientation (peer learning, citizen satisfaction

surveys)

4. Promoting safe delivery, immediate and

exclusive breastfeeding through provider

training, broad information dissemination

(breastfeeding ambassadors, local curricula,

religious and community leaders), formal

agreements with CSOs

Citizen participation

Information flows

and transparency

Results-based

management

Education 1. School-based management through training for

service providers and local stakeholders in

participatory school development plans,

transparent financial reporting, monitoring

through school service charters

2. School unit operational cost analysis to calculate

financial gaps for meeting education MSS and

budgeting using relevant data, and develop

supporting regulations

3. Proportional teacher distribution through

gathering and analyzing information on current

distributions, resulting in recommended

reallocations and teacher incentives/disincentives

to be piloted with community oversight

Citizen participation

Information flows

and transparency

Standard-setting

Performance-based

payment

Business-

enabling

environment

1. Participatory assessment and public-private

dialogue of business licensing and its impact on

local economy

2. Review of current business licensing mechanism

as basis for one-stop shop for business licensing

and identification and implementation of

necessary reforms

Information flows

and transparency

Citizen participation

Standard-setting

48

Sector Project component Performance Pathway(s)

Cross-

sectoral Public service delivery awards by regional

newspapers Information flows

and transparency

Cross-

sectoral Improve provision of service provider data by

working with national NGOs to support

local/national governments to provide information

and facilitate information requests from citizens for

use in advocating for improved service delivery

Information flows

and transparency

Citizen participation

Cross-

sectoral Budget analysis to measure levels of governance

throughout the budget cycle and identify whether

local budgets are pro-poor and gender responsive

compared to other districts/municipalities (see Table

1)

Information flows

and transparency

Results-based

management

Decentralization

Cross-

sectoral District-produced service standard application

guidelines through working with districts to

prioritize among many possible standards that apply,

giving clear directions to service management and

implementing units on how to proceed

Standard-setting

Results-based

management

Cross-

sectoral

(health &

education)

Complaints surveys through local stakeholders’

initiation of survey and advocacy of

recommendations in coordination with local

governments

Citizen participation

Information flows

and transparency

Cross-

sectoral

(health &

education)

Support to national policy on MSS through local

governments’ and project partners’ feedback to

channel implementation experiences into national

policy formulation

Standard-setting

Information flows

and transparency

Source: Authors

49

Annex. Governance index values for 20 districts

Source: KPPOD/TAF (2012)