Transcript Document 7619001

Financing Education
in Indonesia
Presentation for International Conference on
Governance & Accountability
in Social Sector Decentralization
Intergovernmental Finance of Education
Thursday, 19th February 2004 (Session 5a)
Kai Kaiser, PRMPS
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Context
Diverse Archipelago
171,000 public primary schools / 1.4 million teachers
31,000 secondary schools / 0.68 million teachers
1997/8 Economic Crisis
2001 “Big Bang” Decentralization
400+ Districts
30 Provinces
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Challenges
Equity
Inter-regional
Quality Issues
Governance & Accountability
“Leakages”
Expenditure Assignments
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Pre-Decentralization
Financing Flows
Decentralized “Earmarked” Transfers
Recurrent Subsidies (SDOs)
Capital Grants (Inpres)
Deconcentrated Expenditures
Kanwil DIP/DIK-DAs
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Post-Decentralization
Funding
Decentralized Expenditures
Block Grant (DAU)
Revenue Sharing (Natural Resource/Other)
Own Revenues
Conditional Grant (DAK)
Central Expenditures
DIPs
Deconcentrated Agencies (Kanwil’s) Abolished
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Post-Decentralization
Multiple Flows
MoRA
MoE
Central Govt
Bappenas
DAU (APBD)
Provincial
Govt
DIP/DIK (APBN)
DIP/DIK (APBN)
DAU (APBD)
DBO
Scholarship
Local
Govt
Public schools
Madrasah
Source: WB Education Sector Review 2004
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Post-Decentralization:
Center and Regions Finance
Source: APBN/SIKD data (2001)
LG D e v e lo pm e nt
E xpe ndit ure s ( A P B D )
6%
C e nt ra l R o ut ine
E xpe ndit ure s ( A P B N )
12 %
C e nt ra l D e v e lo pm e nt
E xpe ndit ure s ( A P B N )
18 %
LG R o ut ine
E xpe ndit ure s ( A P B D )
60%
P ro v inc e R o ut ine
E xpe ndit ure s ( A P B D )
1%
P ro v inc e D e v e lo pm e nt
E xpe ndit ure s ( A P B D )
3%
Source: WB Education Sector Review 2004
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District Wage Pressures
versus Expenditure Levels
Local Wage Pressures
Wage Share versus PC Total Revenues
High Wage Share-High PC Revs
High Wage Share-Low PC Revs
Est. Share of Civil Servant Wages in Total Revenues/Fitted values
80
60
40
20
51.0% (median)
0
5
6
7
8
Per Capita Estimated Total Revenues, Log Transformation (2003 Figures + DAU 2004
9
Low Wage Shares-Low PC Revs
Low Wage Shares-High PC Revs
Source: Ministry of Finance (2003)
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Challenges for Equitable
Service Delivery
District/Provincial Funding
DAU Equalization
Design versus Political/Transitional Constraints
Decentralized Education Allocations
Local Preferences/Accountability
Minimum Standards/Obligatory Functions
Deconcentrated Expenditures
Equalization vis-à-vis Decentralized Expenditures
Parental Contribution
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Challenges for Financing
Instruments
Minimum Standards
Definition/Proliferation
Affordability
Implementability
Earmarked/Conditional Financing
DAK (Capital Grant versus Conditional Grant)
“Decentralizing” Deconcentrated Financing
Central Teachers
196K Central Teachers for Regions 2003/4
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Challenges of
Decentralization M&E
Central M&E Systems
Collapse as regions no longer have incentives
to report
Local Budget Reporting
APBD-SIKD
Central Budget Allocations
Limited Transparency
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Conclusion
Continued tensions between decentralized
and centralized financing models
Uncertainly about resource composition
and accountability at the facility level
Too early to determine decentralization
impacts on service delivery outcomes
Increased heterogeneity
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