Professional Documents
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29506
INDONESIA
EDUCATION IN INDONESIA:
MANAGING THE TRANSITION TO
DECENTRALIZATION
(In Three Volumes) Volume 1
Page
FOREWORD viii
ACKNOWLEDGEMENTS ix
EXECUTIVE SUMMARY x
ii
TABLES IN TEXT
FIGURES IN TEXT
Figure 1.1 Gross and net enrollment rates in East Asian countries, 2000 1
Figure 1.2 Highest grade completed by 16-18 year olds, by income quintile 3
Figure 2.1 Flows of governance and managerial accountability in
decentralized Indonesia 10
Figure 3.1 Indonesia: Education spending by level of government, 2001 20
Figure 3.2 Relationship between two dimensions of educational
development 22
Figure 4.1 Balanced scorecard to determine appropriate action for each
district/unit 34
Figure 5.1 Districts vary in proportion of primary teachers with minimum
training qualification, percentage of teachers 41
BOXES IN TEXT
iii
TABLE OF CONTENTS
Volume 2
iv
Conclusions and Summary of Recommendations 111
References for Chapter 3 112
Appendix 3.1: Quality Improvement Projects in Indonesia Since 1990 115
Appendix 3.2: A Quality Management Model 121
Appendix 3.3: A Case Study of Project-Based School Rehabilitation 125
TABLES IN TEXT
FIGURES IN TEXT
v
Figure 2.4 Inequality in the distribution of 2001 education expenditures
from APBD and APBN allocations 74
Figure 3.1 Diagram of quality management system 92
Figure 3.2 Relationships between standard-setting entities being developed 94
BOXES IN TEXT
vi
TABLE OF CONTENTS
Volume 3
Table 1 Highest Level of Education as a Percentage of the Population, by Location 1
Table 2 Net and Gross Primary Enrollment Rates, by Gender 3
Table 3 Net and Gross Junior Secondary Enrollment Rates, by Gender 4
Table 4 Net and Gross Senior Secondary Enrollment Rates, by Gender 5
Table 5 Net and Gross Primary Enrollment Rates, by Location 6
Table 6 Net and Gross Junior Secondary Enrollment Rates, by Location 7
Table 7 Net and Gross Senior Secondary Enrollment Rates, by Location 8
Table 8 Percent of Primary Students Enrolled, by Type of School 9
Table 9 Percent of Junior Secondary Students Enrolled, by Type of School 10
Table 10 Percent of Senior Secondary Students Enrolled by Type of School 11
Table 11 Adult Literacy Rates 12
Table 12 Primary School Classrooms and Teacher Profiles 13
Table 13 Teacher Profile in Junior Secondary Schools 14
Table 14 Teacher Profile in Senior Secondary Schools 15
Table 15 Test Scores of Junior Secondary Students 16
Table 16 Test Scores of Senior Secondary Students 17
Table 17 Average Monthly Household Income 18
Table 18 Education Expenditure as a Proportion of Total Household Expenditure 19
Table 19 National Education Development Expenditure, 2001 20
Table 20 Gross Regional Domestic Product at Current Market Prices, 1998-2000 21
Table 21 Per Capita Provincial Revenues, 2001 22
vii
FOREWORD
Improving the lives of its citizens is at the particular, significant steps have been taken
center of Indonesia’s development to decentralize authority for managing
challenge. Economic growth creates more education to local government and to build
jobs and reduces hunger and poverty, but it partnerships with civil society to improve
is clearly not enough. It is widely the quality of schooling. While we join the
recognized that being literate, more skilled, education community in applauding these
and more knowledgeable about the world steps, we recognize too that many other
also gives people the capacity to control and policies and actions are needed.
to enrich their lives. For this reason, it is
important that Indonesia continues to raise This Education Sector Review discusses the
educational levels, especially for poor and issues and the range of options for policies
disadvantaged people. and actions around the issues of
management and governance, financing,
Schooling will count for more when its teachers, and quality of the education
quality is improved. Indonesia achieved system. It specifically addresses the complex
significant progress in bringing children to and changing nature of the relationships
school during the last 30 years. Enrollment between central and local governments that
rates at the basic levels are high, even as have resulted from Indonesia’s
compared to countries with higher incomes. decentralization process. The Review is a
The key challenge now is to raise the quality collaborative undertaking by Government
of education available to young people so and donors, and its broad consultation
that they are well prepared to participate in process with many of stakeholders at the
Indonesia’s ever more dynamic society and national and local levels gives us also the
economy. Schools must be well managed, perspective of those who are closest to the
staffed with motivated and competent schools and the classrooms and has fuelled
teachers, and supported by a system that profound discussions on the key challenges
both provides resources and requires of the sector. We trust that the reader will
accountability. find this report stimulating and enriching
reading.
Indonesia continues to make important
changes at all levels of education. In
viii
ACKNOWLEDGEMENTS
This report was prepared by a team consisting of Home Affairs, Ministry of Education, and
Audrey Aarons, Luis Crouch, Susiana Iskandar, Ministry of Finance; David Sloper; peer
Jennica Larrison, H. Moegiadi, Fredi Munger, reviewers at the World Bank, Marlaine
Jerry Strudwick, Suheru Muljoatmodjo, and Lockheed, Lant Pritchett, and Haneen Sayeed,
Elizabeth King (Team Leader). It also benefited and other colleagues including Vivi Alatas,
from the helpful advise and generous Michael Borowitz, Deon Filmer, Scott
contributions of a large number of people— Guggenheim, Bert Hofman, Robin Horn,
many national education officials at all levels, Emmanuel Jimenez, Kai Kaiser, Samuel
advisors to the government, regional Lieberman, Jessica Poppele, Fadia Saadah,
government officials, school personnel and other Andrew Steer, and Christopher Thomas for their
stakeholders in various districts outside Jakarta. comments on earlier drafts; Owen Haaga and Ali
For their time, advise, and candor throughout the Subandoro for their very able research
process of preparing this report, we are grateful assistance; Fiona MacKintosh for her editorial
to the national education leaders, Baedhowi, contributions; and Elsa Warouw, Idawati
Secretary General, Ministry of National Harsongko, Dinni Prihandayani, Datty
Education; Boediono, now former Head of Sembodo, Dety Palimbong, Imani Rasheeda
Research and Development, Ministry of Haidara, and Dorothy Judkins for helping the
National Education; Herwindo Haribowo, office processes go smoothly.
Secretary, Research and Development, Ministry
We acknowledge the faithful and vigilant
of National Education; Indra Djati Sidi,
support of the donor community in Indonesia—
Director-General, Primary and Secondary
Asian Development Bank, Australian Agency
Education, Ministry of National Education; Fasli
for International Development, European Union,
Jalal, Director-General, Non-Formal Education;
the Royal Netherlands Government, UNESCO,
Satryo Soemantri Brodjonegoro, Director-
and UNICEF—and especially the funding
General, Higher Education; Ace Suryadi, Senior
assistance given by AusAID and the Royal
Adviser to the Minister, Ministry of National
Netherlands Government for the preparation of
Education; Nina Sardjunani, Director, Education
the report and the subsequent regional and
and Religious Affairs, National Planning
national consultation activities. Lastly, this
Agency; A. Qodri Azizy, Director-General,
report benefited significantly from the comments
Development of Islamic Institutions, Ministry of
of many more leaders and experts who attended
Religious Affairs; Bambang Indriyanto, Head,
the various consultative meetings that were
Policy Research Center, Research and
organized during the preparation of this report.
Development, Ministry of National Education;
and a group of young technocrats in government
who are committed to Indonesia’s educational The Team wishes to honor the memory of Dr. H.
Moegiadi, professor, mentor, colleague, and
development (Hamid Muhammad, Abdul Azis,
friend to many education leaders in Indonesia.
Renani Pantjastuti, Harris Iskandar, Suharti,
Dr. Moegiadi, who was part of the report team
Totok Suprayitno, Ratna Kesuma, Agung
Purwadi, Agus Hariyanto, Yun Widiati, Slamet during his last days, enriched the report with his
Soleh, Husaini Wardi, Ninasapti Triaswati, and vision of educational development in Indonesia
and his experiences in working for that vision
Herry Sukarman). We thank Joel Friedman,
while in government.
Frank Hijmans, Walter McMahon, and Blane
Lewis, technical advisers in the Ministry of
ABBREVIATIONS AND ACRONYMS
Acronym /Term Bahasa Indonesia English Equivalent
Indonesia’s population of school-age children is problem is the failure to provide students with
one of the largest in the world. A sustained the rudiments of instruction—textbooks, a
drive to build schools across the country since blackboard, writing supplies, and a teacher who
the 1970s has resulted in more and more of those has mastered the curriculum and regularly
children attending school every year. This is an comes to class.
impressive accomplishment. But there is a
widespread perception that several critical Because Indonesia’s school system is immense
barriers have prevented Indonesia from and diverse, it will be necessary to understand
achieving its goals of: (i) enrolling all students these problems as they manifest themselves
through to the end of junior secondary level, (ii) across all of the regions of the country and
ensuring that poorer and disadvantaged children across all of its demographic groups, searching
have full and equal access to schools that for factors that explain the low quality of
provide a safe and healthy learning environment education.
and effective instruction, and (iii) providing
education that is of acceptable quality and is Decentralization
relevant to the economy and society.
Indonesia’s ambitious decentralization program
First, behind the impressive increase in is transforming the nature and level of public
enrollment at the national level, wide regional service delivery, including education. How
differences remain, which means that the decentralization applies to the education system
likelihood of reaching junior secondary school is has been defined in Education Law 20/2003,
very different for two young Indonesians, one which transfers the principal responsibilities,
who resides in a well-to-do community in authority, and resources for the delivery of
Yogyakarta and the other in a poor rural area in education to lower levels of government, while
South Sulawesi. And even larger than this some decisionmaking power is transferred to
between-province variation are disparities schools themselves.
among districts within provinces.
There are four key conditions for
Second, although Indonesia’s enrollment decentralization to overcome barriers and
expansion closed the enrollment gap between stimulate educational development: (i) clear
males and females and across income groups, division of responsibilities and power among the
especially at the primary education level, different levels of government, (ii) greater
striking inequalities between richer and poorer decisionmaking power and autonomy to local
children remain at the junior secondary and governments, (iii) greater voice of teachers and
senior secondary levels. While nearly all parents on how schools operate, and (iv)
children enter the early primary grades, those effective accountability mechanisms and
who belong to the poorest income quintile drop financial structures that are consistent with
out first, thus completing much less than full educational goals. By distributing power and
basic education, on average. responsibility more widely throughout the
education sector, decentralization has the
Third, the quality of schooling in Indonesia is potential to increase the efficiency of the system
low and declining, and it is worst in the poorest and its responsiveness to the needs of its
parts of the country. Decades of rapid expansion constituencies. The freedom to experiment is
of enrollment have not produced graduates with another potential benefit from decentralization,
the consistently high quality of knowledge and and locally generated innovations can stimulate
skills needed to build a strong society and continuing improvements in education if a
competitive economy. Underlying the quality region can learn from the experiments carried
out in other regions.
x
However, despite its promising aspects, able to restructure and re-equip themselves to
decentralization is not a policy panacea. undertake their new roles.
Conflicts and inefficiencies can sometimes arise
when the goals of the different levels of Finance and Public Spending. Decentralization
governments contradict each other. And even has shifted the flow and allocation of fiscal
when everyone’s goals are aligned, paternalistic resources from the national government to the
behavior left over from decades of centralistic district governments and from the district
policymaking, on the one hand, and the extreme governments to the schools. Are the fiscal
dependency of some areas, on the other, can be resources for education sufficient? Are these
hard to change simply by edict. Inevitably, there resources being used more efficiently and more
will be lags and variations in implementing equitably than before? How can the use of
decentralization across the country. Thus, the resources be improved? What are the
process of reform is likely to be a slow one, implications of the new fiscal arrangements at
punctuated by bursts of progress and frequent the school level and thus on educational
setbacks that may lead to rising frustration and outcomes?
mistrust among stakeholders if they do not
understand that these are inherent aspects of the Education Quality. Under decentralization,
reform process. improving quality will mean identifying those
institutional arrangements (such as standards,
The Challenges of Implementation structures, and incentives) that will improve
performance and accountability. What then are
Like other countries that have decentralized their the best ways to raise quality in the context of
education system, Indonesia faces many local autonomy? How can performance
implementation challenges. However, most of standards be set, measured, and monitored
these challenges really stem from two throughout the education system?
fundamental problems—unclear, incomplete,
and inappropriate assignment of governance and Teacher Management. In Indonesia, as
management functions and a shortage of the elsewhere, teachers are a critical element in the
management and technical skills needed to process of educational development and,
operate a decentralized education system. reflecting this, their salaries and benefits account
for the bulk of resources spent on education.
Numerous questions about decentralization have How will decentralization affect the incentives
emerged with its implementation. This review faced by teachers, how will it determine
focuses on four broad issues. teachers’ entry into and progression within the
profession, and what management systems are
Governance and Management. Will the shift in likely to be effective in a decentralized context?
authority, responsibilities, and resources from
the central level to district governments and
communities help to achieve the desired A Policy Reform Agenda
education outcomes in Indonesia? This depends
on how certain design and implementation The following set of policy recommendations
issues regarding governance and management emerged mainly from the meetings held by the
systems are resolved. These include how the team that undertook this education sector review
relationships between district governments and with many stakeholders, including officials in
district- and school-level service providers the central agencies, provincial and district
change; what are the functions and roles of the officials, teachers, head teachers, members of
large number of decisionmaking bodies in the school committees (including some parents),
sector; whether local government officials and national education experts, and the staff of aid
school staff have the capacity and skills to fulfill agencies. They are informed also by analyses of
their devolved functions and responsibilities; enrollment, school supplies and public
and whether the central agencies are ready and expenditures data in Indonesia, and by the
xi
lessons from experience of other countries that standard setting, teacher certification,
have decentralized their education system. and school rehabilitation and repair, and
retire any leftover policies and programs
Assign functions clearly and efficiently that undermine the goals under
within the education system and align them decentralization.
with appropriate governance and
management structures and financing x Develop, test, and disseminate new
arrangements at all levels. management and operations systems in
three areas—gathering and reporting
The assignment of governance, managerial, and information, budget and expenditure
financing functions in the education sector tracking, and planning, monitoring, and
remain vague. Similar functions and roles have evaluation of performance—at all levels
been given to different levels of government, of government and at the school level.
which is a recipe for replication, conflict, and
chaos. Also, functions and structures are not x Foster a national education information
aligned (for example, the central Ministry of system consistent with decentralization
National Education is still quite large despite the with financial incentives offered to
transfer of many of its responsibilities to lower districts for reporting information to this
levels of government) and financing national-level education database.
arrangements do not conform to functions (as
illustrated by the many different sources of x Develop management and technical
financing for capital expenditures at the local capacities at all levels and define
level). Moreover, some devolved functions are performance standards and measures for
best left to the national or provincial levels, such all decentralized functions and a
as coordinating the strategic direction of the corresponding checklist of basic
education system and setting education competencies needed to carry them out.
standards. Resolving these issues will require
reviewing and revising the decentralization laws Increase the resources that are available to
to clarify the assignment of functions, to correct the district governments for education.
the misalignments between functions and
structures and between functions and financing To implement their assigned functions under
arrangements, and to follow through with decentralization, local governments should
corresponding structural changes. manage far more educational resources than just
teacher salaries. Only a very small proportion of
Reform the central Ministry of Education the transfers to these governments is available
so that it can articulate and harmonize for non-salary expenditures. The result is either
that schools are starved of much-needed capital
education policies and design an
investments or that capital investments in
implementation program, and an schools are financed in a fragmented and
investment and funding plan for those unplanned way by the central government or aid
policies, while ensuring that local agencies, robbing the districts of the ability to
governments and civil society have a voice manage their education systems. To rectify the
in this process. situation, the central government should expand
the education allocation through the block
The MoNE should be reorganized according to transfer mechanism and should develop and
its new major functions consistent with its disclose a multi-year plan for financial, technical
oversight role in a decentralized education and management assistance to local
system. In particular, the Ministry should: governments. These educational assistance
plans should be developed, in consultation with
x Harmonize and link new education local governments.
policies and programs for example,
xii
Require provincial and district quality standards, especially in poor areas. In
governments to prepare and implement line with this, the central government should
multi-year regional investment and adopt pro-poor education programs to stimulate
financing plans as well as a corresponding demand consistent with the goals of the global
Education for All initiative, and provide
assistance plan for each school in
adequate and timely technical assistance to local
accordance with regional goals and with governments to build the capacity of local
school capacities and needs. governments to carry out their new
responsibilities effectively. As for the central
Giving transfers to lower levels of governments government, the Indonesian government should
is more effective when efforts are also made to adopt a “one policy roof” for all schools, and, as
build local planning skills, to increase a first step, assess all religious and private
transparency in the allocation and use of local schools according to the same national minimum
funds, and to require accountability in return for education quality standards that apply to public
the transfers. Start by replacing the budgeting schools.
process that local governments and schools go
through each year and replace it with a multi-
Establish a teaching service, separate from
year investment plan and an annual spending
plan. In doing so, a clear funding mechanism is
the civil service, that includes a
also needed to transfer resources to schools that transparent, system-wide appointment and
is easy to implement and to monitor. Districts deployment process and a professional
should disclose publicly how much they will be development system that is school-based
giving to each school well before the beginning and performance-led.
of the school year. A periodic financial audit of
schools is an input into the preparation of the Our most critical recommendation is for the
schools’ multi-year assistance plans and makes establishment of a separate teaching service that
the implementation of these plans easier. These involves: merit-based appointments, transfers,
are concrete actions that provincial and district and promotions; school-based performance
governments can take together. evaluations; and professional development that
covers all phases of the teachers’ career
Help all schools to make and implement including their initial training, their induction
decisions that will improve quality, into the teaching profession, school life, and
especially those in poor areas. continuous professional development. This
service would need to be built up over time.
But more resources to schools are not sufficient
to improve them. Making schools the center of Implementing the Policy Agenda
a strategy that is performance based is. The first
step in improving school quality is to bring the Finally, there is the question of how best to
physical and human infrastructure up to implement these recommended actions. Both
minimum standards for accreditation and to supply-side and demand-side approaches will be
ensure that schools are funded at least to the needed to fill existing policy and technical gaps.
minimum necessary for operations and Supply-side investments are needed to
maintenance. This should be accompanied by a strengthen the capacity of central education
periodic audit of schools on the basis of a agencies to make policy, to plan, to set
checklist of standards, require schools to report standards, and to measure the performance of
their own expenditures in a timely fashion, districts and schools. They are also needed to
establish a proposal-based grants program that stimulate the development of new solutions that
would allow schools to request extra resources can be used by local governments. It is vital to
for specific innovations and experiments, and link all of the different supply-side investments
develop a policy for targeting special assistance in one institution-building agenda instead of
to those schools that do not meet the minimum
xiii
undertaking them separately with no Conclusion
coordination.
Many messages have emerged from the review,
However, in the spirit of decentralization and in but the two overarching messages are:
recognition of the great diversity that exists
across Indonesia, demand-side programs are also x Improving education quality across the
needed. First, the central government must system is the key educational challenge
expand its use of block transfers to regional for Indonesia today, and even concerns
governments, rather than move away from them, about equity and serving the poor must
as the channel for education resources, while be couched in terms of universal access
investing urgently in enhancing local capacities to education of acceptable quality.
to manage there resources well. Second, the
national government should establish grants x Decentralization can potentially help to
targeted to the poorest districts to fund projects meet this quality challenge—by
initiated by local schools and communities. To spreading the governance and
encourage districts to collaborate to take managerial responsibility for improving
advantage of economies of scale, the grants better education across different
program could award more money to those stakeholders, by strengthening
proposals that are submitted by associations of accountability mechanisms, and by
districts. Third, as a managerial safety net, the enhancing incentives to innovate.
government should evaluate and support the However, any delays in clarifying and
education management systems being developed rationalizing functions, structures, and
and used in different regions. financing throughout the education
system and any lack of commitment
There is also a need to examine both past and from the government to confronting
ongoing pilot initiatives in education - to build a some difficult implementation issues
body of evidence-based, analytical lessons about could erode the effectiveness of the
how to deliver education services of good reform.
quality in the new decentralized education
system. An integral part of this evaluation effort
must be to establish a mechanism to ensure that
these lessons are widely publicized so that they
can be taken into account in national and local
policymaking and school-based management.
xiv
Chapter 1: Indonesia’s Educational Progress and Challenges
Enrollment Expansion
Table 1.1: Rising Education Enrollment Rates at all Levels, 1995-2002
Indonesia’s population of 1995 1997 1998 1999 2000 2002
school-age children is one Gross enrollment rate
of the largest in the
Primary level 107.0 108.0 107.6 108.0 107.7 106.0
world, but a sustained
Junior secondary level 65.7 74.2 73.4 76.1 77.6 79.9
drive to build schools
across the country since Senior secondary level 42.4 46.6 47.4 48.4 50.2 48.2
the 1970s has resulted in Net enrollment rate
more and more of those Primary level 91.5 92.3 92.1 92.6 92.3 92.7
children attending school
Junior secondary level 51.0 57.8 57.1 59.2 60.3 61.7
every year. This has been
Senior secondary level 32.6 36.6 37.5 38.5 39.3 38.2
an impressive
accomplishment for the Data sources: Pradhan (2001) and calculations using SUSENAS, 2002
country. The primary
school enrollment rate has grown from 62 and to 80 percent in 2002. In 2002, the net
percent in 1973 to nearly universal coverage enrollment rate was 62 percent. The senior
by 1983 and stayed high even through the secondary enrollment rate has been rising
financial crisis of the late 1990s. In 2002, too, though at a much more modest rate.
the gross primary enrollment rate exceeded These enrollment rates, especially at the
100 percent, and net enrollment rate was 93 primary level, compare favorably with
percent (Table 1.1). The gross enrollment enrollment rates in other countries in East
rate for junior secondary education showed Asia with much higher per capita incomes
more marked increases, rising from 18 (Figure 1.1).
percent in the 1970s to 66 percent in 1995
Figure 1.1: Gross and Net Enrollment Rates in East Asian Countries, 2000
120
100
100
80
80
60
60
40 40
20 20
0 0
Indonesia Philippines Thailand Malaysia Korea Indonesia Philippines Thailand Malaysia Korea
($710) ($1020) ($1980) ($3540) ($9930) ($710) ($1020) ($1980) ($3540) ($9930)
Primary Gross enrollment Primary Net enrollment Secondary Gross enrollment Secondary Net enrollment
Notes: GNP per capita data (in parenthesis) are for 2002
Data sources: UNESCO, 2003 and World Bank Edstats (http://www1.worldbank.org/education/edstats)
1
Education Sector Review Volume 1
The financial crisis of the late 1990s in Sumatera Utara. At the junior secondary
threatened to derail the educational progress level, net enrollment rates ranged from 40.9
that Indonesia had made in the previous percent in Nusa Tenggara Timur to 77.2
decade. Enrollment rates faltered percent in Jakarta, and at the senior
immediately after the crisis but have since secondary level, from 24.5 percent in Nusa
recovered. Impressively, large decreases in Tenggara Timur to 58.4 percent in
enrollment rates were avoided even though Yogyakarta.1
real household education expenditures—and
the share of education expenditures in total Even larger than this between-province
household expenditures—declined by about variation are disparities among districts
one-third from 1998 to 2000 (Pradhan, within provinces. Only about one-fourth to
2001). Perhaps this is partly attributable to one-third of the total inequality in
the national pro-poor scholarship and school enrollment rates in primary to senior
grants program that the government secondary education is due to differences
launched at that time to mitigate the adverse between provinces; the rest of the inequality
effects of the crisis (Cameron, 2002 and is due to differences among the districts
Filmer et al, 2001), and perhaps also to a within provinces (Table 1.2). This means
more established demand for schooling in that how education resources are distributed
Indonesia, even among the poor. among districts within each province matters
more than how resources are distributed
Educational Challenges among provinces if equality in education
outcomes is to be realized.
There is a widespread perception that
several critical barriers have prevented
Indonesia from achieving its Education for Table 1.2: Inequality in Enrollment Rates: Wider Gaps
All (EFA) goals of: (i) enrolling all students within than between Provinces, 2002
through to the end of junior secondary level, Source of Junior Senior
(ii) ensuring that poorer and disadvantaged inequality Primary secondary secondary
children have full and equal access to Gross Between
enrollment provinces 30.5 29.2 27.5
schools that provide an appealing learning rates Within
environment and effective instruction, and province 69.5 70.8 72.5
(iii) providing education that is of acceptable Net Between
enrollment provinces 39.2 35.8 29.9
quality and is relevant to the economy and rates Within
society (PROPENAS, 2000-2004 (Jalal and province 60.8 64.2 70.1
Musthafa, 2001). These challenges are Notes: The coefficients of variation for enrollment rates across the
discussed in this section. years are small at the primary level (ranging from 4 to 7 percent
for net enrollment rates), as compared with those at the junior
Closing Large Regional Gaps secondary level (22-28 percent) and at the senior secondary level
(41-46 percent).
Data sources: District-level database for ESR, using data from
Behind the impressive increase in various years of SUSENAS.
enrollment at the national level, wide
regional differences remain. In a country as
large, spread out, and diverse as Indonesia,
differences among regions are to be 1
These comparisons exclude a few provinces where
expected. However, extreme differences the samples tended to be in urban areas. According to
mean that some regions have been lagging the SUSENAS Work Manual (BPS, 2002), “Because
of the unfavorable security situation, in the following
for sustained periods and thus need extra provinces/regencies SUSENAS 2002 is only
help. In 2002, net enrollment rates in conducted in Banda Aceh (Aceh), Ambon (Maluku),
primary education ranged from 83.5 percent Ternate (North Maluku), Sorong (West Irian Jaya),
in the province of Gorontalo to 94.4 percent Timica (Central Irian Jaya), and Jayapura (East Irian
Jaya).”
2
Chapter 1 Indonesia’s Educational Progress and Challenges
Table 1.3: Education Equality at the Primary Level and Increasing Equality at
Higher Levels: Net Enrollment Rates by Income Quintile, 1993-2002
Income Primary Junior secondary Senior secondary
quintile 1993 1997 2002 1993 1997 2002 1993 1997 2002
Poorest 86.7 90.3 91.4 22.6 37.7 45.5 7.0 12.4 17.8
2 90.7 93.0 93.6 37.5 52.2 57.9 15.4 24.4 28.0
3 92.5 93.4 93.8 47.5 60.0 65.1 25.2 34.2 37.9
4 93.3 93.5 93.2 61.3 69.2 72.0 42.3 47.8 49.8
Richest 93.0 92.4 91.4 72.5 75.1 76.9 60.8 60.9 62.0
Q5/Q1 1.07 1.02 1.00 3.21 1.99 1.69 8.68 4.91 3.48
Data source: Calculations based on SUSENAS data, various years. Data exclude East Timor. 2002
exclude most of Aceh and Papua.
3
Education Sector Review Volume 1
4
Chapter 1 Indonesia’s Educational Progress and Challenges
5
Education Sector Review Volume 1
Will the shift in authority, responsibilities, Improving the quality of the education
and resources from the central level to provided in schools has emerged as a high
district governments and communities help priority in the government’s policy and
to achieve the desired education outcomes in issues papers. It has focused on how to
Indonesia? This depends on how certain provide more and better inputs such as
design and implementation issues regarding textbooks and teaching aids to schools.
governance and management systems are Under decentralization, however, improving
resolved. These include how the quality will mean identifying those
relationships between district governments institutional arrangements (such as
and service providers (district and school- standards, structures, and incentives) that
level providers) have changed; what are the will improve performance and
functions and roles of the large number of accountability. What then are the best ways
decisionmaking bodies in the sector; to raise quality in the context of local
whether local government officials and autonomy? How can performance standards
school staff have the capacity and skills to be set, measured, and monitored throughout
fulfill their devolved functions and the education system?
responsibilities; and whether the central
agencies are ready and able to restructure Teacher Management
and reequip themselves to undertake their
new roles. In Indonesia, as elsewhere, teachers are a
critical element in the process of educational
Finance and Public Spending development. No systems for managing the
teaching force have been fully specified in
Decentralization has shifted the flow and either the general decentralization laws or in
allocation of fiscal resources from the the new Education Law. Yet such systems
central government to the district are vital for managing the employment,
governments and from the district deployment, and career opportunities of this
governments to the schools. While very large workforce and to ensure that
Indonesia is no stranger to transfer schools reach a level of performance that is
mechanisms, such as its current block grant consistent with the country’s education
system to districts, it has now become one of goals. How will decentralization affect the
the most decentralized countries in the incentives faced by teachers, how will it
world. Are the fiscal resources for determine teachers’ entry into and
education sufficient? Are these resources progression within the profession, and what
being used more efficiently and more management systems are likely to be
equitably than before? How can the use of effective in a decentralized context?
resources be improved? What are the
implications of the new fiscal arrangements
at the school level and thus on educational
outcomes?
6
Chapter 1 Indonesia’s Educational Progress and Challenges
7
Education Sector Review Volume 1
8
Chapter 2: Governance and Management
9
Education Sector Review Volume 1
Figure 2.1: Flows of Governance and Managerial Accountability in Decentralized Indonesia
Governance or Management
Representative Aspect of or Executive Aspect of
Government: Government:
Governance Accountability Management Accountability
President of the
MPR Republic
DPR
MoHA MoF
Depdiknas National
Level
standard-setting report on
(sets standards of reporting organization of
on financial and educational issues) regional government
(accountability is around standards) through MoHA,
reporting to standards
(Provincial Level)
reporting to standards
School
Committees Principals
reporting to standards School
Level
10
Chapter 2 Governance and Management
kepala dinas, and between these boards expanded roles. Management systems at all
and the school committees do not appear levels of government that used to operate the
to be effective. education system have broken down or are
now obsolete. New systems that will allow
x As defined by ministerial decree local governments to perform the functions
(KepMen 044/U/2002) and the that have been transferred to them under the
Education Law, the duties and powers of decentralization reform are just beginning to
the school committee need to be made emerge, but there is no national strategy for
clearer and more efficient. In the case encouraging or disseminating good
of financial management, should school practices. There is also some concern that
committees have oversight over all staff at the local levels are not sufficiently
financial matters rather than just the trained and experienced to carry out their
issues related to funds raised by parents? new and expanded roles. Moreover, field
Many of the duties of school committees visits conducted for this review revealed that
appear to require them to enter into there is a great deal of confusion
contracts, but do they have the legal surrounding the functions related to, for
right to do so, and if so, how will this example, teacher management (including
legal status be supported? It would be training, recruitment, deployment,
very inefficient if each of over 400 performance evaluation, human resources
district governments had to resolve these databases, payroll, and redeployment) or to
issues on its own. the allocation of resources to schools. We
highlight a few issues here.
x At the moment, many functions have
been decentralized too far, that is, down x The MoNE stopped receiving regular
to a level that does not have the capacity information through its past data
to perform that function effectively. collection mechanisms because districts,
Having recognized this, some districts now being autonomous, no longer feel
and provinces are coming together to compelled to transmit information
form agencies that can handle certain of upwards. In 2002, the annual school
their functions on a collective basis (as census yielded only a 30 percent
suggested in Law 22/1999). For response rate from schools as compared
example, various districts in East Java with 80 percent in 2000. As shown in
are collaborating on the development of Box 2.1, this has also been the case in
student tests; each district develops the other countries that have decentralized
exam for one academic subject and then their education sectors.
all of the exams are shared across
districts, thereby taking advantage of x The experimentation that follows from
economies of scale. Apart from this, the implementation of decentralization
there are other tasks that are most makes it possible to adapt systems to
usefully undertaken in collaboration— natural variations in local conditions.
but how should collaboration For example, some districts have
agreements be developed? experimented with upgrading their
budgeting and finance systems by
Rebuilding Management Systems setting formulae for district–to–school
funding. One dynamic bupati in Bali
It is clear that the systems that are currently has managed to eliminate certain fees by
in place at the lower levels of government consolidating schools and reducing
are not sufficient to perform the many certain types of expenditure, thus
functions that have been devolved to them. making enough room in the budget to
Nor do the staff at these levels have the eliminate school fees and still cover
necessary skills to carry out those new and costs. The lessons from these various
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Education Sector Review Volume 1
In Brazil and Spain, devising good management information systems under decentralization was difficult
and problematic but was possible with effort and partnership between the various levels of government.
Brazil. Until 1995, educational databases in Brazil were outdated and data collection was unsystematic.
Not only was there no up-to-date information available to guide policymaking but there was also no way to
monitor or follow up on policy actions. This caused a huge amount of waste in the use of funds. In the
absence of a standard national system of information and indicators, several states built their own data
gathering and processing systems that were not compatible with each other. As a result, Brazil could not
provide international organizations with consistent national data on education, and the available information
was neither sufficient nor reliable enough to be used as a basis for designing policies.
However, in 1995 the federal government issued guidelines for the creation of evaluation mechanisms to
monitor the country’s education system. Since then, the educational information system has been gradually
reformulated and now has an integrated but decentralized structure that meets the country’s monitoring and
evaluation needs. Several factors have contributed to this successful reorganization - the strong leadership
of the Ministry of Education in constant partnership with sub-national authorities and representatives of the
education sector, growing public support for systematic evaluations of schools and other educational
institutions, and multilateral cooperation in building capacity and disseminating the experiences of other
countries.
Spain. As the decentralization process unfolded in the 1980s, the country needed a planning mechanism to
coordinate the educational policies and programs being developed and executed by Ministry of Education
and the decentralized autonomous communities. One example of why such a coordinating mechanism was
necessary was the fact that soon after the decentralization process began the capacity to gather and
reproduce nationwide educational statistics was lost. Various regions had begun gathering their own data in
ways that could not be aggregated at the national level.
The Education Law of 1985 created the Conference of Counselors, with the Minister of Education and the
autonomous community counselors (chief educational officers) of the seven already decentralized regions as
members. Much of the work of the Conference (which meets at least once a year), is carried out by five
technical sub-committees each focusing on a specific issue (such as personnel, the curriculum, or statistics).
The Conference is an instrument of cooperation and not coordination because none of the decentralized
regions is obligated to carry out the decisions of the Conference when they believe their own statutes of
autonomy are being violated. Also, several autonomous communities worry that the Ministry may use the
Conference to control the actions of the decentralized regions. Another problem is that, even though issues
are brought to the Conference as technical problems, the proposed solutions tend to have heavy political
overtones. After all, the Minister and the Counselors sitting around the table are all appointees of particular
political parties, so political agendas are never far from the surface. Nevertheless, at times the Conference is
capable of reaching important agreements and carrying out complex actions.
experiments, however, have not been to the districts, but if a district takes any
systematically documented at the action that would result in changes in
national level or analyzed to see how the payroll database, it must report this
applicable they might be to other action to the national-level personnel
situations. And even in those districts board, which has the power to veto the
that are experimenting, it is not always action. With unresolved issues about
clear if the evolving financial the assignment of functions, it is not
arrangements are ideal or what functions surprising that districts do not yet have
to decentralize to schools and why. adequate teacher management systems.
x At present, responsibility for personnel
x Increased corruption under
management is nominally decentralized
decentralization has been raised as a
12
Chapter 2 Governance and Management
concern. The argument is that it is more principles of the reform because it must be
difficult to monitor 400 districts than it willing to assume the costs involved in
is to monitor the central government. changing its role in the management of
In principle, however, decentralization education (Box 2.2).
has the potential to reduce corruption.
Corruption can be kept under control if Building Local Capacity
resources are transferred to districts
using transparent allocation formulae, There has not yet been an audit of available
such as a per student funding allocation, local skills covering all of the likely
if all actors know the amount of the functions that would need to be carried out
transferred resources and when the at the district level under a rationalized
funds are transferred, and if a culture of model of decentralization. While districts
public disclosure is engendered at all clearly must be responsible for raising their
levels of government. own skills to the level necessary to carry out
their decentralized functions, the national
Reframing the Role of the MoNE government is responsible for the
maintenance of standards. Therefore, it
Many major responsibilities and powers seems appropriate that the central
now rest with district and provincial government should be responsible for
governments. However, there are some carrying out a nationwide, district-level
important policies and programs that these audit of current management skills and
governments have no incentive to carry out standards. At a minimum, the central
because they cannot fully capture the government should devise an instrument and
returns, because they are unable to perform protocol for doing such an audit and for
them well because of a lack of economies of compiling and communicating the results, as
scale, or because they do not have sufficient having each district devise its own protocol
resources to undertake them. For these would be wasteful. It may be tempting for
reasons, the central government needs to the central government to slow down the
step in if such policies and programs are to pace of decentralization for fear that district
be undertaken. Such policies and programs and provincial governments do not have
include setting goals for and standards of sufficient capacity to carry out their newly
service provision, experimenting when assigned responsibilities effectively.
needed, rewarding innovations from other However, there is greater capacity at the
parts of the system, disseminating local level than most central government
information widely and regularly, policymakers assume. Since few real
establishing a transparent regulatory decisions have had to be made locally
framework and enforcing it, ensuring more before, the actual extent of capacity and skill
equitable education spending, and at these levels has not been put to the test.
motivating districts and schools to adopt As decentralization proceeds, it may be that
national education goals. existing local talents and capacities emerge
naturally, at least in some places. It is clear
Because these may be unfamiliar roles to the that this is already happening in some parts
central education agencies, they may be of Indonesia, as some districts have much
tempted to hold on to their previous roles better and more talented bupatis than others.
rather than to redefine their mission (and The same process will undoubtedly occur
those of their deconcentrated units in the when authority is decentralized to the school
provinces in the case of the MoNE), to level; it will become clear that there are
reorganize themselves accordingly, and to many principals and community leaders
update their own skills. Evidence from other capable of wielding that authority
countries shows that the central government effectively.
has to be politically committed to the
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Education Sector Review Volume 1
Box 2.2: Transforming the Current Organizational Structure of the Ministry of National Education
Since the government of Indonesia has not yet arrived at a final and optimal function assignment and since
organizational form should follow function, it is difficult to suggest improvements for the Ministry of
National Education (MoNE) in any detail. However, judging by the organizational structure of the central
agencies of many countries that are decentralized or effective or both, Indonesia’s MoNE is not optimally
organized to provide support and guidance to lower-level government units and to schools.
The national level of modernizing and decentralizing governments, in other words, those that do not
implement policies but guide their implementation by local governments, is characterized by:
x Less focus on traditional line functions such as early childhood, primary, and secondary education
and more focus on “transversal” support functions such as governance improvement, financial
equalization, and quality control.
x Relatively less focus on supporting the direct execution of projects and hence fewer staff devoted
to the inspection and audit functions of these projects.
x More focus on the procurement not so much of goods and construction services but of analytical
and developmental services.
x The separation of those functions that support narrow issues of human resources or budgeting as
they apply to the MoNE itself and to projects run by the national level from those functions that
apply to the country as a whole.
With regard to size, it should be noted that central authorities in many decentralized countries have very
few staff. One extreme in the developed world is Canada, where the national education body functions
with a staff of only a few dozen, since there is no central authority but only a council of provincial
ministers with a very small secretariat. The United States functions with about 5,000 education staff at the
federal level. Developing countries such as China, Argentina, and South Africa have as few as a few
hundred to little over a thousand national-level staff.
The training and capacity of staff matter much more than the number. The dedication of staff time to
functions that have been appropriately assigned to the national ministry is also key. Staff who are highly
capable and whose actions create considerable leverage—because they are focused on overall direction,
policy, measurement, and comparisons—are much more important than the number of staff at the apex of a
decentralized system.
The proportion of the total budget spent by the national level in decentralized countries varies but is
generally higher than the proportion of staff working at the national level. At the pre-tertiary level in
decentralized countries, this ranges all the way from less than 10 percent (in China, the United States,
South Africa, and Hungary) to as high as 20-40 percent (in Australia, Poland, and Spain). As noted above,
the staff working at the national level in decentralized countries have a great deal more leverage over
resources than similar staff in a centralized system or than similar staff at lower levels of government.
14
Box 2.2: Transforming the Current Organizational Structure of the Ministry of National Education
continued
In sum, a central ministry in a decentralized system does not implement policies or interventions. Instead,
its functions should be to:
x Set standards and measures of performance (ideally related to outcomes rather than inputs) and
ensure that the necessary information systems exist to collect and report them, (including and
engage in goal-setting or minimum service standard-setting, again outcome-oriented
x Focus on institutions of delivery (for example, schools or colleges) rather than “levels” (such as
primary or secondary)
x Ensure competition and emulation between decentralized regions
x Ensure that decentralized units can raise their quality up to the necessary standard through systems
development, teacher training, and sufficient funding
x Ensure that functions with large economies of scale are carried out at a level that takes advantage
of those economies of scale, perhaps by brokering associations between districts or provinces
x Use funding or norming to correct spillovers between regions, for example in specialized areas of
education where one institution could serve more than one district
x Defend equity in funding and outcomes by norming funding equity if possible and, if not, by
persuasion
x Make planning, forecasting, and investment priorities for the whole education system, including
forecasting and analyzing teacher supply and demand
x Encourage experimentation and disseminate any lessons learned from those experiments.
Chapter 1 in Volume 2 of this review contains a more considered discussion of these issues and proposes,
for discussion purposes, an organizational structure for the MoNE that might better suit Indonesia’s needs
than the current one.
15
Education Sector Review Volume 1
16
Chapter 3: Finance and Public Spending
3
These new financial structures are described in
various revenue-sharing mechanisms. On
greater detail in various studies, including Hofman,
average, the DAU transfers account for Kaiser, and Goga (2003) and Lewis (2001, 2002, and
about 70 percent of the total revenues of 2003).
4
provincial and district governments, and This is to say that the central government is not
responsible if all of the block grant funding does not
reach the regional governments.
5
This is not a new phenomenon, however. Law
18/1997, the previous law on local taxes and levies,
was intended to stop the practice that then prevailed in
17
Education Sector Review Volume 1
18
Chapter 3 Finance and Public Spending
exclusive of salary costs, and 20 percent of easy to monitor and to implement, is non-
the districts’ APBD budgets, also exclusive discretionary, and depends on just a few key
of salaries, must be allocated to education. measurable criteria. One important step is to
Including salaries, districts now spend on define minimum learning standards that will
average about 40 percent of their APBD be the basis for an agreed level of funding
budgets on education. Excluding salaries, per student. The advantages of this type of
they spend less than 10 percent (assuming funding mechanism are that it makes it
that salaries are a modest 80 percent of easier for local governments and schools to
education spending out of APBD resources) plan ahead because they will know precisely
or less than one-half of what is stipulated in how much funding to expect. It is also more
the Education Law. To double the share of transparent, which ensure accountability.
education spending in APBD net of salaries, One of its disadvantages is that it relies on
districts will need to make significant the availability of accurate and timely local
reductions in the shares of other sectors, enrollment data. If these are not available,
which may or may not be politically then the allocations to schools and districts
possible. may either fall short of what is needed or
fall prey to corrupt efforts to use bloated
Likewise, earmarking 20 percent of the enrollment numbers (Ross and Levaþiü,
APBN when the MoNE is supposed to have 1999). This formula for funding should
devolved most of its functions to local become the routine way to allocate basic
governments may be well-intentioned but education resources in Indonesia, and, in the
has disadvantages. It puts pressure on the process, it will facilitate school-based
MoNE to develop its own spending management by allowing schools to manage
programs in the regions, which would mean assistance in cash rather than in kind.
that most of the capital investments in
education would be outside the control of Table 3.2: Per Capita Education Spending, 2001-
district governments. The experience of 2002
other countries shows that this kind of 2001 (Actual) 2002 (Planned)
earmarking often leads to more spending but Total 134,000 175,058
not better outcomes because these centrally (1,586 – 463,753) (1,193 - 540,479)
initiated interventions guarantee the Routine 126,118 159,460
(998 - 450,789) (1,013 - 539,287)
provision of funds regardless of regional
Development 16,185 21,692
performance and creates multiple (177 - 205,044) (402 - 415,463)
opportunities for corruption. The challenge Notes: Numbers in parentheses indicate minimum and
then is to ensure that central and local maximum values.
education budgets are indeed spent on Source: SIKD, Ministry of Finance
schools and students, that they cover the
basic operating expenses of schools besides There has already been an attempt as part of
the costs of teaching and non-teaching staff the Education for All effort to estimate the
and their career development activities per-student level of spending that would be
(including instructional supplies, the routine consistent with attaining universal
activities of the school committee, the enrollment and improving education quality
maintenance of a school database, the in Indonesia (McMahon, 2003). What needs
dissemination of information to parents and to be done is to open up this proposed
the community, utilities, and light repair of formula to national scrutiny and debate in
the school buildings and other maintenance). order to validate it and to obtain political
support for it. What also needs to happen is
Our principal recommendation about for the funding formula to be applied to the
ensuring adequate resources for districts and local processes of allocating the DAU, not
schools is for the education system to adopt the DAK. Lastly, the funding mechanism
a formula-based funding mechanism that is needs to take into account the extreme
19
Education Sector Review Volume 1
variation in the current per-student are off-budget and local governments often
allocation of the routine and development have no knowledge of them. In 2003, there
budgets in the sector. Clearly, those districts were around 400 different education projects
that are at the lower end of the range will not in operation in Indonesia, but there was little
meet any kind of education standard (Table coordination and information exchange
3.2), so the funding mechanism should be among them. During field visits for this
designed to enable district governments to report, regional education officials in
mitigate specific inequalities among schools. Yogyakarta and Central Java expressed
For example, the funding formula might frustration at not knowing the full extent of
apply only to the per-student level of routine the resources (in kind) available to them.
operational expenditures. Without information and without
transparency, it is very difficult for local
Alternatively, the funding mechanism could governments and schools to plan ahead, to
use a per-school rather than per-student develop coherent and effective educational
resource formula to deploy teachers and programs, and to monitor and assess the
other staff to schools and to determine flow of funds through the system. Another
capital investments. Many schools in significant advantage of using the DAK
Indonesia have urgent development needs,
ranging from staff development to the
Figure 3.1: Indonesia: Education Spending by
construction of a library or science
Level of Government, 2001
laboratory. Richer districts will be able to
undertake these capital investments
Central
themselves, but poorer districts will not, so a LG Capital Recurrent
20
Chapter 3 Finance and Public Spending
the central and local levels, on whether those government was successful in expanding
resources reach the schools, and, within the enrollment, but has not been effective in
schools, on how those resources are used. raising the quality of education to a
Certain key actions can increase the minimum acceptable standard. The
efficiency of these education resources. financing issue that most affects the quality
of education (the topic of the next chapter) is
Spend Locally whether budgets for schools are sufficient to
cover schools’ basic operation costs, let
There are three important ways to make alone to support their efforts to improve
expenditures more effective. The first way quality. Many junior and senior secondary
is to change the pattern of spending on schools now receive 50 percent or less than
education, especially by district their pre-decentralization budgets
governments. In the system as a whole, (McMahon, 2003).9 Therefore it is important
three-quarters of resources are spent on to ensure that resources find their way to
recurrent items, mostly on salaries and schools and do not get appropriated –
benefits and a small amount on operational whether legally or through corruption – by
costs and pedagogical supplies, and one- the district governments.
quarter is spent on capital outlays (Figure
3.1). This pattern is more extreme at the Differentiate Assistance to Districts and
district level; in 2002, 95 percent of the Schools
routine budgets of district governments was
spent on the salaries of teachers at the When allocating DAK or DIP funds across
primary and junior secondary levels and districts, it is crucial to differentiate among
other personnel.8 Often, even the tiny share districts based on their resources and needs.
left over for development expenditures, Provided that reliable data on districts and
which is supposed to be devoted to building schools are available, the national
new classrooms, repairing school facilities, government should be able to develop an
and teacher training, is occasionally used to assistance program to local governments
cover routine expenditures, especially staff that is based on three indices: (i) an index
salaries. This expenditure allocation is that characterizes educational progress in all
going to have to change if education quality of the 400-plus districts, (ii) a financial
is to improve. Teachers do play the key role needs index, and (iii) an education
in the teaching process, as will be discussed management capacity index that measures
in the next two chapters, but adequate the effectiveness of each district’s
resources need to be devoted not only to performance assessment, information
salaries but also to teacher professional system, and financial processes. All districts
development and classroom supplies. can be ranked in a three-dimensional grid
defined by these indexes and grouped into
It is not a good idea for the central discrete categories that would correspond to
government to step in to fill the capital different packages of assistance from the
expenditure deficits at the local level. The central government.
current system of development projects
designed and controlled by the central For example, those districts with the worst
education index and the poorest financial
8
and management capacities would qualify
Article 49 of the new Education Law states that the
for the highest level of investment and
salaries of teachers and personnel appointed by the
central government will be paid out of the national
9
budget, the APBN. Presumably, the teachers and Districts with high levels of local revenue and
personnel whose salaries were transferred to the districts that are required to maintain particular levels
districts as part of the decentralization reform will of funding to qualify for project funds have
continue to be paid under the local budgets, the maintained or increased their level of financing for
APBD. schools.
21
Education Sector Review Volume 1
22 11 12 11 11 1312
20 11 12
20 20 11 201117 1333 10
29 17
11
13
11
11 13
13
1113
22
say, those in the upper
2013 12201111 10 1313 311113 1341311
10 10
11
10
20411
11 20
29
13
20
11 11 111311
22
11
16
11
10
10
221123 11
3 13
22
20
2213
17320
13 10
13
273
13
135 right-hand quadrant
13 20 13 13 1013 19 22 113 13 1114 16813 2213
2029131620 13 1917 518 1020
13
419 20
17 11 28 18 20
17213
18 618
4
0 13 13 20
10
203010 16 20
20
31616 10
6 14 19 4
19
19
22
17 10
3
10
17
34
20 10 20 10 4
3162415 302 13 2
4 10 should not be receiving
14 17 14
1610
52 1017416
2015 5 17
1555516
28 24 28
619 4 22224
30
28 24 15 24 24 14
16
191514
27 614
1424 24 62885838 828108248223
2 6 222 5218 2 the kind and level of
24 5
28 24 23 14 21 27
assistance that those in
23 21 21
-2 24
24
23 21 the lower left-hand
17 24 21
2424 quadrant should be. The
24 23
23 chart also shows that, in
-4 6 general, districts that do
-4 -2 0 2
better or worse in one
Residual gross enrollment variat dimension also do better
Residual variation of total score and gross enrollment or worse in the other.
Data source: 2002 EBTANAS test scores for junior secondary schools averaged by district; However, there are
gross enrollment data by district from SUSENAS 2002.
Note: The codes for the plots refer to the provincial affiliation of each district. districts that do well in
one dimension but not the
other, and the type and
technical assistance program for accelerating level of assistance to them should be
educational development. In exchange for a different also.
high level of financial assistance, these
districts would be required to agree to accept Spend More Resources on Those Most in
a correspondingly high level of technical Need
and managerial assistance from the MoNE.
At the other end of the spectrum, those A common concern about decentralization is
districts with the best education index and that the transfer of authority and
the highest capacities would qualify only for responsibilities to local governments
enough assistance to enhance their weakens the central government’s ability to
educational development but would not be close gaps between the richest and poorest
required to take technical or managerial areas of the country and thus inequalities
assistance in exchange for financial help. grow. Districts with the most resources are
The idea behind the varying level of frequently those with higher enrollment
oversight is that districts prefer to have more
autonomy (less technical and managerial 10
support) than less autonomy (more technical Regression analysis was used to identify the
relationship between education outcomes (that is, test
and managerial support), so this acts as an scores or enrollment rates) and the districts’ average
additional incentive for better performance. household income levels. The regression results were
To illustrate, Figure 3.2 portrays the then used to obtain “residual” test scores and
distribution of districts according to two “residual” enrollment rates that could be attributed to
differences in the education systems and other factors
dimensions of educational development –
and not to differences in the economic status of the
school enrollment rates and average student district.
22
Chapter 3 Finance and Public Spending
rates and better schools, whereas districts experience with its large scholarship and
with fewest resources are those with lower school grants program, launched at the onset
education indicators. The current formula of the recent financial crisis, can also be an
for the DAU allocations includes poverty as important input into the design of such a
one of its criteria (albeit affecting only a targeted program.
small part of the allocation), but there is no
similar mechanism for ensuring that district One estimate of the cost of raising the
governments themselves use poverty as a education of poor youths is given in the EFA
criterion for funding schools. In addition, costing report for Indonesia (McMahon,
the trend towards local governments raising 2003). The report recommends eliminating
their own resources may widen the gap fees. Currently, fees are charged for
between those districts that have a strong entrance; BP3; examinations; procurement
revenue base and those that are less of textbooks, notebooks, and school bags;
prosperous. Currently, districts receive transport; and so on. Districts and schools
twice as many resources from would have to be able to forego revenues
intergovernmental transfers as from their from these fees while increasing the
own revenues, so if transfers are used enrollment of poor students and without a
equitably, they can be a powerful worsening of education quality. At the
mechanism for reducing regional primary level, eliminating fees would mean
inequalities. foregone revenues of Rp 13,000 per pupil in
2004 (2003 prices), on average. At the
Do district governments consider the same junior secondary level, foregone revenues
factors as the central government does when amount to about Rp 57,000 per pupil.
allocating their funds? When we examined
what factors appear to influence education The report also recommends an additional
spending by districts, using their level of grant for the poorest 18 percent of students
per-student education expenditures (from the to cover the opportunity cost of schooling
2002 APBD allocation), we found that those incurred by their parents and the cost of
districts with greater fiscal capacity make teacher salary supplements in their schools.
larger capital investments in education than The report estimates a student grant of Rp
those districts with lower fiscal capacity. 290,000 per pupil per year at the primary
Also, poorer districts (with the level of level, which is more than doubling the
poverty measured as the proportion of the current grant by the government, and Rp
population below a certain poverty 93,000 per pupil per year at the junior
threshold) do not spend more on education secondary level. It would be advisable to
from their budgets than richer districts initiate pilot tests of these and alternative
despite receiving a larger allocation more grant amounts in order to ascertain the likely
from the DAU. Since the households in responses of poor families across different
poorer districts are less able to spend for parts of Indonesia.
education themselves, both central and local
governments should be willing to Lastly, the central government can influence
compensate for this deficit in order to reduce the allocation decisions of the better-off
inequality among districts. districts, for example, by instituting a reward
system for those districts where the
To make pro-poor policies and programs education indicators of the poorest
financially sustainable, it is important to communities or schools significantly
target them to those who need them most. improve and, conversely, by taxing those
There are valuable lessons to be learned where indicators become worse.
from around the world (for example, from
Bangladesh, Brazil, and Mexico) on how
this can be achieved. Indonesia’s own past
23
Education Sector Review Volume 1
Leverage Governmental Resources – But society that exceed the benefits that they
Consider Consequences for the Poor yield to individuals, there is good reason for
society to subsidize the provision of basic
The total resource envelope for education education. In addition, if the direct and
includes private expenditures as well as indirect costs of education are too high, they
public expenditures. The new Education deter poor children from going to school. In
Law states that the financing of education is the various sites that were visited for this
a responsibility shared by the government study, most schools seem to have granted
and the community (Articles 9, 47, and 54). exemptions to those who could not afford
Indeed, students already pay a variety of the fees, even in cases where the fees were
school fees, including monthly tuition fees, quite low, but this is clearly a situation to
entrance fees for new students, term and watch as practice differs across districts and
final test fees, and extra-curriculum fees, across schools.12
averaging an estimated Rp 213,000 per pupil
in primary and junior secondary schools Track and Monitor Spending
(McMahon, 2003). These fees together
constitute a substantial contribution to the The importance of establishing an effective
income of any school. One study found that, information system has already been
on average, fees consist of about one-third discussed above. Having access to accurate
of schools’ non-salary expenditures, which and timely information helps governments
usually account for about one-fifth to one- to plan and manage the system, and sharing
tenth of a school’s budget (McMahon et al, the information with local stakeholders, such
2001).11 Schools also receive revenues in the as parents, through periodic reports may put
form of BP3 contributions and other pressure on district officials themselves to
donations from parents, private foundations, be more transparent and efficient. The focus
and NGOs. group meetings with teachers, principals,
and district officials undertaken as part of
Should schools be relying on students and this review indicate that decentralization,
the local community for resources? There while mostly a positive change, has created
are opposing views on this. On the one more opportunities for bribery and corrupt
hand, those schools that receive considerable practices (Vanwel, Musthafa and
financing from the local community tend to Miftahuddin 2003). Bribes in money or kind
have greater parental involvement, to are said to be more costly, processes often
operate more efficiently, and to have more take longer than before, and the distribution
successful educational outcomes (Bray, of grants, scholarships, and other school
1997; Jimenez and Paqueo, 1996; and funds is particularly vulnerable to
James, King, and Suryadi, 1996). People corruption. Also, school principals
who pay at least a small amount directly for complained that the lack of transparency
education and other school services come to about budget allocations at the central and
value those services more highly than when district levels prevents schools from
they receive those services for free. On the predicting how much revenue they will
other hand, if schools yield benefits to receive except through fees collected at the
school level and makes it impossible for
11
A similar situation prevailed a decade ago when
public schools obtained 92 percent of their total
12
funding (both salary and non-salary) from government At the beginning of the financial crisis in 1997, the
allocations. However, there was considerable MoNE reminded schools that the school admissions
variation among regions. In Jakarta, public schools fee had been abolished in government primary schools
depended on government resources for only 70 in 1984 and that BP3 payments were voluntary.
percent of their total budget, while in other parts of the School revenues decreased in real terms by as much as
country, public schools depended on the government one-third because of the drop in the real values of fees
for more than 90 percent of their budgets (James, and government subsidies as well as an increase in the
King, and Suryadi, 1996 and King, 1997). non-payment of fees.
24
Chapter 3 Finance and Public Spending
them to do any multi-year improvement Smart, 2002). For Indonesia, this means
planning. These problems are exacerbated requiring local governments to prepare both
by the fact that district governments and an adequate investment plan and an
schools receive funding from a number of adequate maintenance plan. Meanwhile, the
different sources, often too many for them to central government should provide
keep track of, all with different management technical assistance to help local
arrangements.13 Because of the fragmented governments to develop plans, arrange
nature of the funding allocations at the financing, and operate the local education
district level in Indonesia, it is almost system as efficiently as possible. Also,
impossible for the ultimate beneficiary (the financial accounting and reporting processes
school or the student) to know how much should become a standard part of the
funding they are supposed to receive and operating procedures at all levels of
whether the funds have been released. In government and in schools.
this situation, standards and information are
very important in increasing transparency At least as much managerial effort needs to
and compliance with policies, regulations, be spent on accounting and reporting
and laws and in reducing corruption at all processes as is spent on planning and
levels of the system. budgeting. It is already clear that a program
for building the financial management
The experience of countries around the capacity of local officials and school
world shows that better information and personnel is urgently needed. This capacity
greater disclosure are key to maximizing the building program also needs to focus on
effectiveness of decentralization (Bird and reporting responsibilities and techniques.
13
This is not a new phenomenon. It was noted in
World Bank’s report “Education in Indonesia: From
Crisis to Recovery” (World Bank, 1998) that essential
information on the budget is “scattered among five
different ministries,” making the management of the
education system a very difficult task.
25
Education Sector Review Volume 1
26
Chapter 4: Quality Assurance and Improvement
27
Education Sector Review Volume 1
The standardized examinations14 for that are still being discussed are the
competence of candidate teachers, though incentives for compliance, the consequences
far from ideal, are based on specified of non-compliance with minimum standards,
curricular or professional competencies. and the mechanisms for undertaking
performance or process audits of more than
Quality assurance as it pertains to individual 400 districts and 180,000 schools and
schools, or groups of schools as in a district, madrasahs. The development of past
is based on self-assessment against some programs related to quality standards has
normative and some self-determined tended to be ad hoc, which has sent
standards rather than on external inspections conflicting messages to districts and schools
against absolute standards as in the past, but regarding minimum standards and
the processes involved are still in the procedures for quality assurance. At
planning phase. Some of the basic issues present, the directorate of the MoNE
responsible for basic education has 54
14 projects providing resources directly from
MoNE technical experts acknowledge that the the central government to schools,
student final examinations (Ujian Akhir
Nasional) are not yet adequately standardized in
weakening the ability of district
terms of test taking, although much progress has governments to fulfill their obligatory
been made in this direction. function to plan, finance, and manage
28
Chapter 4 Quality Assurance and Improvement
education and making it impossible for them them the most. The accreditation document
to monitor centrally funded projects.15 suggests that schools should apply for
accreditation after undertaking their own
In schools, the quality assurance system is in evaluation to determine if their inputs and
its early stages. According to our focus processes meet national requirements and
group discussions with school principals and their own expectations. If schools feel that
teachers in Lampung and Makassar, the they are viable, then they should request a
performance monitoring presently being visit from the local accreditation body.17
done in schools still concentrates largely on Accreditation must be renewed every four
financial matters. The principals and years. It is unclear, however, what will
teachers in the focus groups said that they happen to those schools that do not meet
had not yet discussed setting school minimum accreditation requirements over an
performance standards, and school extended period of time. It is anticipated
supervision and inspection documents that many schools, particularly the numerous
collected during the focus group exercise small private madrasahs that provide
show that the tools used by inspectors in educational services to many poor children,
Lampung and Makassar for supervising especially in remote areas, will fall far short
schools still emphasize administrative issues of the minimum accreditation standards
rather than professional development. (Box 4.2).18 The school accreditation policy
states that the national government will
As set forth in the Education Law and a support and help all non-accredited and low
ministerial decree (KepMen, 087/U/2002),16 ranking schools, but it is not clear from
the post-decentralization model emphasizes where the funding and technical support will
the need for standards. This is evident in the come.
school accreditation process that is currently
being developed and that will apply to all Quality Improvement
public, private, general, and madrasah
schools. Under this system, schools will be Quality improvement is a different approach
accredited as either “viable” or “not viable” that involves upgrading inputs, the learning
by a school accreditation body (SAB). environment, teaching practices, school
Viable schools will be ranked into three organization, and school performance. In
categories, with the lowest category Indonesia, these efforts have tended to be
including schools that meet some absolute limited to particular geographic areas and to
minimum standards. The aim of the system specific supply and/or demand-side
is to raise all schools within a district to the interventions. Past projects have provided
highest category of accreditation by schools with specific inputs (such as teacher
targeting resources to the schools that need training, infrastructure repair, or textbooks)
or have funded processes (such as active
learning methods or continuous assessment)
15
Chapter 2 in Volume 2 of this review contains an
appendix showing the plethora of standard-setting
initiatives that are currently underway. 17
Primary and junior secondary schools will apply to
16
Article 60 of the Education Law stipulates that the the district body for accreditation, while senior
accreditation of schools will be the responsibility of secondary schools will apply to the province.
the government and/or an independent body. The 18
In 2002, according to MoRA data, 5.7 million
KepMen 087/U/2002, which predated the law, children were enrolled in 37,362 madrasahs
established an independent accreditation body (BAS) (ibtidaiyah, tsanawiyah, and aliyah, which correspond
and listed nine school components to be evaluated to the primary, junior secondary, and senior secondary
during accreditation including: the curriculum and the levels of regular schools). Numerous community-
teaching/learning process; school administration and organized madrasah diniyahs also serve a large
management; school/institutional organization, number of children, but no reliable enrollment rates
equipment, and infrastructure; staffing; budgeting; are on record for this type of school. In addition,
teachers and students; community participation; and about 2.7 million children were enrolled in 11,312
the school environment and culture. pesantrens.
29
Education Sector Review Volume 1
100
90
Percent of children 80
70
60
50
40
30
20
10
0
7 8 9 10 11 12 13 14 15 16 17 18
Age
Average student test scores are lower in madrasahs than in regular public schools in 17 out of 26 provinces,
although their overall averages are not very different. Other evidence indicates that madrasahs lack adequate
school facilities, teaching and learning materials, and trained teachers. Those that are registered or accredited
are considered public madrasahs and receive some funding from the Ministry of Religious Affairs; however,
this funding is often not enough to meet their minimal operational and salary needs. Occasional public
subsidies are available also for private madrasahs (in the form of grants, teacher training, the provision of land
and teaching materials, and the secondment of government teachers), but these schools mostly rely on
community contributions and student fees.
Under the decentralization reform, the government is considering treating all schools (whether public, private,
or madrasah) exactly the same according to one policy under the governance of the MoNE at the central level
and of provincial and district governments at the local level. To integrate madrasahs into the regular school
system will mean not only reconciling the governance and funding structures of public and religious schools
but also addressing critical challenges related to quality. Thus, being integrated into the mainstream education
system will bring both benefits and costs to madrasahs. The benefits include the increased ability of madrasah
graduates to transfer to regular public schools and universities and to find employment. Also, they may receive
greater technical and budgetary support from district governments and communities than they now receive from
the national government. However, there is a risk that the opposite will happen – that madrasahs will receive
less support from district governments, partly because they will not be able to compete for resources against
regular public schools. They have to subject themselves to district oversight and of having to adopt the
district’s general curriculum, to hire qualified teachers, to use textbooks, and to build facilities such as
laboratories that are required by the curriculum. Madrasahs will face a double burden in that they must teach
the public school curriculum as well as a religious curriculum. The Islamic State Institutes (IAINs), which
currently produce the majority of the 450,000 graduates who become teachers in madrasahs, will need to be
integrated into the national teacher training system. Also, madrasahs may find it increasingly difficult to deny
admission to non-Muslim students.
Sources: Aziz (2002); Faiqoh (2002); Jalal (2000); Ministry of National Education/Office of Educational Research and
Development (2002).
30
Chapter 4 Quality Assurance and Improvement
Indonesia has experimented with quality Table 4.1: School Committees Still Not
improvement projects for over 30 years, but Fully Engaged
the many lessons from these projects have Percentage distribution by frequency of School
not been integrated into the way in which Committee meetings
teachers teach and principals manage Every week 0.5
Every two weeks 0.7
schools. This is partly because of low Every month 18.3
political willingness at the national level to Every six months 43.7
follow through on successful models and Every year 20.5
partly because there are not enough Only once in awhile 16.3
professionals in the government and in Data source: Bali Impact Crisis Survey, 2003
schools with the competence to implement
these good practices on a wide scale. 20/2003). School-based management (SBM)
is a form of decentralization in which the
Quality improvement projects have followed individual school is the primary unit of
two models – school effectiveness and improvement and the transfer of
school reform in Indonesia. School decisionmaking authority to the school is the
effectiveness models, which have been built primary means through which improvements
on a solid foundation of empirical studies in can be stimulated and sustained (Malen et al,
developed and developing countries, are 1990). Its purpose is to engage people from
about the mix of inputs that define “the the schools’ local communities in planning,
school climate” and about the “enabling monitoring, and improving school quality by
conditions” and “teaching/ learning process” serving on school committees (Article 56
that most effectively produce cognitive Law 20/2003).20
achievement. In Indonesia, these programs
were largely expert-driven and developed at Our findings indicate that school committees
the central level. Very few projects became are in place in Indonesia but are not yet
nationwide programs, and innovations rarely operating as instigators of quality
spread on their own from school to school.19 improvement. For example, a survey of 425
schools in Bali in 2003 revealed that 97
In contrast to school effectiveness models, percent of schools had a school committee,
school reform models are inherently mostly consisting of teachers, parents, and
grounded in management theory, honorary members who might include the
particularly management for change. These bupati. In more than 80 percent of these
models emphasize relationships among schools, however, the committees met at
stakeholders and recommend making most once every six months and played only
decisions based on negotiation, standard a peripheral role in the schools’
measures, comparative and publicly decisionmaking processes (Table 4.1).
available information, and accountability to Similarly, we found in our focus group
achieve school development goals. Under discussions with teachers and principals in
decentralization, this is the key policy that Lampung and Makasar and our meetings
the Indonesian government has adopted for with school committees in Central Java and
improving school quality (Article 51 Law Yogyakarta that there is confusion about the
role of these committees and a high level of
19
skepticism about what they can achieve.
Two exceptions include the active Many principals had not yet discussed
learning/contextual learning projects (CBSA-SPP) that
established communication channels and innovative performance standards or improvement
teaching approaches through local teacher groups and
the new competency-based curriculum. The National
20
Curriculum Center reports that numerous teachers The model has been tested at the junior secondary
from Jakarta’s private schools have requested level (in the BOMM and JSE projects, for example)
materials and have obtained guidance from the and is a component of several large projects (such as
Center’s website. the DBEP, SIGP, and BEP).
31
Education Sector Review Volume 1
planning with school committees, and there information collection and processing
were not enough public funds to sustain the systems; and (vi) circulate information on
committees. This situation has created a good practices to schools to spread effective
financial burden for parents that has led to ideas for school quality improvement as
mistrust between schools and communities. widely as possible.
Nevertheless, the focus group participants
reported that decentralization has Many districts are responding with
empowered teacher and principals and given enthusiasm and initiative to their new
them more confidence in their ability to responsibilities. Having these
manage the teaching/learning process. responsibilities is giving them a much
greater incentive to assess the education
These mixed reviews were further provided within their boundaries. Because
confirmed by a 2003 survey of 36 schools in of the magnitude of the changes involved,
five districts undertaken by the Managing however, the situation at the local level may
Basic Education Project. The survey found be chaotic for a while as institutions redefine
that school committees have been their roles and relationships, debate how
constituted and that they meet two or three best to allocate and manage resources, and
times a year to discuss problems regarding learn to become more democratic and
facilities and fundraising, but the teachers accountable to civil society. In addition,
felt that the committees were not active many districts lack the experience and
enough. knowledge to develop multi-year,
information-based plans that address issues
Policies to Improve the Quality of such as low completion rates, poor learning
Education achievement, and rigid teaching methods.
Inadequate information and obsolete
We recommend the following policies: management information systems also limit
the extent to which districts can plan for the
Support National Programs, District future effectively. In sum, significant
Projects, and School Improvements investment and time will be required before
districts will be able to develop and
As districts and schools begin implementing implement information-based strategies for
both quality assurance and quality educational development.
improvement measures, the role of the
central government needs to be redefined. Everything that is measured, monitored, and
Instead of undertaking new project-based evaluated is aimed in the end at improving
initiatives, the MoNE should: (i) phase out the performance and practices of schools.
any of their policies that inhibit schools Hence, the bulk of investment in the new
from managing their own plans; (ii) crack decentralized education system must be at
down on entrenched behavior like patronage the school level. Likewise, these
and petty corruption that prevents the investments must be planned, managed, and
effective use of resources in the system; (iii) monitored at the school level. Whether they
phase in programs that set standards and are meant to rehabilitate crumbling school
rules but not targets for quality management; buildings or to revise teaching practices, if
(iv) adopt policies that foster quality they do not happen in and for the schools,
improvements, for example, by introducing they simply will not yield the required
regulated market-based incentives to results – better education quality and higher
encourage districts and schools to improve student academic achievement.
their performance; (v) develop the central
government’s capacity to provide needed
services to districts, such as better teacher
training, student assessment mechanisms,
32
Chapter 4 Quality Assurance and Improvement
33
Education Sector Review Volume 1
34
Chapter 4 Quality Assurance and Improvement
Ensure Equity in Quality Improvement the low attendance rate of children at junior
secondary schools is generally attributed to a
Indonesia has an admirable record of lack of schools of this level, the perceived
adopting pro-poor policies, particularly lack of relevance of secondary education,
during the economic crisis of the late 1990s, and economic hardship. However, another
but these gains could be lost unless a pro- possibility is that these schools are not
poor agenda is built into the national quality providing instructional programs that are
assurance and improvement program. For sufficiently challenging and
example, if poor communities are to be developmentally appropriate for 13- to 15-
expected to share the costs of repairing year-old students.
schools, then there may be a drop in demand
for education among the very poor. Also, if From Setting Standards to Meeting
district minimum service standards are not Standards
pro-poor, then they might have the
unintended effect of pushing poor children Once the standards for minimum service,
out of the system unless the worst accreditation, and certification are set, how
performing schools are improved, they are will they be implemented and what are the
merged with stronger schools or closed, or incentives for implementation? Local
their students are subsidized so they can education officials are now accountable for
afford to enroll in better schools. their performance to two higher authorities –
the local legislature or executive and the
Stimulate Demand for and Supply of central MoNE. It is still unclear what
Innovations and Good Practice for responsibilities the central government has
Improving Teaching towards those districts that fail to meet
minimum standards over a period of time. If
While projects have helped specific districts there are no incentives for compliance or
and schools to improve their management consequences for non-compliance, then the
and teaching practices, there is as yet no standards will not help to assure quality.
systematic way to disseminate successful The critical unresolved issue of what to do
ideas for improving teaching and learning about non-compliant schools is a
practices available across the whole governance issue that should not be left up
education system. Therefore, to encourage to the school accreditation body. Whether
the development of ideas for improving the or not to revoke a non-accredited school’s
quality of teaching and learning, the central right to enroll fee-paying students should be
government should set up a national grant- decided by a policymaking level of
making institution for educational government rather than by an independent
development to provide competitive grants body. Similarly, any decision to provide
to schools or clusters of schools who come targeted resources to unaccredited and low-
up with innovative proposals. This agency performing schools should be backed up by
should also encourage schools to implement a national commitment to provide districts
approaches that have already been proven to with these resources.
improve teaching practices. For example,
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Education Sector Review Volume 1
36
Chapter 5: Teacher Management and Performance
The level of school performance and student individual schools. At the moment, there
achievement is the result of several factors are several projects in effect that are taking
but perhaps the single most influential factor various demand-driven approaches to
is the quality and performance of the teachers’ in-service training, but no
teaching force. When schools perform well, systematic evaluation has been done of their
it is due to a combination of effective impact on student learning and teacher
teachers and strong leadership by the school performance.
principals. The education and experience of
teachers are all important factors in Management Changes under
improving student performance, but Decentralization
teachers’ freedom to choose their own
methods and books and how much time they When teacher management systems are
spend on tasks such as preparing lessons and changing, this can be a good opportunity to
marking students’ work are also vital implement new ways to achieve education
factors.23 goals. However, during the period of
transition, there can be tensions and
As discussed in the previous chapter, opportunistic behavior at the school and
minimum service standards and district levels in the employment,
accreditation criteria for schools and deployment, and promotion of teachers. The
teachers are currently being developed. implementation of the school-based
However, it is not yet clear how the management approach and the creation of
information from the accreditation and district education boards are changing the
quality assurance processes will be used to nature of teachers’ accountability and their
assist schools and teachers to improve their incentives to perform well. These changes
performance. Nor is it clear where the mean that decisions about a school’s
technical capacities would come from to resources and goals are made by those who
help schools and teachers. The centralized are in the best position to understand the
top-down approach to in-service training is circumstances that prevail at that school,
no longer appropriate as it is supply-driven which is highly desirable. However, they
and is divorced from the goals and needs of also put a heavier burden on teachers, school
principals, school committees, and parents
23
What do we know about teachers in other countries? to work together to improve students’
Researchers in the U.S. have found that teachers’ achievement levels.
higher cognitive skills, as demonstrated in
standardized tests, are associated with better student
outcomes (Strauss and Sawyer, 1986). Recent Responsibility for Teacher Employment
research has also found that on-the-job teacher and Deployment
training is associated with improved student
performance (Angrist and Lavy, 2001). Rewarding At the time of decentralization, large
teachers for what they actually know and do in the
classroom is likely to have a considerable positive numbers of civil servants formerly
impact on student performance (Odden, 2000), but employed by central government agencies
measuring and evaluating what teachers know and do were relocated to district governments along
in the classroom is expensive and far from with budget allocations to cover their
straightforward. Finally, an analysis of junior
secondary school data from the Third International
salaries. The district government became
Mathematics and Science Study (TIMSS) (Woessman, responsible for employing all teachers in
2001) showed how institutional characteristics as well public schools except those in madrasahs.
as teacher characteristics contribute to students’ These include all civil service teachers
academic performance.
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Education Sector Review Volume 1
Although district governments are As already discussed, the MoHA has been
responsible for hiring teachers and paying developing minimum service standards,
their salaries, several ambiguities persist. especially as they apply to districts’
For example, those madrasah teachers who obligatory functions, while the MoNE has
are civil servants are still managed by the been developing performance standards that
MoRA, not by districts. Districts, through will affect teachers. The Directorate of
the MoHA, have always been responsible Higher Education has developed standards
for deploying teachers, but with the that must be met by teachers graduating
establishment of school committees, districts from the DII teacher education program (a
might take on a greater role in selecting and two-year post-secondary school teaching
appointing teachers. Three districts in diploma needed to teach in primary schools)
Flores, with the support of AusAID, are and is expecting to extend this exercise for
piloting just such community participation other initial teacher preparation programs
in determining the selection criteria for under its accreditation control (such as the
teachers and head teachers and in the DIII, which is a three-year diploma required
selection process itself. However, district to teach in junior secondary schools, and S1,
governments are bound by a centrally a four-year university degree). These
determined ceiling on the number of standards apply to teacher education
additional civil servants they can recruit (for programs and define in some detail what a
any and all sectors). Hence, if a district graduate teacher should know and be able to
government wishes to hire additional do. Complementary to this, the Directorate
teachers above this ceiling, the district must of Education Personnel is preparing teacher
pay for them from its non-salary resources. competency standards to be used in
assessing teacher performance and
The salary levels and promotional and identifying their professional development
reward systems for civil servants are still set needs. It is expected that these competency
centrally, although many districts provide standards will be used by quality assurance
teachers within their jurisdiction with teams in the provinces acting on behalf of
supplementary benefits and incentives. the MoNE.
While the districts have the option to
dismiss contract and honorary teachers or Besides standards regarding qualification
not to renew their contracts, it is still not and competency, monitoring is also essential
clear whether or not a district government with respect to teacher behavior in school.
can retrench or dismiss civil service Teacher absenteeism is one of the reasons
teachers, as they might want to do if they why students do not learn. A multi-country
38
Chapter 5 Teacher Management and Performance
24
Primary teacher absence rate is the percentage of The ways in which the lifelong education of
full-time teachers who were absent from a random teachers relate to teachers’ career,
sample of primary schools during surprise visits. promotion, and incentive structures have not
Enumerators made two to three rounds of been clearly articulated. Districts now are
unannounced visits to each school over a period of taking the initiative to link teacher
weeks or months, to get a more accurate estimate of development programs directly to teachers’
absence and, after verifying workers' schedules, classroom behavior as a way of improving
recorded which of them were absent. The data school quality and are putting a high priority
provide the number of teachers who were supposed to on providing teachers with adequate skills.
be on duty but were in fact absent from the school, Indeed some school committees have been
without regard to the reasons for absence. Many using resources to allow teachers to attend
personnel were absent for valid reasons, such as in-service or other professional development
authorized leave or official duties. Nevertheless, these programs.
absence rates are useful for two reasons: first, because
the reasons for absence given by facility directors
Teacher Employment and
were typically not verifiable; and second, because
even authorized absences reduce the quantity and
Deployment
quality of public services in these primary schools.
The study covered 147 public and private schools in In 2000, there were over 2 million teachers
10 districts in Indonesia (Chaudhury et al., 2004). serving the entire school system in
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Education Sector Review Volume 1
Indonesia, with 1.3 million in primary teaching load, regardless of the size of the
schools and 600,000 in junior secondary school where they are employed. Even
schools. It was a relatively young teaching when the teacher/student ratio is calculated
force, the majority of teachers (64 percent) using class teachers only, the national ratio
being under 40 years old. More than half is 1:32, which is comparable with other
were employed in primary schools, and of countries in the region.25 At the junior
these, 93.4 percent were civil servants. In secondary school level, the teacher/student
comparison, only 62 percent of teachers in ratios are 1:16 in public schools and 1:10 in
junior secondary schools were civil servants. madrasah schools. At present, teachers at
The large number of teachers who are civil this level expect to teach only one subject,
servants means that districts have a large and regardless of a school’s enrollment,
wage bill inherited from the centralized era each school expects to have at least 18
when teacher-to-school allocation norms teachers.
were extremely, if not extravagantly,
defined. To rationalize teacher salaries and teacher/
student ratios, several districts have been
However, Indonesia’s birth rate is falling, its merging several small schools into one and
primary enrollment rates already high, and redeploying school principals and teachers
the supply of teachers at the primary level to understaffed schools and are discussing
plentiful, so the country is in a position to the relative merits of civil service teachers
reduce the size of the teaching force at the and contract teachers.26 In cases where
district level. This would allow districts to schools have been merged and the number
spend more of their resources on quality of school principal posts have decreased,
inputs and to shift resources to the salaries there is the danger that tensions will arise
of additional teachers at the secondary level. between those who lose out and those who
This does not mean that there are no teacher retain their jobs. As with primary schools,
shortages, but the shortages in the primary many small junior secondary schools could
sector are primarily problems of distribution also be amalgamated to form more efficient
rather than supply. units, and many districts are now doing so.
This implies that junior secondary school
For many districts, the most difficult teachers will need to be able to teach more
questions about increasing access and than one subject, which has implications for
efficiency at the primary and secondary teacher training and teacher development
levels are about changing teacher/student programs. Some small junior secondary
ratios (particularly at the primary school schools are already aiming to recruit
level) and recruiting secondary school teachers who have majors in at least two
teachers who are qualified to teach more teaching subjects.
than one subject. Nationally,
teacher/student ratios are generous at all We recommend that districts develop their
levels, but there are wide differences among own formula for calculating teacher
districts. At the primary level, based on the requirements that takes into account the
total number of teachers including head number of students enrolled in a school
teachers, religion teachers, sports teachers, rather than the number of classes. One
and class teachers, the national teacher/
student ratio is 1:22 in public primary 25
By comparison, the teacher-student ratio is 1:18 in
schools and 1:14 in religious primary
Malaysia, 1:35 in the Philippines, 1:20 in China, and
schools. Only 68 percent of teachers are 1:32 in Korea in 2000 or thereabout (World Bank,
class teachers; of the remainder, 13 percent 2004).
26
are religion teachers and 6 percent are sports These discussions are based on the pilot activities of
teachers. Head teachers, religion teachers, the District Basic Education Project, and the Unit
Fasilitasi, the MoNE, and Basic Education Project
and sports teachers rarely have a full reports.
40
Chapter 5 Teacher Management and Performance
proposal put forward in the past in Indonesia schools. The minimum qualification for
laid out a sliding scale of teacher primary teachers was set in 1989 as a two-
deployment based on school enrollment year post-secondary school teaching
(Somerset, 1997). This scale takes into diploma (DII). Yet in 2002, only one-half of
account the needs of children in lower all primary school teachers in Indonesia held
primary school classes (highly dependent this certificate or a higher qualification. The
learners) that should have fewer students per minimum qualification for teaching in junior
teacher and in upper primary classes (more secondary schools is a three-year diploma
independent learners) that should have more (DIII). By 2002, 67 percent of junior
students per teacher. Small schools where secondary school teachers held this or a
multi-grade teaching is the norm often have higher qualification, while the remaining
fewer students per teacher. To implement one-third had only a two-year diploma (DII).
this sliding scale of teacher allocation, For many teachers, the opportunity to
district planners will need timely and upgrade to the 1989 standard came through
accurate information on the number of participating in Open University part-time
teachers and enrollment rates in each of their distance education programs. However,
schools. Also, the central government will there is very little school-based content and
need complete information on districts’ practice in either the formal full-time
needs as well and on how many students programs or the part-time programs, and
graduates each year from universities and what does exist is poorly executed.27
other institutions in order to broker the
deployment process efficiently. The distribution of those teachers with only
the minimum qualification is uneven across
The MoNE can assist this process by districts and provinces (Figure 5.1). Because
ensuring that adequate information about the many districts operate small school systems
supply and demand for teachers is available and because the pool of qualified teachers is
to local governments, schools, and teachers likely to come from the province as a whole,
themselves. A pilot scheme for identifying these disparities in the distribution of
those schools with too many and too few qualified teachers will need to be addressed
teachers as a guide for deploying contract at the provincial level. Provinces need to
teachers is being implemented as part of the find ways to fund and develop programs for
Basic Education Project. Hopefully, lessons upgrading teacher qualifications that are
from this pilot scheme can be used to inform
efforts to deploy regular teachers as well. A Figure 5.1: Districts Vary in Proportion of Primary
teacher deployment scheme in the Teachers with Minimum Training Qualification,
Philippines also provides valuable Percentage of teachers
experience about how to deploy new
teachers (Box 5.1). Sum atra
Sulaw esi
Teacher Professional Development Papua & Eastern Is
Kalim antan
Java
In the past, teacher quality has been
measured mainly by the level of certification 0 20 40 60 80
rather than performance and classroom
results. This is now changing, as can be seen Notes: The island categories pertain to all provinces in those islands.
Data Source: Ministry of National Education,.
in the efforts of different directorates in the
MoNE to prepare standards for new
graduates from teacher training courses,
27
technical competencies that serving teachers A similar situation prevails in Nigeria where
should meet, and minimum service research has shown that little value is added to a
teacher’s performance if he or she acquires a higher
standards and accreditation criteria for qualification through full-time or part-time study.
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Education Sector Review Volume 1
The Philippines is conducting a pilot program to improve its system for deploying new teachers. Using
student-teacher ratios as the principal indicator, disparities in teacher provision at the regional,
provincial and school level were analyzed and the results were displayed in table form, and also through
GIS mapping. A color-coding scheme to identify areas with relatively generous teacher provision and
areas with teacher shortages of varying severity and estimates of a statistical measure of equity in
access to teachers were employed. It was found that while the national distribution of teachers among
regions (clusters of provinces) is fairly equitable, the distribution among provinces within a region and
the distribution within provinces themselves were much less equitable. In fact, there were high-
shortage schools even in provinces that, in aggregate, were relatively well supplied with teachers.
Older schools, especially those in areas of stable or declining population, tend to be generously staffed,
sometimes showing substantial teacher surpluses, while newer schools, many in poor areas, had
deficits.
This scheme was applied in 2002/3 to the deployment process of new teachers that takes place every
two years. In preparation, provincial teams were required to provide teacher-availability data for all
schools under their jurisdiction. These teams attended two-day workshops, conducted by the
Department of Education staff, to acquaint them with a new-teacher deployment request form and to
train them in using computer software designed to prepare data tables and teacher-deployment maps.
All schools complied with requests to provide the necessary data. The color-coded provincial maps
became the basis for all deployment negotiations among provinces, at the level of principals and with
parliamentary representatives who had a say in how education resources are allocated among schools.
As a result of the new system, of a total of 25,000 new teaching positions, 77 percent of elementary
school teachers and 71 percent of secondary school teachers were allocated to the teacher-shortage
areas. There were still wide variations, however. At the elementary level, one region achieved a
targeting proportion of 97 percent, while two others achieved only 31 percent and 54 percent. At the
secondary level, the range was equally wide: between 96 percent in the most effective region and less
than 50 percent in three less-effective regions. Further steps are to be implemented. In particular, it will
be essential to conduct further training to ensure that at all levels of government and the schools, there
is a critical mass of professional and administrative staff who understand the deployment system, know
how to apply it, and feel committed to its maintenance.
qualitatively better than those that currently competency standards for teachers and ways
exist and that are compatible with the to measure their performance against these
principles of school-based management. standards. However, in line with the new
There have been a large number of teacher school-based management model, teachers’
training projects in Indonesia over the past professional development needs to be linked
30 years (Sweeting, 2001). These projects much more closely to the context of the
have had various objectives including to actual classrooms in which they work and to
revise the curriculum in pre-service the monitoring of school performance and
education programs, upgrade the technical standards. Teachers need to be given
capacities of teacher educators and teacher opportunities to continue learning for their
education institutions, and develop in- own self-development, to gain their license
service training and professional support to teach (assuming that such a system is put
systems. While there is considerable in place) or improve their performance, to
experience to build on, it is time to consider enable them to become mentors in induction
a new paradigm that takes school programs, and to enable them to be
performance as the focal point of the career- promoted to posts of responsibility in
long professional development of teachers. schools and/or training programs. This
Indonesia has begun to develop a set of assumes that appropriate reward systems are
42
Chapter 5 Teacher Management and Performance
Mexico’s decade-old teacher incentive program, Carrera Magisterial, is a teacher compensation reform
program first implemented in 1994. Teachers who voluntarily join the program agree to participate in
annual performance evaluations and to have their annual salary increases linked to the results of these
evaluations. These performance evaluations, totaling 100 points, consist of: the performance peer
review (10 points), teacher subject matter knowledge as measured by the teacher’s test score (28
points); student examination scores (20 points); teachers’ educational attainment (10 points); their
completion of accredited courses to update their skills (17 points); and years of teaching experience (15
points). The wage bonus associated with the program consists of a percentage of the base wage and can
be quite substantial.
Although the program is voluntary, the number of teachers who have joined the program has increased
substantially since 1994—from 39 percent of teachers in its first year, to 49 percent after three years.
As a result, the proportion of students whose teachers are enrolled in the program more than doubled in
the period between 1994 and 1996 and is now around 25 percent of all students. In addition, in 1997
the percentage of all teaching positions that were filled by an individual participating in the program
was close to 50 percent. Of these, 22 percent have received promotions.
The Carrera Magisterial program appears to be having a significant impact on the Mexican education
system as a recent study found that those students whose teachers participate in the program have
higher average test scores than students whose teachers are not in the program.
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Education Sector Review Volume 1
Indonesia may be lower than those in other to work, the DAU allocations to districts
countries at a similar level of economic must be disproportionately targeted to
development (such as Chile, the Philippines, poorer districts so they can afford to add
and Thailand), this is partially offset by the sufficient incentives to the basic salaries to
fact that teachers in Indonesia work fewer ensure that teachers will have an incentive to
hours and have smaller classes on average apply for jobs in those districts, even for
(OECD, 2001). MoNE studies of how much vacancies in remote schools. Districts
time teachers spend on instructional tasks should be responsible for determining
indicate that teachers spend only about half appropriate allowances and top-ups for
their time in school actually teaching, teachers working in remote locations or
perhaps because they are not aware of the under difficult conditions. This should not
number of hours of instruction and school be done centrally because if it were, then all
days in a year they are obligated to work. schools would try to be classified as
On a per hour basis, teachers earn more than “difficult” so that their teachers would be
most other workers and have many more paid more. An approach like this has been
days off per year. Indeed, during the 2003 tried in Brazil (Box 5.3).
national recruitment of contract teachers,
there were two applicants per vacancy, In most cases, it would be better to offer
indicating that current salaries do not appear bonuses to supplement teachers’
to be a major deterrent to aspiring teachers. remuneration instead of altering their basic
However, the situation is not the same for all pay scales to reward teachers who take on
teachers, so a review of the entire salary extra responsibilities or duties, to attract
scale is warranted. In particular, teachers better candidates to the teaching profession,
with a university degree (that is, mostly and/or to attract teachers to rural locations
those who teach senior secondary students) where there is a scarcity of applications for
earn slightly less than other workers with an vacant teaching posts.
equivalent level of education.
Using Teacher Management Systems
Under decentralization, it is important to to Achieve Education Goals
ensure mobility in the teacher labor market,
even while decentralizing the employment Decentralization in itself does not
of teachers to, for example, the school level. automatically improve the performance of
The best way to set up teachers’ salary schools and teachers, but effective teacher
scales may be to have a national (or management systems can help to do so.
provincial) pay scale or salary grading Over the longer term, several actions are
system that is based on minimum pay levels needed: (i) to devise strategies to strengthen
agreed between the central government and the professional life of teachers (ii) to
teachers’ unions and professional develop transparent mechanisms for schools
associations but to allow districts and to select their own teachers; (iii) to link
schools to offer supplemental benefits and school performance and teacher
allowances to teachers according to their performance reviews to teachers’ career
own criteria.29 For this topping-up process development and promotion; and (iv) to
37 percent less respectively than other paid workers
with the same levels of education. facilities and materials, longer school days, better
29
After determining the base salary level, a study in management practices, and more skilled teachers, but
India (Kingdon, 1996) suggested that salary structures that investing in smaller pupil-teacher ratios (in urban
for teachers were inefficient, with teacher areas where there is no multi-grade teaching), and
characteristics that improve student learning hardly investing in teacher experience, training, post-graduate
being rewarded while other teacher attributes that have education, and higher across-the-board teachers’
few discernible learning benefits for the students had a salaries may not yield enough benefits to be justifiable
significant salary pay-offs. This suggests that it would in a resource-scarce environment.
enhance school efficiency to spend funds on school
44
Chapter 5 Teacher Management and Performance
In 1998, Brazil implemented an education finance reform called the Fund for the Maintenance and
Development of Primary Education and Teacher Enhancement (FUNDEF). The main objective of this
fund was to equalize educational opportunities across states and municipalities by guaranteeing a
minimum expenditure per pupil in primary schools throughout the country. Embedded in the reform
was a requirement that at least 60 percent of the additional funds provided by FUNDEF to local
governments must be spent on teachers’ salaries.
The program was expected to improve teacher quality and student outcomes in several ways. First, it
would increase the salaries of existing teachers in regions that, previous to the reform, had had
relatively low teachers’ salaries. This would make teaching a more attractive profession, particularly in
these regions. As a result, it would increase the number of individuals interested in entering teaching
and make teaching an attractive career to more highly skilled individuals, who prior to the reform
would have been likely to choose to enter other professions. Second, local governments could use the
increase in resources for teacher salaries not only to increase the salaries of existing teachers but also to
hire additional teachers, thus enabling them to reduce class sizes, which would probably also improve
student outcomes.
An assessment of the reform in 2002 revealed that regional disparities in teacher pay had been reduced
and that the number of teachers who had at least graduated from secondary school had increased. The
study also showed that the increase in teachers’ compensation and in the number of teachers with at
least a secondary education were positively associated with better student outcomes such as lower
dropout rates and higher pass rates.
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Education Sector Review Volume 1
46
Chapter 6: The Way Forward: Making Decentralization Work for
Education
This review of Indonesia’s education sector has system and any lack of commitment
addressed the familiar issues of quality, from the government to confronting
efficiency, and equity but through the special some difficult implementation issues
lens of the current decentralization reform. It could erode the effectiveness of the
has addressed how the country’s key education reform.
goals (reaching universal enrollment in basic
education and improving the quality of Based on the evidence discussed in the previous
schooling) are going to be achieved in a system chapters, this chapter presents a detailed policy
that is supposed to be managed primarily at the agenda that identifies core objectives, specific
district rather than at the central level. The recommendations for action (with a
introduction of decentralization three years ago corresponding assessment of how urgently those
dramatically changed the rules and processes of actions need to be taken), and suggestions on
service provision, and all of the relevant which agencies should implement each action.
stakeholders are still in the process of This agenda is summarized in a policy matrix at
understanding, adapting to, and managing the the end of this chapter (Table 6.1). Many
implications of those changes. With this district governments and schools urgently need
paradigm shift in governance, how education some guidance on the extent of their
services are going to be delivered cannot be decentralized responsibilities and assistance on
“business as usual” for everyone. The review how to carry them out, so the recommendations
has identified areas in the regulatory framework of this review apply to them as much as to the
and implementation processes of the central government.
decentralization reform that need to be clarified,
improved, or corrected. Many messages have A Policy Reform Agenda
emerged from the review, but the two
overarching messages are: The following set of policy recommendations
stem from: (i) the observations and conclusions
x Improving education quality across the of the team that undertook this review of
system is the key educational challenge Indonesia’s education sector, (ii) numerous
for Indonesia today, and even concerns documents produced by donor-assisted projects,
about equity and serving the poor must and (iii) discussions (in the form of meetings
be couched in terms of universal access and interviews) with many stakeholders in the
to education of acceptable quality. system, including officials in the central
agencies, provincial and district officials,
x Decentralization can potentially help to teachers, heads teachers, and members of school
meet this quality challenge—by committees (including some parents), national
spreading the governance and education experts, and the staff of aid agencies.
managerial responsibility for improving In addition, in collaboration with the central
better education across different government, the team launched a much broader
stakeholders, by strengthening consultative process with these various
accountability mechanisms, and by stakeholders in December 2003-January 2004.
enhancing incentives to innovate. The team’s recommendations are as follows.
However, any delays in clarifying and
rationalizing functions, structures, and
financing throughout the education
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Education Sector Review Volume 1
Establish clear and efficient function Reform the structure and processes of the
assignment within the education system and central Ministry of Education so that it can
align this with appropriate governance and fulfill its core functions of developing and
management structures and financing harmonizing education policies and designing
arrangements at all levels of the system. an implementation program, and an investment
and funding plan for those policies, while
As discussed in previous chapters, the ensuring that local governments and civil
decentralization laws left the assignment of society have a voice in this process.
governance, managerial, and financing functions
in the education sector vague. Similar functions At the moment, the MoNE is not organized in a
and roles have been given to different levels of way that is consistent with its new core function
government, which is a recipe for replication, of quality management and with the spirit of
conflict, and chaos. Also, functions and decentralization. Currently, the Ministry is
structures are not aligned (for example, a large organized by levels of education, which has
central Ministry of National Education continues tended to produce administrative silos and a
to exist despite the transfer of many of its large, unwieldy bureaucracy. There have been
responsibilities to lower levels of government) limited initiatives within the Ministry to fulfill
and financing arrangements do not conform to its functions given under the decentralization
functions (as illustrated by the many different reform, but these initiatives have been assigned
sources of financing for capital expenditures at mainly to an existing unit (for example, the
the local level). Moreover, some devolved Decentralization and Facilitation Unit). What is
functions are best left to the national or needed instead is a fundamental change in the
provincial levels. Some tasks that can most way the Ministry operates. The MoNE should be
efficiently and effectively be carried out at a reorganized according to its new major
level of government higher than the district are: functions, consistent with its oversight role in a
coordinating the strategic direction of the decentralized education system. In particular,
education system, setting education standards, the Ministry should:
developing technical support systems, assessing
best practices, and encouraging the development x Harmonize and link new education
of markets. policies and programs, and retire any
leftover policies and programs that
There are some other issues that need to be undermine the goals under
resolved at a higher level than within the decentralization. Since decentralization,
education sector itself because they also pertain various simultaneous efforts in, for
to other sectors besides education. Resolving example, standard setting, teacher
these issues will require bold steps, including certification, and school rehabilitation
reviewing and revising the decentralization laws and repair have been launched, but it is
to clarify the assignment of functions, to correct vital to coordinate these initiatives to
the misalignments between functions and prevent wasteful duplication and
structures and between functions and financing contradictions. In addition, the MoNE
arrangements, and to follow through with should participate in a permanent inter-
corresponding structural changes. Without these ministerial forum for resolving any
bold changes, education stakeholders will not be policy conflicts that affect different
able to trust the central government’s sectors such as the current civil service
commitment to sharing authority and resources, regulations that are not appropriate for
which will dissipate all of the current impetus managing a decentralized teacher
for reform. service.
48
Chapter 6 The Way Forward
x Develop, test, and disseminate new central government can facilitate this
management and operations systems. collaboration by giving financial
The central government, local incentives for information reporting, by
governments, and schools all urgently reinforcing local pride at being involved
need new systems in three areas— in producing a joint product (such as
information, budget and expenditure standards and definitions developed
tracking, and planning, monitoring, and collaboratively over time), and by
evaluation. The existing system for stressing to weaker districts that
collecting and reporting information on collaboration will enable them to learn
schools has collapsed since from what the stronger districts are
decentralization. Nor is there any doing.
effective system for keeping track of
district-level education expenditures or x Develop management and technical
for determining and tracking the capacities at all levels. Running the
allocation of funding and resources to new management and operations
schools. There are some local systems will require new skills. The
experiments and projects that are biggest bottleneck to implementing
addressing these issues, but these efforts devolved functions is the lack of
are largely sporadic and undocumented. technical and managerial capacity at the
One of the responsibilities of the central local level. Building this capacity must
government is to encourage local begin with the MoNE defining
experimentation, identify good performance standards and measures for
practices, and build on these to create all decentralized functions and a
management and operations systems corresponding checklist of basic
that will be effective in a decentralized competencies needed to carry them out.
context. This checklist can then be used by each
level of government to assess their own
x Foster a national education information current capacity, design a program for
system consistent with decentralization. upgrading that capacity, and fill future
It is worth singling out this function staff vacancies. Such a variety of skills
because having an effective information will be needed that it is highly unlikely
system will be vital for the MoNE to that a single service provider will be
carry out any of its new functions, able to meet all staff development needs.
particularly quality assurance. In order However, since the current supply is
to build an effective information system, limited, the government should take
the MoNE should decide what kinds of immediate steps to expand and diversify
information the database should contain, the supply of service providers.
establish the most effective means for
sharing information between levels of x Develop and disclose a multi-year plan
government, and design and test a for financial, technical and management
simpler data management system for assistance to local governments. During
districts with very little capacity. the consultation meetings for this report,
However, any effective information some local leaders lamented the fact that
system requires reliable and timely capital investments in schools are often
input, so collaboration between the financed in a fragmented and unplanned
MoNE and the regional governments is way by the central government or by aid
essential because the Ministry’s agencies, robbing the districts of the
bureaucratic power alone will not be ability to manage their education
enough to ensure that local governments systems. There are an estimated 400
and schools collect and report projects currently managed by the
information. Under decentralization, the MoNE, accounting for the bulk of the
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Education Sector Review Volume 1
APBN allocation for education and discretionary and that depends on just a
controlling the capital and quality few key measurable criteria. Besides
improvements investments in the sector. these “operational funds,” the
government should make additional
Require provincial and district governments to funds available through a proposal-
prepare and implement multi-year regional based grants mechanism to cover the
investment and financing plans as well as a costs of, for example, staff development
corresponding assistance plan for each school programs or the construction of a new
in accordance with regional goals and with classroom or laboratory. This funding
school capacities and needs. channel is discussed in greater detail
below. Third, to facilitate school-based
The experience of other countries has revealed management, the government should
that giving transfers to lower levels of give this assistance to schools in cash
governments are more effective when efforts are rather than in kind.
also made to build local planning skills, to
increase transparency in the allocation and use x Disclose publicly the amount of funds
of local funds, and to require accountability in and other assistance that districts will
return for the transfers. For Indonesia, this be giving to each school well before the
means that the central government should: beginning of the school year. This will
give the school committee in each
x Scrap the budgeting process that local school a chance to finalize its own
governments and schools go through spending plan and to raise additional
each year and replace it with a multi- resources if needed. This is complicated
year investment plan and an annual by the fact that the district and school
spending plan. These plans should budget years do not correspond (January
specify the level, source, and type of to December for districts, July to June
resources needed and whether for schools). While it is not necessary to
investment activities would be under the align these budget cycles, local
direct management of the local governments should find a solution that
government or of the school alleviates this problem for schools.
committees.
x Conduct a periodic financial audit of
x Establish a clear funding mechanism to schools as an input into the preparation
transfer resources to schools that is easy of the multi-year assistance plan for
to implement and to monitor. First and each school.
foremost, this means ensuring that
schools receive adequate block grants to x Monitor and evaluate the
cover their basic operating expenses, implementation of school investment
including the costs of teaching and non- plans by means of periodic progress
teaching staff, instructional supplies, reports, field inspections, and
some staff development, the routine evaluations of outcomes. All
activities of the school committee, the investment projects should also be
maintenance of a school database, the audited, and the results of these audits
dissemination of information to parents should be made public.
and the community, utilities, and light
repair of the school buildings and other x Ensure that routine allocation processes
maintenance. Second, to increase are responsive to the needs of the poorer
transparency in the allocation of funds districts and schools by adopting pro-
and to enable schools to plan ahead, the poor education programs to stimulate
size of these grants should be based on a demand consistent with the goals of the
formula-based allocation that is non- global Education for All initiative.
50
Chapter 6 The Way Forward
To achieve these changes, local governments ensure that schools are funded at least to the
need adequate and timely technical assistance to minimum necessary for operations and
build their capacity to develop plans and budget maintenance. Other steps that are needed are to:
processes, arrange financing, operate the local
education system efficiently, and assist schools. x Begin a periodic audit of schools on the
These technical assistance and training programs basis of a checklist of standards,
do not have to be provided by the central produce scorecards on the basis of this
government. In fact, considering the size and audit that rate the overall quality and
diversity of Indonesia’s education system, it performance of each school, and
would be better to encourage the development of develop a protocol for the public
a private supply of technical assistance and disclosure of these scorecards.
training. Specific grants (possibly through the
central government’s development budget – the x Require schools to report their own
DIP – or through the DAK) could be given to expenditures in a timely fashion, but this
the regions to allow them to procure the services will require switching to a multi-year
of national and international experts to help process in order to give schools enough
them to develop their budgeting and planning time to complete their expenditure
skills, to raise their revenues, to track their records before the next planning period.
expenditures, to manage information flows, and
to assess school performance. Ultimately, x Establish a proposal-based grants
regions will be expected to use their own program that would allow schools to
budgets to maintain their planning and request extra resources for specific
management skills and to purchase these innovations and experiments. Some
technical services from an organized schools are going to be much better at
marketplace of suppliers. preparing proposals than other schools,
so this grants program needs to include a
Help schools to make and implement decisions training facility to help build this
that will improve quality, especially those in capacity in those schools that lack it.
poor areas. Several ongoing donor-assisted projects
(for example, the DSSD and the DBEP)
Since the mid-1990s, there has been a trend in have been building similar capacity in
Indonesia towards school quality improvement selected areas of the country so some
projects that are school-planned, school-based, local governments and schools already
and school-monitored. This trend is consistent have the required capability as well as
with Education Law 20, which has empowered the ability to train school personnel.
schools to make decisions regarding their
governance and management. However, as this x Develop a policy for targeting special
review concludes, there is tremendous variation assistance to those schools that do not
in the capacity of schools to exercise the meet the with minimum quality
authority that decentralization has given them. standards, especially in poor areas.
A big challenge over the next few years is to
develop a viable strategy for raising the capacity As discussed above, one significant challenge
of schools to manage resources and programs. for the central and local governments is to make
Another challenge is to ensure that schools meet policies related to education quality that
the minimum requirements for accreditation as embrace all different types of schools. We
defined by the central government and that recommend that the Indonesian government
schools receive sufficient funds to cover their adopt a “one policy roof” for all schools and, as
basic operating expenses. This means that the a first step, should assess all religious and
first step in improving school quality is to bring private schools according to the same national
the physical and human infrastructure up to minimum education quality standards that apply
minimum standards for accreditation and to to public schools. This major task would fill the
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Education Sector Review Volume 1
information gap left by the collapse of the paying their base salaries (the national
national annual school census and would minimum) and any additional benefits and
underpin subsequent periodic assessments by incentives, for monitoring teacher performance,
local governments. Also, as part of the school and for ensuring that teachers have access to
registration and accreditation processes, local professional development programs. There are
governments should require these (private and also areas where cooperation among the levels
religious) schools to formulate a plan for of government could be highly beneficial. For
bringing their quality standards up to the example, as discussed in the previous chapter,
required level and a timetable of the specific central and provincial governments could
actions and the level of resources that they will increase the efficiency of teacher deployment by
need to do so. Those plans would become helping districts to develop their own formulas
components of a regular accreditation process for calculating their teacher requirements that
for these schools, and their progress in achieving take into account the number of students
its goals could be used as a basis for providing enrolled in a school rather than the number of
them with targeted assistance in the future. classes in the school.
Establish a teaching service, separate from the Educators in Indonesia already feel that there is
civil service, that includes a transparent a need for a new paradigm for the teaching
appointment and deployment process and a profession. Many elements of this new approach
professional development system that is school- are already in place or are being tried out in a
based and performance-led. number of projects. However, developing an
overall framework that defines teachers’
Effective teacher management systems in professional development as a lifelong process
schools are essential for achieving national should be a priority. Many of the elements of
education goals. Table 5.1 in the previous this framework could be tested in simultaneous
chapter lays out a list of appropriate policies, the pilot projects by different institutions and in
kind of actions required to implement these different districts.
policies, and some ideas about who should be
responsible for implementing those actions. The Implementing the Policy Agenda
most critical recommendation is for the
establishment of a separate teaching service with Finally, we return to the question of how best to
the following characteristics: merit-based implement the recommended actions outlined in
appointments, transfers, and promotions; school- this chapter.
based performance evaluations; and professional
development that covers all phases of the Supply-side and Demand-led Programs
teachers’ career including their initial training,
their induction into the teaching profession, Both supply-side and demand-side approaches
school life, and continuous professional are needed to fill existing policy and technical
development. This would need to be built up gaps. Supply-side investments are needed to
over time. strengthen the capacity of central education
agencies to make policy, to plan, to set
In a decentralized teacher management system, standards, and to measure the performance of
the main role of the central government is to set districts and schools. They are needed also to
minimum teaching standards and minimum stimulate the development of new solutions that
salary scales and to develop guidelines for can be used by local governments. These
promotions and incentives. The provincial investments can be made through a national
education units are responsible for ensuring that program or through discrete projects managed
districts are able to meet their statutory by the central agencies. Either way, it is vital to
obligation to provide high-quality education. link all of the different supply-side investments
District governments are responsible for in one institution-building agenda instead of
employing and deploying teachers and for
52
Chapter 6 The Way Forward
undertaking them separately with little or no three decades. Many of these initiatives have
coordination. borne fruit and have provided valuable lessons
about what kind of programs are effective, but
However, in the spirit of decentralization and in many other initiatives have either failed to
recognition of the great diversity that exists produce results or petered out because of a lack
across Indonesia, demand-side programs that of attention from the government or donors.
address the specific needs of provinces, districts, Under decentralization, there is an even greater
and schools should be a cornerstone of education need to learn from these initiatives. Two
policy. As already mentioned earlier, three immediate steps are needed. The first is to cull
measures in particular need to be taken. lessons from past programs. During the
preparation of this review, the team compiled all
x The central government must provide available documents from or about these
adequate block transfers to regional programs and concluded that many types of
governments, especially for those with interventions have been implemented but that
limited local revenues. The larger the share evidence-based, analytical lessons about their
of resources that is directed through this effectiveness or otherwise have seldom been
channel rather than through specific drawn. This review has cited lessons from these
programs, the more it will support the past initiatives whenever they have been
development of local governance and available. It may be impossible to recover
management. lessons from or most of these programs, but it
would be useful for the government and the
x The central government should establish donor community to try.
grants to fund projects initiated by local
schools and communities. These grants will The second immediate step is to identify
have the dual objective of stimulating ongoing and planned programs that should be
innovation and experimentation and of rigorously evaluated. The aim is to build a body
reducing inequality of education quality of evidence-based lessons about how to deliver
among districts. The law allows districts to education services of good quality in a
collaborate in initiating these projects and decentralized setting. It is important to extract
applying for these grants so that they can not just localized lessons but also broad ones
take advantage of economies of scale. To that reflect the wide diversity of contexts in
encourage the formation of this kind of Indonesia. An integral part of this evaluation
association between districts, the grants effort must be to establish a mechanism to
program could award more money to those ensure that these lessons are widely publicized
proposals that are submitted by an so that they can be taken into account in national
association of districts. and local policymaking and school-based
management. Regional meetings held for this
x The central government should evaluate and review suggest that the demand for such lessons
support the education management systems exists.
being developed and used in different
regions.
53
Table 6.1. Proposed policy agenda for educational development under decentralization
Ź Finalize PPs for Establish committee of technical and management experts to carry out NG in See Chapter 2 for discussion.
Education Law 20 to analysis and consultations, to review roles for national level and prepare consultation with
provide detailed job descriptions for new national functions. and to determine degree to PG and DG
assignments of which resulting assignments can be mandated Especially in the next three years, will need to
governance and evaluate the assignment continuously to assess
Improve governance standards for Education Boards and School
management functions their appropriateness and effectiveness
Committees, and determine degree of need for national regulation.
to all levels
Ź Align structure of Restructure MoNE along function lines NG (MoNE, with See Chapter 2, Box 2.5, and Volume 2, Chapter
central education collaboration of 1 for discussion.
Launch dissemination activities to inform local governments and schools
authority to functions MoHA)
about this new structure
assigned under
decentralization
Ź Build a national Determine the informational base needed to implement and document the NG in Bureaucratic power alone is not enough to
education information policies at district level collaboration with enforce compliance on information reporting.,
system consistent with PG and DG so (a) rely on incentives (e.g. conditional
Determine the information transmission standards between levels of
decentralization supplementary grants to schools); (b) allow local
government, as information, not as software
officials to work with information professionals
Study already-existing cases of good practice of information use at at central level to develop standards and test
school and district level systems; (c) ensure that product is better than
what is readily available from the market; (d)
Design a prototype default system in a few districts that are weak but
customize local system to capacity of districts,
willing to experiment and improve while ensuring comparability across Indonesia.
Test system and disseminate key findings
54
Policy objectives Specific actions Implementing Comments
agency
(Ź means “For
immediate action”)
All government,
ŹImprove Develop management standards that all government levels, and schools Many ongoing projects (e.g., DSSD, DBEP) do
levels, in
management capacity should meet this, so need to compile lessons, disseminate and
coordination with
throughout the incorporate them into new systems.
Based on function assignments and standards, audit current management each other
education system
systems and capacities throughout the system Where needed and possible, use private
Schools (head providers to conduct audit and systems
Develop plan to restructure organizations and train staff to develop new teachers, teachers, improvements
systems and School
Committees) Process will be ongoing.
Based on standards, develop procedures for local governments and
schools to assess their own management capacity
Develop monitoring and evaluation protocols for capacity development
programs
Establish policy Assess cost-benefit of private provision as it compares with public All levels of
towards private provision government
provision, especially at
secondary and tertiary
education levels
Support capacity of Create funding and selection mechanism to provide legislators with DPR at NG level, Legislative bodies currently have to rely entirely
legislative bodies to demand-led access to academics or consultants to provide studies DPRDs at LG on executive branch for analysis of education
analyze education level policy changes and the state of execution of
Consider funding small technical unit or panel that can be drawn upon
policy policy
repeatedly
Obtain support for Analyze current role of civil society in education, from policy design to NG and LG As democratization and civil society activism
educational goals and policy oversight are relatively new in Indonesia, there are
strategies from civil dangers of misunderstandings and role
Develop training program and materials for government officials on this
society, NGOs, and the confusion.
issue, and train government officials on role of civil society in policy
media
oversight Democratization and decentralization require an
informed citizenry, ideally informed by high-
Improve capacity of the media to analyze and report on education issues,
quality reporting.
by developing training materials for national and regional media and
instituting a yearly award for the best education reporting
55
Policy objectives Specific actions Implementing Comments
agency
(Ź means “For
immediate action”)
B. Core policy objective : To ensure adequate resources for education, improve the improve the efficiency and effectiveness of resource use, and address equity
concerns
Ź Secure adequate Develop and implement per-student funding formula to determine NG in The per-student funding formula is to be cost-
operational budgets for operational education budget at district level consultation with indexed with adjustments for needs of
education at provincial PG and DG disadvantaged groups, using reasonable cost
Develop and implement per-school funding formula to determine staff
and district levels and estimate of enrollment and agreed-upon quality
deployment
in schools standards and geographic-specific prices.
Establish tracking and reporting systems for regular monitoring and
To improve teacher deployment, base staff
analysis of education financing at all levels
deployment on a per-school rather than per-
student basis, with indicative teacher-student
parameters. See section D below.
Ź Secure adequate Evaluate lessons from current development projects throughout the NG in While this should be initiated immediately, the
development resources system, and develop a plan for consolidating or linking, and for scaling consultation with process will take a few years to complete.
for education in regions up those that are effective and terminating those that are not PG and DG
and in schools, esp. for
Audit investment projects for schools and require public disclosure of
poor regions
results of audit; develop monitoring and evaluation protocols for capacity
development programs
Determine which development projects are best undertaken at regional or
national levels
Ź Improve the Develop multi-year plan of financial, technical and management NG in Develop schema for determining level and
transparency and assistance to district governments that is consistent with regional needs consultation with nature of needed assistance to regions:
predictability of and goals PG and DG Categorize districts according to performance
assistance to local level on multiple education indicators, resource
Publish plan so it is broadly known, and establish mechanism for
governments levels, and technical and management capacity
reporting on performance with respect to the plan.
Data requirements: Up-to-date district-level
information on multiple education indicators,
resource levels, and capacity
56
Policy objectives Specific actions Implementing Comments
agency
(Ź means “For
immediate action”)
Ź Improve the Each region to develop multi-year plan of financial, technical and Local Use formula funding mechanisms that are non-
transparency and management assistance to schools governments with discretionary and that depend on a few key
predictability of School Committee criteria; see above.
Publicize assistance plan so it is broadly known; meet with School
assistance to schools in each school
Committees to discuss plans and to disclose expenditures at the end of Up-to-date school-level information on multiple
each year education indicators, resource levels, and
capacity; data should be collected on a regular
basis
Ź Establish on- Initiate a transitional program of assistance to districts with greatest need NG in There is wide variation in revenue levels among
granting mechanism to of support for their education programs and schools but with inadequate consultation with districts. Use DAK mechanism and/or loan
support educational revenues to implement their multi-year educational development plan PG and DG funds to assist poorest districts and their schools
development plans of through on-granting, with matching funds to
Invite these districts to submit well-focused proposals in line with their,
regional governments ensure some additionality.
on condition that these districts will use oversight technical services from
and schools
NG or experts for the duration of the funded project
Ź Develop and Evaluate the pro-poor nature of expenditure patterns at all levels of Local These programs should be owned by districts
implement pro-poor government as part of regular performance audits governments and and provinces, using a DAK allocation.
education programs for schools to inform Additionally, national government might want to
Transition step: Establish a special, finite-term, well-targeted pro-poor
schools and students NG establish a mechanism to reward districts that
national program to supplement district financing for schools and
have achieved larger pro-poor progress.
students in selected areas
Lessons are available from SGP and SIGP of
Districts to launch their own similar program over the long-term how these might be implemented.
C. Core policy objective : To improve education quality
57
Policy objectives Specific actions Implementing Comments
agency
(Ź means “For
immediate action”)
Ź Set standards, Harmonize and link various standard-setting processes for schools and All levels of Separate efforts in MoNE, Civil Service, and
measures and teachers currently underway government MoF have begun efforts to define standards and
monitoring mechanisms measures..
Initialize school mapping and audit of schools on the basis of checklist of
for both institutions and standards, and produce “balanced scorecards” to rate overall quality and Useful to assess also good international practice
individuals governance performance of schools and districts. and Indonesian experiments from other sectors.
Develop protocol for public disclosure of balanced scorecards Some consensus within education agencies
about definition of minimum learning conditions
Develop policy on schools below standards on minimum accreditation
and service standards
Initiate national media campaign to inform people
Ź Set pro-poor x Formalize minimum service standards for local governments in the NG in Separate efforts in MoNE have to define
performance standards area education into appropriate regulation, and harmonize minimum consultation with performance and technical standards and
for districts, provinces service standards developed under MoHA umbrella with standard PG and DG measures.
and the central level setting initiated under new Education Law
District capacities to meet national standards
x Conduct an audit of district performance using the results of school even with flexible timeline is questionable
mapping and school audit activity plus education profiling of district, District capacities to manage standards
to produce “balanced scorecard” for each district monitoring varies widely,
x Set service and performance standards for national level, and audit Risk of increasing inequity unless district
performance of national level against standards standards are pro-poor
Ź Enable and Provide adequate resources for school improvement through proposal Schools and all Risk of increasing inequity unless quality
encourage pro-poor based grants to schools for quality improvements levels of improvement programs are pro-poor
school quality government
Create regulations that empower schools to make decisions that improve Use information on population, status of
improvement school quality education and school mapping to plan for
school rehabilitation, rationalization and system
Locate and disseminate pro-poor good practices, and retire those that are
expansion
ineffective
Stimulate the supply of pro-poor school improvement services
Initiate creation of “one Using quality standards for regular schools, undertake a performance PG and DG in The poorest children are educated in small
regulatory roof” for all audit of all religious and private schools coordination with private schools and Madrasah.
58
Policy objectives Specific actions Implementing Comments
agency
(Ź means “For
immediate action”)
schools School
Require all these schools to formulate a plan of achieving quality
Committees
standards (providing a timetable of specific actions and level of resources
needed) as part of the registration and accreditation processes
Establish a regular accreditation process for these schools using the
standards, and link this requirement to assistance to these schools
D. Core policy objective : To improve teacher management
Ź Establish a new ŹPrepare guidelines on optional teacher deployment patterns NG to set national This system should be compatible with district
system for teacher standards autonomy and the principles of school-based
Establish mechanisms for districts (as employers) to have access to data management, and based on professional
recruitment Districts to work
on graduates from teacher education programs to assist their teacher partnerships among districts (as employer),
supply and demand planning closely with all
schools, and licensing body
levels including
schools
Ź Establish a teacher Ź Accredit teacher education programs and institutions All levels of Depends on the establishment of transparent
professional government to set teacher appointment processes to be successful.
development system national standards
Measure schools and teacher performance and link this to teacher
that is school-based and
development plans DG to work
performance-led.
Establish mechanisms for grant systems to schools for teacher closely with all
development linked to school performance levels including
schools.
Establish licensing scheme and require teachers to be licensed to teach,
i.e., to have approved qualification, have completed an induction period,
and have been assessed as fit to be licensed with periodic review to
renew licensing
Establish a separate Prepare national legal framework for a teaching service cadre outside the NG in conjunction Requires substantial commitment from many
teaching service that regular civil service that identifies the legal employer, defines the with DG (the GoI agencies including MoNE, MoRA, MoHA,
incorporates system- conditions of teacher contracting, and the optional benefits packages that employers) and MoF, BKN, Menpan.
wide transparent would accompany various hiring and deployment strategies PG (the quality
teacher appointment control
Prepare minimum teaching service standards including conditions of
and deployment mechanism)
service salary levels guidelines for career paths and compliance and
59
Policy objectives Specific actions Implementing Comments
agency
(Ź means “For
immediate action”)
processes service, salary levels, guidelines for career paths and compliance and
National consensus on definition of basic
quality mechanisms
competencies required of teachers at different
Establish a National Teaching Commission to oversee the teaching levels of education.
service, including initiating legal actions and defining norms or standards
Determine impact of separate national teaching
service on the existing civil service structure,
civil service regulations.
Deployment norms, career structure, and
employment procedures (that incorporate a
compensation and rewards system that is clear,
transparent, guided by considerations of
qualifications, responsibilities and motivations
for continuous development) need to be simple
to understand, relatively straightforward to
execute and accountable to the community.
Notes:
60
Chapter 6 The Way Forward
61
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61
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63
Report No. 29506
INDONESIA
EDUCATION IN INDONESIA:
MANAGING THE TRANSITION TO
DECENTRALIZATION
(In Three Volumes) Volume 2
1
Education Sector Review Volume 2
discussed. Finally, suggestions for improve- been, and there still is, widespread confusion
ment are made.2 as to who does what, and why. This has been
the situation as decentralization gets under
The Situation as Decentralization Gets way.
Under Way
A Comparative Perspective
Detailed governance and management diagno-
ses have already been carried out in the last Table 1.1 presents a list of the most common
few years, both by donors (Greene, 2000; challenges encountered in those countries that
Hickling Indonesia, 2001a and 2001b; and have decentralized their education sectors.3
World Bank, 1998) and by Indonesian schol- The table lists each challenge, indicates
ars (see Sudharto, 2002; Supriyoko, 2002; whether the challenge appears to be relevant to
Widarinata and Mudyahardja, 2002, and oth- the current Indonesian situation, and assesses
ers in the same series). Some of the studies whether the challenge in question seems to
document issues pre-dating the recent laws, impede Indonesia’s decentralization process,
while others focus on the challenges presented and finally whether Indonesian policymakers
by decentralization. They generally agree that appear to be sufficiently aware of this chal-
there is a lack of clarity in the laws and a lack lenge, and how it can be confronted. Whether
of capacity at the local level. Thus, Indonesia Indonesia faces these challenges was assessed
now has to continue its efforts to meet pre- via a series of interviews conducted specifi-
existing goals, such as widening access to cally for this report with various policymakers
education and improving quality, but in the and experts on governance and management
new and complex context of decentralization. issues and with representatives from
Yet, in this section we will show that: a) from Education Boards and school committees.
an international perspective, Indonesia’s de- (See Appendix 1.2 for a complete list of the
centralization process is not yet sufficiently experts interviewed.)
well-embarked; b) based on empirical analyses
of data on local governance and management, Judging by this table, Indonesia’s
there appear to be serious problems, and rely- decentralization is not yet well-embarked.
ing on citizen pressure to solve these problems The experts running the sector are quite aware
will not be easy or automatic; and c) there has of this, but they are often not clear on what to
do about it.
2
“Community participation” is not addressed in
this chapter under that name. However, it is clear
that, in discussing effective community-level gov-
ernance through school committees or the role of
3
civil society in policy definition, we are addressing As captured by the knowledge management tools at
the issues normally covered under the rubric of http://www1.worldbank.org/education/globaleducationreform/
“community participation.” 06.GovernanceReform/governace_ref.htm.
2
Chapter 1 Governance and Management under Decentralization
3
Education Sector Review Volume 2
4
Chapter 1 Governance and Management under Decentralization
always slightly positively. Furthermore, par- “help” with some function that belongs to
ents’ opinions vary much less than principals’ level Y. For example, according to PP
opinions about management problems, and are 25/2000, the education Dinas at the province
uncorrelated with the expert opinions on ob- level is supposed to “help” with providing
jective problems. Thus, in districts manage- textbooks or to “help manage” higher educa-
ment tasks are particularly slow, for example, tion. It is difficult to interpret such regula-
parents’ opinions of the system are about the tions, and it is possible that such language
same as in other districts. might exacerbate jealousy and turf battles
rather than alleviate them.
All of these factors taken together suggest that
the sector is indeed poorly managed and gov- Functions are assigned vaguely. For example,
erned but that citizens have fairly low expecta- “books” (without specifying which aspect) are
tions and uniformly so. This presents obvious the responsibility of the province. Some ex-
problems for decentralization, in terms of the perts advocate that this function should be
degree to which one can use citizens’ expecta- given to the districts, but nobody specifies
tions to pressure for improvements in service precisely how the textbooks should be funded,
provision. Possible solutions might include purchased, and distributed. For example,
introducing a public information campaign Wiradinata and Mudhyahardja (2002) recom-
about the education system or encouraging (or mend that: “At least in the medium term, some
requiring) comparative ranking of schools us- authorities of the Province (for example, book
ing systems such as school or district score- supply) should be given to Kabupaten/Kota.”
cards. Culturally appropriate methods of Yet even though the law now stipulates that
making citizens aware of their rights and of “books” are no longer the responsibility of the
the level of service they are entitled to expect central government, DEPDIKNAS still in-
need to be developed. This is discussed fur- cludes the provision of books in its planning.
ther below in the context of Minimum Service
Standards (SPMs in the Indonesian acronym). In fact, most education planning at the na-
tional level still includes functions that are (or
“Who Does What, and Why” Unclear logically ought to be) assigned to lower gov-
ernment levels. However the MoNE seems to
The various laws, decrees, and guidelines pro-
spend little on the functions that are logically
pose conflicting and overlapping functions at
nationwide functions like those involving
the most fundamental level. In one example, a
standard-setting, policy monitoring, training,
MoNE report (MoNE, 2002) states on page 17
and research. Thus, for example, while MoNE
that “Education Boards and School Commit-
(2003) explains that decentralization is being
tees control educational management or out-
taken into account, most of the activities that it
put.” However, other pages in the same
proposes to undertake seem to involve con-
document (as well as in Kepmen 044/U/2002)
struction or materials procurement, which are
describe the functions of these bodies as being
not appropriate activities for a national minis-
quite limited and as not really being to control
try in a country as big as Indonesia, and with a
or manage educational output. In another ex-
decentralized education system. 6
ample, according to PP 39/2001, the education
Dinas at the province level is responsible for
“providing education and training in Kabu- 6
For example, the activities in the basic education
paten/Kota” (Wiradinata and Mudyahardja, area (MoNE, 2003, Table III.4) include: construc-
2002) but this is contradicted by Law 22/1999. tion of junior high school (SLTP) buildings, con-
Similarly, Keppres No. 165/2000 appears to struction of additional classrooms, renovation of
contradict Law 22/1999 with regard to the SLTP buildings, construction of laboratory rooms,
level of status it accords to the MoNE. It is construction of library rooms, supply of sport and
quite common to find, in the regulations, musical instruments, supply of teaching aids for
statements such as that level X is supposed to mathematics, supply of teaching aids for pure sci-
ence, supply of books for main subjects, and sup-
5
Education Sector Review Volume 2
Furthermore, some experts and policymakers place at district level since it involves inter-
are still proposing function assignments that district spillovers.
seem to run counter to the spirit of decentrali-
zation, as was noted by several of the experts Heads of the Education Boards/Councils often
whom we interviewed. This spirit is also evi- do not yet have clear mandates or clear job de-
dent in occasional proposals to re-centralize scriptions, even in districts that are, by reputa-
(or to keep central) certain aspects of teacher tion, well-managed and are embracing
management. “Next to teacher supply, teacher decentralization. As became clear in our in-
rotation needs to be nationally and intensely terviews, many heads of Education Boards,
managed” (Djohar, 2002, p. vii). As reported while dynamic, curious, and eager to help,
by our interviewees, many aspects of teacher seemed unclear about what role they were ex-
management are still centralized, including pected to play in the new decentralized educa-
personnel database management, the registra- tion system.
tion of personnel actions, and the transmitting
of this information to the payroll system, even Although the central government, in principle,
when many of these aspects are decentralized is empowered to set standards, it has been
in theory. For example, personnel manage- timid about setting governance standards, in
ment and the payroll function take place at the particular in defining clear roles for districts’
district level, but the recording of such actions, Education Boards and School Committees.
in order for the action to trigger the payroll, is Similarly, there are no national standards for
still centralized. school funding. This can be seen in Kepmen
No. 044/U/2002.
No means have yet been found to avoid par-
ticularism (meaning, for example, each district On the other hand, the central government has
wanting its own teacher training institution or retained those functions whose role and pur-
wanting to appoint only local teachers) while pose in a decentralized system are not clear or,
staying within the spirit of decentralization. if clear, not ideal. For example, the role of the
Several interviewees gave us evidence of in- central inspectorate in the decentralized sys-
creasing particularism. This is a reflection tem is not clear. In the view of senior Indone-
within the education system of a tendency that sian analysts, the fact that the central
can be seen in society at large, such as districts government is holding on to such functions is
creating fisheries rights for themselves and not necessarily in the public interest and may
creating local nuisance taxes. Finding a solu- have more to do with either inertia or personal
tion to these problems is part of the process of interest.
clarifying function assignments. It will re-
quire both technical skills and consultations, There are no clear national standards for han-
and it is hard to imagine that this can take dling and reporting information or, if they are
clear, they are not being followed, since re-
ply of books for libraries. While the MoNE’s Stra-
porting is very poor. As a result, the education
tegic Plan contains a chapter that refers to man- authorities of the central government have in-
agement development under decentralization, the sufficient information even on basic issues
activities that it proposes are not really activities such as enrollment. At this point, for example,
but are re-statements of goals or of the findings of it seems as if basic Education Management In-
studies or seem unrealistically limited. For exam- formation System (EMIS) data on some 90
ple, the Plan states as one of its aims: “to develop a percent of the schools at the primary level are
system and mechanism of educational planning and missing from the national computer files,
budgeting and also to describe the annual targeting meaning that only about 10 percent of schools
and budgeting,” but this receives no more descrip- are reporting their data (or districts are for-
tion than is contained in this quotation and is
scheduled only as one activity (not described) per
warding the data) to the central government.
year in the Plan. However, it does indicate that the At the secondary level, it might be as high as
MoNE is at least aware of the issues. 25 percent, but this is still far from ideal.
6
Chapter 1 Governance and Management under Decentralization
7
Education Sector Review Volume 2
Governance or Management
Representative Aspect of or Executive Aspect of
Government: Government:
Governance Accountability Management Accountability
President of the
MPR Republic
DPR
MoHA MoF
Depdiknas National
Level
standard-setting report on
(sets standards of reporting organization of
on financial and educational issues) regional government
(accountability is around standards) through MoHA,
reporting to standards
(Provincial Level)
reporting to standards
School
Committees Principals
reporting to standards School
Level
picture will emerge as a result of the discus- ity is strongly “horizontal” as be-
sions that this report will stimulate. fits a truly decentralized system.
For the sake of simplicity, the diagram skips 2. The whole notion of a governance
the provincial and sub-district levels. The fol- “line” is unfamiliar in the Indone-
lowing aspects should now be clear: sian context. Given the nature of
public sector management in the
1. There is a clear governance “line” past, the governance and man-
that runs vertically down the left- agement lines were essentially one
hand side of the graphic and a and the same, with governance be-
clear management “line” running ing largely vertical, hierarchical,
down the right side. Accountabil- and indistinguishable from man-
8
Chapter 1 Governance and Management under Decentralization
9
Education Sector Review Volume 2
clear and appropriate roles for other levels, has been much discussion on the issue (see
because one of the key roles the center is not Jalal and Musthafa, 2001).
performing well is precisely to help determine
an appropriate (appropriate to a non- The Current Internal Organization and
hierarchical governance line) assignment of Size of Depdiknas Should be Improved.
functions for other levels.
Given that the role or task of Depdiknas is still
The central government has not yet adapted to not truly appropriate, the internal organization,
being at the apex of a decentralized system it follows, is also not appropriate. Since the
rather being than the sole decision-maker as in government of Indonesia has not yet arrived at
the past. The impulse of central politicians a final and optimal function assignment and
and civil servants is to make things happen, since organizational form should follow func-
for example, by building schools or ordering tion, it is difficult to prescribe improvements
them to be built. It has not become second na- for Depdiknas in any detail. However, judg-
ture to them to steer and support, to set norms ing by the organizational structures in the na-
and regulate wisely and unobtrusively, to re- tional-level education ministries of many
search and disseminate, to encourage innova- countries that are decentralized or effective or
tion, and to provide technical advice to the rest both, it can be stated that Indonesia’s Depdi-
of the system rather than actually to do the knas is not optimally organized to provide
“direct” work of education, such as managing support and guidance to lower-level govern-
teacher deployment or textbook design and ment units and schools.
procurement.
The national level of modernizing and decen-
This is partly because central government staff tralizing ministries is characterized by:
do not yet have the skills to perform their new
functions, and they are understandably wary of x Less focus on traditional “level”
performing functions for which they do not line functions such as early child-
have the requisite skills. It is also possible hood, primary, and secondary, and
that there are fewer rent-seeking opportunities more focus on “transversal” sup-
for them in their new functions than there port functions such as governance
were in their old roles, and therefore they are improvement, financial equaliza-
resisting abandoning their old ones, which tion, and quality assurance. The
were more profitable. It is also likely that cen- latter functions have more staff
tral government staff lack the process man- and more status, in a decentralized
agement and substantive skills not only to do or modern ministry, relative to the
their new jobs well but to finalize the defini- “level” functions.
tion of decentralization. (For example, it takes
a combination of process management skills x Relatively less focus on support-
and substantive knowledge of public manage- ing direct execution of projects
ment to arrive at solutions that are consen- and hence less staff devoted to in-
sual—and hence likely to be implemented—as spection and audit functions, and
well as technically sound.) This is logical. these functions tend to carry less
Since decentralization, at least in initial design status.
aspects, is a one-off event, most staff naturally
have not had practice in designing decentrali- x If there is procurement, focus is
zation processes. As an example, the critical on the procurement not so much
issue of teacher management, and which as- of goods and construction services
pects of this function should be relatively de- but of analytical and developmen-
centralized or centralized is still unresolved; tal services.
there is also uncertainty about whether it will
be re-centralized, despite the fact that there
10
Chapter 1 Governance and Management under Decentralization
11
Education Sector Review Volume 2
to as high as 20-40 percent (in Australia, Po- ple, not to educational substance), effective
land, and Spain). law should, among other things:
12
Chapter 1 Governance and Management under Decentralization
As the process of legal drafting proceeded, the tion system is the responsibility of the
bill noticeably improved in several of these Minister” (article 50). Though again,
dimensions. However, the law that was even- the word “management” is vague and
tually signed by the President in July of 2003 open to interpretation, because spe-
is still far from ideal. For example: cific rights and duties are not dis-
cussed.
x There are at least 35 calls for further x Key aspects of the way in which the
regulation in areas that require major system functions are regulated
policy decisions rather than technical vaguely on the one hand but over-
details, thus glossing over key matters. regulated on the other. Just to take
All of the further regulations appear to one example, the vital issues of stan-
be the duties or rights of the national dard-setting, certification, evaluation,
government. Should there be regula- and minimum standards is covered in
tions issued by a regional government at least five different articles (or more
that contradict the Act, it is not clear depending on how one interprets the
which regulation should prevail. law) that define duties that are likely
x Rights and responsibilities too often to seriously overlap or duplicate each
devolve on more than one actor (as in other (articles 35, 59, 60, 62, and 66).
“the [national] government and the re-
gional government must guide and It may seem that all these issues can be re-
develop educational staff”). This solved in later regulations. This is certainly
phrase appears about 15 times, often true in principle and happens in all countries.
in crucial contexts. However, in Indonesia there are two problems
x The nature of the actors is left vague, with this.
so that the Act often specifies that it is
“the government” that has a responsi- First, the whole legal and regulatory approach
bility, not the Kepala Dinas, or the has been characterized by a lack of specificity,
Bupati/Walikota, or the national Min- with the resolution of important problems al-
ister. ways being deferred to a later date. Also, once
x The language used in the law is often the problem has eventually been specifically
quite vague, saying that some level of addressed, it is often open to a very wide mar-
government will “coordinate” or “fa- gin of interpretation. Thus, for example, if the
cilitate” or “guide” or “assist” or “su- law appears to create overlaps (for example, as
pervise” some function that another noted above where five different articles of the
level is actually in charge of deliver- Education Act deal with standard-setting and
ing. Language such as “manage” or quality control), this will simply not be re-
“coordinate” or “facilitate” is often solved during the regulation drafting stage,
used without any apparent substance because those who are drafting the regulation
behind the language or without distin- work in separate groups, and thus have often
guishing what might be meant by the lost sight of the overall context.
different versions of the same concept.
x The law seems to attempt to take back A second problem with delaying the resolution
many functions that one would as- of important problems to a subsequent regula-
sume to be the prerogative of local tion is that this regulation is unlikely to be
government, based on previous gov- taken as seriously as a fully fledged law
ernment legislation and regulations. passed by the DPR. This means that there are
One example would be the issue of more opportunities for mistakes, uninformed
teacher management and employment, actions, a lack of transparency, and self-
and another would be the notion that interested actions on the part of the executive
“the management of national educa- branch (since it is this branch that drafts regu-
lation), and other governance failures is much
13
Education Sector Review Volume 2
greater than if the regulation was clearer to in no small measure to a lack of clarity in the
begin with. In any case, in drafting the secon- legislation, including the definition of termi-
dary regulation, it would be wise to follow the nology (see Donor SPM Working Group,
principles of good education regulation, which 2002, also GTZ-Support for Decentralization
are similar to the principles of good education Measures et Al, 2003). (This problem is com-
legislation as listed above (while bearing in pounded by the Education Law, No. 20/2003,
mind that they refer to process and legal prin- as noted in other sections of this chapter.)
ciples, rather than educational substance). In However, in spite of a rocky start, the process,
particular, it would be a positive development under a MoHA-led “model-building” exercise,
if the secondary regulation were sufficiently had produced a set of draft minimum stan-
specific not to require a third regulation to dards for the education sector by mid-2003
clarify its details. (Departemen Pendidikan Nasional/Unit Fasili-
tasi Desentralisasi Pendidikan, 2003).
In spite of the above problems with the Act, it
is important to note that it does make positive In gauging the likely impact of minimum
contributions. It, for example, lays out the le- standards on decentralized governance, it is
gal basis for notions of school autonomy and important to note that there is no accepted
school-based management for the first time at body of theory or practice that can be used as
this high level. (In practice there are many pi- a solid basis for guidance (see Ferrazzi, 2002).
lot experiments taking place, but they have lit- However, minimum standards can also be ap-
tle high-level legal basis.) proached from the point of view of more gen-
erally accepted practical and theoretical
Minimum Service Standards notions of decentralization and intergovern-
mental public finance (see Smoke, 2002 and,
Minimum Service Standards (Standar Pelaya- for interesting similarities to a very different
nan Minimal–SPM) are a potentially useful sector with salutary lessons for education, see
tool of management and governance. How- Baker and Trémolet, 2000). It also makes
ever, if misapplied, they can be a hindrance or, sense to anchor the discussion of SPMs in the
worse, can actually undermine decentralized specific context of the overall process of de-
governance. This section tackles the issue of centralization in Indonesia. If one then adds
whether SPMs in Indonesia, as the situation what little international evidence does exist,
currently stands, are likely to be more of a one has some basis for judging the current
help than a hindrance. A more detailed dis- state of affairs with regard to education SPMs
cussion is presented in Appendix 1.6. in Indonesia according to the certain criteria.
A detailed analysis (contained in Appendix
The basic decentralization law, No. 22/1999, 1.6) of the current draft education SPMs sug-
is silent on the issue of minimum standards. It gests the following:
is Government Regulation No. 25/2000 that
calls for the preparation of guidelines for de- x Numbers: There are too many, nearly
termining SPMs that must be “implemented” 200. This leads to a loss of focus and
by local governments. Other recent regula- increases rather than decreases the
tions, such as Government Regulation 105 of transaction costs of accountability.
2000, have specified that local government Reducing the numbers should be
budgets should be performance-oriented, strongly considered.
based on minimum standards that measure
x Type: Most of the existing indicators
performance. Government Regulation 108 of
are not true service standards aimed at
2000 also calls for minimum standards in the
improving service to citizens, such as
evaluation of local government performance.
the number of days it takes the school
In response to these various regulations, Indo-
to provide a service to parents, or mu-
nesia began in 2002 to devise some SPMs
tual accountability between service
with some false starts and some confusion due
units, such as the number of weeks it
14
Chapter 1 Governance and Management under Decentralization
takes the Dinas Pendidikan to supply a x Level at which measured: Too many
school with books or to get a teacher of the indicators have little practical
promoted. Serious work should be manifestation at the level of the unit of
done to include more true service delivery and/or data on these indica-
standards. tors are often not routinely collected
x Motivation and use: The motivation and reported upward by the actual
for adopting SPMs is too often the de- service unit (for example, schools or
sire for bureaucratic reporting along districts). Thus, it requires special ef-
the management line rather than citi- fort to collect these data—a special ef-
zen accountability along the govern- fort that may be in no one’s inherent
ance line. There is insufficient interest, even under a good system of
realization at the national level of the horizontal accountability. Thus, they
usefulness of indicators in a decentral- will tend not to be collected or re-
ized and democratic system as tools ported. These sorts of indicators need
whereby horizontal accountability can to be reduced or eliminated. Note that
be monitored. There also appears to the current system is barely capable of
be a motivation to protect special or reporting upward even such basic in-
sub-sectoral interests (such as sports dicators as enrollment data, or rather
or teachers’ privileges rather than their there is a lack of incentive to do so.
rights and responsibilities as profes-
sional agents) via the setting of SPMs, It would appear that a large amount of work is
with a consequent loss of focus on the still needed on the education SPMs before
most important issues, such as the de- they can be an effective element of the sec-
livery of general and basic education. tor’s governance and management. Standards
x Technical quality: The technical qual- are necessary, in principle, however, and a
ity of a few of the indicators is low. start has been made.
They are non-measurable, at least as
Governance and Management Systems
currently specified, either in theory or
in practice. Lacking
x Level to be reached: For many of the So far this chapter has noted that policies have
indicators, it makes little sense to been confusing and often inappropriate, that
specify an actual level to be reached. there are objective, measurable problems in
Furthermore, the logic of setting up an the governance of the sector. The more recent
indicator framework and allowing policies have attempted to clarify, and do help
competition and emulation to deter- in some ways, but they still need much work.
mine the actual level to be reached In particular, practical ways to implement cur-
appears not to be understood, or, if rent policies are needed. Furthermore, many
understood, utilized in the standard- progressive districts have proceeded to im-
setting exercise. For some key vari- plement in innovative ways, under the flexibil-
ables, in a country with as little ex- ity allowed by decentralization. In any case,
perience with competitive electoral pilot projects, often donor-funded, have been
processes as Indonesia and with poor experimenting with techniques such as school-
horizontal accountability mechanisms, based management and more transparent
the level should be set by the central school budgeting for many years. However,
government (albeit with a locally de- this experimentation has thus far taken place
termined speed of approach to the without the education system as a whole
goal), but in other cases there is no evaluating and learning from these experi-
theoretical or practical justification for ences, at a central level (but not necessarily by
setting a level.
15
Education Sector Review Volume 2
Depdiknas)8, and then spreading them through ized management but instead on random ideas,
better norming and standardization around tradition, and the experience of other countries
good practices. Also, because experimenta- that ignores their different historical and po-
tion and pilot testing has been largely up to litical contexts. For example, some experts
donors and innovative Bupatis, progress has are suggesting that the Education Boards
tended to be a hit-or-miss affair. To improve should have the same functions as similar
on this, systematization of good practice is boards in other countries, despite the fact that
needed. As central policy also improves, sys- the Indonesian context is very different and
tems for implementing the improved regula- that, even in those other countries (such as the
tion will be needed. This section lays out US and Japan), the boards are controversial
some of these systems needs, as “technical and are still evolving.
challenges,” first in governance and then in
management. Again, this is because of the absence of a
management and governance framework
Technical Challenges in Governance within which these roles could be defined. At
the moment, it seems that each district is being
There are several important issues relating
left to design these roles largely on its own.
specifically to the governance “line.” For ex-
(There are some donor projects working in
ample, the governance bodies at each level
these areas, but the lessons provided by these
have no way to evaluate the educational ap-
projects do not seem to become part of the
propriateness of legislation, policies, and regu-
mainstream.) This is not a healthy approach to
lations independently of the executive branch.
decentralization. It leaves the lower levels of
The lack of access by governance bodies to
government to wrestle with difficult concep-
technical analysis is a reason often given for
tual tasks that may be beyond their capacity,
placing personnel appointed from the execu-
while taking away from them some of the ac-
tive branch of government in governance or
tual management tasks, such as teacher man-
legislative-like bodies. However, it would be
agement, that they may be more than capable
far better to develop research and analysis
of handling. In a sense, the wrong functions
mechanisms for governance bodies or to pro-
are decentralized.
vide legislatures with research and analysis
consultants rather than to continue setting up
The duties and powers of School Committees
bodies with both elected and appointed mem-
are a crucial matter to define clearly, and with
bers from the executive branch.
a view to autonomy and real school-based
management. Current legislation does not do
The current role of Education Boards in the
this. Current viewpoints, both in general and
kabupaten/kota is not necessarily efficient.
relative to school principals, are not clear or
Specifically, the division of labor between
efficient, at least as they are currently defined
Education Boards and DPRDs, between Edu-
either in Kepmen 044/U/2002 or in legislation
cation Boards and kepala dinas, and between
such as the 2003 Education Law. For exam-
Education Boards and School Committees
ple, their roles in finance and teacher man-
does not appear to be effective. Much of the
agement as outlined in existing regulations
ongoing discussion in Indonesia on this issue
and legislation are not clear, conflict with each
is not based on sound principles of decentral-
other, and may be too demanding in certain
areas and not demanding enough in other ar-
8 eas. The fact that the Committees should, ide-
In Brazil’s CONSED, for example, it is the state educa-
tion secretaries manage the organization, not the national ally, have oversight rights over all financial
minister of education. And, as noted elsewhere in this matters, not just the issues related to parent-
report, Canada does not even have a national Ministry, raised funds, is not made clear. The relation-
but this does not mean national functions are not per- ship between the old BP3s and the School
formed. There are many ways to perform national func-
Committees, and the question of whether BP3s
tions via bottom-up association, delegation to non-
governmental entities, etc. should even exist after School Committees are
16
Chapter 1 Governance and Management under Decentralization
in power, is not clear. The separation between exam for one academic subject for madrasah
the governance and the professional manage- schools and then all of the exams are shared
ment of the pedagogical process is not clear. by all of the districts, thus taking advantage of
The legal status of the School Committees, economies of scale. However, no one has yet
relative to their duties, is also not clear. Many researched the ideal features of this kind of
of their duties appear to require them to enter collaboration, such as what kinds of tasks
into contracts with providers (e.g., for minor would most usefully be performed in collabo-
physical plant improvements), but it is not ration and how to develop effective collabora-
clear whether they have the legal right to enter tion agreements.
into contracts, and if so, how this will be sup-
ported with legal assistance to schools, should Technical Challenges in Management
they require it. Again, each district could
In terms of management, it is clear that the
simply be left to determine its own issues and
systems that are currently in place at lower
design its own solutions, but this would be in-
levels of government are not sufficient to per-
efficient.
form the many functions that are being allo-
cated to these levels in the decentralization
To study such issues and determine optimal
process. It is also clear that the staff at these
solutions would require a considerable degree
levels do not have the necessary skills to carry
of technical skill, which is unlikely to be
out their new and expanded roles.
available at the local level. Also, this kind of
organizational research is subject to econo-
Some districts have conducted interesting ex-
mies of scale, meaning that leaving each one
periments in improving their budgeting and fi-
of around 390 district governments to carry
nance systems. For example, projects such as
out its own research and design would be quite
the DSSD have experimented with setting
inefficient. Since there is plenty of interna-
formulae for district–to–school funding and
tional experience on these issues, it would
with simplifying budgeting formats. The ex-
make sense for Indonesia to draw on that ex-
perimentation allowed or encouraged by de-
pertise at the highest level and for the gov-
centralization will also allow natural variations
ernment to ensure that effective norms or at
in practices (e.g., budgeting systems) to
least examples of best practices are developed
emerge. For example, one dynamic Bupati
and made available to districts. Deriving these
has managed to eliminate certain fees by con-
lessons and making sure that good practice
solidating schools and reducing certain types
spreads is a central function, but not one that
of expenditure, thus making room in the
need be performed by Depdiknas.
budget to eliminate fees and still cover costs.
However, the lessons from these various ex-
It is not yet clear how to organize the decen-
periments have not been systematically docu-
tralized governance of religious and/or private
mented at the national level or analyzed to see
schools without unduly affecting their inde-
how applicable they might be to other situa-
pendence. Various interviewees highlighted
tions. Also, even in those districts that have
the need to resolve this issue carefully.
been experimenting, it is not always clear that
their evolving financial arrangements are
At the moment, many functions have been de- ideal. For example, it is not clear how much
centralized too far, in other words down to a authority is really being devolved to schools,
level that does not have the capacity to per- even in these districts. It emerged during our
form that function effectively. Having recog- interviews that personnel at the district level
nized this, some districts and provinces are were not always clear about what functions to
coming together to form agencies that can decentralize to schools and why. Newer dis-
handle certain of their functions on a collec- trict-to-school funding approaches that were
tive basis (as suggested in Law 22/1999). For called “block funding” were not really block
example, various districts in East Java are col- funding and seemed to be just as cumbersome
laborating so that each district develops the
17
Education Sector Review Volume 2
and intrusive as previous approaches. The There has not yet been a universal (all dis-
current laws and regulations often seem to tricts, not just a sample) audit of skills at the
give away authority with one hand but take it district level covering all functions that would
back with the other, leaving the system more probably need to be performed at that level
complicated than before and no more decen- under a rational model of decentralization.
tralized. While districts must be responsible for raising
their own skills to the necessary level to carry
There is a great deal of confusion surrounding out their decentralized functions, the national
the allocation of functions related to teacher government is responsible for the maintenance
management (including training, recruitment, of standards. Therefore, it seems appropriate
deployment, performance evaluation, human that the national government should be re-
resources databases, payroll, and redeploy- sponsible for carrying out a nationwide, dis-
ment). For example, at present, even though trict-level audit of current management skills
responsibility for personnel management is and standards. At a minimum, the central
nominally decentralized to the districts, any government should devise an instrument and
personnel actions that would result in changes protocol for carrying out such an audit and for
in the payroll database must still be communi- compiling and communicating the results, as
cated to the national level BKN. Because having each district devise its own protocol
there are still tensions and unresolved issues in would be a waste of resources. Current infor-
the assignment of functions, it is not surprising mation systems at the district level do not
that districts do not yet have adequate teacher seem to be capable of reporting reliable statis-
management systems in place. It is vital to re- tics on basic, fundamental issues such as en-
solve the issue of who is responsible for which rollment to the central level. As is shown in
teacher management functions because any in- Box 1.2 and in Appendix 1.3, Case 5, this has
appropriate assignment of these functions (for also been the case in other countries where
example, if the assignment is bureaucratically education functions have been decentralized.
unclear, if it sets up a conflict between bu- This is a problem that needs to be addressed.
reaucracies, or if it is technically unsound) can
lead to financial and other problems. A case
study is shown in Box 1.1, and in Appendix
1.3, Case 2.
Box 1.1 In South Africa, a lack of definition as to who could set minimum standards, combined with
sectoral collusion in teacher management, led to the emergence of unfunded mandates and fiscal prob-
lems after decentralization.
[After decentralization] all provinces experienced similar over-spending, in large part due to implementing
nationally determined policies. This included the nationally negotiated salary agreement and new policies in
the education, health, and welfare sectors. Much of this problem was due to the lack of co-ordination be-
tween policymaking and budgeting, and the rapid creation of a decentralized system compounded this prob-
lem. The implementation of nationally agreed policies was not necessarily an unfunded mandate, however.
Such policies (in education, health, and welfare) were implemented with the full support of provincial line
function departments, who were also involved in developing the policies.
Sectoral collusion to secure more funds for a sector proved to be a far stronger factor in overspending than
unfunded mandates. Intergovernmental forums in education, health, and welfare developed national policy
[especially on standards] without taking into account budgetary resources. Many departments adopted an
aggressive policy to address backlogs in deprived black areas. For instance, differences in teacher-pupil ra-
tios were reduced between black and white schools. The increase in personnel expenditure squeezed out ex-
penditure in non-personnel inputs like textbooks, undermining the attainment of the desired outputs.
18
Chapter 1 Governance and Management under Decentralization
Box 1.2 In Brazil and Spain, devising good management information systems under decentralization
was difficult and problematic but was possible with effort and partnership.
Brazil
Until 1995, Brazilian education data were outdated and unsystematic. Since there was no recent information
available, directing government policies in that area was a challenge as difficult as flying a plane in the midst
of a storm with no guiding instrument on board. Not only did the lack of up-to-date information jeopardize
the decision-making process, but it also caused huge waste in the allocation of funds. Furthermore, in the
absence of a standard nationwide system of information and indicators, several states had their own data
gathering and processing systems, which were not compatible with each other. For this reason, Brazil could
not even provide international organizations with consistent data on education.
By the beginning of 1995, the latest school census that was available dated back to 1989, and the last fin-
ished survey had been carried out in 1991. Therefore, there was not enough information available to inform
the design of actions aimed at improving the education system. From that year on, the Brazilian educational
information system has gradually undergone a complete reformulation into an integrated, decentralized and
comprehensive structure, which provides all levels and types of education, from early childhood to tertiary
education and more advanced programs.
Gumaraes de Castro, M.H. 2000. “Role and Value of International Education Indicators For National Policy Develop-
ment.” Fourth General Assembly of the OECD Education Indicators Programme (INES). 11 - 13 September - Tokyo,
Japan.
http://www.inep.gov.br/download/internacional/idioma/Role%20and%20value%20of%20international%20indicators%2
0for%20national%20policy%20development.pdf.
Spain
As the decentralization process unfolded in the 1980s, the country needed a planning mechanism that would
coordinate the educational policies and programs being developed and executed by the MEC and the decen-
tralized autonomous communities (de jure). One reason why such a coordinating mechanism was necessary
was that, soon after the decentralization process began, the capacity to gather and reproduce nationwide edu-
cational statistics was lost because various regions had begun gathering their own data using formats that
were not comparable and thus could not be aggregated at the national level.
From Hanson, M. 2000. “Democratization and Educational Decentralization in Spain: A Twenty Year Struggle for Re-
form.” Country Studies. Education Reform and Management Publication Series. Vol. 1, No. 3, June 2000.
http://www1.worldbank.org/education/globaleducationreform/pdf/hanson.pdf.
The possible increase in corruption under de- tion. On the other hand, having too many
centralization has been brought up in the dis- funding and provisioning channels into
cussions held as a part of this review. In schools creates great opportunities for corrup-
principle, decentralization has the scope either tion or at least for waste. Funding and provi-
to increase or to reduce corruption – the key is sioning that is discretionary and not based on a
the actual design of institutions and systems. simple formula also creates opportunities for
For example, ensuring that resources flow as corruption, waste, and patronage. However,
per capita grants, ensuring that all actors know having too many controls could make systems
the amount of the grants to which they are en- too cumbersome. Therefore, extreme care
titled and when the funds will arrive, and en- needs to be taken in the design of such sys-
suring that actors have oversight over each tems. What is crucial is to bear the potential
other (parents can check what the principal for corruption in mind when designing decen-
does, and the principal can check what parents tralized systems and to create the appropriate
do) can all help to limit the scope for corrup-
19
Education Sector Review Volume 2
checks and balances without paralyzing flows proving and clarifying function definition can
of resources. be informed by emerging practice, in any case,
and because it will help further clarify and
There is considerable inequality within dis- validate experimentation.
tricts in terms of both funding and education
achievement in Indonesia already, and it is not Step 2: Thoroughly inventory existing man-
clear that there are any effective mechanisms agement systems, skills stocks, and innovation
for reducing this source of inequality in the capacity at the local level. Based on how
education sector. As we noted above, asym- functions are assigned in step 1, the next step
metric decentralization of governance and should be to carry out thorough inventory
management, along with funding targeted to- management systems at all levels, particularly
wards the poorest districts and populations in the areas of finance, the management of
within districts, may be one way to reduce ex- personnel (particularly teachers), procurement,
cessive inequality. and information management. This search
should be conducted by means of nationwide
Governance and Management consultations with both system users and sys-
Development Tasks tem developers at all levels or by means of
empirical research. An integral aspect of this
As this chapter makes clear, certain actions stocktaking exercise should be to recommend
need to be taken to clarify the roles and func- improvements and to develop a time-phased,
tions of the various levels of government in demand-led plan for improving management
the governance and management of the new systems. Another important aspect of the ex-
decentralized education system. These actions ercise should be to carry out an audit of the
are listed here, starting with the most impor- current management skills of personnel at
tant and urgent. It is important to note that every level of governance and to map the na-
these steps are not equal in costs or in time. tion’s lack of and need for these skills. The
exercise should go on to suggest ways to de-
Step 1: Clarify and assign functions. This is velop a system (possibly run by outside pro-
the step that must, in principle, be taken before viders) for upgrading skills and a facility for
all others because, without a clear assignment continuously assessing both systems develop-
of functions, nothing else can be clarified. ment and the skills upgrading system, includ-
This can be done through a set of well-guided, ing a yearly or twice yearly repetition of the
specific technical consultations. In other nationwide consultation process. The proposed
words, it is possible to have a technically in- approach should constitute a program that is
formed yet consultative process that leads to a flexible enough to be able to receive funding
solid conclusion; it need not be left up to from a variety of donors without each of these
chance, pure politics, or relatively non- donors having to develop a separate project
technical “least-common denominator” con- that would be expensive and time-consuming
sultations. Furthermore, it is important that to design.
the consultation process yields conclusive rec-
ommendations on the assignment of fairly de- Of all the existing systems and skills, perhaps
tailed sub-functions. This consultative process the most crucial one that needs to be further
(which should last from about six months to a strengthened, documented, and fed into a sys-
year) can be seen as a preliminary form of dis- tem (not necessarily central) of lesson-
semination of the conclusions reached as a re- spreading, is the set of relations of account-
sult of the consultations, but true ability between schools and parent commu-
dissemination should be a separate and ongo- nity. This will not be an easy task, as many
ing process. In practice it may not be possible parents themselves may have lowered expecta-
to be fully sequential, and to take this step tions, conditioned by years of centralism.
first. Districts are moving ahead in any case.
However, it is still worth doing, because im-
20
Chapter 1 Governance and Management under Decentralization
Step 3: Upgrade systems and skills. This step tice, it might be wise to set a five-year time-
will be the most costly and long-lasting by far. frame for completing the systems development
In theory, it could go on forever, but in prac- and skills upgrading process.
21
Education Sector Review Volume 2
Bedi, A., and A. Garg. 2000. “The Effective- DSSD–Capacity Building for Decentralized
ness of Private versus Public Schools: the Social Services Delivery. 2002d. “Draft
Case of Indonesia.” Journal of Development Analysis No. 4 On School Integrated Financial
Economics. Vol 61, pp. 463-494. Management System.” Asian Development
Bank ADB TA 3042-INO.
Center for Indonesian Legal and Policy Stud-
ies. 2002. “A Gloomy Picture of the At- Ferrazzi, G. 2002. “Obligatory Functions and
tempts to Eradicate Corruption: Reflection of Minimum Service Standards: A Preliminary
the Policies, Laws, and Institutions of Corrup- Review of the Indonesian Approach,” GTZ-
tion Management in Indonesia, 1969-2001,” in SfDM, Jakarta: Word processed.
Holloway, R., ed., Stealing from the Poor.
Book Four. Jakarta: Aksara Foudation. Filmer, D., N. Suwaryani, and B. Indriyanto.
2001. “Indonesia’s Primary and Junior Sec-
Departamen Pendidikan Nasional, Balan Pene- ondary Schools in a Post-crisis Environment:
litan dan Pengembangan (Balitbang). 2002. Findings from a Follow-up survey of 600
“Studi Kesiapan Propinsi dan Kabupaten/Kota
22
Chapter 1 Governance and Management under Decentralization
Stealing from the Poor. Book One Jakarta: School Improvement Grants Program.” Draft
Aksara Foudation. May 17. Word processed.
Singapore, Republic of. 1957. Education Act. The World Bank. 2002b. “Decentralizing In-
Ordinance 45 of 1957. Available at donesia.” A Regional Public Expenditure Re-
http://www.lawnet.com.sg/. view. Overview Report. East Asia Poverty
Reduction and Economic Management Unit.
Smoke, P. 2002. “Expenditure Assignment Draft June 15, 2002.
under Indonesia’s Emerging Decentralization:
A Review of Progress and Issues for the Fu- The World Bank. 2002c. “Decentralizing In-
ture.” Prepared for conference on “Can De- donesia. Kota Sukabumi.” A Regional Public
centralization Help Rebuild Indonesia?” Expenditure Review. Overview Report. East
Andrew Young School of Policy Studies, Asia Poverty Reduction and Economic Man-
Georgia State University, Atlanta, Georgia, agement Unit. Draft June 15, 2002.
USA. May 1-3. Word processed.
The World Bank. 2002d. “Decentralizing In-
South Africa, Republic of. 1996. South Afri- donesia. Lombok Timur.” A Regional Public
can Schools Act, No. 84 of 1996. Available at Expenditure Review. Overview Report. East
http://www.gov.za/acts/96index.html. Asia Poverty Reduction and Economic Man-
agement Unit. Draft June 15, 2002.
Sudharto. 2002. “The Improvement of Edu-
cational Supervision System in the Regional The World Bank. 2002e. “Decentralizing In-
Autonomy Era.” Policy Paper. Ministry of donesia. North Sumatra.” A Regional Public
National Education. Office of Educational Expenditure Review. Overview Report. East
Research and Development. Jakarta. Asia Poverty Reduction and Economic Man-
agement Unit. Draft June 15, 2002.
Supriyoko, K. 2002. “Towards the Improve-
ment of Quality and Equity of Secondary Edu- The World Bank. 1998. “Education in Indo-
cation in Indonesia.” Policy Paper. Ministry nesia: From Crisis to Recovery.” Education
of National Education. Office of Educational Sector Unit. East Asia and Pacific Region.
Research and Development. Jakarta.
Warta/CIMU. 2000. Special Issue: History
Syarief, H. 2002. “Madrasah Education: Ac- and Review of the Scholarship and Grants
cess, Quality, Finance, Governance.” Paper Program. August.
presented at the Symposium on Madrasah
Education in the Context of a National Educa- Wiradinata, R. and R. Mudyahardja. 2002.
tion System. Sponsored by the Ministry of “Decentralization and Management of Educa-
Religious Affairs and the Asian Development tional Programs and Activities within the
Bank. Jakarta, 4 November 2002. Framework of Decentralized Service Pat-
terns.” Policy Paper. Ministry of National
The Center for Indonesian Legal and Policy Education. Office of Educational Research
Studies. 2002. “A Gloomy Picture of the At- and Development. Jakarta.
tempts to Eradicate Corruption: Reflection of
the Policies, Laws, and Institutions of Corrup- Woodhouse, A. 2001. “The dynamics of Ru-
tion Management in Indonesia, 1969-2001,” in ral Power in Indonesia: Fighting Corruption in
Holloway, R., ed., Stealing from the Poor. a Community Development Project.” Novem-
Book Four. Jakarta: Aksara Foudation. ber. Word processed report, Kecamatan De-
velopment Project (KDP), The World Bank.
The World Bank. 2002a. “An Assessment of
the Scholarships and Grants Program and
24
Chapter 1 Governance and Management under Decentralization
25
Education Sector Review Volume 2
26
Chapter 1 Governance and Management under Decentralization
27
Education Sector Review Volume 2
28
Chapter 1 Governance and Management under Decentralization
In addition, we interviewed representatives of the Bupati and the Dinas Pendidikan Office in the
Jembrana District.
29
Education Sector Review Volume 2
30
Chapter 1 Governance and Management under Decentralization
The national government was forced to inter- educators to schools. These new national
vene. It solved the problem of a lack of co- guidelines specified a learner: educator ratio
ordination by creating joint intergovernmental of 1:40 in primary schools and 1:35 in secon-
forums between the Treasury and the relevant dary schools. However, because decisions
national line ministries. For example, a com- about educator numbers and salaries were
mittee was set up comprising the national made at national level [in a process led by the
Ministers of Finance and Education together education authorities] while implementation
with their counterparts in provinces, and this took place at provincial level [with budgets
met at least twice a year to co-ordinate poli- determined by financial authorities], these
cymaking, budgeting, and implementation. agreements were often unaffordable at provin-
These structures are supported by a range of cial level.
large and small technical forums of officials
from national and provincial treasuries and The national process of educator provisioning
line function departments. These forums en- was abandoned, and it was decided that each
sure that budgets and national policy are province would have its own target learner:
aligned and that provincial departments adhere educator ratio [with affordability driven from
to their budgets. It has also reduced the the budget side determining the number of af-
budget games played in such sectors. fordable teachers in a province], but a nation-
ally negotiated post-provisioning model would
The implementation of these simple but criti- guide its application in individual schools.
cal measures helped to turn around provincial The attempt at equitable distribution of educa-
finances dramatically. They ran a R500 mil- tors has not been ruined, however, since pro-
lion surplus in 1998/99 compared to a R5.5 vincial education departments became
billion deficit a year earlier. Provinces stabi- responsible for the process. The latest statis-
lized their personnel expenditures and began tics released by the Department of Education
shifting funds towards non-personnel budgets suggest that provinces have moved closer to
and the payment of debts. The implementa- each other in terms of learner: educator ratios.
tion of a multi-year budget [MTEF] from 1998
onwards also helped provinces to prepare Lange, M. 1998. “Opening Re-
more realistic budgets. Provinces have run marks,” Seminar on Democratic
surpluses every year since 1998 and had paid Transformation of Education,”
off their debt by the end of the 2000 financial Konrad Adenauer Foundation Jo-
year. This has put them in a strong position to hannesburg, at
focus on the micro reforms necessary to im- http://www.kas.org.za/Publications
prove the quality of spending in education and /Semi-
health and on increasing their infrastructure narRports/Democratictransformati
budgets. onofeducation/lange.pdf.
Case 3. USA and Japan: School Boards, an
From: Momoniat, I. No date. old tradition—but sometimes a controver-
“Fiscal Decentralisation in South sial one.
Africa: A Practitioner’s Perspec-
USA
tive,” at
http://www.worldbank.org/wbi/pub
From San Francisco to New York City, may-
licf-
ors and state legislatures are contesting local
nance/documents/South%20Africa.
school boards for control over classrooms.
pdf
It's a flat-out challenge to one of the deepest
In 1994, gross inequalities in learner: educator
traditions in American public education:
ratios were also identified as an important ob-
schools being run by boards that are anchored
stacle to equity, and plans were made to de-
in the community.
velop national norms for the provision of
31
Education Sector Review Volume 2
"Mayoral control is a new phenomenon in That system is now under siege in many urban
troubled urban school systems, and the early centers. Early takeovers in cities like Boston
signs in the cities that have moved this way (1991), Chicago (1995), Cleveland (1998),
look promising enough for others to follow and Detroit (1999) were prompted by a melt-
suit," says Ted Sanders, president of the Den- down of school finances or governance. In
ver-based Education Commission of the Baltimore (1993) and Philadelphia (2001), the
States. state engineered the takeovers.
Last week, San Francisco Mayor Willie In some cases, elected school boards con-
Brown called for returning that city to a spicuously mismanaged funds - overspending
mayor-appointed board, after 30 years with an credit cards or bungling millions in funding
elected board. The change would result in for school construction. In others, petty
more qualified people on the board and im- squabbles and erratic behavior spilled out onto
provements in public schools, he said. the front pages of local newspapers, undermin-
ing public confidence in the capacity of local
Meanwhile, New York City's new mayor, Mi- boards.
chael Bloomberg, wants to abandon an ap-
pointed board in favor of a commissioner who More recently, pressure for change is coming
reports directly to the mayor. And last month, down to the central issue of student achieve-
New York Gov. George Pataki (R) called for ment.
putting mayors in charge of schools in the
state's six largest cities, including Albany and Most students in urban public schools aren't
New York City. doing well. And with new state and federal
testing regimes, such failures are becoming
But current moves to center more control on more and more conspicuous…
City Hall are already generating a backlash
from critics. They argue that the shift from "The basic problem is that school boards are a
elected boards will distance poor and minority 19th century idea that made sense when most
voters from decisionmaking. communities were small and self-governing,
and people tended to grow up and live and die
Cleveland - now starting a $1 billion school- in the same place.... That has all changed
construction project - is gearing up for a vote now," says Chester Finn, president of the
this fall on whether to return to an elected Thomas B. Fordham Foundation and an ad-
school board after three years of control by viser to GOP presidents…
City Hall. Mishandling of a $60 million bond
issue was one reason the state turned control From Chaddock, G.R. 2002.
of schools over to the mayor in 1998. “Mayors, States, Push School
Boards Aside,” Christian Science
32
Chapter 1 Governance and Management under Decentralization
33
Education Sector Review Volume 2
new policies and programs that may provide Several factors have contributed to the refor-
answers for new trends. In order to fulfill mulation of the educational evaluation, statis-
these multiple purposes, information systems tics and indicators systems in Brazil. In the
must count on uniform and scientifically based domestic context, the strong leadership of the
methodologies and survey instruments, up- Ministry of Education should be pointed out,
dated and reliable databases, as well as agile driving this initiative forward in constant part-
and precise dissemination mechanisms. nership with sub-national authorities as well as
with representatives of the education sector.
[But] until 1995, Brazilian education data Growing public opinion support to the sys-
were outdated and unsystematic. Since there tematic evaluations of the educational institu-
was no recent information available, directing tions has also been an extremely relevant
government policies in that area was a chal- factor. In the international context, the impor-
lenge as difficult as flying a plane in the midst tance of multilateral cooperation should also
of a storm having no guiding instrument on be stressed, for the purposes of acquiring
board. Not only did the lack of updated in- knowledge, capacity-building, sharing experi-
formation jeopardize the decisionmaking ences and comparisons with other countries.
process, but it also caused a huge waste in the
allocation of funds. Furthermore, in the ab- Gumaraes de Castro, M.H. 2000.
sence of a national standard system of infor- “Role and Value of International
mation and indicators, several states had their Education Indicators For National
own data gathering and processing systems, Policy Development.” Fourth
not compatible to each other. For this very General Assembly of the OECD
reason Brazil could not even provide interna- Education Indicators Programme
tional organizations with consistent data on (INES). 11 - 13 September - To-
education. kyo, Japan, at:
http://www.inep.gov.br/download/i
By the beginning of 1995, the latest school nterna-
census available dated back to 1989, and the cional/idioma/Role%20and%20val
last finished survey was that of 1991. The in- ue%20of%20international%20indi
formation available was, therefore, inadequate ca-
to provide support for the design of actions di- tors%20for%20national%20policy
rected at improving the education system. %20development.pdf.
From that year on, the Brazilian educational
information system has gradually undergone a
Spain
complete reformulation, having acquired an
integrated, decentralized and comprehensive
As the decentralization process unfolded in the
structure, which includes now all levels and
1980s, the country needed a planning mecha-
types, from early childhood to tertiary educa-
nism that would serve to coordinate the educa-
tion and more advanced programs.
tional policies and programs being developed
and executed by the MEC and the decentral-
This process was based on government guide-
ized autonomous communities (de jure). An
lines for the creation of evaluation mecha-
early experience signaled why such a coordi-
nisms to monitor the country's education
nating mechanism was necessary; soon after
systems. As a matter of fact, nowadays all
the decentralization process began the capacity
programs and projects carried out by the Min-
to gather and reproduce nation-wide educa-
istry of Education are based on diagnoses and
tional statistics was lost. Various regions had
recommendations derived from statistical sur-
begun gathering their own data using formats
veys and assessments on basic and higher edu-
that could not be aggregated at the national
cation.
level.
34
Chapter 1 Governance and Management under Decentralization
35
Education Sector Review Volume 2
most of the data gathered at federal x The federal level tries to make it as
level does not fall under this category. easy as possible to submit data, ac-
x Another incentive is that, as the qual- cepting a wide variety of computer
ity of data have improved over time, formats.
the federal government does use the x The system has evolved. Over the
data in initial planning and indicative past 15 years, the federal level has
resource allocation. The states know emphasized networking, the build-up
this, and thus there is an incentive to of professional relations, allowing par-
improve. ticular States to show off their best
x A major incentive is maintenance of practices to the other states, etc. This
close professional and personal rela- has been a great help.
tions between the data groups at fed-
eral level and each of the states. In short, a decentralized system can assure a
x There are technical statistical working considerable degree of data compliance. The
groups that are cooperative in nature, key lessons are that it takes time, professional-
but exist on a permanent basis. These ism, nurturing of relationships, and, of course,
groups generate awareness of the need some sustainable budgetary allocations to en-
for standards, agree on definitions, sure that the effort does not flag once it starts.
etc. The most important example is
the National Forum on Education Sta- Compiled by Luis Crouch
tistics (http://nces.ed.gov/forum/), from personal communica-
which brings together public sector of- tions with the CDD and
ficials from education and other re- NCES.
lated sectors, but also from teacher
unions, and others concerned with
education. The forum is funded by
the federal government, which gener-
ates sustainability, but is not a gov-
ernment office. Importantly, the
forum provides training, guidebooks
on definitions, etc. It meets twice per
year, though some sub-committees
meet more often.
36
Chapter 1 Governance and Management under Decentralization
37
Education Sector Review Volume 2
cally and chronologically. However, they are d. Officers of the Dinas Kesehatan
not much more labor-intensive. (141)
e. Officers of the Dinas Pendidikan
Basic Facts about the Survey (141)
f. Members of NGOs (563)
The Governance and Decentralization Survey g. Members of the media (422)
(GDS) carried out by the Center for Population h. Lawyers (133)
and Policy Studies (CPPS) at the University of i. Officers of Puskesmas
Gajah Mada, with World Bank funding, was an j. Officers of schools (857)
opinion survey that was applied to many levels k. Citizens or households (8579)
of Indonesian society.9 The survey was carried l. Representatives of private sector
out in 2002. The survey has the following rele- (562)
vant characteristics:
3. The list of districts where the overall survey
1. It is largely an opinion survey, based on was carried out is shown in Table 13 (This
scales, with only a few objective indicators table is shown at the end of this appendix as
or judgments by enumerators trained to it is quite long.) Sixty households were in-
evaluate a process or situation. The lack of terviewed in each district. (In one or two of
objective measurements (or judgment of these districts both the kota and the kabu-
processes by trained enumerators) makes it paten were sampled, for a total of 120 inter-
difficult to assess the objective quality of views.) It would be tedious to show the
governance. It also makes it difficult to cor- geographical distribution of every type of
roborate opinions by seeing whether they are respondent, so only the list of districts is
correlated with the objective measurements. shown.
Thus, the absolute value of the opinions is
not of very much interest. However, opin- Initial Results and Puzzles
ions can be compared with each other a)
across sectors and issues, to see whether A logical place to begin, given the aim of this
opinion about governance in some sectors or appendix, is to see what the most “basic” or “fi-
issues is better or worse than in others and nal” respondents, namely parents and citizens
b) for a given sector or issue across localities think about the quality of services and govern-
and actors to see whether these opinions cor- ance of the education sector, both at present and
relate with each other. over the past few years.
2. The following actors—numbers of each in The following observations can be made from
the database are shown in parentheses— the survey. First, the proportions of citizens
were interviewed: who thought, at the time of the survey, that ser-
a. Officials in Bupati/Walikota’s office vices were at 3 (or 4) or better on a scale of 1 to
and other general local government 5 (where 5 is best) is as shown in Table 1.
(741) Given the standard errors, differences between
b. Members of regional legislature or proportions of more than .015 are generally sig-
DPRD (567) nificant at the 5 percent level. The data have
c. Practitioners in the justice system— been sorted from the “worst” service to the
judges and district attorneys (259) “best.”
9
For a fuller description of the survey see:
http://lnweb18.worldbank.org/eap/eap.nsf/2500ec5f1
a2d9bad852568a3006f557d/f342ce243175816d4725
6c1a0015a2a0?OpenDocument.
38
Chapter 1 Governance and Management under Decentralization
Generally, education falls in the middle of the A majority of citizens think that services
range. A very large majority of citizens seems have not changed, but far more think that
to think services are either “ok” (3) or better, services have gotten better than think they
with the numbers thinking services are “better have gotten worse (the middle category of “no
than ok” (4 or higher) being a small majority change” is the rest). Again, differences be-
(except for in the police and sub-district cate- tween services of more than about 0.015 in the
gories). It would be hard to argue that in static “better” column and of more than 0.003 in the
terms, and in terms of subjective opinion, edu- “worse” column are statistically significant. It
cation services are failing, either compared to is true that the largest proportion of citizens
other services or in purely subjective absolute who think services have gotten worse is in
terms. education, but 6.1 percent, while statistically
significantly different from the value for the
Second, citizens seem to think not only that other services, is not striking from a social or
things are not bad, but also that services ap- economic point of view. It is interesting to
pear to be improving under decentralization, if note that, regarding education, fewer citizens
one goes just by citizens’ subjective opinions, are in the middle and fewer are without an
as shown in Table 2. opinion.
Table 2. Proportion of citizens who think services have Third, when citizens were asked to say
gotten better or worse since decentralization whether they were happy with particular
Don’t aspects of education, on average, across
Better Worse
Service Know most sub-aspects, about 80 percent said
School 0.396 0.061 0.045 they were happy, and there is not much
Health 0.403 0.030 0.066 variability across sub-aspects.11 This is
Village 0.397 0.026 0.032 shown in Table 3.
Sub-District 0.318 0.017 0.142
District 0.264 0.021 0.298 All this presents a puzzle. The experts
seem to think that the Indonesian educa-
tion sector is in trouble, yet citizens appear not
to think so. One possible explanation is that
10 11
The source for all tables is our analysis of the The phrasing of the question was altered between
GDS itself. The source for each individual table is “are you satisfied” and “are you unhappy.” The
therefore not listed. percentages were roughly the same in either case.
39
Education Sector Review Volume 2
the experts are wrong, that they are rent- technically reasonable. Thus, this suggests a)
seeking in promoting a sense that education the need not only for School Committees and
has problems (because if they promote a sense other citizen groups to articulate demands and
of crisis, there will be a higher demand for ex- hold service providers to account but also for
pert services). This may mean that the situa- ambitious but reasonable standards of per-
tion is in fact truly better than subjective formance and b) citizens to realize what stan-
Table 3. Percentage of citizens satisfied dards they have a right to expect.
with various sub-aspects of education
School fees 71 If the second explanation is true, this means
Uniform prices 78
that parents and communities will tend to un-
School achievement 82
der-invest in education, which means that cen-
School discipline 87
tral budgetary pressure of some sort (some
School learning process 86
earmarking or even mandates), as well as
PTA management 83
training and moral persuasion, will be neces-
sary to ensure that citizens recognize the na-
Extra-curricular activities 81
tion’s needs as well as their own. Again, this
opinions would suggest or there may be at is likely to be a difficult task. We now turn to
least two other explanations. the task of sorting out whether these two hy-
potheses might be true.
One possible explanation is that citizens told
the enumerators what they thought they Sorting out the Puzzle
wanted to hear and thus responded fairly posi-
tively to most questions even though they may The first hypothesis, that there is some bias to
have thought otherwise, or citizens may sim- the positive middle, can be tested in at least
ply have had very low expectations. If one one simple way. We took all the responses to
takes into account noise and randomness, then the question on the degree of happiness with a
there is some variation around a generally variety of services (the question underlying
positive, but somehow “standardized ok” out- Table 2). The range of judgment as to the
look. The lack of many objective correlates to quality of services can go from 1 to 5, with 5
the opinion questions makes it hard to assess being the best. We averaged the valid re-
whether this is the case. sponses for all services in each district. We
then ranked all of the 142 districts. The dis-
Another possible explanation is that citizens trict falling at the boundary of the 1st and 2nd
genuinely perceived things to be going fairly quintiles (the average of the 35th and 36th) had
well in education, but there was a gap between an average of 3.51. The district falling at the
what they perceived and what is in the na- boundary of the 4th and 5th quintiles (the aver-
tional interest—in other words, the survey as- age of the 106th and 107th) had an average of
sessed individual or local satisfaction rather 3.69. The very worst district of the 142 had an
than collective need. Since the effects of edu- average rating of 3.23, nearly half-way be-
cation are perhaps 50 percent external to the tween “fair” and “good,” and the very best
family and to a considerable degree external to only 3.95, not quite “good.” The total range
a village, it makes sense that villagers would from 3.23 to 3.95 is 0.72 or only 18 percent of
tend to under-invest in education and/or over- the total range of variation possible (4 points),
estimate the degree to which it is provided at a and the inter-quartile range is only 4.7 percent
“good-enough” level compared to the national of the total possible range of variation.
need.
All this strongly suggests a pre-disposition to
If the first explanation is true, then citizens respond with a bias towards the slightly posi-
need to be educated to have higher expecta- tive above neutral. It is true that averaging out
tions. However, their expectation must also be all services produces an artificial uniformity
bias that may not be present in the responses.
40
Chapter 1 Governance and Management under Decentralization
Thus, taking specific services one at a time, and of the schools. The services concerned
the actual range of total variation between the were:
worst and best district is, on average, 24 per- 1. Changing the status of a position
cent of the possible range of variation, and the (promoting a position)
inter-quartile range, service by service, is 6.3 2. Promoting a teacher
percent of the possible range. Finally, the 3. Approving a student movement
worst service, policing, got an average rating 4. Fulfilling the school’s book procure-
of 3.1, and the best, Posyandu, got an average ment proposal.
of 3.8, with the difference between the two be-
ing 16 percent of the possible range. This The responses were in ranges (1 to 3 months,
confirmed the notion of a restricted range of 4 to 7, etc.). Giving the middle value of the
variation that sits right above the average. range to each range, the approximate time in
The idea that this restricted range might be months taken to carry out each of these tasks
“natural” still has to be dealt with—there is, from the points of view of the Dinas Pendidi-
after all, no reason why citizens’ ratings would kan and the school is shown in Table 4.
have to be uniformly distributed or distributed
in any particular way. If the quality of ser- This table is significant for various reasons.
vices really is very tightly controlled by gov- First, taking 3.7, or even 3 months, to promote
ernment and kept within a certain range, it is a teacher, or taking 5.7, or even 5 months to
entirely possible that the citizens’ reactions fulfill a procurement order, is a very low stan-
might simply reflect this fact. We will return dard, and yet this is the perception of the Di-
to this when we have a way to test it. nas Pendidikan. The perception of the school
is that the tasks take, on average, some 30 to
Another way to test the notion of positive bias 70 percent longer (44 percent on average), as
due to a lack of objective scaling is that there much as 7 months to fulfill book procurement
were at least some governance and manage- orders or 5 to 6 months to get a teacher pro-
ment questions that were a) based on an objec- moted. One has to remember that “2” in the
tive scale (though not independently table above really means 1 to 3 (months), so
measured) and b) asked of more than one type one has to interpret the results cautiously.
of respondent. There was a question about Nonetheless, these are poor performance lev-
how long it took the Dinas Pendidikan office els. When this is juxtaposed with parental
to process a certain type of action. The same opinion, then, parents seem to have a bias to-
question was asked of the Dinas Pendidikan wards the positive or to have low expectations.
Second, the difference in perspective between We can now turn to the issue of whether the
the Dinas Pendidikan and the schools is clear range of citizens’ rating of services might be
and strong: 44 percent on average. The one “natural,” in other words, might reflect the
exception to this divergence of perception is true range of objective variation in quality. To
the time it took to approve a student move- check this, we assessed the coefficient of
ment. Schools’ estimates of the time required variation between district averages of the time
for certain actions is much longer than those it takes to perform various services as above.
of officials. These results are shown in Table 5.
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Education Sector Review Volume 2
Interestingly, the averages as perceived by the limited than the “real” range of quality as de-
Dinas Pendidikan are wider even than those noted by officials’ reported range of variation
perceived by the schools. However, this is in a few objective indicators of service quality.
due to the fact that within many districts the
Dinas Pendidikan officials answered simply Another way of assessing whether citizens are
by choosing the lowest possible level (the “right” is to assess the correlation between
range 1-3). A few, however, appear to have citizens’ opinion on the subjective scale and
admitted that things take longer. This yielded the opinions of both Dinas Pendidikan offi-
a wide range—a range greater than that re- cials and school principals on an objective
ported by schools, which would otherwise measure of the time it takes to perform tasks.
seem unlikely. The hypothesis suggests itself Some simple correlations between citizens’
that perhaps Dinas officers have been exag- opinions on various services were added as a
gerating at the low end. In any case, it is clear benchmark to allow us to judge whether citi-
that citizens’ range of expressed evaluation of zens’ opinions, themselves, might be mere
quality is much more restricted—by about noise. The results are shown in Table 6.
four-fifths—than the variation in this one ob-
jective indicator of quality of services as re- Note that citizen’s opinions do not seem to be
ported by the schools or—by nine-tenths—by mere noise. Opinions on the quality of differ-
the Dinas Pendidikan. ent levels of schooling are highly correlated to
each other and are highly correlated to the
This strongly suggests that citizens’ range of opinions of village heads on educational qual-
perceptions of service quality is much more ity (last row, third panel of the table).
42
Chapter 1 Governance and Management under Decentralization
noise, they are not very correlated with offi- also interesting that education is listed fourth
cials’ opinions regarding the time it takes to but a fairly distant fourth: the drop from third
perform certain tasks. This suggests that one to fourth place is from 18 to 9 percent. This
should be cautious when using task perform- suggests, but only vaguely, that citizens might
ance time as a measure of quality or taking be thinking of education in terms of its private
subjective quality perceptions too seriously. and local returns and that therefore they tend
to put a relatively low priority on education.
Interestingly, while the correlation between Improved health services are also given a rela-
the Dinas Pendidikan officials’ and the school tively low priority. It is likely that here too
principals’ opinion on task time is statistically citizens tend to think not so much about public
positive, 0.23 is low in substantive terms. health measures as about measures that apply
Our second hypothesis is that parents’ or citi- to themselves as individuals or perhaps as a
village.
Table 7. Investment priorities of citizens upon receipt of large
fiscal windfall for their municipality
Poverty alleviation 23% What Do More “Objective”
Local physical development (means/ infrastructure) 19% Observers Say?
Increasing existing business capital 18% One way to assess relative qual-
Improving education service quality 9% ity of services, even without ob-
Agricultural development 7% jective measurements, is to see
Other 5% what other “objective” observers
Improving health service quality 5% (other than parents since, as we
Improving other public service quality 4% have seen, their range of reactions
Distributed to the people 4% seems biased towards the posi-
Financing manpower intensive projects 2% tive) might have to say. NGOs
Developing industrial factories 2% are not likely to be truly objec-
Increasing salary 0% tive, in that NGOs, as is the case
Increasing the number of staff 0% with most policy and service de-
livery analysts and advocates,
zens’ opinions reflect a private or local view presumably benefit from the maintenance of a
of education that naturally tends to under- perception that problems and crises exist.
estimate its importance and thus overestimate (However, it is hard to imagine reasons why
the degree to which delivery is sufficient or of they would tend to be more alarmist about one
adequate quality. sector than another; it would seem logical that
they would be about equally biased in all ar-
One possible way to test this is to assess the eas.) The proportion of NGO respondents
degree to which citizens would want to invest who said that in each of the areas shown there
in education as opposed to other items if their were few or no complaints against local ser-
municipality were to receive a fiscal windfall. vice providers is shown in Table 8.
The results are not an uncommon local priori-
tization: invest in economic assets that do
Table 8. Proportion of NGO respondents who report no com-
not move. The results are as shown in
plaints or hardly any complaints, by sector or office
Table 7.
Program and project development and implementation 0.45
Education service 0.48
The top responses, if taken together,
Health services 0.54
suggest that citizens tend to want to in-
vest in activities of fairly direct economic Regulation of informal economy 0.61
benefit and that apply to fixed assets. Land or building disputes 0.64
Notably, interest in direct investment in Human rights violations 0.65
work schemes or in investment projects Discipline violations in public service 0.68
Labor conflict 0.77
appears not to be high. In any case, it is
43
Education Sector Review Volume 2
The only area “worse” than education appears Table 10. Proportion of DPRD members or offi-
to be general program and project develop- cials who reported no complaints, by sector
ment. All services whose low-complaint pro- Education 0.19
portions are statistically different from Program and project development 0.21
education at the 5 percent level are shown in Health 0.25
italics. The number of low complaints in the Land/building certification 0.37
area of program and project development is Identity card 0.61
not statistically different from education. Amount of land/building tax 0.66
Thus, education is, in a sense, the sector
against which there are most complaints or is Again, education is at the bottom and indistin-
equivalent to the worst. guishably so from program and project devel-
opment. Note that the perceptions on this
It may well be that there are more complaints score are similar to NGO perceptions. And, it
against education simply because this is the is noteworthy how different these numbers are
social service that touches most people on a from citizens’ own responses about problems
daily basis. This cannot be tested. and levels of satisfaction. The same idea, with
some refinement, is shown in Table 11. The
To look at this issue further, we narrowed the results are the same, placing education at the
focus of management or governance com- bottom.
plaints down to the issue of corruption. The Table 11. Proportion of DPRD members
results are shown in Table 9. Sectors statisti- or officials who report few or very few
cally different from education at the 5 percent complaints (within those who report some
level are shown in italics. complaints), by sector
Education 0.23
Table 9. Proportion of NGO respondents who reported
low or very low levels of corruption, by sector or office Program and project development 0.24
Health 0.27
Head of District Office 0.23
Land/building certification 0.32
Local Parliament 0.23
Identity card 0.39
Land Certification Agency 0.21
Amount of land/building tax 0.41
Education Department 0.34
Health Department 0.34
Sub-district 0.4 Does Regulation Exist?
Village 0.46 The DPRD members were asked whether
regulation exists, for some key areas and
The absolute numbers above are of some in- their opinion of what regulation does exist.
terest: if 34 percent of the respondents were The results are shown in Table 12.
reporting little or no corruption, then 66 per-
cent were reporting some or more. This has This is a Table 12. Proportion of DRPD
positive implications for the drive towards de- somewhat ob- respondents saying regulation ex-
ists, by area
centralization below the district level, as advo- jective meas-
cated in the Education Act, as the village level urement, and it Poverty alleviation 0.1
is seen as the least corrupt. is of some Education 0.28
concern that Health 0.53
Similarly, whereas the DPRD might be biased only 28 per- KKN 0.05
in some general direction, it is hard to hy- cent of re-
pothesize that they would have particularly spondents seem to believe that the education
strong sectoral biases. Thus, their perception sector at the local level has been regulated.
of citizens’ complaints is of interest. This is This could be mere perception, but nonethe-
shown in Table 10. less it is the perception of the regional legisla-
ture, so it should be regarded as an important
issue.
44
Chapter 1 Governance and Management under Decentralization
45
Education Sector Review Volume 2
46
Chapter 1 Governance and Management under Decentralization
47
Education Sector Review Volume 2
States after 200 years as a decentralized so- mies of scale, perhaps by bro-
ciety (for example, the ongoing debate as to kering associations between dis-
whether district education boards should be tricts or provinces.
elected or appointed or whether they, or 6. Use funding or norms (such as
mayors, should control education in a mu- requiring districts to enroll chil-
nicipality—see Case 3 in Appendix 1.3). dren from outside the district,
The functions that a ministry in a decentral- and then funding them to do so)
izing country should perform are different to correct spillovers between re-
from those the same ministry might perform gions, for example, in special-
in a country that is already effectively de- ized areas of education where
centralized. Thus, looking at international one institution could serve more
examples of countries that are already de- than one district.
centralized (such as the UK, Spain, and the 7. Keep up funding levels and en-
US) is of limited, but some value. Looking courage local levels to pursue
at decentralizing cases is more interesting, equity in outcomes by creating
but there is a danger that one may try to regulation on the internal distri-
learn lessons from countries that are con- bution of funding within dis-
stantly decentralizing but getting there only tricts if possible, and by moral
slowly (Colombia). Chile, South Africa, persuasion if direct regulation is
Argentina, and Hungary are examples of deemed too intrusive into dis-
countries that have “achieved” some degree trict affairs.
of effective decentralization but are still suf- 8. Carry out overall system plan-
ficiently dynamic that there is an ongoing ning, forecasting, and invest-
decentralization process for the national ment prioritization, including
level to support. Judging by these cases, a forecasting and analyzing
central ministry in a decentralizing system teacher supply and demand.
should not implement education but instead 9. Encourage experimentation and
should: disseminate lessons learned
from that experimentation.
1. Set standards and measures of
performance, ideally outcome The organizational structure corresponding
measures rather than input ones; to such a “modern” set-up can be seen in the
ensure that these indicators are organigrams for two very different Minis-
measured and reported (includ- tries of Education: 1) Korea, an Asian uni-
ing information systems); set tary republic where students score extremely
goals and/or minimum service well in international comparative assess-
standards, again outcome- ments (Figure 1), and 2) Argentina, a Latin
oriented. American federal republic with an education
2. Focus on institutions of delivery system of medium effectiveness by middle-
(schools, colleges) rather than income country standards (Figure 2).12 It
“levels” (primary, secondary). would be possible to produce organograms
3. Ensure competition and emula- for strongly decentralizing developed coun-
tion between decentralized re-
gions.
4. Ensure that decentralized units 12
can come up to standard through Note that, since the focus of this ESR is pre-
systems development, training, tertiary education and education as such rather
and by advocating for effective than culture, science, sports, and other ancillary
functions often assigned to Ministries of Educa-
funding. tion, we have glossed over the details in the parts
5. Perform, or ensure performance, of the organigrams that correspond to such func-
of functions with large econo- tions.
48
Chapter 1 Governance and Management under Decentralization
49
Figure 1. Structure of Ministry of Education, Republic of Korea
Minister
Lifelong and
Planning and School Policy Human Resources Local Education
Vocational University Affairs General Affairs
Management Development Services
Educaiton
Planning and
Teacher Policy
Budget
Legal Affairs
Curriculum Teacher Education
Policy and Development
Education
Facilities
Asessment and Teacher
Evaluation Welfare
Women's
Education
Emergency
Planning
50
Figure 2. Structure of Federal Ministry of Education, Argentina
Minister of Education
Secretary for
Secretary for Secretary for
Science, Technology,
Education University Policy
and Innovation
National
National
DG DG National Directorate:
DG Directorate:
Finance and International Directorate: Curriculum and
Legal issues Information and
Management Funding Targeted Funding Teacher
School Quality
Development
Directorate: Directorate:
Directorate:
Accounting and Human
Budget
Finance Resources
51
Education Sector Review Volume 2
Based on these considerations, Depdiknas is and more prominent than the units
not currently optimized to support the performing such functions internal
decentralization process or a decentralized to the national ministry itself and
system. The following are suggestions for should be quite separate from them.
ways in which it could be reorganized to In a sense, these units should be
make it more supportive of a decentralized considered “line function” units just
education system: as important as traditional line units
such as “basic” or “tertiary” or “vo-
1. In a largely non-implementing min- cational.” The structure of the Ko-
istry there is no obvious need for a rean ministry is a good example in
large Inspectorate. This is not to say this regard. At a minimum, such
internal audit functions and the audit units should be headed by a Director
of sub-national units in charge of General (and not the Secretary Gen-
projects should be neglected, but the eral) such as a Director General for
unit performing internal and special Policy and Planning, who would
project audit, while strong and well- cover not only the traditional policy
staffed, need not be very large. The and planning issues but also these
internal audit function should be issues related to administrative and
part of the internal ministry staff governance support to regions.
function, in other words, organiza- 4. However, incentives should be cre-
tionally it should be placed in a ated for staff working in such units
manner similar to that of Korea. to work in tandem with the internal
2. A distinction needs to be made be- Depdiknas staff because the latter
tween the “staff” working on func- often have practical know-how,
tions that are internal to the ministry such as how the personnel databases
(generally associated with some- operate. Without such practical
thing like a Secretary General), such know-how, staff in such a Policy
as human resources, budget, pro- and Planning Directorate General
curement, on the one hand and sup- will tend to be seen by their regional
port to decentralized regions counterparts as “mere theoreti-
carrying out those same functions cians.” Some of these key support
on the other. functions would be:
a. The offices performing a. Funding and developing fi-
functions internal to the nancial norms, such as
ministry can be fairly small. model funding norms for
b. The technical focus of these districts to fund or provision
functions will need to schools.
change. For example, pro- b. Developing models and
curement expertise should tools for personnel (teacher)
shift from materials to tech- management.
nical assistance and re- c. Improving procurement of,
search and development for example, books.
contracts. This will also re- d. Developing information
quire better links between systems.
technical staff and central e. Continuing governance and
staff. It is likely to require management development.
the retraining of some staff. 5. The Directorate General for Policy
3. Units providing assistance to sub- and Planning should be divided into
national governments in functions two (or more) broad areas, to handle
such as human resources, budgeting, a) these financial, administrative,
and procurement should be bigger and governance support functions
52
Chapter 1 Governance and Management under Decentralization
53
Education Sector Review Volume 2
14
In South Africa, the Ministry as such is very
small and exists only to support the Minister as a
political appointee. The Department, which con-
tains most of the employees, runs all of the bu-
reaucratic and operational affairs and is headed
by a single technical appointee on contract who
answers to the Minister.
54
Figure 3. One possible organizational structure for Depdiknas
Minister
Inspector General
(focus on financial and Secretary General
audit issues only)
HR Internal to
Ministry
Policy and Planning General education Lifelong education Higher education
Budgeting and
Financial Controls of
Institutional Finance Ministry and
(Funding formula Curricular analysis, Nationally-Run
support, norming, development, norming, Various subunits Programs
policy; budget dialogue) and support
Other functions
Teacher policy on internal to Ministry
Information systems and or nationally-run
evaluation, in-service
data gathering programs
training, pay,
deployment
Institution (schools.
colleges, universities)
measurement and quality
assurance
Governance and
management norming
and support to districts
and schools
55
Education Sector Review Volume 2
56
Chapter 1 Governance and Management under Decentralization
transaction costs involved when social or eco- tention away from the more central and gen-
nomic agents hold each other accountable. eral interests, such as basic general education,
Thus, the criterion by which to judge whether that have less organized defenders. Setting
an appropriate number of standards is being minimum standards and obligatory functions
used is whether the number of standards really and maintaining a strong central role in poli-
helps agents to hold each other accountable, cymaking can prevent this sort of “whip-
whether standards are in fact lowering transac- sawing” of local governments.15 However, as
tion costs or increasing them, or whether the will be seen below (where undue attention is
transaction costs they avoid are worth the cost sometimes given to sports education or to
entailed in tracking the standards. Further- teachers in general), at the moment the central
more, clearly those sectors where policymak- government in Indonesia seems more likely to
ers believe that accountability is most abet special interests than to control them.
important (perhaps because they require a
higher proportion of the national budget) In Indonesia, as the draft minimum standards
should have more standards. Having too many document currently stands, it appears that
standards can actually reduce accountability if there are simply too many standards, or, indi-
the number gets to the point where it is unreal- cators, and that they are grossly out of propor-
istic to expect so many to be monitored. tion to the importance of the areas in question.
Worse, a proliferation of standards, especially The draft contains 197 indicators, all with ap-
if they are set too high or if their numbers are parently equal priority. True, many of them
out of proportion to the intrinsic importance of are repetitive, since, for example, the draft re-
the area in question, can be a signal that spe- quires that data on enrollment rates be col-
cial interest groups are trying to capture budg- lected at the primary, junior secondary, and
etary resources, by mandating, say, that senior secondary levels. Nonetheless, to ex-
schools or districts must have teachers teach- pect managers to agree to be held accountable
ing in specialized areas. Finally, the appropri- for 197 indicators, without any real sense of
ate number of standards will also depend on prioritization among them, seems either naïve
the type of standards in question. (See below or cynical. Few competent managers would
for a discussion of types.) If the standards be- agree to be truly held politically accountable
ing set are of the consumer-satisfaction or citi- for that many indicators. Furthermore, the
zen-rights type, it is likely that the optimal numbers are out of all proportion to their in-
number may be fairly high. If standards are trinsic importance. While there are only 18
for purposes of bureaucratic or political ac- indicators related to primary schooling, there
countability and diagnosis, the optimal number are 22 indicators related to sports education,
is likely to be much smaller. and while there is an indicator that induces
better reporting of sports statistics, there is no
One reason to prefer more, rather than fewer, similar indicator inducing the reporting of
indicators, is that having a clear set of indica- educational statistics. This is not necessarily
tors allows local governments to stick to their to suggest that the latter should be added; it is
core mission. If DPRD members are seen as more to suggest that the former is excessive.
venal or not very capable and local citizens are
prey to populist illusions such as “fiscal illu- The clear impression is that tracking this many
sion” (the belief that resources that come from indicators will increase rather than lower the
a central level are “free”—see Dollery and
Wallis 2001), they can easily fall prey to spe-
cial interests who try to force local govern- 15
“Whip-sawing” is a style of collective bargaining
ments to compete with each other in providing in which a powerful union negotiates with more
non-essential services. By the logic of collec- than one employer, pitting one employer against
tive action, it is naturally the less “general” in- another and forcing each employer in turn to meet
terests that are able to steer public funding or exceed the agreement that the union previously
towards their favorite cause. Hence, it is pos- made with a different employer. The same applies
to special interests pitting local governments
sible that special interests could start races be-
against each other and to any sort of negotiation in
tween local governments in providing services general. A whip-saw is a saw operated by two
or sub-services that are of more special interest people, where the cutting requires a back-and-forth
such as sports or music, drawing managers’ at- motion.
57
Education Sector Review Volume 2
transaction costs related to accountability and gated data as the gross or net enrollment ratios
runs the risk of skewing accountability by that risk being too general to be useful at the
forcing managers and governors to concentrate local level. Of the indicators that we re-
equally on essential and non-essential items. viewed, only one or two would be of any in-
Both the absolute numbers of indicators and terest to a particular parent, such as the
proportionality between them needs to be seri- proportion of students who pass a given exam.
ously revisited. Few parents are likely to care whether the
gross enrollment rate is 70 percent or 90 per-
Type, Motivation, and Use cent as long as his or her child is enrolled in
school. Nor do the SPMs focus on workers
Across the world, the overwhelming majority within the system and the accountability of
of “minimum service standards” are con- system units to each other. Similarly, they do
sumer-level or citizen-level standards of direct not contain any service indicators such as the
service delivery. Some examples of these in- time it would take the Dinas Pendidikan to ful-
clude citizens being notified more than 24 fill a school’s book order or how long it would
hours in advance of any planned interruption take to register a teacher’s promotion and no-
in service or specifying that parents will be in- tify the payroll system, and for the teacher’s
formed of their children’s end-of-year test promotion to be reflected in his or her pay.
scores within four weeks or that a local educa- The whole ethos of providing parent-oriented
tion office will respond to any query from a service indicators or indicators of mutual ac-
school within forty-eight hours or that parents countability is absent from Indonesia’s current
have a right to know the average test scores of draft SPMs.
all the schools in the district. These standards
can be set irrespective of political ideology or As noted above, when indicators focus on di-
whether one regards the subject of service as a rect service provision, it may optimal to have
“client” or “consumer” in a “marketized” ap- rather more indicators than when indicators are
proach or as a “citizen” with rights in a “hu- used for upward accountability or horizontal
man-rights” approach. Thus, institutions but political accountability. The reason for this
advocating quality improvements from a is because each individual client is likely to
rights-oriented viewpoint emphasize the indi- want to hold service providers accountable ac-
vidual-level service standards (see Theis, cording to the indicator that interests him or
2003) as much as traditional corporatist insti- her and because indicators bearing on direct
tutions. (For a discussion of the changes in service delivery are likely to be more immedi-
perspective and ideology involved in the ate to the actual process and characteristics of
“Charterist” or MSP approach in the UK, service delivery and to the everyday tasks of
which applies fairly generally, see Falconer, the service delivery agents. Furthermore, in-
no date, or Wallis and Dollery, 2002.) dividual clients are less likely than system
managers to act as interest groups engaged in
If not at the level of direct service provision, rent-seeking; their actions are more likely to
indicators should at least refer as much as pos- be consistent with actual welfare. Thus, if in-
sible to outputs of the system rather than in- dicators are oriented towards making service
puts. In cases like governance, where process providers accountable to clients, then there is
is in effect the output, it is vital to have proc- likely to be little loss of focus from having a
ess indicators, such as ensuring that govern- few more indicators.
ance bodies (such as School Committees) are
working to norm, e.g., have the right number One suggestion would be for Indonesia to con-
of parents as opposed to teachers, and have sider replacing many of its current aggregate,
followed proper nomination procedures to top-down indicators, with citizen-level and
elect the members. unit-level indicators that will enable both hori-
zontal and reverse accountability. (Reverse ac-
At present, the draft Indonesian SPMs are de- countability means, for example, Dinas
signed to make schools and districts account- Pendidikan being accountable to schools for
able to the central education ministry rather book delivery, not just schools being account-
than to clients or citizens. They are very often able to the Dinas Pendidikan for the quality of
input-oriented and tend to cover such aggre- their education services.) Furthermore, the
58
Chapter 1 Governance and Management under Decentralization
overall number of indicators should be re- teach and which are not weighted in
duced and those that remain should mostly be any way.
indicators of output rather than inputs.
x Many districts in Indonesia are quite
Technical Quality small. Measurement of such key vari-
ables as dropping out or moving up to
To be useful, it is self-evident that SPMs have a higher education level will therefore
to be measurable. Yet, according to the cur- generally be extremely unreliable. In
rent draft of the education minimum standards, small and generally under-supplied
a minority (but a fairly large minority) of the districts, transition rates will probably
Indonesian indicators are not measurable or appear to be very low. In large, well-
are specified too poorly to be measurable. For supplied districts that are situated next
example: to smaller and less well-supplied ones,
the transition rate to higher levels of
x There are indicators that specify that education (junior or senior secondary)
systems will exist to allow teachers appear to be higher than 100 percent
access to certain levels of training, and because children are migrating, either
the indicator is set at, say, 50 percent, on a day-to-day basis, or sent to live
without specifying whether this means with relatives, to take advantage of
that the systems should be 50 percent educational opportunities. This will
operational, whether 50 percent of dis- make indicators such as dropping out
tricts should have operational systems, and transition rates extremely difficult
or whether the systems should reach to measure—in fact impossible, in
50 percent of the teachers. practice.
x Similarly, there are indicators for such It does not do any good to wish these matters
vague things as the percentage of away: they are fundamental measurement
youths taking part in training that im- problems, and attempting to measure the un-
proves their character and attitude, measurable creates, rather than reduces, social
without specifying how one might and bureaucratic tension, and makes citizens
measure whether a program helps im- lose respect for the state. In short, there are
prove attitude or character, or whether quite a few indicators in the draft document
in fact the students’ character and atti- that have simply not been well designed.
tude have in fact been improved. The
issue of self-selection (youths of fairly In the case of some of the indicators, even
good character are more likely to join though measurement is possible in theory, in
such programs) needs to be taken into practice it will turn out to be very difficult be-
account. In principle, one could cer- cause there are no actual delivery units on
tify certain courses as being “charac- whom it makes administrative sense to gather
ter-improving” and then count those, the data. One example would be the proposal
but this would require the onerous task to track the number of youths participating in
of certifying just about every course of an economically meaningful activity. (See be-
any kind available to students and still low on the importance of data being a by-
avoids the fundamental measurement product of administrative practice.) It would
issue. be possible in principle to use random sample
surveys to measure this indicator, but note that
x On a more important point that refers random sample surveys are no good for track-
to basic educational delivery, there is ing the data needed for accountability except
an attempt to measure “teachers’ at the very highest and most aggregated level.
readiness to teach,” and a standard is This is a much more serious problem than the
set at 90 percent. But the indicator re- problem of the theoretical inadequacy of the
fers to a number of extremely complex indicator.
variables for which there is little em-
pirical evidence about their effective-
ness in measuring actual readiness to
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Education Sector Review Volume 2
Level at which Indicators are Set, Level invest. Finally, in situations where horizontal
to be Reached accountability mechanisms (accountability of
local government to DPRD or citizens, for ex-
In a competitive market or in a democracy, ample) are still weak, it is justified for higher-
government (in the case of markets) or higher- level government to set levels of key indica-
level governments (in the case of governance) tors, not just the indicator framework as such.
need not in principle set the levels of any per-
formance standards. The role of the govern- But the cases where specific levels are stated,
ment, for example, should be limited to in Indonesia, are excessive, as they go beyond
establishing the whole system of weights and the above-stated justifications. Even if, as
measures as a standard and ensuring that all appears to be the case, the policy is that the in-
merchants sell in kilograms rather than some dicators can be reached at different speeds by
in kilograms and others in pounds and others different governments, having the same termi-
in bushels (thus creating transparency for con- nal point still does not make sense, in many of
sumers). However, the government should not the indicators. For example, it is not clear why
tell merchants how much to sell or at what every local government should value sports
price. Similarly, in a competitive political en- the same (and it is difficult to argue that sports
vironment where local bureaucrats and politi- represent a serious externality) or why the
cians have to compete for votes and taxes, fight against HIV/AIDS or drug abuse should
higher levels of government should ensure that be fought at exactly the same level of intensity
lower levels of government can be judged in every district, when it is well-known that
against a common set of standards but need both HIV/AIDS and drug abuse tend to happen
not necessarily set a level for those standards. in geographical clusters. Yet the SPMs are ex-
In either case, competition and emulation will tremely detailed regarding sports indicators
set the optimum level at which transactions (for example, something to the effect that 15
take place, in other words, the level that con- percent of athletes in every location should be
sumers want and at which producers can af- winning or should be competing at the highest
ford to produce. This will vary from place to organized level!), yet totally silent on many
place and from person to person because eve- other areas of education for life, such as art or
ryone and every local government has differ- music. Perhaps some local governments
ent needs and different capacities. Setting a would rather have less sports education and,
fixed level is by definition sub-optimal, unless say, more gamelan education. Yet music or
every citizen has exactly identical preferences arts education is not at all covered. This is not
and every firm and local government has ex- to say that arts and music education should be
actly identical technology, natural resources, covered; it is to say that the current coverage
and capital, which is never the case. of areas such as sport is extremely excessive.
And, this is only one example—there are quite
In situations of monopoly, however, the gov- a few other such cases. One could argue that
ernment does set the actual level of expected this imbalance already represents a “capture”
service provision, as is the case in the devel- of local government by special interests,
opment of service standards for either public though in this case with the connivance of cen-
or private public utilities that are “natural” tral government. It is clear that this is not
monopolies. These standards are, or should likely to be the intent, but it is nonetheless the
be, contained in the licensing of new utilities, practical effect—hardly an optimal role for
such as cell phone or cable television licenses. central government to be playing.
Similarly, in situations where local govern-
ments affect each other in non-measurable The level (and the numbers) at which the indi-
ways (“externalities,” as in the case where citi- cators are set might also “set up” local gov-
zens with secondary education are likely to ernment for failure, which would be an excuse
migrate from the areas where they were edu- for the central level to “re-centralize.” Few
cated, thus benefiting the receiving areas with central organizations give up the privileges of
services they did not pay for) it makes sense centralization willingly, so it is logical that
for government to mandate certain levels of they would try to reassert control, and one way
provision that assure the national interest— to do so is to set the goals very high so that lo-
otherwise the local area has a disincentive to cal governments fail. Even if the motivation
60
Chapter 1 Governance and Management under Decentralization
were not so undesirable, a moment’s reflection ministratively within the delivery units them-
will suggest that the national government ap- selves, and, furthermore, the administrative
pears to want to hold local governments ac- recording should be such that it directly helps
countable with a degree of specificity and at a the unit itself do a better job of delivering its
level that it did not hold itself effectively ac- services.
countable to citizens during the period of cen-
tralization. The fact that the standards One solution that has been proposed to the
suddenly appear higher when it is someone problem of under-reporting by schools is that
else (local governments) that is being held ac- schools be supplied with the data that are
countable should be cause of some concern re- compiled by the central Education Manage-
garding the sincerity of motivation in the ment Information System (EMIS), so that they
SPMs, and is likely to be noted by local au- see what is done with the data. But this is not
thorities as a questionable intention on the part likely to be very motivating, except initially,
of central government. as a novelty. Another idea that is similarly
unlikely to be effective is the idea that schools
Finally, it should be noted that, with only one supply the EMIS with data and that the EMIS
exception to our knowledge (Lewis, 2003), no somehow makes the information available
one is estimating the costs of the levels at back to the school for management purposes
which the indicators are being set. It is not as a way of creating an incentive for them to
just a matter of financial cost—that is the easy continue collecting and reporting data. This is
part. In many cases, the financial cost is lower also likely an unworkable proposition, as any
than the opportunity cost of scarce manage- data useful for management will be out-of-date
ment talent, because the rationing of labor and by the time it makes the round trip from the
the allocation of labor to tasks, and in particu- school to the EMIS and back to the school. In
lar scarce high-level management talent, in the the end, the most effective means of ensuring
public service is not very efficient and the hu- adequate reporting from schools and districts
man resource implications of meeting the lev- is a combination of a) data reporting as a by-
els of the various indicators are not being product of routine administrative recording by
calculated either. This suggests that much the delivery units and b) sheer bureaucratic
more emphasis should be put on using the in- pressure from the center within a strengthened
dicators as a framework of accountability in administrative system. On the first score, the
which the level is not determined by fiat but is idea is to make sure schools are directly ac-
determined through emulation and competi- countable for certain services and feel pressure
tion, for example through the issuance by cen- to be so accountable, to make sure that they
tral government of comparative score-cards on understand what data helps them discharge
service performance of local governments. that accountability well, and to make sure that
the system for reporting data towards higher
Level at which Measured levels of government mostly use the same data
as are needed at the local level, and which are
Indicators and minimum standards should therefore reported as a by-product of good
lower the transaction costs involved in agents’ administrative practice at the school level.
holding each other accountable, but they
should do so without imposing complex bu- In Indonesia’s draft education SPMs, some of
reaucratic requirements and measurement cost. the indicators are indeed a byproduct of good
One way to do so is to make sure that the indi- administrative practice. The gross and net en-
cators are measured as much as possible as the rollment indicators, for example, are the result
by-product of administrative systems that as- of data that good schools should keep and use
sist the actual delivery units (such as schools) in management in any case, such as records of
in the delivery process. Clearly, indicators student numbers by grade and age (as well as
that are aimed at ensuring the quality of direct by gender). However, a few are difficult to
service delivery to the client will accomplish track because there are no units that currently
this more or less automatically (which is an- provide the services being tracked and in
other advantage of such indicators), but that is whose interest it is to track the variable in
only one way. In general, the indicators question. For example, there is an indicator
should be measurable as much as possible ad- that refers to activities aimed at increasing
61
Education Sector Review Volume 2
awareness of the value of education. That is a livery units already exist that have an
fine sentiment and lofty goal, but the indicator interest in measuring these indicators
is set at 80 percent, without specifying what for their own administrative purposes
this means. It is not clear what the numerator (if they are well-managed).
and denominator should be, nor in whose in- x set more indicators as direct service
terest it is to track this, nor what classifies as delivery indicators, both for service
such an activity. delivery to parents and students and
service delivery from unit to unit, and
Conclusion set much fewer indicators of upward
bureaucratic or political accountabil-
In summary, the education SPM exercise may ity.
be a good beginning. However, before these
x limit the use of indicators that are not
indicators can be activated, very serious work
measurable as an essential element of
should be done to:
the administrative capacity of service
x radically shorten the list of indicators. delivery units.
x reduce the number of the input indica-
tors in particular. If this is not done, the indicators are likely to
x not set actual levels for many indica- add more to transaction costs than they will
tors and instead use score-cards and save in transaction costs, and on top of that,
other means of stimulating informed they are likely to increase measurement and
competition so as to allow “natural” bureaucratic costs. In that case, the natural re-
levels to be found. action of local government and delivery units
x keep levels as quantitative goals in a will likely be to ignore the indicators, even if
few key output indicators. they initially agreed to collect them. This will
x think through the technical problems tend to make enforcement costs very high, and
and costs of gathering the indicators, cause the effort to wither.
including their definition, ways to
measure them, and whether local de-
Baker, B. and S. Trémolet. 2000. “Regulation mum Service Standards: A Proposal for Con-
of Quality of Infrastructure Services in Devel- ceptual Development and Implementation,”
oping Countries.” NERA. Paper given at the Jakarta: Word processed.
conference on Infrastructure for Development:
Private Solutions for the Poor, London, UK, Falconer, P. No date. “Public Administration
31 May – 2 June. Word processed. and the New Public Management: Lessons
from the UK Experience.” Department of Law
Departemen Pendidikan Nasional/Unit Fasili- and Public Administration, Glasgow Caledo-
tasi Desentralisasi Pendidikan. 2003. “Kewe- nian University, Glasgow, Scotland, UK:
nangan Wajib Dan Standar Pelayanan Minimal Word processed.
Bidang Pendidikan, Pemuda dan Olahraga.”
Jakarta: Word processed. Ferrazzi, G. 2002. “Obligatory Functions and
Minimum Service Standards: A Preliminary
Dollery, B. and J. Wallis. 2001. “A Taxo- Review of the Indonesian Approach,” GTZ-
nomic Analysis of Government Failure in Lo- SfDM, Jakarta: Word processed.
cal Government.” School of Economics,
University of New England, Armidale, Austra- GTZ-Support for Decentralization Measures,
lia. Working Paper Series in Economics No. USAID-Perform, USAID-MSH, ADB-Basic
2001-7. Word processed. Education, The World Bank-WBDTFID.
2003. “Draft Laporan Sintesa – Kegiatan
Donor SPM Working Group. 2002. “Local Model Building Kewenangan Wajib Dan
Government Obligatory Functions and Mini-
62
Chapter 1 Governance and Management under Decentralization
Standar Pelayanan” Minimal, Jakarta: Word Theis, J. 2003. “Rights-based Monitoring and
processed. Evaluation.” Save the Children: Word proc-
essed.
Lewis, B. 2003. “Minimum Local Public
Service Delivery Standards in Indonesia: Wallis, J. and B. Dollery. 2002. “Styles of
Fiscal Implications and Affordability Con- Policy Leadership and Local Government Re-
cerns.” Draft version. Research Triangle In- form.” University of Otago Economics Dis-
stitute International, Research Triangle Park, cussion Papers No. 0206. Dunedin, New
North Carolina, USA: Word processed. Zealand.
63
Education Sector Review Volume 2
64
Chapter 2: Financing Education under Decentralization
Indonesia’s decentralization laws have not classrooms, then education outcomes will de-
only profoundly changed the distribution of teriorate under the new regime. Finally, the
authority and responsibilities among different chapter offers policy options for improving al-
levels of governments but also how fiscal re- location mechanisms at all levels of govern-
sources are generated and who controls them. ment, for aligning resources and financial
The old transfer system, which was character- management with the goals of the Indonesian
ized chiefly by earmarked grants from the cen- education sector, and for ensuring that schools
tral government budget to provincial and receive adequate resources.
district governments, has been replaced by one
that consists largely of general grants from the New Fiscal Structures under
central government budget to local govern- Decentralization
ments with expanded revenue sharing. Unlike
earmarked grants that have to be spent for Prior to decentralization, the national govern-
specified purposes, how the general grants are ment transferred public funds to the regional
used is left up to the discretion of the recipient governments through the Autonomous Gov-
government. Also, the laws now allow re- ernment Subsidy (Subsidi Daerah Otonom or
gional—that is, provincial and district— SDO) and through Presidential Instruction
governments to retain an increasing share of grants (Instruksi Presiden or INPRES). For
the revenues generated from local economic more than 30 years before 2001, the SDO was
activity and natural resources. By the time de- the basic grant mechanism for recurrent ex-
centralization has been fully implemented, to- penditures, while general- and special-purpose
tal regional government expenditures are INPRES transfers were the vehicle for devel-
expected to account for about 10 percent of opment grants. The SDO financed almost the
GDP or more than 40 percent of total govern- whole bill for the salaries and allowances of
ment spending (Hofman, Kaiser, and Goga civil servants in regional governments, includ-
2003). ing the pay of primary school teachers. It also
covered routine expenditures such as those to
This fiscal and financial restructuring is likely fund the operation and maintenance of school
to affect how much public money will be spent buildings and administrative expenditures.
on education and also how efficiently those re- Meanwhile, INPRES grants, which began as a
sources will be spent, although many of the simple block grant mechanism in the late
specifics of these fiscal structures have yet to 1960s, evolved into a diverse array of grants
be defined or clarified. This chapter discusses with at least 15 different specific-purpose
the implications of these new financial ar- transfers, including those for primary schools,
rangements and identifies important issues that primary health care, roads, and agricultural ex-
should be addressed by policymakers. The tension among others (Silver, Azis, and
chapter begins by briefly contrasting the old Schroeder, 2001 and Lewis, 2002). A lot of
and new fiscal structures and the old and new the progress made in human development in
relationships between the central government the regions has been attributed to the INPRES
and the regional governments, and then goes grants,16 but this mechanism is said to have
on to discuss the likely consequences of these been characterized also by excessive central
changes for the financing of education. Be- control, a lack of transparency in its allocation
cause financing education involves not only procedures, and a lack of regional autonomy.
increasing the amount of resources available
but also improving how those resources are
spent, the discussion covers both efficiency 16
and equity concerns. One important issue is Duflo (2001) estimates that the INPRES program
raised the probability that a child would complete
what happens within districts and within
primary school by 12 percent, and thus increased
schools. If regional governments fail to allo- the average years of schooling by 0.25 to 0.40 year
cate adequate resources to schools or if those for the cohort of children during the period 1974-
resources somehow do not reach schools and 78.
65
Education Sector Review Volume 2
DAU/Shared Revenues
Central
Government
DAK
Ministry of Ministry of
Religious National General Flows
Affairs Education APBD
Earmarked Flows
ABPD
Provincial
government
APBN APBN
Public Schools
Religious Schools
66
Chapter 2 Financing Education under Decentralization
daerah or APBD) and an allocation factor, has civil service wage bill. The fiscal gap ac-
been criticized for being mechanistic rather counted for 50 percent rather than the 40 per-
than based on the real expenditure needs of re- cent that was the case with the allocation to
gional governments.18 districts.
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Education Sector Review Volume 2
this authority, district governments have been increasingly exercise their right to borrow, it
creating new taxes aggressively (Lewis, will soon be necessary to improve the frame-
2002).20 The reality, however, is that district work of grants and on-lending mechanisms for
governments have limited capacity to raise the regions.
taxes from their own resources such as land,
buildings, and natural resources, which consti- In the future, provincial and district govern-
tute only about 5 percent of their revenues. ments will be increasingly expected to mobi-
Provincial governments have a larger own- lize their own resources in addition to their
resource base but must share this with district transfers from central government in order to
governments. Moreover, there are large ine- finance their expanded responsibilities.21 This
qualities in the revenue bases of the different may make public spending more efficient.
provinces and of the different districts. For ex- When people have to spend some of their own
ample, the per capita non-oil and gas GDP of money on providing services, they are more
the richest province, Jakarta, is almost nine likely to want to see the whole allocation spent
times larger than that of the poorest province, wisely and frugally. Also, local governments
East Nusa Tenggara (Akita and Alisjahbana, may be able to spend money more effectively
2002). The DAU allocation formula includes than the national government because they
a poverty measure and thus provides a means have more access to critical information about
of targeting those districts that are most in local needs, inputs, and providers and because
need and for equalizing the potential resources they can (and are more motivated to) closely
that are available to districts. monitor service provision.
A final point on local financial resources is Several questions arise with respect to the im-
that district governments are allowed to bor- pact of the new fiscal structures on education.
row, although their borrowing is limited by a Will the district governments’ expanded re-
formula that restricts the extent to which they sponsibility for education increase or decrease
can go into debt, that requires approval by the the amount of resources available for educa-
MOF in the case of foreign loans, and that tion? Will the current transfer formula make
cannot be guaranteed by the central govern- regions more or less equal in terms of their
ment. Law 25/1999 also restricts these gov- ability to meet national standards of provision?
ernments to borrowing only for projects that Are district governments allocating sufficient
will generate a financial return, but this clause resources to schools? The next section takes a
has been loosened up by the implementing macro view of these questions.
regulations, which explain that this financial
return can either be direct or indirect. At the Public Spending for Education at the
national level, about half of the development National and Local Levels
budget continues to be financed by donor pro-
ject loans, and the national government cur- One commonly used method for assessing the
rently bears the debt servicing burden on these level of government spending is to compare
expenditures (Hofman, Kadjatmiko, and Kai- numbers across different countries. Based on
ser, 2002). However, as district governments 1998-2000 data from several countries, Indo-
nesia ranked second lowest among its Asian
neighbors in terms of its share of education
the taxpayer and the economy. Law 18 restricted expenditures in GDP (Table 2.1) with only
regional taxes to a specified list and made any addi-
tional taxes conditional upon the approval of the
Ministry of Home Affairs with advice from the
21
Ministry of Finance. With the transfer of authority and management to
20
Property taxes are administered and collected regional governments in Indonesia, “it is hoped that
mainly by the national government, although re- the local governments are capable of obtaining
gional governments assist with tax collection in ru- more funds in their regions and in managing them
ral and urban sectors. Until recently, the national more efficiently and effectively. It is expected that
government retained 10 percent of total tax reve- the local governments are able to use or exploit the
nues for its own use, 9 percent was provided to lo- sources of funds in the regions, such as the private
cal tax offices to assist with collection, 16 percent sector and other education stakeholders, in funding
to provincial governments, and 65 percent to local education” (National Committee for Education,
governments. (Lewis, 2002). Sub-Committee III, 2001).
68
Chapter 2 Financing Education under Decentralization
Table 2.1 Public expenditures for education: How does Indonesia compare with other Asian countries?
Per student primary ex- Percent of education
Education expenditures penditures as a percent expenditures in total
as percent of GDP [a] of GDP per capita [b] public spending [c]
China 2.2 6.58 13.0
Indonesia 2.8 4.21 9.6
Vietnam 2.8 7.26 7.4
India 4.1 12.72 13.7
Singapore 3.1 7.00 23.4
Philippines 3.5 12.69 20.6
Japan 3.5 21.41 10.5
South Korea 4.1 12.30 17.5
Thailand 5.4 17.21 20.1
Malaysia 6.2 12.88 25.2
Notes: [a] From EdStats (http://www1.worldbank.org/education/edstats), World Bank; data from 2000 or latest two years, ex-
cept for China, 1998, Vietnam, 1997 and Singapore, 1995; data are originally from UNESCO; [b] From EdStats and World
Development Indicators, World Bank; data pertain mostly to 2000, except for China, 1998 and Vietnam, 1996, Singapore and
Korea, 1997, or latest two years; [c] From EdStats; and UNESCO, 2000.
China ranking lower; however, Indonesia was Estimates of the level of transfers that were
well behind China in regard to per student made to district governments in 2002 suggest
primary expenditures as a percentage of GDP that, on average, districts have more resources
and education expenditure as a percent of total at their disposal than in the past, and the recent
public spending. Indonesia’s education spend- trend in education spending suggests that dis-
ing was 2.8 percent of GDP, as compared with tricts are spending more of those resources on
4.7 percent for Thailand and 4.6 percent for education. Important questions are whether
Malaysia. As a share of total government these higher educational budgets are sustain-
spending, Indonesia’s education spending was able in the future and also whether they are
slightly higher than Vietnam’s 7.4 percent but adequate for meeting the current responsibili-
was far lower than Thailand’s 20 percent. ties of districts for delivering services.
Perhaps because Indonesia maintained its fo-
cus on getting more children in primary The block grant system, which gives district
schools and perhaps because the cost of inputs decisionmakers latitude to pursue their local
was relatively low, it was able to raise enroll- goals with funds that are not restricted to one
ment rates with relatively meager resources. particular use, offers no guarantees. Local
decisionmakers may choose to spend most of
In FY2001, total government (actual) expendi- their transfers and own revenues on those
ture for education was Rp 41 trillion, of which budget items that are likely to have a quicker
about one-half was part of the APBD alloca- and more stimulating effect on the local econ-
tion. In FY2002, the APBD expenditures in- omy than on education. Indeed, this desire of
creased to Rp 25.5 trillion. In FY2003, total local politicians to obtain quick returns for
government expenditure was expected to reach public spending, coupled with the inability of
Rp 370 trillion, of which nearly Rp 77 trillion districts, being limited labor markets, to cap-
will make up the DAU transfer to regions and ture fully the human capital benefits of educat-
less than Rp 3 trillion will make up the DAK ing their children, may make investing in
transfer. The total government budget repre- educational development unappealing to them.
sents a 13-percent increase over actual expen- On the other hand, local leaders may be driven
ditures in FY2002, and total transfers to to invest in education by the desire of local
regions have increased by 14 percent. If edu- voters for more and better schools or by the
cation expenditures increased by as much, then fact that schools provide local employment or
districts’ spending for education have reached that schools can be a source of prestige for the
about Rp 50 trillion in FY2003, with about Rp community and its leaders. In a decentralized
30 trillion coming from the APBD. setting, the outcome of these factors is uncer-
tain, since the allocation is the result of a mix-
ture of allocation formulae and procedures
69
Education Sector Review Volume 2
and, in very large part, on the willingness of as a way of anticipating issues that may arise
the regions to invest in education. also in Indonesia. In Brazil, the “municipali-
zation” of education resulted in a net loss of
Recent legislation attempts to secure a greater $2.7 billion in total public education spending.
slice of the country’s revenue pie for educa- Between 1988 and 1991, spending on educa-
tion. Education Law 20/2003 stipulates that a tion at the federal level dropped by about one-
minimum of 20 percent of the central APBN half, state-level spending remained approxi-
budget, exclusive of salary costs, and 20 per- mately the same, and spending in municipali-
cent of the districts’ APBD budgets, also ex- ties rose by one-third but not by enough to
clusive of salaries, must be allocated to compensate for the decline in federal spending
education. Including salaries, districts now (Workman, 1997 cited in Behrman, Deola-
spend on average about 40 percent of their likar, and Soon, 2002). In contrast, in Argen-
APBD budgets on education. Excluding sala- tina, total spending on education increased
ries, they spend less than 10 percent (assuming with decentralization, but in Mexico, it did
that salaries are a modest 80 percent of educa- not. Given the educational challenges facing
tion spending out of APBD resources) or less Indonesia, a reduction in education spending
than one-half of what is stipulated in the Edu- in the next few years, especially in the wake of
cation Law. To double the share of education the financial crisis, would certainly set the
spending in APBD net salaries, districts will country back with respect to educational de-
need to make significant reductions in the velopment.
shares of other sectors, which may or may not
be politically possible. So besides the earmarking stipulated by Edu-
cation Law 20/2003, what policies would en-
Earmarking 20 percent of the APBN when the courage the regions to keep up education
MoNE is supposed to have devolved most of spending? Given that DAU allocations are the
its functions to local governments may be dominant means of transferring resources, the
well-intentioned but has disadvantages. It puts key challenge is to encourage provinces and
pressure on the MoNE to develop its own districts to spend these block grants in a par-
spending programs in the regions, which ticular way (in other words, on education)
would mean that most of the capital invest- without relying on earmarking restrictions that
ments in education would be outside the con- can undermine the autonomy of provincial and
trol of district governments. The experience district governments. Chapter 1 of this volume
of other countries shows that this kind of ear- discussed the intention of the central govern-
marking often leads to more spending but not ment to enter into agreements with provincial
necessarily better outcomes because these cen- and district governments on their obligatory
trally-initiated interventions guarantee the functions and on minimum service standards
provision of funds regardless of regional per- as a way of influencing the expenditure
formance and creates multiple opportunities choices of local leaders. There have been sig-
for corruption. A big challenge is to ensure nificant developments and some pilot projects
that earmarked national and local education related to these agreements in the past year;
budgets are indeed spent on schools and stu- within the MoNE, the unit charged with this
dents, that they cover the basic operating ex- responsibility is Unit Fasilitasi. But these
penses of schools besides the costs of teaching compacts are not enforceable unless the central
and non-teaching staff (such as instructional government has enough information to moni-
supplies, the routine activities of the school tor the financial choices that provincial and
committee, the maintenance of a school data- district governments make, and such an infor-
base, the dissemination of information to par- mation system has not yet been built.
ents and the community, utilities, and light
repair of the school buildings and other main- Another option for ensuring that regional gov-
tenance) and their career development activi- ernments spend enough on education is for the
ties. central government to make transfers condi-
tional on the money being spent on basic edu-
It is useful to review some evidence from cation services. The DAK allocation, which
other countries about what happens to the level requires matching funds, has a lot of potential
of funding for education after decentralization for stimulating essential education investments
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Chapter 2 Financing Education under Decentralization
if the central government uses it to leverage Figure 2.2 Education Expenditures, 2001
capital expenditures that will yield high bene- Central
Recurrent
fits for education. LG Capital
Expenditures
Expenditures
(APBN)
(APBD)
12%
In sum, legislation has expanded the revenue- 6% Central Capit
raising ability of district governments, and Expendit ure
(APBN) 18%
regulations are allowing them to determine
their own financial management, accounting, Province
Recurrent
and procurement systems within broad guide- Expendit ures
lines. That district-level spending now domi- LG Recurrent (APBD) 1%
Expendit ures
nates the country’s education expenditures is (APBD) Province Capital
seen in Figure 2.2. These are reforms that are 60% Expenditures
(APBD)
fully consistent with the goal of devolving de- 3%
cisionmaking authority and accountability to
regional governments. However, the effects of Source: Ministry of Finance, SIKD data.
this new authority are undermined by the fact
that the funding system remains too diverse estimate, fees contribute as much as one-third
and fragmented, with separate agencies admin- of total primary school revenues that are not
istering the relevant budgets at the national allocated to salaries (McMahon and Suwary-
level. During field visits made for this report, ani, 2002).23
regional education officials in Yogyakarta and
Central Java expressed some degree of frustra- Education expenditures in households that
tion at not having a clear sense of the total have children of school age, on average, ac-
level of resources that are actually available counted for 3.4 percent of these households’
for education or of the total amount actually total expenditures and 8.5 percent of their non-
being spent per pupil. Without information food expenditures in 2002 (Table 2.2).24 On
and without transparency, it is very difficult to average, these households spent Rp 341,654
plan ahead, to develop coherent and effective that year. However, there was a wide differ-
educational programs, and to monitor and as- ence in such expenditures between poor and
sess the flow of funds through the system.22 non-poor households. Households in the
poorest quintile (with young children) spent
Private Spending for Education
1.8 percent of their total expenditures (or 6.4
Remains Low percent of their non-food expenditures) on
Households, communities, and private organi- education, while those in the richest quintile
zations spend out of their own pockets to fi- spent 4.6 percent (or 9.0 of their non-food ex-
nance education in Indonesia in addition to the penditures) on average.
resources spent by governments. Schools re-
ceive revenues in the form of BP3 contribu- To what extent should school finance depend
tions and other donations from parents, private on students and the local community for sup-
foundations, and NGOs. Students pay a vari- port? There are opposing views on this. On
ety of school fees, including monthly tuition the one hand, there is some evidence that those
fees, entrance fees for new students, term and
final test fees, and extra-curriculum fees.
These fees together constitute a substantial
contribution to the income of any school, pri- 23
A similar situation prevailed a decade ago when public
marily to its non-salary expenditures, which schools obtained 92 percent of their total (salary and non-
usually account for about one-fifth to one- salary) funding from government allocations. However,
tenth of a school’s budget. According to one there was considerable diversity among regions. In Ja-
karta, public schools depended on government resources
for only 70 percent of their total budget, while in other
parts of the country, public schools depended on the gov-
22
This is not a new phenomenon. It was noted in World ernment for more than 90 percent of their budgets (King,
Bank, 1998 (Education in Indonesia: From Crisis to Re- 1997).
24
covery) that essential information on the budget is “scat- Moreover, this pattern is similar to the situation that
tered among five different ministries,” making the prevailed in 2000 when education accounted for 1.9 per-
management of the education system a very difficult cent of households’ total expenditures and 7.1 percent of
task. their non-food expenditures (SUSENAS data).
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Education Sector Review Volume 2
How can an effective and equitable financing system be created within the prevailing legal and regulatory frame-
work in Indonesia? A component of the technical assistance project Capacity Building for Decentralized Social
Services Delivery (DSSD) of the Asian Development Bank has been studying alternatives for improving the allo-
cation of resources to schools in three pilot districts. In these districts, the project has established a School Opera-
tion Fund (Biaya Operasion Sekola or BOS) to consolidate all resources available for financing school operations
from the district APBD and from central programs (DSSD, 2002). This is a mechanism for addressing a key
shortcoming of the current grants system—extremely fragmented sources of funds. The project stressed the impor-
tance of elaborating a formula to allocate the total BOS funding to schools and to use APBD funds to “balance” all
other funds. The rationale behind this approach is that, when schools are funded from national-level programs,
there is more likely to be a mismatch between the needs of individual schools and the “one-size-fit-all” approach
of the central programs and a lack of coordination that may result in some schools repeatedly receiving resources
while others are excluded from all schemes.
The three pilot districts for the project – Magelang, Purworejo, and Lampung Barat – are very diverse with respect
to financing, as shown by their per capita education budget using their APBD allocations. Purworejo, which allo-
cates 52 percent of its APBD grant to education, has a per capita education budget that is less than one-half of Ma-
gelang’s which devotes 37 percent of its APBD grant to education. Lampung Barat, which allocates 41 percent to
education, has an even lower budget. And since regions do not control civil service pay, it is important to look at
the proportion of their education allocation devoted to development and non-salary routine expenditures over
which they do have discretion. The disparities among the three districts are even more pronounced in this respect:
Purworejo’s discretionary education budget is one-third that of Lampung Barat and only one-fifth that of Mage-
lang’s. In all three districts, however, an overwhelming share of the education grant (79 percent to 94 percent) is
spent on salaries. Lastly, another critical statistic is the fraction of the non-salary education expenditures that
reaches schools directly. As a share of the total education allocation from APBD, this is miniscule, less than 5 per-
cent in Magelang, 6 percent in Lampung Barat, and less than 2 percent in Purworejo.
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Chapter 2 Financing Education under Decentralization
Equitable Financing in an Unequal Figure 2.3 Enrollment Rates of Children Ages 13-
15, By Province
World
The trend towards local resource mobilization, Yogyakarta
Jakarta
as discussed above, risks widening the dispari- North Sumatera
East Kalimantan
ties between those districts that have a strong West Sumatera
Riau
revenue base and those that are less prosper- Lampung
Bali
policies within their areas, this would elimi- Source: Susenas 1998 and 2002
nate only within-district disparities and not be- Notes: Figure reflects provincial divisions in 1998; the prov-
tween-district disparities. Currently in inces of Aceh, Irian Jaya, Maluku and North Maluku have
Indonesia, districts receive twice as many re- been excluded because their sample sizes in 2002 were very
sources from intergovernmental transfers as much smaller and limited than in 1998.
from their own revenues, so if transfers are
used judiciously, they can be a powerful Table 2.3 Source of inequality in enrollment rates:
Between and within provinces
mechanism for reducing regional inequali-
Junior sec- Senior sec-
ties.25 Source Primary ondary ondary
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Education Sector Review Volume 2
80% Education
Development from
APBD by Kabupaten,
Cum % Budget
2001
60%
Education
40% Development from
APBN, 2001
20%
Education
Development from
0% APBN, 2001 without
0% 20% 40% 60% 80% 100% Jakarta
Cumulative Percent of Population
100%
Education
Development from
80% APBD by Kabupaten,
2001
Cum % Budget
60%
Education
Development from
40% APBN, 2001
including Jakarta
20% Education
Development from
APBN, 2001
0%
0% 20% 40% 60% 80% 100%
Cumulative % population
74
Chapter 2 Financing Education under Decentralization
Table 2.4 Determinants of Education Expenditures using APBD: Results from Regression Analysis
% share of education ex-
Total per student Per student routine Per student devel- penditures in total DAU
Variables expenditures [a] expenditures opment expenditures allocation
Fiscal capacity (Rp tril) 0.798 (1.84) 0.334 (0.77) 0.554 (7.33) 364.19 (1.83)
Population (mil) -0.566 (-4.22) -0.429 (-3.22) -0.143 (-6.77) 60.04 (0.98)
Land area (sq km) -4.169 (-0.88) -7.817 (-1.66) 3.582 ( 4.25) -2189.21 (-1.03)
Poverty [b] 407.43 (1.36) 378.72 (1.27) 22.76 (0.46) -1498.56 (-0.01)
Notes: t-values are in parentheses. [a] Education data used pertain to APBD routine and development expenditures,
2002. A fixed-effects model was estimated to take into account unobserved sources variation within each province. [b]
Poverty as measured by the size of the population with incomes below a poverty threshold. Regressions using GDP per
capita, 1999, as an indicator of poverty yield similar results.
Source: Population data for 2000 from BPS website.
districts in 2001.26 These curves were obtained this equalization scheme, regardless of which
by ranking districts from lowest to highest ac- measure of expenditure needs is used, the
cording to their mean income levels and ac- variation in potential revenues was lower after
cording to their junior secondary education total DAU allocations were incorporated
enrollment rates and then plotting their APBD (Lewis 2001). Those district governments
and APBN education shares against their share with more land and more poverty tend to re-
of the country’s population. The diagonal line ceive higher per capita DAU transfers,
is the line of equality—a line showing that any whereas those with larger populations tend to
given proportion of the population receives receive smaller per capita transfers, perhaps
exactly that share of education resources. because large economies of scale are likely.
There is no such formula telling districts how
The estimated concentration curves indicate much of their revenues should be allocated to
that the district and central education expendi- education, only the aforementioned earmark-
tures, exclusive of spending in Jakarta, are un- ing established by legislation. But do district
equally allocated with respect to income governments nevertheless use similar factors
levels, but that APBN expenditures, exclusive as the central authority to determine their
of Jakarta spending, are more equally distrib- budget allocation for education?
uted than APBD expenditures. With respect
to enrollment rates, both types of expenditures For this report, we estimated a statistical rela-
are fairly equally distributed among districts, tionship to examine the factors that affect dis-
with a slight concentration in districts in the trict-level education spending. Using different
middle of the enrollment distribution. When measures of education spending (from the
APBN expenditures in Jakarta are taken into 2002 APBD allocation) as the dependent vari-
account, expenditures are overwhelmingly able in a multivariate regression analysis and
concentrated in Jakarta, as shown by the factors similar to those used in the DAU for-
curves that are farthest from the diagonal line. mula, we obtain the following results (Table
2.4): (i) Districts with a larger population tend
As already mentioned, the DAU transfer for- to have smaller per capita allocations for edu-
mula takes into account the fiscal capacities cation, which suggests also economies of scale
and needs of district governments. Because of in the provision of services; this result is statis-
tically significant. (ii) Districts with greater
fiscal capacity tend to make larger per-student
capital investments in education. (iii) Districts
26
Concentration curves plot the proportion of total ex- with more (or less) poverty, as measured by
penditures that is received by a given proportion of the
population. The 45-degree line is the line of equality, in-
the proportion of the population below a cer-
dicating, for example, that 10 percent of total expenditure tain poverty threshold, do not have larger (or
is received by 10 percent of the population, that 20 per- smaller) per-student education allocations than
cent of total expenditure is received by 20 percent of the other districts. This result suggests that, al-
population, and so on. The farther away a concentration though poorer districts may receive a higher
curve is from the 45-degree line, the more unequal is the
distribution of expenditure. DAU allocation by virtue of the DAU transfer
75
Education Sector Review Volume 2
formula, the same districts do not necessarily What can the central government do to engen-
spend a larger proportion of it on education. In der local capacity? It can: (i) Disclose the
a decentralized setting, central mandates be- amount of funds and other assistance that re-
come less and less effective, and so the central gional governments can expect to receive well
government must turn to powerful incentives before the beginning of each school year to
to compel local governments to behave in a give them a chance to finalize their spending
desired manner. Brazil provides a good ex- plans and to mobilize additional resources, as
ample of this (Box 2.2). needed. (ii) Give local governments more of
their resources through block transfers, rather
In sum, the inequalities among districts pre- than through centrally-initiated and centrally-
date decentralization, but decentralization managed projects. Indeed, the greater the
could exacerbate them. Transferring fiscal re- share of resources that are coursed through this
sponsibilities to local areas and a growing reli- channel rather than through specific programs,
ance on local resources and expertise is likely the stronger the support for developing local
to widen educational gaps between those areas capacity for governance and management.
that have a strong revenue base and those that There is some concern that local governments
are less prosperous, while weakening the cen- and schools, lacking experience and skills in
tral government’s ability to close education managing considerable discretionary funds,
gaps between the richest and poorest areas. will use those funds inappropriately.
Extreme regional differences signal the need to
establish an effective equalization mechanism. It is feared that corruption and fraud in the ab-
sence of effective controls and audits will
Increasing Efficiency under waste valuable resources and thus erode past
Decentralization educational gains.27 These problems are exac-
erbated by the fact that district governments
Enhance Local Capacity to Manage and schools receive funding from a number of
Financial Resources different sources, often too many for them to
While resources are important to sustain the keep track of, all with different management
educational progress achieved by Indonesia, arrangements.28 Because of the fragmented
higher spending alone does not guarantee bet- nature of the funding allocations at the local
ter education outcomes. A critical bottleneck level in Indonesia, it is almost impossible for
in implementing the decentralized functions of the ultimate beneficiary (the school or the stu-
regional governments is often a shortage of dent) to know how much funding they are
sufficient technical and managerial expertise. supposed to receive and whether the funds
In addition, the lack of viable and coordinated have been released.
management systems that link the operations
of central agencies to local governments and These are legitimate concerns, but the appro-
schools exacerbate the problems that arise priate response is not to re-centralize financial
from weak local capacity. With the new func- management. Rather, they call for establish-
tion assignments under decentralization, all ing better accountability mechanisms —
levels of government are effectively mandated
to train (or retrain) staff in financial planning
and budgeting, personnel management, infor- 27
Focus-group meetings with teachers, principals, and
mation collection and communication, among district officials undertaken as part of this report indicate
others. Given the collective inexperience with that decentralization, while mostly a positive change, has
created more opportunities for bribery and corrupt prac-
decentralized management, these skills are
tices. Bribes in money or kind are said to be more costly,
likely to be acquired not only through formal processes often take longer than before, and the distribu-
training but also through learning-by-doing tion of grants, scholarships, and other school funds is
within an enabling environment. For instance, particularly vulnerable to corruption.
local capacity for financial management is 28
challenged and stimulated by changing the This is not a new phenomenon. It was noted in World
Bank’s report “Education in Indonesia: From Crisis to
manner in which funds are provided to the dis- Recovery” (World Bank, 1998) that essential information
tricts. on the budget is “scattered among five different minis-
tries,” making the management of the education system a
very difficult task.
76
Chapter 2 Financing Education under Decentralization
During the period of 1996-1998, the Government of Brazil carried out a comprehensive educational policy
reform. A new national educational law, enacted in 1996, laid out new roles and responsibilities for all levels
of government, and introduced a simple mechanism that links resources to student enrollment, thus creating a
powerful incentive for schools to raise enrollments. This financing mechanism, called the Fundo de
Manutenção e Desenvolvimento do Ensino Fundamental e de Valorização do Magistério (FUNDEF), revolu-
tionized the financing mechanism for sub-national governments by addressing the divergence between re-
source needs and revenue availability for education. The 1988 Constitution tied 25 percent of state and
municipal government expenditures to education, but a constitutional amendment in 1996 raised this to 60
percent for basic education (grades 1-8). In addition, it created a new mechanism to distribute tax collection
among states and municipalities. Each state, then, has its own FUNDEF, which corresponds to 15 percent of
revenue collection from specific tax and transfer sources. The total revenue collected within a given state, in-
cluding tax revenue from the state and its municipalities, is divided according to the total population of stu-
dents enrolled in that State within the previous academic year. The amount per student is then multiplied by
the current number of students enrolled within each sub-national government and distributed accordingly.
According to this new financing mechanism, each sub-national government contributes a certain amount of
resources to FUNDEF based mainly on their tax revenue per student, but receives a different amount based
on the current number of students they have enrolled in their respective basic education systems.
State and municipal governments are obligated to contribute a certain earmarked proportion of their revenues
to the FUNDEF fund for each state; the resources are then distributed to the state and each of the municipal
governments in that state on the basis of the number of primary education students enrolled by the respective
education systems managed by the sub-national entities. As each sub-national government contributes to
FUNDEF but receives money from the fund only according to its number of enrolled students, the new legis-
lation created an incentive for sub-national governments to enroll as many primary education students as pos-
sible.
Some municipalities have done much better than others in making use of the additional resources that they
have received. These municipalities have invested adequately in upgrading and rationalizing school infra-
structure, instituted transportation services for children, improved the quality of teachers, and provided them
with greater administrative and pedagogical support. At the same time, some municipalities still lack a coher-
ent educational policy, and learning is poor. Municipalities that have received additional resources due to
FUNDEF have maintained their own contributions to educational expenditures. The fungibility of resources
means that municipalities may reduce their own expenditures when they receive additional transferred re-
sources. However, the opportunities for such reductions have been limited because municipalities have faced
increased expenditure requirements for pre-school education, which does not benefit from FUNDEF re-
sources. Pre-school education suffered a temporary setback as states stopped spending on this level of educa-
tion as enjoined by the constitutional amendment of 1996 that established the FUNDEF mechanism.
However, municipalities have since picked up the reduction in state enrollments, leading to increase in the
coverage of pre-school education.
Among its significant contributions, FUNDEF created new administrative and teaching incentives within the
basic education system. Most importantly, it promoted an increase in enrollment pervasive across sub-
national governments. “As each sub-national government contributes to FUNDEF, but obtains receipts from
the fund only to the extent that is has enrolled students, the new legislation created an incentive to sub-
national governments to enroll as many primary education students as possible” (World Bank, 2002). In addi-
tion to the administrative incentive to expand access, legislation also specified that states and municipalities
spend a minimum of 60 percent of their FUNDEF funds on the payment of salaries of teachers and others in-
volved in the provision of educational services. Ultimately, this centrally-driven policy helped improve re-
gional disparities in terms of teacher salaries and subsequently of teacher profiles.
Source: World Bank 2002. “Brazil. Municipal Education Resources, Incentives, and Results.”
defining performance standards and measures, Standards and information are very important
developing checklists of basic standards and in increasing transparency and compliance
competencies, auditing current capacity and with policies, regulations, and laws and in re-
performance on the basis of those checklists. ducing corruption at all levels of the system.
77
Education Sector Review Volume 2
Having access to accurate and timely informa- resources that are spent on the actual opera-
tion helps district governments to plan and tions and maintenance of schools tend to be
manage the system, and sharing the informa- very limited. Often, even the tiny share left
tion with local stakeholders, such as parents, over for development expenditures, which is
through periodic reports may press district of- supposed to be devoted to building new class-
ficials to be more transparent and efficient. rooms, repairing school facilities, and teacher
The government has promulgated several key training, is used to cover routine expenditures,
regulations governing information flows under especially staff salaries.
decentralization. The PP11/2001 on Regional
Financial Information provides for a compre- With such a minute share of education re-
hensive information system to be developed to sources going to development expenditures, is
link national and district decisionmakers. It it possible to achieve needed improvements in
obliges sub-national governments to submit the quality of education? Teachers do play the
specified information to both the MoF and the key role in the teaching process, as is dis-
MoHA, thus giving national agencies the nec- cussed in the next two chapters, but adequate
essary data to develop a nationwide perform- resources need to be devoted not only to sala-
ance and financial monitoring system. A ries but also to teacher professional develop-
further regulation is needed to require schools ment and classroom supplies.
to feed data back to district governments.
With improved accountability, it is possible to Spend Locally
use the potential ability of district govern-
ments and schools to use public funds where The impact of the current reform will depend
they are most needed and where they can have ultimately on how much of the fiscal resources
the greatest educational impact. allocated to education actually reach the
schools and, within the schools, how those re-
Spend Productively sources are put to use. Some issues are:
Improving the efficiency of the education sys- First, the level of funds available for education
tem requires spending educational resources within a district needs to be predictable and
where they are most productive. This is not in assured and should be closely linked to educa-
any way a concern that is unique to the decen- tion plans and standards at the national level
tralized reform. However, with responsible that have been discussed and negotiated with
parties spending more autonomously than be- local stakeholders. It is also important to have
fore, it has become more difficult to coordi- clear, well-understood rules for allocating
nate the balance in the composition of these funds to schools so that schools know
expenditures throughout the education system. the level of funding to expect each year from
the government at the beginning of each
Consider that in the system as a whole, three- school year. (Box 2.3) Schools in Indonesia
quarters of resources are spent on recurrent receive funding from a number of sources, of-
items, mostly on salaries and benefits and a ten too many for the schools to keep track of
small amount on operational costs and peda- them all. These sources include public monies
gogical supplies, and one-quarter is spent on from as many as seven channels, all with dif-
capital outlays (Figure 2.2 above). This pat- ferent management arrangements. During fo-
tern is more extreme at the district level, where cus-group meetings for this report, school
governments spend more than 90 percent of principals complained that the lack of trans-
their education budgets on routine expendi- parency about budget allocations at the central
tures; in 2002, 95 percent of their routine and district levels prevents them from predict-
budgets was spent on the salaries of teachers at ing how much revenue they will receive ex-
the primary and junior secondary levels and cept through fees collected at the school level
other personnel (McMahon and Suwaryani, and makes it impossible for them to do any
2002 and Clark et al, 1998).29 In contrast, the
tral government will be paid out of the national budget,
the APBN. Presumably, the teachers and personnel
whose salaries were transferred to the districts as part of
29
Article 49 of the new Education Law states that the the decentralization reform will continue to be paid under
salaries of teachers and personnel appointed by the cen- the local budgets, the APBD.
78
Chapter 2 Financing Education under Decentralization
multi-year improvement planning. In several dance later in the year. It is also essential to
countries, the amount of funds allocated to track how much of each school’s allocation is
schools is based on the number of students ex- actually received by the school and how much
pected to enroll in the school by means of an goes astray. If schools provide appropriate
agreed-upon cost-indexed per student alloca- and timely information to the various levels of
tion. This per-student cost is defined on the government, this will help government per-
basis of delivery of an acceptable standard of sonnel to plan and administer schools. Schools
service, which directly links the subsidies that should also provide this information to local
the school receives to its educational quality stakeholders such as parents, who can then use
and performance. The alternative, allocating this information to press district officials to be
equal resources to each school regardless of more transparent and efficient.
the number of pupils, gives schools no incen-
tive to achieve cost-effective pupil-teacher ra- Third, the capacity within schools for devel-
tios.. A formula-based allocation is equitable opment planning, budget preparation and exe-
in that every student is allocated an equal cution, and accounting also determines how
amount of cost-indexed funds, but does not well they are able to use the decentralized fis-
preclude MoNE or the district governments cal structure to their advantage and how effi-
from establishing mechanisms for mitigating ciently they are able to spend the resources
specific inequalities among communities and allocated to them. The largest single subsidy
schools.30 This compensatory or equalizing to schools is in the form of teacher and staff
role is essential since communities are not salaries, which means that schools’ discretion-
equal in their ability to mobilize extra re- ary budgets are often quite limited.
sources for their schools and schools are not
equal in the educational challenges that they As districts and communities mobilize greater
have to face every day. District governments resources to cover non-salary expenditures that
should target these additional grants to schools improve schools, they will need the skills nec-
that are unable to mobilize sufficient resources essary for preparing and implementing school
to meet minimum quality standards, but the improvement plans. Past studies have sug-
government should do so only in conjunction gested that the benefits of decentralization are
with greater supervision of those schools and more likely to emerge when school councils
performance evaluation against agreed-upon are able to exercise some autonomy over ad-
indicators of progress. ministrative and financial matters related to
the school (Reithwood and Menzies, 1998,
Second, there must be a free exchange of in- Jimenez and Sawada, 1999 and King and
formation between the levels of government Ozler, 2000). School Committees in Indonesia
and schools, and the data that are exchanged have yet to be given clear functions and have
must be accurate. Obviously, accurate enroll- yet to take advantage of their supposed greater
ment numbers are essential. Many students autonomy. As school “governors,” these
who will drop out tend to do so soon after the Committees will need to make the hard deci-
start of the school year, so school subsidies sions about how to spend school revenues.
must be based not on enrollment at the begin-
ning of the year but on average daily atten-
30
In the U.S., under most equalization programs, poor
school districts experience increased spending, but some
poor school districts actually receive lower per-pupil
school spending under equalization programs that at-
tempts to level spending down a lot (Hoxby 2001).
Hoxby suggests that it is possible to minimize the nega-
tive effects of school finance equalization by combining
elements of categorical aid with property taxes. This
could mean redistributing grants among school districts
on the basis of their characteristics such as mean house-
hold income, poverty rate, and/or demographic variables,
such as the proportion of children who live in single-
parent families.
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Education Sector Review Volume 2
Summary of Implications for Policy generation, allocation, and use of funds. Three
key messages on financing education are:
This chapter began with the proposition that
establishing appropriate resource allocation
Ensure that total education expenditures are
and accountability systems for the manage-
adequate to maintain educational develop-
ment of those resources in Indonesia’s educa-
ment and increase the efficiency of resource
tion sector is key to increasing its effectiveness
use.
and attaining the country’s educational goals.
This message would have applied even if In- This task requires strong leadership from the
donesia had not embarked on its “big bang” central government, both in crafting an effec-
decentralization, but under decentralization, tive funding mechanism that is easy to monitor
the ways and forms in which these challenges and to implement and in building political
can be met have changed. Decentralization support for that mechanism among provincial
has shifted the relative roles of different levels and district leaders. Earmarking the central
of governance, from the central government and local budgets for education, as the Consti-
down to the regional governments and the tution and the Education Law have done, goes
School Committees. At the same time, the only part of the distance to ensure that ade-
success or failure of the decentralization will quate resources are allocated to the schools
rest partly on how well these governance lev- where they can make a difference. The real
els use their discretion and autonomy over the challenge is to ensure that earmarked national
80
Chapter 2 Financing Education under Decentralization
and local education budgets are indeed spent fulfill their responsibility to deliver education
on schools and students, that they cover the of acceptable coverage or quality. This is evi-
basic operating expenses of schools besides dent in the strikingly wide range of per-capita
the costs of teaching and non-teaching staff levels of education expenditures across dis-
(such instructional supplies, the routine activi- tricts. However, a “sunset clause” should be
ties of the School Committee, maintaining a included in this special DAK allocation that
school database and disseminating information would ensure that it ended once the DAU
to parents and the community, utilities, and mechanism had been improved.
light repairs of the school buildings and other
maintenance), and their development activi- In addition to a national investment plan for
ties. Together with efforts to define a mini- education, Indonesia needs a multi-year educa-
mum standard of provision, it is possible to tion development plan for each region (prov-
design a formula-based allocation that is non- ince and/or district) that would spell out the
discretionary and that depends on just a few education goals and the implied resource re-
key measurable criteria. quirements of those goals for each region.
This is not the same as the yearly budgeting
The Education For All effort is already an at- process to arrive at an annual budget for the
tempt to estimate the per student level of sector. What is needed is a resource plan that
spending that would be consistent with attain- is more closely linked to the educational de-
ing universal enrollment and improving educa- velopment goals of the region than is the case
tion quality in Indonesia (McMahon, 2003). with the yearly budgeting process, that is the
What needs to happen is to open the proposed product of a broad consultation with school
formula to national scrutiny and debate in or- stakeholders, that specifies clear performance
der to validate it and to obtain political support indicators, that identifies the different intended
for it. What also needs to happen is to apply sources of funds and required management
the funding formula to the local processes of and technical skills, and that is widely publi-
allocating the DAU rather than the DAK. This cized among the various stakeholder groups in
formula funding mechanism should become the regions. In turn, there should be a re-
the routine way to allocated education grants gional (provincial and/or district) multi-year
in Indonesia and, in the process, it will facili- resource plan that would specify all planned
tate school-based management by allowing investments in the improvement of all schools
schools to manage assistance in cash rather within the control of the regional government,
than in kind. including investments that go beyond the con-
struction and repair of facilities. These multi-
The funding formula mentioned above should year assistance plans to schools would not just
apply only to the per student level of routine be expenditure plans but also financial, staff-
operational expenditures. However, a per- ing, and management plans. To formulate the
school rather than per-student funding formula assistance plans to schools and, consequently,
is more appropriate in deploying teachers and the regional resource plan, what is needed is a
other staff to schools. In addition, many funding allocation formula that is based on a
schools in Indonesia have urgent development cost-indexed, per-pupil basis and consensual
needs, including staff development and the quality standards and region-specific prices.
construction of libraries or laboratories.
Richer districts will be able to undertake these It is important to have an equivalent and paral-
capital investments themselves, but poorer dis- lel process of planning at the level of the cen-
tricts will not, so a pro-poor investment pro- tral government. The regional plans can be
gram will be needed. In fact, in the short run aggregated to formulate a multi-year plan of
(that is, until the DAU mechanism is fixed), assistance for educational development, and
schools are likely to need direct cash assis- this can be achieved using the different in-
tance, perhaps through a special DAK alloca- struments available to the national government
tion, to cover even their basic operational in the new decentralized context. Because the
costs. This is because the current DAU alloca- sum of regional demands is likely to exceed
tions are not equalizing the distribution of lo- the resources available to the national gov-
cal resources, which means that poorer ernment, districts should be categorized ac-
districts repeatedly find themselves unable to cording to their performance on multiple
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Education Sector Review Volume 2
education indicators, their resource levels and an adequate maintenance plan. Second,
(transfers as well as own resources), and their the communities or schools that receive trans-
technical and management capacity. This cate- fers should be selected based on both their
gorization would make it possible for the na- needs and their capacity as well as of the eco-
tional government to prioritize the level of nomic viability of the project in question.
assistance that it provides to provinces or dis- Third, the central government should make
tricts. In recognition of the fact that resource adequate technical assistance available to local
levels and technical capacities vary across dis- governments to help them to develop plans, ar-
tricts in Indonesia, adjustments would have to range financing, and operate the local educa-
be made in the allocation amounts that are cur- tion system as efficiently as possible. Fourth,
rently given to the disadvantaged areas. Using the central government should monitor and
this categorization, it would be possible to de- evaluate the implementation of the investment
termine the notional level and nature of assis- plans by requiring periodic progress reports
tance for each region. This notional level of and by making field inspections and formal
assistance could then be the basis for the an- evaluations of outcomes. Finally, all regional
nual transfers to the regions, particularly the governments that receive a transfer should be
DAK allocations. required to testify about the condition of the
infrastructure on which the resources are to be
Another important aspect of using perform- spent to enable the central government to
ance-based or results-based funding schemes make an adequate assessment of the future
to ensure that resources are used more effi- needs of local governments.
ciently is that this holds regional governments
and schools ultimately accountable for meas- Because of the fragmented nature of the fund-
urable indicators of progress within their juris- ing allocations at the district level in Indone-
dictions. For the central government, this sia, there are numerous opportunities for
means imposing a hard budget constraint on corruption and leakage in the current system.
regional governments, refusing to bail out Information plays a critical role in improving
those that miss their goals because of bad de- the quality of decisionmaking by policymak-
cisions or poor implementation. At the same ers. Information flows are likewise important
time, the central government should help local for improving the implementation of policies
governments to build their capacity for effi- and investment programs. They help to in-
cient planning, budgeting, and fiscal manage- crease transparency and compliance with poli-
ment and to train provincial and district cies, regulations and laws and to reduce
officials to use data to target assistance and to corruption at all levels of the system. The re-
measure impact. There have been several ef- gional education investment plans discussed
forts in the past at improving the planning and above should be based on regular, systematic,
budgeting processes in schools and districts, and purposive collection and analysis of edu-
such as the DSSD program. Although these cation data. Local governments are likely to
have been fragmented efforts, and often only spend transfers for capital investments more
pilot programs, some lessons can still be effectively if they know in advance how much
learned from these efforts that can be used to they are going to receive so they can devise a
guide a country-wide effort to formulate edu- coherent development strategy.
cation investment and assistance plans at all
levels. Similarly, it is important for schools to know
accurately and in a timely manner the size and
Increase the productivity and effectiveness of nature of the resources that they will be receiv-
resources spent on education at the provin- ing so they can plan accordingly. This is diffi-
cial, district, and school levels. cult under the current system in which public
resources flow through many different chan-
There are lessons from the experience of coun-
nels, some of which are completely unpredict-
tries around the world about how to increase
able or subject to being diverted by local
the effectiveness of transfers that might be
politicians. A formula-based allocation that is
useful to Indonesia (Bird and Smart, 2002).
non-discretionary and that depends on a few
First, regional governments should be required
key—and simple—pieces of information helps
to prepare both an adequate investment plan
to make allocations more transparent. When
82
Chapter 2 Financing Education under Decentralization
school committees know in advance how First, as mentioned above, the DAU mecha-
much of a subsidy they are due to receive from nism needs to be improved so that it can help
the regional government, they can compare to equalize the wide disparities in educational
that amount with what they actually receive, outcomes across regions. Second, the central
which thus serves as an effective check on cor- education authority should support targeted,
ruption in local public spending. pro-poor education programs, perhaps through
a DAK allocation. Indonesia’s past experience
Focus education resources on those who with its large scholarship and school grants
need them most. program, launched at the onset of the recent
financial crisis, can inform the design of a tar-
In Indonesia, as in many other developing geted program. To make such a program fi-
countries, a more pressing concern than effi- nancially sustainable, what is needed is the
ciency is often the inability to meet the de- political will to keep it well targeted to those
mand for services, especially the demand from who need it most. There are valuable lessons
the poor and disadvantaged. Districts that from around the world (for example, Bangla-
have higher enrollment rates and better quality desh, Brazil, and Mexico) on how this can be
are frequently those with more resources, achieved. Third, the national government can
whereas districts that have low education indi- use incentives to influence the allocation deci-
cators are typically also the districts with sions of the better-off districts, for example, by
fewer resources. To improve education out- rewarding those districts that are able to make
comes in Indonesia, it is imperative to serve large improvements in the education indicators
the needs of those districts that are in greater pertaining to the poorest communities or
need and to tailor the type of assistance pro- schools within their jurisdiction and, con-
vided to the type of need manifested. Under versely, by taxing those with worsening indi-
decentralization, whether or not adequate re- cators. Indonesia is very capable of doing this
sources are allocated to pro-poor services de- type of monitoring because of its longstanding
pends on the priorities of local leaders and experience with fielding large household sur-
communities. This is one of the dangers of veys, such as the SUSENAS.
decentralization.
83
Education Sector Review Volume 2
Akita, Takahiro and Armida S. Alisjahbana. Duflo, Esther. 2001. “Schooling and Labor
2002. “Regional Income Inequality in Indo- Market Consequences of School Construc-
nesia and the Initial Impact of the Economic tion in Indonesia: Evidence from an Unusual
Crisis,” Bulletin for Indonesian Economic Policy Experiment,” American Economic
Studies 38(2): 201-22. Review 91(4): 795-813.
Hofman, Bert, Kai Kaiser, and Soraya Goga.
Alm, James, Robert H. Aten, and Roy Bahl.
2003. Decentralizing Indonesia (A Regional
2001. “Can Indonesia Decentralize Success-
Public Expenditure Review). Washington
fully? Plans, Problems, and Prospects,” Bul-
DC: The World Bank.
letin for Indonesian Economic Studies 37(1):
83-102. Hofman, Bert, Kadjatmiko, and Kai Kaiser.
2002. “Evaluating Indonesia’s Fiscal
Behrman, Jere R., Anil B. Deolalikar, and
Equalization.” Washington DC: The World
Lee-Ying Soon. 2002. Promoting Effective
Bank. Processed.
Schooling through Education Decentraliza-
tion in Bangladesh, Indonesia, and Philip- Hoxby, Caroline. 2001. “All School Fi-
pines. ERD Working Paper Series No. 23, nance Equalizations Are Not Created
Asian Development Bank. Equal,” Quarterly Journal of Economics.
116(4) : 1189-1231.
Bird, Richard M. and Michael Smart. 2002.
“Intergovernmental Fiscal Transfers: Some Jalal, Fasli and Bachrudin Musthafa. 2001.
Lessons from International Experience,” Education Reform in the Context of Regional
World Development 30(6): 899-912. Autonomy: The Case of Indonesia. Ministry
Brodjonegero, B. and J. Martinez-Vasquez. of National Education and National Devel-
2002. “An Analysis of Indonesia's Transfer opment Planning Agency, Republic of Indo-
System: Recent Performance and Future nesia, and the World Bank.
Approaches.” Can Decentralization Help
James, Estelle, Elizabeth M. King, and Ace
Rebuild Indonesia, Stone Mountain Park,
Suryadi. 1996. “Finance, Management, and
Atlanta, Georgia, Georgia State University.
Costs of Public and Private Schools in Indo-
Bray, Mark. 1997. “Community Financing nesia,” Economics of Education Review
of Education: Rationales, Mechanisms, and 15(4): 387-398.
Policy Implications in Less Developed
Countries.” In Christopher Colclough (ed.), Jimenez, Emmanuel and Yasuyuki Sawada.
Marketizing Education and Health in Devel- 1999. "Do community-managed schools
oping Countries: Miracle or Mirage? Ox- work? An evaluation of El Salvador's
ford: Clarendon Press. EDUCO program." World Bank Economic
Review (International) 13(3): 415-41.
Clark, D. et al. 1998. Financing of Educa-
tion in Indonesia. Asian Development Bank Jimenez, Emmanuel and Vicente Paqueo.
and the University of Hong Kong. 1996. "Do Local Contributions Affect the
Efficiency of Public Primary Schools? "
Decentralized Strategy for Education Fi- Economics of Education Review 15(4): 377-
nance (DSEF) Project. 2002. Education Re- 86.
form in the Context of Decentralization
Jones, G. W. and P. Hagul. 2001. “School-
(Strategy and Action Plan for Decentralized
ing in Indonesia: Crisis-Related and Longer-
Financing of Education). January 29 Draft
Term Issues,” Bulletin for Indonesian Eco-
Report. Processed.
nomic Studies 37(2): 207-231.
Decentralized Social Services Delivery
King, Elizabeth M. 1997. “Who Really Pays
(DSSD). 2002. “Draft Analysis No.2 on
for Education? The Roles of Government
District Financing of Schools,” Asian De-
and Families in Indonesia,” in Colclough,
velopment Bank.
Christopher, ed., Marketizing Education and
84
Chapter 2 Financing Education under Decentralization
85
Education Sector Review Volume 2
The Education for All (EFA) goals are to in- BP3, examinations; procurement of
crease net enrollment rates at both primary textbooks, notebooks, and school bags;
and junior secondary education levels, transport; and so on. At the primary
reaching out even to the poor and disadvan- level, eliminating fees mean foregone
taged populations, and to improve the qual- revenues of Rp 13,000 per pupil in 2004
ity of education available. The cost (2003 prices), on average, increasing to
implications of these goals have been calcu- Rp 38,000 per pupil in 2008. At the jun-
lated by Professor McMahon (McMahon, ior secondary level, the amount is about
2003). A key concept for his costing is ade- Rp 57,000 per pupil.
quacy, or “what it takes in terms of text- x In addition, a student grant of Rp
books, teaching materials, teacher abilities 290,000 per pupil per year for 18.2 per-
and qualifications, school libraries, and so cent of all primary school students,
forth to produce an educationally adequate which is more than doubling the current
education for each child” (McMahon 2003). grant by the government, will cover the
McMahon’s estimates, developed on a per- opportunity costs borne by parents and
pupil basis, are based on the following as- for teacher supplements and BP3. The
sumptions, among others: corresponding grant is Rp 93,000 per
pupil per year.
x The EFA goals are to achieve 100 per-
cent net enrollment rate by 2008 in pri-
mary education and 95 percent in junior Table 1. Cost estimates for EFA
secondary education by 2008, and to as- Primary Secondary
sure that this education is of acceptable 2004/5 2008/9 2004/5 2008/9
quality. Per-pupil cost (Rp thousands)
Incremental cost 179 209 509 834
x A recently conducted survey of schools of EFA
provide data on what schools are actu- Current cost 966 966 1,449 1,449
Total 1,145 1,175 1,958 2,283
ally spending. These data provide the Total cost (=Per-pupil cost x students enrolled)
current or base cost of schools. (Rp billions)
x What the “best practice” schools are cur- Incremental cost 5,061 5,702 5,331 10,245
of EFA
rently spending is the measure of what Current cost 27,255 26,397 15,476 18,049
inputs are needed and “most cost effec- Total 32,316 32,099 20,807 28,418
tive” to improve learning in schools. The Source: McMahon (2003)
“best practice” schools, those that have Note: All estimates are in 2003 prices.
experienced increases in EBTANAS test
scores, have been found to have more The estimates per pupil for 2004/5 indicate
books and teaching materials for every that the incremental costs associated with
pupil, and salary supplements for teach- EFA would be 18 percent of the current
ers are larger. For example, in expendi- (2004) per-pupil cost at the district level for
ture terms, the average schools is primary education and 35 percent for junior
estimated to spend Rp 15,000 per pupil secondary education (Table 1). These repre-
on teaching aids while the “best practice sent a significant increase in per-pupil
schools” spend Rp 21,745 per pupil, on spending. Primary and junior secondary
average. education costs would total Rp 53 trillion in
x The corresponding cost estimate for jun- 2004. According to SIKD estimates, educa-
ior secondary education is 1.5 times the tion expenditures in 2002 were 2.4 percent
cost above for primary education. of Indonesia’s GDP at the local level, or to-
x To increase the enrollment rate of the taling about Rp 43 trillion. This spending
poor and disadvantaged population re- may well have increased close to the EFA
quires additional resources, largely for cost estimates by 2004 if education spending
the purpose of eliminating fees. Cur- increases by the same percentage as the pro-
rently, fees are charged for entrance, jected percentage increase in DAU transfers.
86
Chapter 2 Financing Education under Decentralization
Thus, while the EFA cost implications as es- Lastly, there are several ways to improve the
timated by McMahon (2003) will mean a existing EFA cost estimates while maintain-
significant rise in education per-pupil spend- ing the basic principles of McMahon’s esti-
ing, the implied total expenditure is not far mation model. Examples are: Improve the
off from the total education expenditures al- reference used for the level of spending per
ready being made at the district level. pupil needed to raise quality. The assump-
tion used was that the “best practice”
Is EFA by 2008 guaranteed then? No, by no schools are not able to reduce their cost per
means is EFA guaranteed without the neces- pupil without quality reductions (thus, that
sary accompanying changes in the manage- they are at optimal efficiency). To what ex-
ment of schools and the education system as tent this is true would require more studies
a whole. Costing EFA is an important step on the gains and cost of increasing school ef-
in understanding what is required to fulfill ficiency. And improve the estimate of what
this national commitment, but more re- is needed to raise the enrollment of poor
sources are not enough. The changes for youths. Impact evaluations of the national
better quality are discussed in Chapter 3 of scholarship program initiated in the late
this volume. 1990s would be able to inform this.
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Education Sector Review Volume 2
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Chapter 3: Education Quality Assurance and Improvement
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Education Sector Review Volume 2
90
Chapter 3 Quality Assurance and Improvement
cation, and from consultants working on grams is to improve school conditions and
project evaluation and management. These raise school performance.
inputs have been incorporated into the text.
Quality assurance refers to processes for
Basic Terms guaranteeing that schools and districts meet
particular standards. The quality assurance
This chapter uses several terms that are open
activities in Indonesia have three compatible
to interpretation and have no universally ac-
goals: (i) equivalence – ensuring a basis for
cepted definition. These “terms of art” are
comparing the credentials of teachers and
briefly described below, and more complete
school graduates throughout the archipelago
explanations are given later in the chapter.
through programs that include examinations
Quality is typically defined in terms of its and certification; (ii) equity – meeting the
instrumental value in increasing students’ basic rights of even very poor children to re-
academic performance. In other words, ceive basic educational services that meet
quality is usually defined as that mix of in- minimum service standards through a pro-
puts, classroom practices, school environ- gram that holds districts accountable to na-
ment, and school organization that adds tional standards for their performance; and
value to student learning. This chapter ex- (iii) groundwork – ensuring that schools
pands that definition to include an additional have a basic minimum amount of material
intrinsic dimension to the definition of qual- and human infrastructure that is both large
ity. We take the position that children have and equitable enough to improve quality.
a basic right to attend schools that meet the Under the new Education Law (No.
minimum conditions of learning as stipu- 20/2003), the mechanisms for achieving
lated in the Education Law and that any in- these ends consist of accrediting schools,
vestments in improving the quality of certifying teachers, and setting graduation
unsafe, unhealthy schools staffed by un- requirements for post-primary students.
qualified teachers to minimum standards are
by definition investments in educational Quality Management
quality regardless of their impact on chil-
Quality management means linking quality
dren’s academic performance. Expanding
improvement and quality assurance through
the definition to include the health, safety,
a common set of standards and measures.
and welfare of students aligns this definition
Under this approach, information from peri-
of quality with Indonesia’s Education Law
odic performance evaluations guide both
and its commitment to educational quality
quality assurance and quality improvement
for all (Education for All, 2002b) as both a
activities, as illustrated in Figure 3.1 and de-
basic human right and an instrument for
scribed in Box 3.1. The new Education Law
economic and social development.
provides part of the framework for quality
assurance by establishing a body that will set
Quality improvement simply means upgrad-
national standards and evaluate perform-
ing inputs, learning environments, teaching
ance. However, the law does not specify the
practices, school organization, and school
relationship between national standards and
performance to bring them closer to the ex-
quality improvement at the district or school
pectations of both the state and parents. In
levels. In this section, we discuss progress
Indonesia, recent quality improvement pro-
and issues in setting national standards and
jects have involved training and managing
measures and in establishing a nationwide
teachers, revising curricula, providing text-
system for reporting on performance.
books, rehabilitating classrooms, supporting
school-based management, and promoting
packaged inputs both on specific subjects
(for example, the Science Education Quality
Improvement package or SEQIP) and on
modern teaching methods (for example, the
Creating Learning Communities for Chil-
dren’s “joyful learning” package or CLCC).
The purpose of quality improvement pro-
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Education Sector Review Volume 2
Monitoring
Results Information
Based Planning
QUALITY
IMPROVEMENT
COMPONENT
Milestones Improvement
Mobilizing Resource, Plan
Implementing Plans
A hypothetical school is evaluated by an accreditation body and is performing just at the minimum
standard level. On the quality assurance side, the school receives an incentive for performing up to
minimum standards, in this case a certificate of accreditation that carries with it certain privileges.
This certificate qualifies the school to send representatives to an annual conference of accredited
schools offered by the district. On the quality improvement side, the school uses the performance
evaluation to prepare a school improvement plan and at regular interval checks to see if it is on
course to achieve these milestones. In this case, the school evaluation shows that many grade 4
students are not able to read at the 4th grade level; so the school introduces a daily program of
30minutes of sustained silent reading for students in grades 2 and 3. Teachers from grades 4 and 5
agree to monitor the progress of the children every two months. If the program works well, the
school will make 30minutes of sustained silent reading part of their daily teaching practice.
Need for Common Ground standards will be the conceptual link between
the quality assurance and quality improvement
A quality management approach requires a set systems, for example, by aligning school per-
of standards and measures to serve as common formance evaluation (quality assurance) with
ground for quality assurance and improve-
school development planning (quality im-
ment. The standards and measures must be provement) to the same set of national stan-
uniform across the education system, although dards. Second, the national standards will
performance targets can vary to take into ac- coordinate the activities of different agencies
count differences in conditions between dis-
operating at the same levels, for example, by
tricts or schools. For example, the standards focusing independent accreditation bodies and
of teacher competence must be the same in,
district school inspectors on the same set of is-
say, Mataram, East Java and Kupang, NTT. sues or by focusing public and private provid-
Likewise, the instruments used to measure ers of teacher training services on the same set
teacher competence, such as public examina- of competencies. Finally, as the function of
tions on subject matter plus observed teaching
quality management has been allocated to
practice, must be the same in both places. more than one level of government, the na-
However, the scores that teachers must receive
tional standards will help to ensure that all
to be certified or promoted can vary depending these different agencies carry out these quality
on the needs and resources of each district. functions towards the same end. For exam-
ple, while the central government will be re-
A single, well-considered set of national stan- sponsible for setting minimum standards for
dards is seminal in several ways. First, these
tests of basic student competencies, districts or
92
Chapter 3 Education Quality Assurance and Improvement
independent bodies will be responsible for de- 1. The school accreditation body (BAS) is
veloping tests that meet those standards. setting minimum standards for the ac-
creditation of schools and is defining a
Under decentralization, the central government process for monitoring and improving
is responsible both for setting national stan- school quality.
dards and measures and for evaluating the per- 2. The decentralization facilitation unit
formance of the education system overall. The (UFD) is working under the MoHA um-
MoNE is currently undertaking several parallel brella to develop minimum performance
standard-setting activities, and Figure 3.2 on standards for the districts.
the following page contains a diagram of the 3. The national evaluation center is devel-
standard-setting activities begun in 2003. The oping standards and tests of students’
most important of these standard-setting exer- mastery of basic competencies and the
cises are the National Education Standards for general and subject knowledge of trainee
schools, Minimum Service Standards for dis- teachers.
tricts, and Teacher Performance and Certifica- 4. The national curriculum center is defin-
tion Standards. Each is being developed by a ing basic competencies in all subject ar-
different working group, and, as yet, there is eas.
no standing body to coordinate their activities. 5. The textbook and academic publications
The absence of a steering body on standards center is defining technical standards for
has two dangers: first, that the cumulative print and graphic teaching materials.
number of standards may be too many to man- 6. The teacher training department is de-
age and, second, that the standards being de- veloping teacher competency standards.
veloped may not be compatible and may
therefore send different messages to teachers, Until this body is established, we highly rec-
schools, and districts about what they need to ommend forming a steering committee for
achieve. The Education Law mandates the harmonizing standards.
formation of a standardization and evaluation
body that will, among other duties, specify na-
tional education standards.32 Among its other
duties, this new body will have to coordinate
the following standard-setting activities:
32
Law No. 20/2003 Chapter IX, Article 35 and Chapter
XIV, Articles 57-59.
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Education Sector Review Volume 2
94
Chapter 3 Quality Assurance and Improvement
95
Education Sector Review Volume 2
five districts (Cianjur, Cirebon, Kota Sura- control quality and put district educational au-
baya, Kota Malang, and Lombok Timur). The thorities in a difficult position.
piloting began in the provincial capitals with
discussions with local government officials Lead and Lag Indicators
about the concept, function, and types of stan-
Quality management systems are most effec-
dards. The process continued at the district
tive if they are based on standards that include
level where various interest groups came to-
both “lead” and “lag” indicators.” Lag indica-
gether to discuss standards for 10 obligatory
tors describe what has been accomplished so
functions and 24 types of services. This
far. At the school level, for example, the
model-building exercise defined about 173
number of qualified teachers is a lag indicator,
minimum service standards for education (ex-
while the number of teachers sent for special-
cluding higher education), with each service
ized training is a lead indicator. At the district
type having as many as 19 or as few as two
level, the participation rate is an example of a
performance indicators (Hijmans, 2003). The
lag indicator, while the number of “at risk”
set of standards that are currently being devel-
children receiving scholarships is an example
oped include access, equity, and quality indi-
of a lead indicator. We recommend that the
cators such as enrollment rates, dropout and
standards for schools and districts contain a
completion rates by gender, students’ aca-
mixture of lag and lead indicators.
demic performance, and the percentage of the
APBD directed to the basic education sector
excluding teacher salaries. These are a mix of
Measures
input (technical) and output (performance) Setting standard measures for quality indica-
standards. The minimum service standards for tors is also an important element of a nation-
districts are critiqued in Chapter 1 on govern- wide quality management system. For quality
ance and management in this volume. management systems, the most important per-
formance measure is student learning. There
Local Targets – National Standards are many approaches to measuring student
learning, some being appropriate for quality
The national education standards were origi-
assurance and others for quality improvement.
nally intended to be set in an open process in
Each approach has specific advantages and
which the central government and the regions
disadvantages for Indonesia. For quality as-
would negotiate region-specific targets on the
surance, many countries use standardized tests
basis of indicators set by the central govern-
at the end of an educational cycle as one of the
ment. However, the MoNE now plans to have
factors that determine whether students have
national targets but flexible timelines for
learned enough to qualify for diplomas or cer-
achieving those education targets. Setting tar-
tificates of completion. In a large decentral-
gets at the national level is problematic for
ized system, equivalence among various
several reasons. First, it impinges on the pre-
private or public providers of examinations
rogative of local governments to chart their
can be assured by accrediting the testing insti-
own course. Second, it makes local education
tutions based on the rigor of their test devel-
officials accountable for their performance to
opment process, the reliability of the
two higher authorities, not only the local legis-
instruments that they prepare, and the validity
lature/executive but also the central MoNE.
of their test administration and scoring proto-
This is less troubling if all of these authorities
cols. Another alternative is to use sample-
have the same performance expectations but
based national assessments early or in the
can be problematic if the national and local
middle of an education cycle to measure stu-
performance expectations are very different.
dents’ performance against national standards.
Third, it is unclear what responsibilities the
Table 3.1 below shows how different types of
central government will have towards those
standard learning assessments can be used in a
districts that fail to meet minimum standards
quality management system.
over a period of time. If there are no incen-
tives for compliance or consequences for non-
compliance, then the standards do not help to
96
Chapter 3 Quality Assurance and Improvement
Table 3.1 Common Uses of National and School-based Tests in Quality Assurance
Norm Referenced Competency Referenced
Nationwide or Regional
High Stakes: Filtering: Rank students in per- Qualifying: Determine which
x Determine future oppor- centiles to determine which stu- students obtain diplomas or cer-
tunities for test takers dents may pass to favored tificates.
x Tied to performance in- schools at the next level
centives/ corrections
systems for schools Formerly used in Indonesia Currently used in Indonesia
x Expensive to develop (EBTANAS) (UAN)
and implement
x Prone to corruption
Middle Stakes Comparative ranking of schools Diagnostic: Used to recommend
x Tied to performance in- or districts: Used to rank order specific quality improvement in-
centives/ corrections schools or districts to determine puts for particular schools
system for schools which schools are eligible for
x No consequences for benefits, remediation or correc-
test takers tion Not yet used in Indonesia but can
x Expensive to develop be used in conjunction with ac-
and implement Not used in Indonesia in educa- creditation system or Provincial
x Somewhat prone to cor- tion sector, (an analogy can be Quality Improvement Institutes
ruption drawn with the Human Resource (LPMP)
Index which is used to rank dis-
tricts to determine welfare eligi-
bility)
Low Stakes Informational ranking of schools Informational for district or
x Information for plan- or districts school planning purposes only.
ning purposes only
x Not tied to performance Not used in Indonesia in educa-
incentives/ corrections tion sector, (an analogy can be
system for schools drawn with rankings on Human
x No consequences for Resource Index
test takers
x Expensive to implement
x Not prone to corruption
Sample-based International tests, such as Assessment of overall system ef-
x Information for plan- TIMSS, used to rank countries fectiveness for policy and pro-
ning purposes only for informational purposes gram planning
x Not tied to performance
incentives/ corrections Used in Indonesia Not yet used in Indonesia
system for schools
x No consequences for
test takers
x Relatively inexpensive
to implement
x Not prone to corruption
School-based
High Stakes Competitive ranking of pupils for Qualifying: Determine which
x Expensive to develop purposes of screening admissions students obtain diplomas or cer-
or awarding prizes or benefits. tificates.
x Open to corruption Entrance exams are used in In-
donesia to screen applicants. Used in Indonesia (UAS)
Box 3.2 Information from a National Evaluation System Changed the Focus of Debate in Brazil
Brazil is a large, decentralized country like Indonesia. Its decentralized structures and systems are heterogeneous to
the point where there are almost as many different education systems as there are states and cities. In such a system,
information is especially critical.
The evaluation system introduced in the 1990s has three components: a school census, a national assessment, and
public examinations at the end of the basic education cycle. Brazil has built up a very useful professional expertise
on the application of sample-based standardized student assessment tests that bring educational quality into the fore-
front of policy formulation and implementation. The active dissemination of test results, together with results about
resources and school operating standards, are fuelling competition among municipalities to improve their schools.
This practice puts a high value on the importance of establishing feedback mechanisms for ensuring that information
is shared across and within sub-national entities and community organizations.
Information derived from the evaluation tools focused the educational debate in Brazil on equity in the distribution of
public resources and conditions of instruction, the quality of instruction at various levels and in the various school
systems, teacher training, school autonomy, and management models. More specifically, after the census revealed
financing inequities among districts, the government redistributed about $10 billion among all public schools in dif-
ferent localities, which benefited 30 million students throughout the country. As a result of the national assessment,
policymakers introduced accelerated learning programs for students who were at least two grade levels behind their
age group and a training and certification program for teachers. Also, introducing a requirement that students had to
pass public examinations to graduate from secondary school created a standardized credential that is useful to both
higher education institutes and employers.
Although information from standard tests can targets. Brazil has a large, decentralized edu-
be used to devise and implement improve- cation system in which performance informa-
ments within schools, most systems rely on tion is used to inform policymakers’ decisions.
school-based tests or continuous classroom as- A brief description of how pupil assessment is
sessment to monitor and upgrade the progress managed in Brazil is provided in Box 3.2.
of individual pupils. These methods require a
great deal of time and attention from teachers. Recommendations
We make the following recommendations in
Information
the area of quality management.
We discuss the need for a robust information
system in Chapter 1 on governance and man- x Under a decentralized program ap-
agement. At its most basic, the information proach to quality management, a
system must collect information relative to the permanent capacity for reviewing
national standards using the standard metrics. standards and measures is required.
One critical function of the information system The national Education Law (No,
is to provide reports to all levels schools, 20/2003) requires the establishment
districts, provinces, and the central govern- of an independent body reporting to
ment. For quality management purposes, in- the Minister of Education that is re-
formation on performance is most useful if it sponsible for standardization and
includes three types of information each evaluation. Until such a body is es-
school or district’s performance relative to na- tablished, we recommend that the
tional standards, their own past performance, MoNE appoint a standardization
and the performance of other districts or steering committee to oversee the
schools. In this way a district or school can several parallel standard-setting proc-
monitor changes in its performance over time. esses that are already underway.
Although the results of performance assess-
ments can be reported as a single number by x In the interest of imposing discipline
using a formulated index, if the results are dis- and rigor on the standard-setting
aggregated by topic, this can help districts and process, we recommend that staff
schools to meet specific quality improvement who are qualified, experienced, and
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Chapter 3 Quality Assurance and Improvement
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Education Sector Review Volume 2
quality assurance and technical matters like the and replaced at the junior and senior secondary
lack of capacity to implement policies pertain- levels only with the Ujian Akhir Nasional
ing to school and district educational quality (UAN) and the Ujian Akhir Sekolah (UAS).
assurance. The UAN covers three core subjects (Bahasa
Indonesia, Mathematics, and English) and
Students and Teachers draws the multiple-choice items from the same
item bank for schools nationwide. The items
At the present time, quality assurance pro-
on the UAN still mostly require only factual
grams for students and teachers are examina-
recall and rarely measure competencies, espe-
tion-based, routine, and structured as part of
cially in subjects like Indonesian in which lan-
the normal course of doing business. There
guage competency is the core of the
are clear incentives for students and teachers
curriculum. The UAS is the test for all na-
to comply with standards, as there are clear
tional subjects other than Bahasa Indonesia,
consequences for failing (for example, senior
Mathematics, and English as well as local con-
secondary students who do not pass the final
tent chosen by the districts and can include es-
national examination are not allowed to gradu-
says, portfolios, laboratory work, and other
ate and candidate teachers who fail knowledge
assessment methods. However, at this stage,
tests are not certified). The standard examina-
the UAS also mainly relies on multiple-choice
tions for measuring student achievement and
questions. Tests can be, and often are, set by
the competency of candidate teachers, though
individual schools or, in some cases, as the re-
far from ideal, are reasonable. Technical ex-
sult of agreements among groups of teachers at
perts at the MoNE acknowledge that students’
the district (junior and senior secondary) or
final examinations are not yet adequately stan-
sub-district (primary) level.
dardized, although much progress has been
made in this direction.
The parliament decided to permit the 2004
public examinations to go ahead but stated its
Student Diplomas. In Indonesia, academic intention to discontinue allocating public funds
quality is monitored through students’ end-of- for that specific purpose in the future. As a
level examinations. School certificates are newly elected parliament will be responsible
granted or withheld on the basis of the stu- for appropriations in 2005, it remains to be
dents’ examination scores. These certificates seen whether the 2004 public examinations
grant, but do not guarantee them access to the are, indeed, the final finals.
next level of study. In the 1980s, the Evaluasi
Belajar Tahap Akhir Nasional (EBTANAS) Teacher Certification. Teachers are the single
was introduced as a national test. Originally most important determinant of students’
intended as a tool to assess and control the performance and school quality, and teacher
quality of the education system, the tests issues are discussed in depth in the next
quickly became high-stakes public examina- chapter. Therefore, the management of the
tions that determined which students would be supply of this most critical “input” must be the
able to continue their education and the kind first step in ensuring that the teaching
of school to which they could hope to gain workforce meets the country’s minimum
admission.35 Due to widespread criticism of standards of quality through the process of
expense, corruption and lack of usability of the certification. There are currently four types of
public examination system, the EBTANAS teachers in Indonesia (see Box 3.3), two of
was abolished by ministerial decree in 2002 which are certified. Teacher certification is
managed by an appointments procedure,
which takes into account their performance on
35
Although the EBTANAS was a nationwide public ex- standardized tests.
amination, it did not meet the standard for a standard-
ized test. Provinces were sent alternative questions and
could choose easier or harder questions to suit the ability For the last six years, graduates of accredited
of students in their region. The formula to work out the institutions of higher education who wish to
final score also varied by region to make sure that any become junior or senior secondary teachers or
differences in final scores between regions were not too contract teachers must take a public
great, although in practice the differences in scores be-
tween provinces were considerable.
examination, which tests their general
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Chapter 3 Quality Assurance and Improvement
x Public teachers are civil servants and have minimum teaching qualification (for a new SD teacher, D2,
two year degree and post SMU, for new SMP/SMU teachers, this is S1, a four year university degree).
x Contract teachers are fixed term contract teachers, normally engaged as part of education projects but
with the same qualifications as public teachers.
x Permanent teachers are engaged by foundations to teach in private schools. Those in better schools
have to have all of the required minimum qualifications described above, but in poorer schools, many
have less qualifications.
x Temporary teachers are employed in all kinds of schools (private and public) to fill shortages and are
normally paid by the scholl committee or a foundation. These teachers vary widely in their
qualifications, some have only the minimum qualification and many in poorer schools lack even the
minimum. Their wages are often very low, sometimes less that Rp. 100,000 per month.
knowledge,36 subject mastery, and scholastic school accreditation body (BAS), listed the
aptitude. As of this year, 2004, primary key aspects of accreditation, and stated that the
teachers will also take the examinations. Due new ranking will be used to provide guidance
to the large numbers of candidates taking the on quality improvement to schools. The
tests each year (in 2003, 500,000 candidates accreditation procedure itself involves seven
took the examination as part of the application steps. The first step involves each school
process for advertised junior secondary doing a self-assessment of whether it meets the
education positions), a test of teaching national requirements. If the school feels that
competencies has not been included. The it is in compliance with the standards, then it
results of six years of testing will provide a requests an audit from the local accreditation
rich resource for future research into the body.38 If the school passes the audit, then it
specific strengths and weaknesses of the receives accreditation for a four-year period.
current teaching workforce. It has not yet been decided what will happen to
those schools that do not meet the minimum
Schools and Local Government accreditation requirements over an extended
period of time. It is anticipated that many
School Accreditation. In the future, school-
schools, particularly the numerous small
level quality will be maintained and improved
private madrasahs that provide educational
through an accreditation system established
services to many poor children especially in
under the new Education Law. This
remote areas, will fall far short of the
accreditation system will apply to all schools,
minimum accreditation standards.
whether public, private, general, or madrasah.
Accredited schools will be ranked into three
The accreditation system is an interesting ap-
categories, and the lowest category will
proach to quality assurance but tough policy
include schools that meet the absolute
issues remain unresolved. To ensure that dif-
minimum standards. Thus far, the ranking of
ficult policy decisions are aligned with na-
schools under the new system is not much
tional priorities, policymakers rather than the
different from the existing system for ranking
independent accreditation body need to make
schools. A Ministerial Decree (KepMen
some difficult decisions about which incen-
087/U/2002)37 has established an independent
tives and sanctions to put in place for those
schools that do and do not meet the minimum
accreditation standards. As the policy reads
36
General knowledge tests include Bahasa Indonesia, now, the purposes of accreditation are twofold:
civics, public policy, English, and mathematics. (i) to ensure that even disadvantaged children
37
Article 60 of the Education Law stipulates that the ac-
creditation of schools will be the responsibility of the
attend schools that meet the minimum condi-
government and/or an independent body. The KepMen
087/U/2002, which predated the law established an inde- structure; staffing; budgeting; teachers and students;
pendent accreditation body (BAS), lists nine school community participation; and the school environment
components to be evaluated during accreditation includ- and culture.
38
ing: the curriculum and the teaching/learning process; Primary and junior secondary schools will apply to the
school administration and management; district body for accreditation, while senior secondary
school/institutional organization, equipment and infra- schools will apply to the province.
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Chapter 3 Quality Assurance and Improvement
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Education Sector Review Volume 2
that give an accurate picture of the claim that the certification process is
state of learning within Indonesia. We not transparent and that the extortion
recommend introducing a periodic na- of sums of money by officials in
tional assessment of learning, particu- exchange for favorable appointments
larly at the lower grades, which would is a common practice. Indeed, the
yield useful information about the practice is so widespread that poor
overall performance of the education parents of junior high students feel
system. that the teaching profession is closed
to their offspring as they cannot afford
x Although some progress has been the illegal payments (World Bank,
made in establishing a system for 2001). However, once these anti-
school accreditation, many difficult is- corruption activities are implemented,
sues are left unresolved. For example, the quality of the teaching force will
at present there is no incentive system no longer be undermined by corrupt
with rewards and corrections for en- practices like these.
couraging schools and districts to
comply with national standards. Nor Quality Improvement
does the policy include a process for
This section places quality improvement in the
resolving disagreements over accredi-
context of Indonesia’s experiments with qual-
tation or monitoring results. Also
ity improvement, the current legal and regula-
lacking is a system for gathering data
tory framework governing quality
on quality indicators to be used for
improvement. We then tie failures to improve
quality control and resource allocation
quality to underlying structural issues such as
purposes. Until the specifics of the
inadequate sector finance and absence of a
compliance and implementation proc-
system for sustaining quality improvement that
esses are sorted out, the new accredita-
is integrated into routine sector management
tion system is not likely to serve its
practices.
purposes. We recommend an interna-
tional peer review of the proposed ac-
The Indonesian Experience in School
creditation system through an
international conference and a series Quality Improvement
of follow-up workshops with policy Indonesia has been experimenting with quality
makers to resolve difficult issues. improvement for over 30 years. During this
time, public support for quality improvement
x Assuring quality in districts and has been project-based and channeled from the
schools through minimum service central government while private support has
standards is still in the planning phase. been school-based and channeled through
We recommend that quality assurance school fees and other household contributions.
be linked to annual performance-based Remarks made by school committee represen-
budgets prepared by schools and dis- tatives and school principals during the district
tricts. In this way, the quality assur- consultation process during the preparation of
ance system will become a routine part this report revealed that the dynamic that pro-
of financial planning and performance pels schools to improve quality is market-
reviews. based; better public and private schools can
charge higher fees for services. Two factors
x Indonesia is currently planning some limit the effectiveness of the market dynamic:
comprehensive anti-corruption the limited supply of quality improvement
activities that will include monitoring goods and services and the modest purchasing
independent from the government. We power of even the most successful schools.
recommend that anti-corruption Indonesia has been expanding the supply of
activities be considered part of the government-provided goods and services
quality assurance process. The Social through centrally funded projects for over 30
Assessment for the Basic Education years. Since the 1990s, Indonesia has been
IV Project reports that many teachers experimenting with giving government grants
to schools for quality improvement. Donors
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Chapter 3 Quality Assurance and Improvement
have been active in the sector guiding and in- Research Underlying Quality
vesting in many publicly financed projects that Improvement Projects
fund school rehabilitation, textbooks, libraries,
teacher training, technical advice, and other The quality improvement projects over the last
inputs.39 With all this experience, donor guid- decade have been based on practices derived
ance, and investment, why has the quality of from two main research areas – school effec-
education overall not improved? tiveness and school reform.
39
A summary of 25 donor-supported projects appears in
Appendix 1.
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Education Sector Review Volume 2
Table 3.2 Comparing the School Effectiveness and School Reform Approaches
School Effectiveness School Reform
Research area Cognitive science (theory into Management science (practice
practice) into theory)
Research thrust Teaching and learning process Managing for quality improve-
ment
Classroom teaching practices
Managing for change
Allocation of production func-
tions
Research variables Inputs School control over resources
School rehabilitation
Weaknesses Limited demand for quality im- Limited supply of quality im-
provement services in non-project provement services
schools
Does not explain how to make in- Does not explain how to improve
effective schools effective quality of teaching and learning
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Chapter 3 Quality Assurance and Improvement
Current Legal and Regulatory The legal obligations of the central govern-
Framework for Quality Improvement ment in school financing are limited to paying
teachers’ salaries through the wage transfer
Unlike quality assurance, there is no chapter in portion of the DAU formula. Although the
the Education Law that specifically addresses constitution and the Education Law (No.
the issue of quality improvement. However, 20/2003) stipulate that 20 percent of the na-
quality improvement is mentioned several tional budget and 20 percent of the block
times, both as a general agenda item and as the grants to districts must be spent on education,
specific goal of several statutes. For example, there is no regulation that establishes a funding
in Article 56 on education boards and school floor for schools. Indeed, there is no national
committees, the law stipulates that the role of law that regulates within-district transfers of
the community in improving quality in schools APBD funding to schools. If the government’s
should include planning, monitoring, and appropriation to the education sector does not
evaluation. Prior to decentralization, the rou- increase to the level stipulated under the con-
tine management of the primary school system stitution and the decentralization laws, quality
was assigned to local governments, and re- will not improve equitably. Channeling qual-
sponsibility for educational quality improve- ity improvements through the DAK mecha-
ment was assigned to the central government. nism could ensure that funds allocated for
Under decentralization law 22/1999, these education are spent for schools and by schools.
functions were reunited and districts were This chapter on quality recognizes but does
given responsibility for the education sector not address the issues of the 7 to 15-year-old
overall. A national policy of school-based children who do not attend school. Under the
management through school committees and law, they are entitled to receive their fair share
district education management by education of public spending on education, but in prac-
boards was formalized by a Ministerial Decree tice this already disadvantaged group receives
(KepMen 44/U/02). Under this policy um- far less than the young citizens who are en-
brella, schools are responsible for improving rolled in school.
the quality of education while districts are re-
sponsible for improving the quality of the Project preparation documents for the World
management of educational services.40 Bank’s Basic Education IV project under-
Whether this transfer of authority translates scored the need for quality improvement in
into a transfer of assets or of liabilities de- early childhood and early grade education.
pends upon two things: (i) the condition of the Background papers reported that teachers
schools and the capacities of the district and spend most of their classroom time in grades 4
(ii) the amount of the public budget allocated and above on remedial teaching rather than on
to education. helping students to master grade-level skills.
This pattern will continue unless the govern-
ment adopts programs that prepare children for
schooling and strengthen the early childhood
component of basic education.
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Education Sector Review Volume 2
Financing the Quality Improvement of Box 3.4 The New Zealand Equalization Pro-
Schools gram
What kind of value is the Indonesian state and There is a tendency in decentralized education
are Indonesian families getting for what they systems for differences in quality to increase be-
spend on basic education? The Education for tween wealthier and less wealthy areas unless ex-
All (EFA) task force has estimated that com- plicit corrective measures are taken. In New
pulsory academic fees for primary and junior Zealand, the original design of the school-based
secondary average about Rps 213,000 per pu- management reforms did not include mechanisms
pil. These fees are used to cover schools’ op- to ensure the equitable financing of schools. In
erating expenses and improvements in the response to this absence, the government created
the Targeted Funding for Educational Achieve-
quality of its physical assets, teachers’ salaries,
ment (TFEA) as a component of schools’ operat-
schoolbooks, learning materials, and equip- ing grants. The TFEA is targeted to specific
ment. This implies that public spending on schools to enable them to overcome the barriers
these basic conditions of learning is inade- to students’ learning that are associated with so-
quate. At the district level where education cioeconomic disadvantage. All schools are
personnel constitute over half of all public ranked by decile, and per-student funding in-
employees, up to 60 percent of the routine and creases as the school’s decile declines.
development district budget (APBD) is spent
on education, primarily on routine expenses
such as teachers’ salaries. Educational facili- Organizational Systems for Sustaining
ties constitute more than half of the assets held Quality Improvement
by many local governments. The central gov- In this section, we discuss the organizational
ernment has no formula for equalizing district frameworks for sustaining quality improve-
expenditures on quality improvements and no ment, namely school-based management and
means to ensure that districts allocate their district development planning. School-based
education resources equitably. The current management is not only a policy of the MoNE,
practice of channeling quality improvement but is also mandated under Law 20, article
inputs to schools directly through centrally 51(1). District development planning is re-
funded projects exceeds the two-year time quired under Law No. 17/2003 on perform-
limit for direct transfer of resources that was ance-based budgeting. Although neither of
set in Law 25/1999. these systems deals directly with the quality
issue, both systems have some potential for
In Chapter 2 on financing, we pointed out that sustaining quality improvement. District de-
Indonesia is spending less on education than velopment planning is discussed in Chapter 1
might be expected given its per capita income on governance and management. In the sec-
level. The introductory chapter showed that tion below, we focus on school-based man-
Indonesian children perform worse on stan- agement.
dardized international tests than children in
neighboring countries but better than children School-based Management
in some countries that spend about the same
proportion of public money on education. In Indonesia, the strategy that has been
Taken together, the data show that Indonesian adopted to improve schools over the long term
parents and the state have been getting reason- is school-based management (SBM). The in-
able value for their expenditure compared with tention behind school-based management is to
other countries; in other words, they spend lit- engage the wider local community through
tle and get little. Furthermore, Chapter 2 on school committees in planning, monitoring,
financing revealed that spending on education and improving school quality (Article 56 Law
in Indonesia is inequitable, resulting in un- 20/2003). Very preliminary findings from our
equal access and quality. Box 3.4 describes consultations with district-level officials indi-
New Zealand’s approach to equalizing quality cate that school committees have been set up
in a decentralized system.
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Chapter 3 Quality Assurance and Improvement
but are not yet active in the area of quality im- Background papers on school-based manage-
provement.41 ment written for this report acknowledge that
participatory management and adequate school
School-based management does not guarantee resources are a necessary but not sufficient
quality improvement. International research condition for improving student achievement.
reveals that the link between SBM and quality They also recognize that schools require,
improvement is inconclusive. According to a among other elements, performance informa-
recent review of 83 studies of SBM programs tion (through both school profile statistics and
around the world, there is no universally posi- self-assessments) and accountability systems
tive relationship between school-based man- (Umaedi, 1999). Although the MoNE has dis-
agement and school performance or school seminated guidelines to schools for carrying
quality improvement (Leithwood and Menzies, out performance self-assessments that incorpo-
1998). In fact, the authors conclude that SBM rate these concepts, none of the schools in-
fails to improve students’ academic achieve- cluded in the focus groups mentioned using
ment or to reduce dropout and repetition rates, them.
even though SBM does increase parents’ and
communities’ say in decisionmaking, teachers’ In response to studies indicating that school ef-
participation in developing school improve- fectiveness inputs are not always used and
ment plans, and administrative efficiency in al- maintained,42 Indonesia has been experiment-
locating scarce resources effectively. Other ing with pilot programs that require schools to
research indicates that it is not school-based prepare improvement plans designed to im-
decisionmaking per se that improves learning; prove teaching and learning. Since 2000, many
rather, it is the type of decisions that schools quality improvement programs have been pro-
are entitled to make for themselves. Schools’ viding small grants to schools to implement
autonomy in making personnel decisions, their school development plans. These plans
teachers’ autonomy in choosing which teach- reveal much about the gap between the priori-
ing methods to use, and teachers’ involvement ties of education professionals and the priori-
in procurement decisions are particularly in- ties of school managers. Box 3.5 contains a
fluential (Woessmann, 2001). description of the typical content of most
school development plans.
Despite several well-known shortcomings,
SBM is the best method available in Indonesia However, there are many steps that can be
for making quality improvement a part of rou- taken that move beyond the limited scope of
tine school operations. Thirty years of pro- most school improvement plans. One such step
jects have yielded insights into what involves package-based improvement grants.
methodologies work best in classrooms to in- In Indonesia, under the SIGP program of
crease student achievement and to make 2001-2002, the central government gave a
schooling a pleasant experience for both grant package to all schools that met all of the
teachers and students (for example, active and necessary requirements and conditions. SIGP
contextual learning). Unfortunately, systemic funds could only be used for seven purposes:
and structural barriers, such as a lack of ac- buying books and stationery, hiring teachers,
countability, insufficient human and technical purchasing teaching aids, renovating build-
resources, and widespread corruption, prevent ings, repairing classrooms and library furni-
good practices from spreading spontaneously. ture, installing water and sanitation facilities,
and introducing school-based teacher training.
Each school received a set amount depending
41
Focus group discussions with teachers and principals
in Lampung and Makasar as well as meetings with
42
school committee members in Central Java and Yogya- For example, staff from the MBE project in East Java
karta revealed that many principals have not yet dis- and Central Java reported that several of the libraries in
cussed performance standards or improvement planning the 36 schools that they visited appeared to be unused
with school committees. Some focus group members judging by the dust on the books and the records. Also,
also commented that the performance monitoring pres- staff from the JBIC team on field visits to recently con-
ently being conducted by school committees, an essential structed junior secondary schools in 2002 reported that
element in sustaining quality improvement, concentrates over half of the new school stock was not being regularly
only on financial matters. maintained.
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Education Sector Review Volume 2
on its level of poverty, the condition of its x The absence of knowledge and infor-
physical plant, and safety considerations. Dis- mation about education quality im-
trict committees selected the schools and de- provement at the district level is a
termined the amount of the grant. REDIP also major inhibiting factor. Projects such
used a menu of restricted choices for school as the DBEP that used proposal-based
grants and required schools to produce simple grants in an attempt to enhance dis-
proposals written to a template. Packaged tricts’ ability to improve school qual-
grants require less planning capacity on the ity have shown that districts lack the
part of schools than SBM but remove respon- experience and knowledge to develop
sibility from the school and community for multi-year programs to improve edu-
self-assessment and program development. cation quality. We recommend mak-
Box 3.5 School Development Plans and ing a significant investment in
Quality Inputs building the technical and managerial
capacity of districts to improve qual-
There has been no research published yet on the ity.
comparative results of school reform projects.
Anecdotal evidence provided by field workers x The supply of competent government
from the Managing Basic Education (MBE) Pro- and private sector trainers and con-
ject indicates that the school development plans sultants is a compounding and binding
from participating schools are confined largely to constraint. Therefore, we recommend
physical conditions such as rehabilitating build- making a significant investment in de-
ings and providing more books. A recent visit by
veloping the capacity of public and
MBE project teams to REDIP sites in Central
Java found little change in teaching as a result of
private providers of quality improve-
the program. Likewise, a review of DBEP school ment services. Indeed, knowledge
improvement proposals confirmed that schools about how to improve school quality
tend to request the rehabilitation of their facilities already exists in Indonesia; the bottle-
and the provision of more library books and other neck is that there are not enough high
material inputs rather than teacher training. The quality “service providers” (such as
focus on physical inputs is partly the result of the competent and informed teacher train-
lack of teacher trainers. The demand is there, but ers) to apply this knowledge in every
there is no supply to meet it. The CLCC project school. Centrally planned quality im-
is slightly different in that it focuses on SBM in provement projects are often well-
order to improve teaching and directly tackles the conceived packages that, in their pilot
training issue by increasing the supply of trainers.
phases, are usually successful in
achieving their objectives. In the pilot
Recommendations test phase of such projects, project
If simply providing inputs improved quality teams generally provide services to
and school performance, then district educa- schools directly, but it is impractical to
tional planning would simply be a question of extend this pilot approach to all of the
channeling inputs to schools. Unfortunately, one and a half million teachers in In-
the link between specific inputs such as teach- donesia’s 180,000 schools. To over-
ers’ salaries or textbooks and particular out- come this challenge, we recommend
puts such as better student test scores is not using some variation of a cascade
straightforward, and process functions can ei- model, in which the people who best
ther enhance or inhibit progress towards that understand the intervention (project
goal. The use of textbooks, for example, is designers) train others who then train
nearly as important as their availability; nor is teachers, which means that there can
the availability of particular teaching materials be as many as three or four layers of
as significant in raising learning achievement training in between the project team
as teachers having a say in which materials are and individual teachers. If anyone in
procured (Woessmann, 2001 and Pritchett and the chain does not fully understand the
Filmer, 1999). intervention or training methods, this
can result in poor performance further
down the chain. As a result, there are
few examples of improvements lasting
110
Chapter 3 Quality Assurance and Improvement
beyond the life of the project or of Whether the expense is borne by parents or by
good practices spreading spontane- the public is a matter for policymakers. Sec-
ously to other schools.43 ond, schools must receive funds based, at least
in part, on a transparent, per-student formula
x Schools are asymmetrical in their abil- that factors in enrollment or attendance rates
ity to implement quality improvement. as recommended in Chapter 2 on financing
Also, school performance can deterio- and in the EFA Summary Report.
rate as well as improve under decen-
tralization. Therefore, we recommend Third, schools must receive their share of sec-
taking into account the performance of tor development money in cash rather than in
schools relative to national standards kind, either through an earmarking or pro-
and to their own past performance posal-based budgeting process. In terms of
when formulating school or district sustainable improvements, schools must have
budgets and education development some discretion to choose the quality im-
plans. One such approach, an adapta- provement interventions that they are willing
tion of the “balanced scorecard” is and able to implement. This will require that
presented in Appendix 3. 2. they have a supply of proven quality im-
provement packages from which to choose,
Conclusion and Summary of cadres of competent providers of quality im-
Recommendations provement services, and a flexible system for
determining the relative ability of each school
We conclude that the reason why the quality to implement independent planning and block
of education overall has not improved in re- grant financing.
cent years lies deep within the sector’s struc-
tural and financing systems and that quality Finally, we recommend that the effort to en-
must be addressed by changing the sector’s sure education quality be seen holistically as
organizational structure, financing, and opera- an enterprise consisting of both assurance and
tional systems. improvement functions linked by a common
set of simple standards and measures.
Some of the required changes in the area of
sector finance are not under the sole control of
the MoNE. To improve quality, Indonesia
must first spend more and spend wisely.
43
Several projects have experimented with this system in
reverse, with school-based interventions shared among
clusters of several local schools, which are also shared
with local government school supervisors and so forth up
the chain of command via workshops. Occasionally, as
with the CBSA, this leads to an adjustment in national
policy and the innovation becoming an established part
of the education sector.
111
Education Sector Review Volume 2
Asian Development Bank (ADB). 2003. Sta- Fasli Jalal and Bachrudin Musthafa. 2001.
tistical Tables compiled for Review of the “Education Reform in the Context of Decen-
Madrasah System. Jakarta, Unpublished. tralization.” Ministry of National Education
(MoNE), the National Development Planning
Asian Development Bank (ADB). 2000. Staff Agency, and the World Bank.
Appraisal Report on the Decentralized Basic
Education Project. Ford, Daryl. 2003. “Choosing a good school
for you,” Jakarta Post, 27 April.
Aziz, Drs. H. Abdul. 2002. “Madrasah Educa-
tion in Indonesia: Potential, Problems, and Is- Galiani and Schargrodsky. 2001. “Evaluating
sues.” Symposium on Madrasah Education in the Impact of Education on School Quality.”
the Context of a National Education System. http://www.utdt.edu/departamentos/empresaria
Jakarta, Indonesia. 4 November 2002. l/cif/pdfs-wp/wpcif-072001.pdf.
Berita Indonesia. 2003. “Four Government Government of Indonesia. 2003. RPP Standar
Regulations on Education will be Finalized Nasional Pendidikan, draft 29, October 2003.
Before 2004,” Newspaper article posted on the
Internet. In Indonesian. Hijmans, Frank. 2003. “Unit for Facilitation
of Education Decentralization” descriptive
Bond, Linda. 1996. “Norm and Criterion- synopsis. Word processed: Jakarta.
referenced Testing.” Retrieved October 2003.
http://www.mcg.net/Articles/norm/htm Hong, Yao. 1997. “What Investments Raise
School Outcomes: Improving School Quality
Bush, Kenneth, and Diana Salterelli. 2000. or Increasing School Quantity?” Unpublished
The Two Faces of Education in Ethnic Con- manuscript.
flict: Towards a Peacebuilding Education for
Children. Florence, Italy: UNICEF/Innocenti Jones, Gavin. 2001. “Education, Equity, and
Research Centre. Exuberant Expectation: Reflections on South-
East Asia.” FEA Working Paper.
Education for All. 2002a. “Situational Analy- http://www.cassey.com/fea2000-1.pdf.
sis.” Ministry of National Education (MoNE),
Photocopy of draft chapter on quality. Kellaghan, Thomas and Vincent Greaney.
2001. “Using Assessment to Improve the
Education for All. 2002b. “Education for Quality of Education.” IIEP Unesco. Paris.
All.” Ministry of National Education (MoNE),
Photocopy of draft main report. Kim, Gwang-Jo. 2001. “Education Policies
and Reform in South Korea.” Paper prepared
Education for All. 2003. “Per Pupil Costs of as part of a World Bank consultancy for Mau-
Achieving Each EFA Dakar Commitment” ritius.
Handout at EFA costing presentation.
King, E. and B. Ozler. 1998. “What’s Decen-
Educational Psychology Interactive. 1996. tralization Got to Do with Learning? The
“Measurement and Evaluation: Criterion- Case of Nicaragua’s School Autonomy Re-
Versus Norm Referenced Testing.” forms.” Paper presented at the Annual Meet-
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crnmref.html Association held in San Diego, CA referenced
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Faiqoh, Dra. Hj. 2002. “The Development of
Pondok Pesantrens as a Means of Commu- Leithwood, K. and L. Earl. 2000. “Educa-
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Jakarta, Indonesia. 4 November 2002.
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Leithwood, K. and T. Menzies. 1998. “Forms MoNE. 2000. Guidelines for Evaluating
and Effect of School-based Management: A School Performance (Junior and Senior Sec-
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World Bank, 2003. mary and Secondary Education. Jakarta.
Malen, B., R. Ogawa, and J. Kranz. 1990. Monitoring and Evaluation Team, Ministry of
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Pradhan, Menno. 2001. “Welfare Analysis
McMahon, Walter W. 2003. “Financing and with a Proxy Consumption Measure, Evidence
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Organization, Administration, Tasks, Func- 2003, 2002, 2001, 2000. Jakarta: Annual De-
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kolah Lanjutan Tingkat Pertama: Ringkasan tion System Law.
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MoNE. 2001b. “Pedoman Penyusunan Standar struction Project in Indonesia.” Project Re-
Pelayanan Minimal Penyelenggaraan Perseko- port.
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gah” Keputusal Mendiknas 053/U/2001, April Soedijarto, M.A. 2003. Kebijakan Nasional
19. Tentang Akreditasi Sekolah. MONE Policy
Paper.
MoNE. 2001c. “Toward Quality and Equity in
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Suryadi, A. 1989. Improving the Educational UNESCO, UNICEF, MoNE. No date. “Creat-
Quality of Primary Schools. Jakarta: Balitbang ing Learning Communities for Children: Im-
Dikbud. proving Primary Schools through School-
based Management and Community Participa-
Sweeting, Elizabeth. 2001. “Booklet for Ka- tion” Pamphlet. Jakarta.
bupaten Education Planners.” Background
paper prepared for the MoNE and World Bank World Bank. 2003. Decentralization and
as part of the Basic Education IV Project De- SBM Resource Kit.
velopment. Unpublished draft. Jakarta.
World Bank. 2001a. “Social Assessment Pilot
Umaedi. 1999. “School-based Quality Im- Activity Basic Education IV.” Draft report.
provement Management.” In Indonesian. Jakarta.
MoNE (Ministry of National Education).
World Bank. 2001b. “Early Childhood and
USAID. 2003. “Managing Basic Education Early Grades Education” Draft report, Jakarta.
Project Initial District Surveys Phase 1 Dis-
tricts.” Project report. World Bank. 1996. Background Paper to
Textbook Project. Mimeographed.
114
Chapter 3 Quality Assurance and Improvement
In Indonesia during the 1990s, the government The project provided teacher training in sci-
and donors spent hundreds of millions of dol- ence, mathematics, Indonesian, English and
lars on over 25 projects to improve the quality social studies, helped districts to initiate clus-
of primary and junior secondary education. ter-based training for teachers, provided fund-
Various lessons can be learned from these pro- ing for science equipment, and helped to
jects, and these are summarized below. develop a national test item bank and provin-
cial-level teams to improve the testing of stu-
dents.
SPP-CBSA/ALPS
Active Learning through Professional Support
to Teachers (1979-1994). UK Government Management capacity was strengthened by
through Balitbang. conducting studies to establish EMIS to help
the MoNE with school data collection and
Areas: One district each in West Java, NTB, management training workshops.
North Sumatra, South Sulawesi, East Java,
Lampung, South Kalimantan, Central Java, Follow-up projects include the JSE and the
South Sumatra, and Jakarta. BEPs.
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Education Sector Review Volume 2
Areas: Aceh, West Sumatra, Yogyakarta, and Activities included giving fellowships in cur-
Bali NTT riculum development and teacher training as
well as providing some facilities and equip-
The project’s objectives were to improve the ment for the MoNE’s national-level curricu-
quality of primary education through improved lum center.
teaching and learning activities, to increase
districts’ capacity to manage a quality im- The follow-up consists of the SJSE in the five
provement program, and to provide special as- provinces considered to be most in need.
sistance to poor, remote, and under-served
schools through block grants. The PEQIP had
SEQIP
too many sub-components and relied too much
Science Education Quality Improvement Pro-
on the cascade model for teacher training. The
ject (1994-ongoing). Germany through the
legacy of the PEQIP is the school cluster ap-
MoNE’s Division of Primary Education.
proach.
Areas: Jakarta, Central Java, East Java, South
No follow-up projects.
Kalimantan, NTB, South Sulawesi, and West
Papua
PGSD
Primary School Teacher Development Pro- The SEQIP’s purpose is to improve the quality
gram (1992-1999). World Bank through the of science teaching in primary school grades 3
MoNE’s Division of Higher Education. and 6. This is being accomplished through a
package of inputs that addresses all factors af-
Areas: Nationwide through teacher training fecting classroom activities simultaneously.
colleges The logic is that sustainability at the classroom
level is ensured by a package approach. The
The project’s objective was to enhance the package includes: in-service training for se-
teaching/learning process in primary schools lected teachers in active learning methods, in
through a new higher education teacher di- lesson planning, and in using a SEQIP science
ploma course (D2) for both pre-service and in- kit; training for principals and school supervi-
service training. sors so they can support the teachers, science
kits for teachers and students, and a system for
The new pre-service primary teacher education kit maintenance; teachers’ guides on how to
curriculum for D2 is used by all teacher train- use the kits in lessons and guidelines on using
ing colleges. new pupil textbooks; improved end of term
test items to match the new emphasis in sci-
ence teaching; and a project monitoring sys-
JSEP tem.
Junior Secondary Education Project (1993-
1998). Asian Development Bank through the
MDLCC
MoNE’s Division of Junior Secondary Educa-
Managing the Delivery of Local Content Cur-
tion.
riculum (1995-1997). UNDP through the
MoNE’s Division of Junior Secondary Educa-
Area: Nationwide but emphasizing un-served
tion.
and under-served areas and disadvantaged ur-
ban areas in Sumatra and Java.
Areas: Lampung
The project’s goals were to support the gov-
The purpose of the project was to develop
ernment in the delivery of compulsory educa-
policies and strategies to enable junior secon-
tion by improving academic supervision and
dary schools to attract and retain pupils and to
student assessment processes, implementing
develop links between post-primary education
Curriculum 1994, and strengthening the insti-
and income-generating opportunities.
tutional capacity of the MoNE and the MoRA.
Project activities included designing and refin-
ing management for local content delivery and
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Chapter 3 Quality Assurance and Improvement
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Education Sector Review Volume 2
118
Chapter 3 Quality Assurance and Improvement
The goals of the project were to improve the Areas: South Sulawesi and Maluku
quality of primary education, to expand access
to the JSE in poor and remote areas, and to The objectives and activities of the BEP III are
strengthen planning and management of the the same as for the BEP I as described above.
education system at all levels. The project was
the first to focus on decentralization and im- REDIP
plementation to the district level with support Regional Educational Development and Im-
from the province. Primary-level quality im- provement Project (1999-2001). JICA
provement activities focused on rehabilitation, through Balitbang.
school consolidation, and teacher re-
deployment; training for teachers, principals, Areas: Central Java and North Sulawesi
supervisors, and community leaders; the pro- (seven districts, 15 sub-districts in the pilot
vision of books, teaching aids, and materials; phase)
scholarships for poor students; and fellowships
to upgrade teachers’ credentials. The objectives of this project are to improve
the quality of junior secondary education by
Activities to improve quality in junior secon- building the capacity of local education ad-
dary schools included school construction us- ministration and schools and by increasing
ing a community-managed approach, contract community awareness of and participation in
teachers, in-service training for teachers, prin- education.
cipals, supervisors and community leaders,
and the provision of books and scholarships to The project’s activities included two compo-
poor children. nents: (i) the development of the capacity of
sub-district committees and (ii) a choice of one
Management was strengthened at the district from five school-level interventions such as
and province level through school mapping, cluster-based training, textbooks, block grants,
the integration of all ministries’ activities in and parent council development. The school
basic education, an assessment of staff capac- grants that were introduced under the REDIP
ity, and administrative retraining of staff at the are managed at the kecamatan level and are
district and province level to enable them to the same for all schools in the kecamatan. The
manage the project. sub-district committee plans all kecamatan-
level activities and writes and costs proposals
DPAP for funding with the help of project consult-
Development Planning Assistance Project ants. The committee then provides technical
(1998-2001). Policy Studies. CIDA through assistance to the grantees to support the im-
BAPPENAS. plementation of grants.
CLCC
Creating Learning Communities for Children
(1999-ongoing). UNESCO/UNICEF through
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Education Sector Review Volume 2
the MoNE’s Directorate of Primary and Sec- the MoNE’s Directorate of Primary and Sec-
ondary Education ondary Education.
Areas: Central Java, East Java, and South Su- Areas: NTB and Bali
lawesi
The objectives of the DBEP are to create a
The objective of the CLCC is to develop mod- model for increasing equitable access to nine
els to improve the quality of primary schools years of basic education for all children by
through active teaching and learning as well as making proposal-based grants to schools for
school-based management and community rehabilitation and quality improvement, mak-
participation. ing grants to districts for education develop-
ment and improvement, and creating a unit
Activities include providing models for child- within the MoNE to track the impact of decen-
friendly schools, assessing school-based tralization on school quality and on the provi-
training trainers in active learning, providing sion of education services at the district level.
packages of training, grants, and other inputs
to participating schools, and conducting a
community mobilization media campaign to
raise awareness of the importance of educating
children.
DBEP
Decentralized Basic Education Project (2003-
ongoing). Asian Development Bank through
120
Chapter 3 Quality Assurance and Improvement
121
Education Sector Review Volume 2
School (ser- Proportion Integrated Minimum Plans for Student Numbers of School Attendance
vice provi- of school school conditions school im- achievement teachers par- rules en- records by
sion) finance budget of learning provement to on tests of ticipating in forced teachers and
provided met MCL basic skills teacher train- students
by funds ing
122
Chapter 3 Quality Assurance and Improvement
By adding a second dimension for perform- and getting better, good and getting worse, bad
ance on lead indicators, each school or district and getting better, and bad and getting worse.
can be described using the grid in Figure 2. Different interventions can then be determined
Their performance can be reported and veri- for each category of district or education unit,
fied as part of each funding cycle. Taken to- which illustrates how the entire education sys-
gether, the two dimensions yield four tem has moved further away from the supply-
categories of districts or education units: good driven, one-response-for-all model.
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Education Sector Review Volume 2
124
Chapter 3 Quality Assurance and Improvement
Primary schools in Indonesia are not in good Kerusuhan) spent a portion of Rp 241.23 bil-
condition. According to an inventory of assets lion on rebuilding and rehabilitating class-
conducted by the MoNE in 2000, more than rooms. Several donor-financed projects have
half of all public general school classrooms also included a classroom rehabilitation com-
(530,000) were in fair or bad condition, and ponent since 2000 (see Table 2).
about 14 percent of the junior secondary class-
rooms (22,600) needed moderate or heavy re- Taken together these massive efforts have re-
pairs (see Table 1). habilitated about 30 percent of the classrooms
that needed the heaviest repairs or about 13
The government responded to the findings of percent of the classrooms that needed heavy or
the 2000 survey with a two-pronged strategy, moderate repairs. According to figures pro-
which, according to the Education for All draft vided by the government and donors, 82 per-
costing tables, aims to complete the rehabilita- cent of the junior secondary classrooms that
tion of classrooms by 2015 through a series of needed moderate to heavy rehabilitation were
projects. In 2001, Rp 3.55 trillion44 was spent repaired. The huge repair bill is due primary
on the school rehabilitation component of the to two factors sub-standard construction
Bantuan Khusus Sekolah (BKS) program, and no routine maintenance. Future repair
which also expended a considerable sum on bills can be lowered somewhat by including
scholarships. In addition, the centrally funded maintenance costs in the formula for calculat-
Imbal Swadaya program provided Rp 267 bil- ing a school’s operating budget. Indeed, if
lion in 2003 for both new school construction minimum maintenance is not carried out, the
and classroom rehabilitation (Rp 30,000 in 75 classrooms will require massive rehabilitation
percent matching grants to 8,900 schools). about every 10 years. Sub-standard construc-
Also in 2003, a significant DAK transfer (Rp tion is due in part to a lack of competent con-
625 billion) was made specifically for school struction engineers and construction workers
rehabilitation. In addition, a centrally funded and to corruption in various forms, such as
program aimed at remote and conflict areas contractors billing for materials that meet con-
(Daerah Tertinggal Bencana Alam dan struction specifications but substituting infe-
rior materials on site.
44
Rp1.144 trillion from the oil subsidy money was
used in 2001, with another Rp 2.41 trillion coming
from other sources in 2003.
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Education Sector Review Volume 2
Transition from Projects to Program competence to sustain and propagate the inno-
vations have cost more than Indonesian politi-
The advent of the new planning period pre- cians have been willing to spend. Projects still
sents policymakers with a historically unique have a vital role to play in trying out new
opportunity to change the country’s quality
ideas for improving teaching, for pilot testing
improvement strategy from the current series
school quality management models on a small
of discrete and disconnected projects into a
scale, for determining the management and
cogent and comprehensive quality manage-
technical capacity required to implement par-
ment program that integrates quality control ticular quality control approaches, and for in-
and quality improvement into the routine op- creasing the supply of quality improvement
erations of schools and districts.
service providers. The projects approach is
simply not up to the job of improving the qual-
Quality improvement projects have accom-
ity of this enormous and varied education sys-
plished a great deal in a few areas, but the unit tem overall.
costs and the need for high levels of technical
126
Chapter 4: Teacher Management System
Teachers are the most important asset in Indo- creasing the qualifications and technical ca-
nesia’s education system, both because they pacities of teachers and head teachers as a way
are the primary determinant of school per- of increasing the professionalism and improv-
formance and because their salaries consume ing the welfare of teachers, enabling them to
most of the public spending on education. In implement a new curriculum that aims to
this chapter, we argue that a new paradigm for make students more creative and to make
teacher management is necessary to ensure teaching more efficient and effective.” In or-
that Indonesia derives maximum value from der to “achieve the education goals, these
its teachers in terms of the academic achieve- strategies are to be supported by evaluation
ments of their students while adhering to the mechanisms that will function as a quality
principles and legal requirements of decen- control system and by increased supervision of
tralization. schools and accountability for school perform-
ance.” In 2003, the MoNE began working in
The Indonesian debate about teachers, teach- collaboration with line agencies (such as the
ing, and teacher management predates decen- MoHA, the MoF, the BAKN, and the MoRA)
tralization by at least three decades and many to develop a clear regulatory framework for
of the teacher management concerns discussed teacher management, including assigning re-
in this chapter are not new, nor do they all sponsibilities for hiring teachers as civil ser-
arise directly from the post-decentralization vants or as contract teachers.
forms of education governance, management,
and financing discussed in previous chapters. We believe that the regulatory framework,
Some persistent issues that need to be resolved standards, and monitoring systems currently
in the era of decentralization include teachers’ being developed by the MoNE, though ambi-
remuneration, incentives, career structure and tious, do not go far enough. This chapter iden-
promotion, their recruitment and deployment, tifies several key teacher management issues
their education and competence, their career and recommends three systemic actions that
development and in-service training, and their need to be taken: (i) setting teacher profes-
empowerment in the context of school-based sional standards and performance monitoring
management. Indeed, the empowerment of criteria that are based on their classroom and
schools and district governments under decen- school performance; (ii) developing a new
tralization provides a welcome opportunity to paradigm of career-long teacher professional
revisit long-standing issues and to examine development that is school-based and class-
how introducing a new paradigm into teacher room performance-led and (iii) de-linking the
management can contribute to improving management of teachers and their conditions
teaching and school performance. of employment from the civil service and cre-
ating a teaching service that reflects the needs
Since decentralization went into effect in of the educational system and the development
2000, the MoNE has been employing a two- of teaching as a profession. The aim of these
part strategy for improving the quality of recommendations is to encourage the devel-
teachers and teaching. The first part sets stan- opment of a professional teaching force that is
dards for teachers and head teachers and de- consistent with school-based management and
velops quality assurance monitoring systems; improves school performance, and students’
the second part builds the capacity of provin- learning outcomes.
cial institutions and district governments to
carry out their new roles relating to teacher This paper draws heavily on the work of sev-
management. This approach was described in eral teacher policy reform groups that existed
the Government of Indonesia’s Strategic Plan from 1999 onwards. The proposals from these
for Education 2002-2004 and relies on “in groups are reflected in the National Commis-
127
Education Sector Review Volume 2
sion on Education’s 2001 report called “Edu- Finally, we propose some policies and strate-
cation Reform in the Context of Regional gies and outline the kind of timeframe that is
Autonomy: The Case of Indonesia” and in the likely to be required to implement the pro-
Government of Indonesia’s Strategic Plan for posed policies.
Education 2002-2004. The analysis of teacher
management issues in this chapter uses the The Changing Context of Teacher
principles of decentralization and school- Management in Indonesia
based management systems to review progress
to date, to identify areas of concern, and to At the time of the decentralization reform, dis-
propose some possible ways forward. It dis- trict governments inherited a school system
cusses the information, incentives, and ac- that operated according to centrally deter-
countability systems relating to teachers that mined rules governing the employment and
will be needed to support decentralized man- deployment of teachers, the curriculum, teach-
agement systems and the goals to improve ers’ education, school inspections, teachers’
school quality. performance, and information systems. The
system was designed and structured in such a
The analysis in this chapter is based on: (i) a way that districts and provinces fed education-
review of Indonesia’s laws, regulations, policy related information upwards to the central
documents, implementation guidelines, project government (without receiving any informa-
reports, statistics, and media surveys; (ii) an tion in return. In turn, the central government
international literature review; (iii) interviews made all decisions pertaining to the procure-
with key stakeholders and focus group re- ment and distribution of all education inputs
search in Jakarta, Bandung, Makassar, and such as school buildings, books, teachers, and
Bandar Lampung (with additional focus in-service training.
groups to be conducted in three rural districts
by the end of November); and, (iv) a forum However, the situation was more complex
held by the Government of Indonesia and its than this summary might indicate. For exam-
development partners and feedback on early ple, public primary schools (sekolah dasar)
drafts of this chapter from experts in Indonesia were managed by the MoHA at the district
with extensive knowledge and field experience level; specifically, the local government was
of the education system. The chapter reviews responsible for the 3Ms (manpower, money,
proposed strategies, current practices and rele- and materials) for primary schools, while the
vant international experience to construct a ca- curriculum and quality issues were managed
reer-long teacher development and by the MoNE representative at the district or
management framework. Some elements of province level. On the other hand, the MoNE
this framework are already being discussed by managed public secondary schools. Public
the MoNE and various districts, while others schools in the madrasah system were, and
represent a major departure from the current continue to be, centrally managed by the
and proposed teacher management systems. MoRA. Public teachers were, and still are,
civil servants (pegawai negri) who taught and
The chapter is organized in the following way. still teach in public, madrasah, and private
First we look at some key characteristics of schools. In addition, there were contract
schools and teachers in the changing context teachers (mostly employed through central
in Indonesia. Second, we review the main projects financed by donors and “voluntary”
changes in teacher management arising from teachers who were paid an honorarium (guru
decentralization and education laws, stake- honor) from the parents’ contribution to their
holders’ perceptions of these changes, and the children’s school or through the school’s
initiatives being taken by district governments. foundation (yayasan). Contract teachers
Third, we discuss the main issues related to mostly taught in public schools, while volun-
teacher management in Indonesia and look at tary teachers could be found in both public
some lessons from international experience. and private schools.
128
Chapter 4 Teacher Management System
Then, as now, there is a wide variation among cruiting teachers to remote schools, and to de-
districts in their capacity to meet national tar- velop school support systems to meet the
gets and to provide a supportive environment needs of small schools in isolated areas or
for teachers and for schools. Variations in conflict plagued environments. Districts in
population density, financial resources, admin- these situations may not have enough techni-
istrative capabilities, and progress in meeting cal and financial resources to meet the needs
the national education goal (nine years basic of large numbers of remote schools, although
education for all) make it impossible for cen- the districts within any given province often
tral policymakers to develop an effective one- vary considerably in the amount of resources
size-fits-all formula for teacher development that they have available to provide incentives
and management. For example, some districts to teachers (according to provincial economic
are experiencing periodic civil disturbances data from The MoNE’s Research and Devel-
(these include not only Aceh but also districts opment Center (Balitbang). On the other
in Central Sulawesi, Maluku, and parts of hand, in other parts of the country, there are
Papua), thus making it difficult for them to large urban districts where land is scarce and
employ and retain teachers. In other districts, past policies created multiple primary schools
where most of the population lives in accessi- on a single site, each with its own administra-
ble areas, it is relatively easy to provide tive system. Most of these local governments
enough schools, to staff them adequately, and are now streamlining these schools into a sin-
to give teachers regular professional support. gle institution and teacher management sys-
However, many districts have low population tem, thus reducing the numbers of head
densities and limited infrastructure, which teachers, administrative staff, and specialist
makes the task of teacher deployment much teachers as well as rationalizing the use of
more difficult.45 various physical resources.
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Education Sector Review Volume 2
A group of education planners from a number of Latin American countries examined the cost-effectiveness
of about 40 policy interventions that aimed to raise students’ academic achievement. The group measured the
cost-effectiveness of the interventions according to the estimated impact of the intervention on academic
achievement (as measured by a standardized test of mathematics and reading at the primary grade 6 level),
the probability of the intervention being properly implemented, and the estimated cost of implementing the
intervention. Of the 40 policy interventions examined, the top five most cost- effective interventions were
(starting with the best): (i) assigning the best teachers to the first grade, (ii) enforcing the official length of
the school year, (iii) not switching classroom teachers during the school year, (iv) testing 10 percent of grade
4 students annually and distributing the results to teachers, and (v) decentralizing school management. The
first three of these interventions are not very costly but greatly increase teachers’ productivity and school per-
formance.
The group found that four policy interventions had the greatest possible impact on improving school quality
and learning achievement. These were (starting with the most effective): (i) providing teaching and learning
materials and training teachers to use them, (ii) providing self-directed learning materials to teachers without
any accompanying teacher training, (iii) providing a package of interventions to at-risk schools including
self-learning materials, training in active and cooperative learning, hands-on workshops on modern teaching
methods community involvement in school decisionmaking, school-based management, formative evaluation
of the intervention package, and systematic testing and feedback, of student learning, and (iv) paying teach-
ers higher salaries to work in rural areas and assigning the best teachers to the first grade of primary school.
All of these interventions have costs attached, and the probability of them being fully implemented is lower
than the chance that the five most cost-effective interventions above will be implemented.
impact of different policies to improve school tricts to produce some school-age population
quality that the governments of these countries projections (say, for 10-15 years ahead) and
had introduced over time (Schieflebein et al, then to match these to projections of primary
1998). The education planners ranked the im- school enrollment rates and to the qualifica-
pact of these policies on student achievement, tions and age group profiles of the existing
taking into account the cost and degree of dif- population of certified teachers.
ficulty of introducing each innovation. Sev-
eral of these have implications for teacher The decentralization legislation clearly allo-
management. The results of this exercise are cates the responsibility for teacher manage-
summarized in Box 4.1. ment to the districts. Given the vast range of
different types of schools and of varying dis-
One of the key challenges in teacher manage- trict capacities, the national and provincial
ment is estimating the number of teachers that governments will have to continue to play an
will be needed in the future. Districts may important role in teacher management and de-
require financial and technical assistance from velopment in the medium term. For example,
higher levels of government so that they can the provincial quality assurance institute de-
build their capacity to gather information scribed in Chapter 3 on quality can help dis-
about the supply of and demand for teachers in tricts to build their capacity to monitor
the future. The demographic shift caused by teachers’ performance so that this monitoring
declining birthrates and rising primary and system can contribute to the lifelong profes-
junior secondary school enrollments implies sional development of teachers and head
that there is likely to be a decrease in the de- teachers.
mand for primary school teachers and an in-
crease in the need for secondary school
teachers in the future. The central and provin-
cial governments might consider helping dis-
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Chapter 4 Teacher Management System
46 47
This proposal should be vigorously debated as it However, the recruitment of contract teachers is
does not conform to the principles of decentraliza- a special case. This is discussed later in the chap-
tion in Indonesia. ter.
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Education Sector Review Volume 2
teachers, head teachers, and school supervisors benefits and incentives. While the districts
to develop the necessary capacity to meet the have the option to dismiss contract teachers48
requirements of school-based management or not to renew their contracts, it is still not
and to improve school performance. District clear whether or not district governments can
education managers are receiving technical reduce the teaching force by dismissing some
support and training under ongoing MoNE civil service teachers, as they might want to do
projects (such as the DBEP, the BSE, the JSE, if they were to rationalize their teacher/student
and the Unit Facilitasi in areas of school map- ratios or to adjust to lower enrollment due to a
ping), teacher deployment, and quality im- declining school-age population. Currently,
provement planning to help them to fulfill many teachers are under the impression that
their new obligatory functions. However, they cannot apply for vacancies in a different
there are over 420 district governments in In- district, but this may be because districts want
donesia with very different capacities, and not to retain the civil servants whom they already
all of these activities are taking place in all employ. Nor are there any good mechanisms
districts, which means that progress is very by which schools and districts can advertise
uneven. teaching vacancies beyond district boundaries
to recruit those teachers who may be best
Responsibility for the Employment and suited to that particular school.
Deployment of Teachers
Although district governments are responsible
Under the decentralization laws, the district for hiring teachers and paying their salaries,
government is responsible for employing all some ambiguities remain in the system. For
public school teachers except those in ma- example, madrasah teachers who are civil ser-
drasah schools. This includes all the civil ser- vants are still managed by the MoRA which,
vice teachers (pegawai negeri) in public and unlike the MoNE, has not been decentralized.
private schools (mostly secondary schools) Districts, through the MoHA, have always
who were previously hired and paid for by the been responsible for deploying teachers, but
central government. Wages for public teach- with the establishment of school committees
ers are transferred to the districts’ budgets and education boards, schools and districts
(APBD) as part of their block grant (DAU) may take on a bigger role in selecting and ap-
from the central government. There are also pointing teachers, especially head teachers.49
districts that have hired contract teachers District governments are bound by the central
(guru kontrak) as part of projects funded by government’s zero recruitment policies for the
loans made by donors to the central govern- civil service, which have been implemented
ment. The salaries of these teachers do not over the past few years. This applies as much
appear in the district budget but are funded by to teachers as to other civil servants. For ex-
these MoNE-managed projects through the ample, if a district government wishes to hire
DIP mechanism. The status of these contract any additional teachers, the district must pay
teachers will be reviewed when these donor- for them from their own resources. The Min-
funded projects end, although attempts by do- istry of Finance will not grant districts any in-
nors to design an exit strategy have been pre-
empted by the central government’s decision
to recruit an additional 190,000 contract
teachers, which it is no longer supposed to do.
48
Contract teachers are not civil servants. They are
The salary levels and promotional and reward contracted to the MoNE for a period of three years
systems for civil servants are still set centrally, at fixed rates.
49
although many districts provide teachers Three districts in Flores, with the support of
within their jurisdiction with supplementary AusAID, are piloting just such community partici-
pation in determining selection criteria for teachers
and head teachers and in participating in the selec-
tion of teachers and head teachers.
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Table 4.1 Teacher Management Functions for Public Schools (except Madrasahs)
after Decentralization
Decisionmaker Decisionmaking Process
Management function Pre-decentralization Post-decentralization
Teacher employment, deployment Public teachers: By local govern-
x Selection Public teachers: By central ment under national civil service
x Appointment authority deconcentrated to guidelines
x Deployment provincial government.
x Transfer Process governed by civil Contract teachers: Unchanged
x Promotion service regulations and uses
x Conditions of service (salary credit point system Permanent teachers: Unchanged
scales, incentive systems)
Contract teachers: Through Temporary teachers: Unchanged
x Dismissal/rehiring
centrally funded projects,
not subject to civil service
regulation
Permanent teachers: By
private foundations, not sub-
ject to civil service regula-
tion
Temporary teachers: By
schools, not subject to civil
service regulation
Teacher performance Primary Primary
x Standards setting Public Teachers: By the Public Teachers: By districts and
x Performance monitoring MoNe and monitored by dis- schools
x Sanctions and remediation trict circuit inspectors based
in sub-districts Contract Teachers: Unchanged
Temporary teachers: By
schools
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Chapter 4 Teacher Management System
Permanent teachers: By
foundation
Temporary teachers: By
school
Teacher professional development Public teachers: By centrally
x Initial preparation accredited teacher training Public Teachers: Unchanged
x Induction institutions, through public
x Continued professional develop- examinations, by individual Contract Teachers: Unchanged
ment opportunity through credit
system Permanent teachers: Unchanged
Permanent teachers: By
school
Temporary teachers: By
school
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Education Sector Review Volume 2
represented by local government personnel cess by the results of the students’ final
from the district parliament and education and examination and by how many children
planning offices (Dinas Pendidkan, Dinas are accepted by the secondary school of
Agama, Pemda, and Komisi A). their choice. Teachers who have bene-
fited from performance monitoring
Here are a few highlights to illustrate the pointed out that at least now this is done
views that emerged from the focus group ex- at the district level and not far away in
ercise: Jakarta, which they saw as an advantage.
On the other hand, the school supervi-
x Since decentralization, teaching vacan- sors, who were formerly accountable for
cies are advertised in the local media. school monitoring, felt that the district
These advertisements provide the public government was now taking over this re-
with information about the position and sponsibility, leaving them with less of a
location of the job and invite interested role in supervising schools and teachers.
teachers to apply. However, since de-
centralization, it has become more diffi- x Except for teachers in schools that are
cult for teachers to apply for transfers or part of ongoing projects (such as the
promotions out of their original districts. BSE, the JSE, and the DBEP) funded by
The teachers and head teachers in the fo- the national government, there are few
cus groups were concerned about this. resources or opportunities for teachers to
They also expressed considerable con- participate in any kind of professional
cern about the lack of transparency in- development programs (such as in-
volved in the appointment, transfer, and service training or workshops). Educa-
promotion of teachers under decentrali- tion managers themselves said that dis-
zation and about the high cost to indi- trict education budgets are not large
viduals arising from the ”fees” (bribes enough to fund teacher development ac-
and other payments to facilitate results) tivities on a regular basis.
that they have to pay to assist these
processes. In many cases, these pay- Further focus group meetings of education
ments (in cash or kind) are beyond the stakeholders are planned over the next few
means of teachers who might otherwise months in a wider range of districts, including
be eligible for a position. The teachers districts in rural and island areas and districts
claimed that this kind of rent seeking has with different levels of prosperity and with
become worse since decentralization. different population densities and numbers of
schools. As the first two sessions were held in
x Although this is not a specific impact of urban districts, it is planned to include rural
decentralization, teachers were con- and remote districts in the next round to get a
cerned about the infrequency of per- balanced perspective.
formance evaluations and the poor
quality of performance monitoring (by District-led Initiatives
head teachers or district school supervi-
Many districts are responding with enthusiasm
sors). They considered supervision to be
and initiative to their new responsibilities,
too focused on administrative aspects
which are giving them a much greater incen-
and not sufficiently on giving teachers
tive to examine the quality and efficiency of
feedback about their teaching methods.
the education provided within their bounda-
However, as the teachers also pointed
ries. Because resources are now allocated by
out, there are few opportunities for pro-
democratically elected district parliaments, the
motion or any other incentives for either
district planning office is taking a greater role
school managers or teachers to justify
in both preparing budget proposals and de-
more frequent performance evaluations.
fending the allocation of resources.
Parents tend to measure a teacher’s suc-
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Chapter 4 Teacher Management System
These days, education initiatives often origi- instead are buying books and learning materi-
nate within district governments (in other als.
words, within the leadership of the Bupati
through the Bappeda to the Dinas units), espe- Need for a New Teacher Management
cially as they examine ways to use their re- Framework
sources more efficiently. Several districts have
been merging several small schools into one, Good governance and management require in-
redeploying school principals and teachers to formation, accountability, and incentives.
understaffed schools based on more efficient From the examples given above, it can be seen
student/teacher ratios, and are discussing the that districts and schools now have much
relative merits of civil service teachers and greater incentives to make use of information
contract teachers.50 that formerly was only passed up to the central
education authorities. For example, many dis-
In cases where schools have been merged and tricts are seeing that the analysis of these data
the number of school principal posts have de- can help them to use their resources more effi-
creased, there is a danger that tensions will ciently. Now that elected local governments
arise between those who lose out and those are making decisions about budget allocations
who retain their jobs. District governments and schools have a greater say in how they are
are finding ways to deal with these situations – managed, there is increasing evidence of both
for example, school principals who had previ- better planning and greater accountability to
ously been evaluated and had lost their jobs the community. However, the central gov-
due to poor performance as administrators ernment still has an important role to play in
have been asked to return to teaching. In advertising examples of good practice and in
some cases, natural attrition by retirement providing incentives and technical support to
solves the problem; in other cases, school district governments who wish to try out inno-
principals may have chosen to retire or to seek vative ideas and who need to develop the ca-
other work. School committees in some well- pacity to do so.
developed areas have been using their re-
sources to allow teachers to attend in-service Most of the key issues on the subject of
or other professional development programs teacher management are the same after decen-
(as is happening in several districts in East tralization as they were before. The relevant
Java under the UNESCO/UNICEF project). In question is how these issues have been altered
many cases, this builds on practices begun un- by decentralization and how to create an effec-
der such projects as the Junior Secondary tive teaching service within the context of
Education and Basic Education projects. autonomous district governments and of
school-based management systems. We pro-
Districts now are taking the initiative to focus pose a new teacher management framework
directly on teachers’ classroom behavior as a consisting of three teacher management sub-
way of improving school quality rather than systems: teachers’ employment and conditions
relying solely on physical inputs such as of service, teaching performance standards
school buildings. The teacher is seen as being and performance monitoring, and teachers’
central to this goal, and thus districts are put- professional development. These are dis-
ting a high priority on ensuring that they have cussed in the next three sections.
adequate skill levels. For example, some dis-
tricts have put a temporary embargo on fund- Transparent Employment Processes
ing physical infrastructure programs and and Conditions of Service
Advocates of decentralization contend that the
more that school managers and teachers can
50
Based on the pilot activities of the District Basic participate in making the decisions that affect
Education Project, Unit Facilitasi, the MoNE, and their schools, the more likely it will be that
the Basic Education Project. those decisions will meet the needs of their
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Education Sector Review Volume 2
students. Similarly, if school managers (as teachers and 6.2 percent are sports teachers.
opposed to higher-level education authorities) Head teachers, religion teachers, and sports
can make the decisions regarding the hiring teachers rarely have a full teaching load, re-
and firing of teachers in their schools, then gardless of the size of the school where they
they will be able to build a strong teaching are employed. When the student/teacher ratio
force. Some of the burning questions being is calculated using class teachers only, the na-
considered at all levels of government revolve tional ratio is 32:1, which is still reasonably
around who determines the number of teachers low compared with countries at a similar level
that are required, who determines how much of economic development.
teachers should be paid and why, and what
elements should comprise their pay. We have As in primary schools, the national stu-
two policy recommendations: (i) establishing dent/teacher ratios for junior secondary
a transparent teacher appointment process schools are 16:1 in public schools and 10:1 in
based on efficient deployment norms, school madrasahs.51 Junior secondary school teachers
vacancies, advertisement, selection criteria, expect to teach only one subject52 and, no mat-
contractual arrangements, and public informa- ter how small the school, each school expects
tion and (ii) establishing a compensation and to have at least 18 teachers. The mean en-
rewards system that is clear, transparent, and rollment size of public junior secondary
guided by considerations of teachers’ qualifi- schools (SMP) is 358 students, and in reli-
cations, responsibilities, and motivations for gious junior secondary schools (madrasah
continuous development. Implementing these tsanawiyah), 182 students. At the primary
policies would require a dramatic shift from a school level, 93.4 percent of teachers are na-
focus on numbers of schools to numbers of tional civil servants. The remainder are volun-
students and from teachers’ credentials to tary teachers (guru honor) or teachers
classroom practices. employed by the school. Compared with pri-
mary school teachers, only 62 percent of jun-
Student-based Teacher Allocation ior secondary school teachers are permanent
Formula civil servants (who, like primary school teach-
ers, are employed by the district govern-
Indonesia uses a formula for teacher allocation ments), which means that a much higher share
and deployment that is based on the number of of these teachers are employed by the schools
schools not on the number of students. As a or as contract teachers than in primary
result, nationally, average class sizes and the schools.
ratio of students to teachers are both low at all
levels of education, although there are differ- The introduction of decentralization has cre-
ences among districts and between schools in ated an opportunity to link teacher manage-
rural areas and those in urban areas. Based on ment to local education priorities. Past
the total number of teachers in primary policies on teacher recruitment and deploy-
schools (including head teachers, religion ment are being revisited as local governments
teachers, sports teachers, and class teachers), try to balance their allocations of resources to
the national student/teacher ratio is 22:1 in the budget for teachers’ salaries and to the
public primary schools (sekolah dasar) and
14:1 in religious primary schools (madrasah
ibtidaiyah). These low ratios are not an effi- 51
The MoRA has pointed out that many teachers in
cient use of resources, especially when there madrasahs are part-time teachers, and it is not clear
are few resources available for other quality that this estimate is based on full-time teaching
inputs (such as textbooks, library books, equivalents. The Madrasah Education System As-
equipment, and in-service training for teach- sessment (MESA) team is investigating this fur-
ers). However, in public primary schools, ther.
52
only 68.4 percent of teachers are class teach- Also, in junior secondary schools, there may be
ers. Of the remainder, 12.9 percent are religion differences in the availability of teachers of differ-
ent subjects.
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Chapter 4 Teacher Management System
budget for other quality inputs to schools. For students and total number of teachers to man-
many districts, the most difficult questions in- age). Planners might consider a sliding scale
volved in widening secondary school access so that smaller schools have more generous
and increasing efficiency at both the primary student/teacher ratios than larger schools. In
and secondary school levels are likely to be India, each community with 40 children is en-
about changing student/ teacher ratios (at the titled to one teacher per school, and schools
primary school level particularly) and recruit- are allowed one extra teacher with every 40
ing secondary school teachers who are quali- additional children enrolled.53 The principle
fied to teach more than one subject. behind a sliding scale is that small schools
where multi-grade teaching is the norm should
For example, at the primary school level, there have fewer students per class (and thus per
may be a justification for locating schools as teacher) than bigger schools where the teacher
close as possible to where children live. In only has to teach one grade level.
many districts, this would result in a large
number of small schools (sekolah kecil), espe- Teacher Surplus. Up until the 1990s, the
cially in the eastern islands, Papua, central Ka- struggle was to maintain parity between the
limantan, and other rural districts throughout supply of teachers and the growing numbers of
Indonesia. This would mean a policy change schools. At this juncture, however, it is neces-
in that teachers would have to be recruited on sary to re-examine the commonly held as-
the basis of a school’s enrollment rate rather sumption among policymakers that Indonesia
than its number of classes as is presently the suffers from a shortage of teachers. We con-
case. Small schools often require teachers tend that this assumption is false and that gaps
who are trained to teach multi-grade classes in coverage are due to inefficient teacher dis-
and need to be supported with learning materi- tribution rather than to a teacher shortage.
als that enable students to work in groups. This apparent teacher shortage is a result of
Therefore, there is likely to be a significant the allocation formula used to calculate the
need for incentive schemes and professional number of teachers required in each district.
support services to encourage teachers to ac- Indonesia’s annual population growth is 1.6
quire the necessary skills for teaching in small percent (compared with 1.1 percent in East
rural schools. Asia and the Pacific as a whole), and the birth
rate is falling. Of course, this does not mean
Many existing small junior secondary schools that there are no gaps in coverage in Indone-
could also be amalgamated to form more effi- sia, but the gaps in the primary sector are
cient units. If this is to happen, then junior problems of distribution rather than supply. In
secondary school teachers will need to be able many parts of the country, there are pockets of
to teach more than one subject, which has im- teacher shortages alongside pockets of sur-
plications for teacher training and teacher de- pluses. In one district in West Java, for exam-
velopment programs. ple, shortages range from an extreme of 173 in
an isolated rural school far from public trans-
We recommend that district planners consider
a new formula for calculating teacher re-
quirements. This formula should be based on 53
One proposal put forward in the past in Indone-
the number of students enrolled in a school sia (Somerset, 1997) laid out a sliding scale based
rather than the number of classes. In addition, on school enrollments for calculating the provision
all teachers (including sports and religion of teachers, which would be more efficient than the
teachers) should have a full teaching load and present formula. Small schools with fewer than
be included in the formula on that basis. Head 130 students would be eligible for one teacher for
teachers, especially in small schools, should every 30 children, larger schools with between 130
and 200 students would be eligible for one teacher
also be class teachers with amounts of non- for every 35 children enrolled, and schools with
teaching time to be calculated on the basis of over 200 students would be eligible for one teacher
the school’s size (that is, the total number of for every 40 children enrolled.
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Education Sector Review Volume 2
portation and other services to only 9.4 in a throughout the country. There was no short-
small school in a peri-urban area near the dis- age of applicants – over 400,000 people ap-
trict’s center. This is not uncommon as will plied. Teachers will be contracted to the
be seen in the discussion below. In the past, central government for four years and will re-
the MoNE assumed that all primary schools ceive Rp. 460,000 as monthly base salary from
needed one teacher per grade level plus two the central government, with any additional
additional full-time teachers, one for physical benefits expected to be funded by the district
education and health and one for religion as governments.
well as a non-teaching head teacher. The
MoNE continued to use this formula in its re- The role of the central government in recruit-
cent recruitment drive for contract teachers. ing teachers has become a sore point for many
This formula substantially overestimates the districts, especially those that are themselves
number of teachers needed in schools, espe- in the process of rationalizing schools and re-
cially in small schools. For example, in one examining the formula by which teachers are
school in a district in Java with a stu- appointed to schools (Weston, 2003). These
dent/teacher ratio of 9:4, the average class new teacher appointments have been spread
consists of only 11 children, with 66 pupils across districts but are not based on actual
distributed among only six classes (Weston, need. Seven districts in Java and Sulawesi
2003). This school currently has seven teach- that do not have large shortages of teachers are
ers, but according to the MoNE’s teacher for- all due to receive between 300 and 800 con-
mula, the school still “needs” an additional tract teachers, and another district, which can
teacher, which would give it a student/teacher only be described as having a potential surplus
ratio of 8:3. If the formula is applied to all of teachers, is to receive 399 contract teachers.
schools in the district and all these teachers
were supplied, the student/teacher ratio for Donor-funded education projects are also sup-
that district would drop to about 13:1, which is porting the salaries of contract teachers. Un-
even lower than in the most developed coun- der project-related agreements between district
tries of the world. governments and donors, contract teachers
hired under these projects are supposed to be
With high enrollment rates and an already employed by the districts directly while the
plentiful supply of teachers, Indonesia is in a donors guarantee their salaries. However, the
position to rationalize and upgrade the teach- central government has by-passed these ar-
ing force at the primary school level. This rangements by going ahead and recruiting
would allow districts to channel more of their contract teachers directly and paying them
resources into quality inputs and to fund the from the national budget.
salaries of the additional teachers that will be
required at the secondary level, which is The district governments surveyed by Weston
where the education system will be expanding (2003) would like teachers to be selected and
in the future. employed at the district or even the school
level, with the central government having no
Centrally Recruited Teachers. Despite the de- power to select or employ teachers. This is
centralization of education management to the compatible with the intention of Indonesia’s
district level, the MoNE is still funding and decentralization laws and the purposes of the
managing the appointment of contract teachers general allocation funding to districts. A new
across the country. The MoNE is testing ap- system is needed for selecting, appointing, and
plicants, determining who can be employed, transferring teachers based on student/ teacher
issuing their contracts, and paying their sala- enrollment needs and other criteria related to
ries. The MoNE has recruited 190,000 con- the need for multi-grade teaching in small
tract teachers in 2003 to be deployed across all schools. Also, the rules governing the em-
levels of the school system, 20 percent of ployment, deployment, and transfer of teach-
whom are to be employed in private schools ers need to be sufficiently flexible to allow
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Chapter 4 Teacher Management System
schools to hire teachers from outside their own cult” so that their teachers would be paid
districts and for teachers to be able to transfer more. If each district has the power to set top-
to other districts when appropriate. up allowances for its own schools in a trans-
parent way, then this would be an efficient
Performance-based Compensation and way to attract teachers to rural areas. Brazil
Rewards has tried such an approach, and the results are
included in Appendix 4.2 on relevant interna-
Designing teacher salaries and incentive struc- tional experience.
tures that attract the best and the brightest to
the teaching profession and retain them is a Policy decisions about teacher salaries also
complex enterprise. In Indonesia, low salaries need to be informed by research about the
are often seen as being an important contribut- most effective way to spend resources on edu-
ing factor to poor teacher performance, low cation inputs. Research on education expendi-
teacher morale, and the low quality of entrants ture allocations (Pritchett and Filmer, 1999)
into the teaching profession, but is this actu- has shown that the marginal benefits per dollar
ally so? Research from Indonesia indicates of inputs that are not associated with teachers’
that teacher salaries are not low compared salaries are commonly 10 to 100 times higher
with other professions and international re- than those of direct inputs to teachers’ welfare
search draws no correlation between teacher (that is, their salaries and incentives). This
salary increases and improvements in teaching implies that too much is generally spent on in-
performance. puts that provide direct benefits to educators
(like teachers’ wages) relative to the amount
We recommend that under decentralization, spent on other inputs that contribute directly to
teachers’ salary scales should have a national learning such as books or instructional materi-
base and then districts should be allowed to als.
top up salaries. This topping-up process
would need to be monitored by the central Recent research shows that most Indonesian
government to ensure that the DAU alloca- primary school teachers and junior secondary
tions to districts are made sufficiently pro- school teachers have earnings equivalent to or
poor so poorer districts can afford to add suf- higher than those of other workers with an
ficient financial incentives to retain teachers, equivalent level of education. Teachers with a
especially if many of these are posted to re- university degree (that is, mostly those who
mote schools. Care should be taken not to in- teach in senior secondary schools) may earn
crease teachers’ base salaries to unsustainable slightly less than other workers with an
levels. Where material incentives seem to be a equivalent level of education. However,
useful policy tool, it would be better to offer teachers earn more per hour than most other
bonuses to supplement teachers’ remuneration workers and have many more days off per
instead of altering their basic pay scales. Such year.
bonus systems could also be used to reward
teachers who take on extra responsibilities or An analysis of labor force data from 2000
duties, to attract better candidates to the teach- (Filmer, 2002) indicated that teachers with
ing profession, to encourage schools to im- qualifications below the diploma level (about
prove their performance, and/or to attract one-third of teachers) have monthly earnings
teachers to rural locations where there is a that are, on average, 22 percent higher than the
scarcity of applications for vacant teaching monthly earnings of other paid workers with
posts. Districts should be responsible for de- the same qualifications. The differential (in
termining appropriate allowances and top-ups terms of monthly salary) is smaller among
for those teachers who work in remote loca- those with a first or second level diploma and
tions or under difficult conditions. This should then becomes negative; in other words, the 10
not be done centrally because, if it were, then percent of teachers with a third level diploma
all schools would try to be classified as “diffi- and the 24 percent with a university degree
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Education Sector Review Volume 2
earn 18 and 37 percent less respectively than schooling earn 61 percent more per hour,
other paid workers with the same levels of teachers with first and second level diplomas
education. earn 32 percent more, and those with third
level diplomas earn 5 percent more than other
Hourly earnings follow a different profile workers with the same levels of schooling.
since teachers tend to work fewer hours but However, among workers with a university
are typically paid more per hour than other degree, teachers earn 19 percent less than oth-
workers. Teachers consistently work fewer ers.
hours than other workers, regardless of their
level of education. Teachers in the study re- Hence, after controlling for individual charac-
ported working about 34 hours per week while teristics and the respondents’ region of resi-
other paid workers with similar levels of edu- dence, the study found that teachers earn 7.9
cation reported working between 43 and 46 percent less per month than other paid work-
hours per week (see Table 4.2). Not only do ers, but at the same time they earn 18.9 per-
teachers work a shorter week than other paid cent more per hour than other workers. See
workers, but they also have more holidays per Table 4.2 for a comparison of the hours
year. Thus, teachers with senior secondary worked by different types of teachers.
Balitbang of time spent on instructional tasks
The above-mentioned labor force study also indicate that teachers may spend only about
noted regional differences in teachers’ earn- half of their time in school actually teaching.
ings. For example, in West Sumatra, the study
found that teachers earn 7.3 percent less per Table 4.2 Average Number of Hours Worked per
month than teachers in West Java (controlling Week
for age, gender, urban residence, and educa- Not a Teacher
tional attainment). Other workers in West Su- Teacher
matra, however, earn 32.3 percent more than All workers (SAKERNAS 34.0 (8.5)
workers in West Java do. Other places where 2000) 44.7 (13.1)
the differentials are large are Riau (20.7 per- Public school teachers (IFLS
cent), South Sumatra (19.3 percent), DKI Ja- 2000)
karta (28.2 percent), and Central and South Primary schools -- 33.6 (7.4)
Kalimantan (24.3 and 35.3 percent). These
Junior secondary schools -- 24.1 (7.9)
are provinces where teachers earn substan-
tially less than other workers. The same Private school teachers (IFLS
places have large differentials in terms of 2000)
hourly earnings as well. Conversely, there are Primary schools -- 29.6 (10.3)
two provinces where teachers earn substan- Junior secondary schools -- 21.8 (9.8)
tially more per month than other workers –
Source: Filmer, 2002.
NTB (35.7 percent) and Central Sulawesi
Notes: Data derived from SAKERNAS 2000 and from the
(16.3 percent). In the case of hourly earnings, Indonesia Family Life Survey (IFLS) 2000.
two additional provinces make the list –
Yogyakarta (20.9 percent) and West Kaliman-
To compensate for this, managers need to be
tan (20.6 percent).
concerned about teachers’ productivity, and
teachers need to be aware of the statutory
Indonesian primary teachers have salaries that
numbers of hours of instruction and school
are comparable to those paid to other workers
days in a year that they are obligated to work.
but are lower than the salaries paid to teachers
School managers should be able to hold
in other countries. However, this is partially
schools and teachers accountable for their
offset by the fact that they have smaller
productivity. For example, it is common in
classes, although they may work longer hours
many secondary schools for students to attend
than teachers in other East Asian countries
(OECD, 2002). However, studies by the
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Chapter 4 Teacher Management System
school only part-time in the last three weeks of money against their future earnings. The in-
the term and to spend the rest of that time on centive to meet these payments is, of course,
“home study” to prepare for the end-of-term the increased salary and benefits of the promo-
tests. After taking the test, the students might tion, but it also has to do with the increased
not be required to attend school for up to one opportunity to generate additional income
week while their teachers mark their test pa- from, for example, fees for after-school tuition
pers. In return, school managers should be and examinations and commissions on the sale
able to ensure that teachers are deployed effi- of textbooks and school uniforms. Any study
ciently so that no teacher is burdened with of teachers’ earnings and salaries should take
very large classes while others have small into account the high cost to teachers (and to
classes. District governments (and supporting the credibility of the whole education system)
institutions at the national level) need to con- of these kinds of “fees” and other rent-seeking
sider these points as they try to balance their activities.
expenditures on salaries with their expendi-
tures on other valuable and complementary Transparent teacher management systems
inputs to schools. need to be put in place, and mechanisms must
be developed to address grievances. Indonesia
The research findings reported in this section is not alone in recognizing the damage done to
raise questions about the relationship between the education system by poor teacher man-
teachers’ productivity and earnings. If the agement practices. Issues of transparency (in-
number of applicants for vacancies is anything formation, accountability, and incentives) and
to go by, the recent national recruiting exer- what rights teachers have to receive redress for
cise for contract teachers had a ratio of two their grievances about poor teacher manage-
applicants per vacancy, which seems to indi- ment processes are being faced by a number of
cate that teachers’ salaries are not a deterrent countries. At the UNESCO International
to applicants. Institute of Education Planning in Paris in
2002, meetings were held on the subject of
The Impact of Corrupt Practices on corruption in education in which several
Teachers and Teaching countries admitted to having this problem.
For example, in Mexico, the high cost to
What Indonesian teachers earn and what
society of corruption was estimated to be
wages the teachers actually receive are not al-
around 15 percent of GNP. In Ghana and
ways the same. The ESR focus groups in
Nigeria, corruption abounds in school admis-
2003 found that teachers face high transaction
sions, the payment of teachers’ salaries, and
costs in the form of bribes during the process
the leak of examination questions to students.
of, for example, being employed, transferred,
In South Africa and Pakistan, public resources
promoted, or selected for in-service training.
were being diverted to fictitious schools,
A recent small survey of 70 schools with 130
teachers, and pupils as a result of poor data
teachers in eight provinces (Keluarga Sekolah
monitoring and mis-reporting.
Indonesia, 2003) indicated that 80 percent of
teachers do not receive the full amount of their
Hong Kong has been addressing corruption in
pay and that 30 percent or more of their pay is
society in general. It established an anti-
unofficially deducted by the education office
corruption commission in 1973, which has a
or by their school principals beforehand.
sub-committee on education that deals, in par-
ticular with inappropriate allocations of funds
In some cases, teachers seeking to be pro-
and with teachers’ inadequate professional
moted to a head teacher position have had to
practices. Table 4.3 summarizes some of the
pay the equivalent of six to twelve months of
main ways in which corrupt practices in
their salary to the education officials responsi-
teacher management affect quality, equity, and
ble for appointments in order to win the post.
ethical standards in the education sector.
Many teachers use their savings or borrow this
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Education Sector Review Volume 2
Table 4.3 The Impact of Corrupt Practices within the Education Sector
Corrupt practices/ opportuni- Elements of education systems
Area of management involved ties for corrupt practices most affected
Recruitment, promotion, and ap- x Irregular recruitment and Quality
pointment of teachers (including unjustified allocations
systems of incentives) x Unjustified promotions
x Training and scholarship
allocation by criteria
based on passing
x Payment of salaries and
allocations to ghost teach-
ers
x Ignoring posting and
transfer criteria for teach-
ers
(arising from favoritism, nepo-
tism, bribes and pay-offs,
by-passing criteria)
Conduct of teachers x Teaching hours paid for as Access
opposed to the number Quality
really delivered Equity
x Ghost teachers Ethics
x Bribes and pay-offs (for
school entrance, for the
assessment of children,
etc)
x Use of fees requested from
pupils
Allocation of specific allowances x Favoritism Access
(compensatory measures, fellow- x Nepotism Equity
ships, subsidies to the private sec- x Bribes and pay-offs
tor etc) x By-passing criteria
Examinations and diplomas x Selling information Equity
x Favoritism Ethics
x Nepotism
x Bribes and pay-offs
x Academic fraud
Supply and distribution of equip- x Closed processes in public Equity
ment, food, and textbooks tendering
x Embezzlement
x By-passing criteria
Building of schools x Closed processes in public Access
tendering Equity
x Embezzlement
x School mapping
Source: Hallak and Poisson, 2002 (adapted).
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Chapter 4 Teacher Management System
Ibu Guru [the teacher’s real name has been changed] has been a primary school teacher for nine years. She
trained as a religion teacher. She was locally hired and is employed and paid directly by the school. Her
monthly pay is Rp. 100,000 and she teaches grade 1. She uses up-to-date pedagogic approaches and
achieves excellent results with her students. Her outstanding performance as a teacher came to the atten-
tion of education managers, and she was recruited to train teachers in other districts and provinces.
Most madrasahs and many primary and junior secondary schools rely on locally hired teachers who may be
paid in the range of Rp. 50,000– Rp. 125, 000 per month compared to the Rp. 500,000 and more per month
paid to teachers who are civil servants.
District managers (from 30 districts in 10 provinces) have acknowledged their reliance on locally hired
teachers and on the professionalism of many of these teachers. However, they have pointed out that, when
these teachers become members of the civil service, their performance often deteriorates.
The managers expressed the view that hiring new teachers on limited-term contracts would place them on a
similar basis to many private sector employees. Under-performing teachers could be more easily made re-
dundant – good teachers need never fear redundancy. It would also mean that teachers could be placed in
schools as and when they are needed and the level of their wages tied to working in a particular school.
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Chapter 4 Teacher Management System
A review of the literature indicates that a range of factors relating to teacher quality affects stu-
dent performance (see OECD, 2002). However, the literature also reveals the limitations of the
information provided by the more measurable characteristics of teachers. Researchers have often
found it hard to isolate the effect of characteristics such as knowledge of subject-matter,
qualifications, academic ability, pedagogical knowledge, or teaching experience on student
outcomes. The evidence predominantly shows that all of these teacher characteristics have a
positive impact on student learning but to a lesser extent than might have been expected. One
possible explanation is that research studies looking at individual school systems with relatively
uniform teacher characteristics have not been able to observe sufficient variation in such factors
to be able to measure the difference that they make. In addition, for most of these characteristics,
a “threshold effect” is likely to apply; teachers need a certain level of qualifications or experience
to be effective, but further attainments beyond those levels may have progressively less of an
impact on student performance.
A further possible explanation is that the teacher characteristics that are typically measured in re-
search studies may explain less of the variation in teacher quality than other characteristics that
are more difficult to measure. Such characteristics may include the ability to convey ideas in clear
and convincing ways, to work effectively with colleagues and the school community, to use a
wide range of teaching strategies appropriate for students’ needs, and enthusiasm, creativity, and
commitment to the students’ success. The literature reviewed in OECD (2001) includes recent
studies that point to the importance of such variables in influencing student learning. This sug-
gests that policymakers need to take account of the potentially substantial variation in quality that
exists among teachers whose easily measured characteristics are similar.
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Education Sector Review Volume 2
x Students of female teachers score higher than students of male teachers in both mathematics and sci-
ence.
x School autonomy in the purchase of supplies is associated with good academic performance by stu-
dents.
x Students in schools that were responsible for hiring their own teachers performed significantly better
in mathematics and science; thus school autonomy in personnel management seems highly conducive
to good student performance.
x When individual teachers can choose which teaching method to use on the basis of what they think
would be best for their students, this helps students to learn more. Positive effects on students’ test
scores were also observed when individual teachers could influence how the curriculum was taught
in the school and when teachers were responsible for the purchase of supplies.
x The longer the instruction time that students have in school, the better their academic performance.
x Centralized examinations (that is, tests and examinations set independently of the school) that make
students’ learning efforts more visible to external observers were shown to have a positive impact on
students’ educational achievement.
x The more time that class teachers spend outside the formal school day on preparing or grading their
students’ work, the higher their students’ test scores in mathematics.
x It seems that assigning homework less often but on a more ambitious scale is particularly conducive
to students’ learning.
performance (see Box 4.4). These characteristics to protect the interests of teachers. In Indonesia,
are a good place to start in devising ways to meas- the processes of democracy are still being devel-
ure how teachers perform in terms of meeting oped, and much of the standard-setting of the re-
teaching and learning standards. cent past has been centrist and from the top
down. Education stakeholders at the local level
The international literature provides several promis- have not yet had much opportunity to discuss,
ing models for setting standards and monitoring adapt, or reject the standards and performance
teacher performance. The best known of these, the monitoring guidelines that are being developed.
UK school inspection system (Ofsted, 2003), is A study (Avalos, 1998) reviewed the battle for
described in Appendix 4.2. Recently, Chile has been and against the performance evaluation of mu-
developing new models for evaluating teacher per- nicipal teachers in Chile. (A summary of the dif-
formance, although these have been complicated by ference between the proposed evaluation system
long negotiations between the municipalities that as it was set out in the government statutes and
employ teachers and the teachers’ unions that exist the final negotiated system is in Table 4.4.)
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Chapter 4 Teacher Management System
There are lessons from Chile that Indonesia Career-Long Professional Development
might want to consider. Avalos (1998) points
There have been a large number of teacher
out that the most important difference between
education and training projects in Indonesia
the two systems lies in the fact that the new
over the past 30 years (Sweeting, 2001).
system has a well-developed set of criteria or
standards against which to compare teaching These have aimed at revising the curriculum in
behavior, which the statutory system did not pre-service education programs, upgrading the
technical capacities of teacher educators and
have. These standards can also form the core
teacher education institutions, and developing
competencies for a career-long professional
in-service training and professional support
development system.
systems based on concepts of school cluster-
ing and teacher mentoring. However, there are
still many complaints about the fact that most
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Education Sector Review Volume 2
in-service training does not improve teacher ance in the classroom or add value to their
quality, which reinforces the public’s opinion students’ learning.
that the quality of most teachers in Indonesia
is low (Sweeting, 2000). Initial Preparation of Teachers
The minimum qualification for primary teach-
We recommend a new paradigm for teacher
ers was set in 1989 as a two-year post-
training in Indonesia, one that takes as its
secondary-school teaching diploma (DII). Yet
starting point the career-long professional de-
in 2002, only one-half of all primary school
velopment of teachers. This would cover
teachers in Indonesia held this certificate or a
teachers’ initial training, their induction into
higher qualification. For junior secondary
school life, their professional registration, and
schools, the minimum teaching qualification is
their continuing professional development.
a three-year education degree (S1), and in
This continuum of professional development
2002, only 50.7 percent of teachers held this
needs to be linked directly to the actual class-
or a higher qualification. Research consis-
rooms and schools in which teachers work.
tently indicates that the most successful
This means that colleges and universities need
teacher education programs require trainee
to be much more responsive to the demands of
teachers to spend a high proportion of their
schools and of the district governments that
time in teaching and other practical and intern-
employ teachers. They also need to be respon-
ship experiences in schools (see Box 4.5 be-
sive to the professional demands of teachers
low).
who wish to deepen their experience and
knowledge of teaching to add value to what
International research indicates that:
they do in classrooms and in collegial activi-
ties with their colleagues (for example, men-
toring newly licensed teachers). The notion of x The most competent teachers are
teacher preparation is now being redefined to those who have a good mastery of
include reflective teaching approaches and the subject to be taught and have
classroom-based action research collaboration also studied Education.
among teachers, effective communication, and x Teachers with more training in
other characteristics that contribute to lifelong teaching methodology are more ef-
professional development (see Appendix 4.1 fective than those with less.
for a fuller version of what teachers should x Teachers who have spent more
know and be able to do). time studying pedagogy are better
teachers, especially when it comes
While there is constant discussion about re- to encouraging higher-order think-
quiring higher levels of certification for teach- ing skills in their students and ca-
ers, there are issues that need to be addressed tering for their individual needs.
beforehand about the kind of teachers that x How well trainee teachers perform
schools need and the relationship between in well-assessed practice teaching
formal qualifications like the DII or S1 and the is the best predictor of their future
actual lives of teachers. These issues include success in the classroom.
how to organize learning in multi-grade
schools, what are the most appropriate meth- The main implication of these findings for ini-
ods for teaching literacy to young learners, tial teacher preparation and for continuing pro-
and how to approach teaching in multilingual fessional development programs is that
environments. There also needs to be more training institutions will need to send trainee
discussion about whether or not resources teachers to practice in schools in a wide range
spent on constantly upgrading teachers’ quali- of different environments.
fications will actually improve their perform-
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Chapter 4 Teacher Management System
Research on teacher education programs in the USA has shown that the most effective programs have these
characteristics:
x A common vision is expressed in the coursework and in the clinical experiences or practice teaching
sessions.
x They set well-defined standards of practice and performance.
x Graduates are expected to know content-specific pedagogy, child development, learning theory, and
student assessment methods.
x They provide extended clinical experiences (lasting a total of 30 weeks in a four-year degree pro-
gram).
x They have strong partnerships with universities and schools.
x They make extensive use of case methods, teacher research, performance assessments, and portfolio
evaluations.
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Chapter 4 Teacher Management System
Mexico’s Carrera Magisterial (CM) Program, first implemented in 1994, ties teachers’ compensation to their
professional development. Teachers who voluntarily join the program agree to participate in annual perform-
ance evaluations and to have their annual salary increases linked to the results of these evaluations. These per-
formance evaluations consist of the following components: teacher performance evaluations (composed of a
combination of self-assessments and peer reviews); an annual written examination of the teacher’s professional
skills; written student examinations; educational attainment; the completion of accredited courses to update
skills; and years of teaching experience.
Although the program is voluntary, the number of teachers enrolled since 1994 has increased substantially, be-
ginning with 38 percent of the total number of teachers and rising to 49 percent after just two years. Indeed,
the proportion of students whose teachers were enrolled in the program more than doubled during that period,
reaching around 25 percent of all students. In addition, in 1997, the percentage of all teaching positions that
were filled by teachers who were participating in the CM program was close to 50 percent. A recent study
found that students whose teachers are in the CM program have higher average test scores than students whose
teachers are not in the program. Thus, after 10 years, the CM program has already had a considerable impact
on the Mexican education system.
The existing credit point system that is used to Using Teacher Management Systems to
assess whether teachers are ready for promo- Achieve Education Goals
tion needs to be revamped to create more in- Educators in Indonesia probably already feel
centives for teachers to upgrade their skills that there is a need for a new paradigm for the
and update their knowledge on a regular basis. development of the teaching profession. Many
Also, universities and other education institu- elements of this new approach are in place or
tions need to be more responsive to teachers’ are being tried out in a number of project-
professional needs by providing them with related activities. However, developing an
short vacation courses and flexible modular overall framework that incorporates these ac-
courses that would allow them to deepen their tivities into a lifelong perspective on teachers’
knowledge and widen their experience without professional development should be a priority.
necessarily committing themselves to long-
term, full-time academic programs. Teachers’ Having effective teacher management systems
professional development programs should be in place in every school is essential for achiev-
linked to school and teacher performance ing Indonesia’s national education goals. The
monitoring. There is much work to be done in policy framework that we are proposing aims
this area, but there is also a lot of Indonesian to improve schools by creating a professional
experience to build on. Also, other countries, teaching service with the following character-
such as Mexico (see Box 4.6 below), have also istics: merit-based appointments, transfers,
been experimenting with tying teachers’ com- and promotions; school-based performance
pensation to their professional development evaluations; and career-long professional de-
and providing teachers with professional su- velopment. These characteristics mirror three
port. This professional support can consist of longer-term policy goals: (i) creating a teach-
peer mentoring within schools, opportunities ing service in which the professional life of
to work alongside experienced teachers in teachers is central to the management system
their own or other schools, visits to other good and in which schools select their own teachers
practice schools and classrooms, or bringing a in a transparent way; (ii) linking the monitor-
teacher-designated “expert” to the classroom ing of schools and teachers by adding per-
to encourage teachers to reflect on their teach- formance reviews as part of teachers’ career
ing behavior and to try new approaches. development; and (iii) developing the various
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Education Sector Review Volume 2
Table 4.5 Potential Policy Tools for Managing the Teaching Workforce
Demand-side tools Supply-side tools Matching process tools
Class size Attractiveness of the profession Bargaining mechanisms
Monetary incentives Set of mechanisms for bargain-
Teaching loads -relative salaries ing: setting of salaries, pay differ-
-career structure and salary scale entiation to account for shortages,
Required learning time for stu- -other (e.g. merit-based awards, opening of profession to interna-
dents signing bonuses, differentiated tional markets.
pay, housing subsidies, childcare,
Use of teaching assistants and income tax credits) Level of centralization of bar-
other support staff gaining
Non-monetary incentives Degree of autonomy of schools
Use of technology and distance -vacation time, flexibility to take regarding recruitment, selection
learning leave and assignment of teachers; and
-working conditions: opportuni- setting of incentive structure.
Structure of curriculum and edu- ties for collaboration and decision
cational programmers making, school safety and student Recruitment and selection
discipline, class size, working processes
Starting and ending age of com- loads, quality of facilities and in- Organization; definition of quali-
pulsory education structional materials fication requirements; delegation
of authority to recruit; select and
Academic standards defining re- Teacher education and certifi- assign teachers; methods for
quirements for graduation cation screening candidates; emergency
Teacher initial education and pro- recruitment programs.
fessional development: supply,
structure, content, and accredita-
tion of teacher education pro-
grams; incentives to engage in
teacher education; induction and
mentoring programs; provision of
professional development activi-
ties.
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Chapter 4 Teacher Management System
The most critical point in our proposals is the in putting in place such a teacher management
establishment of a separate teaching service. framework, we have given some examples in
This would need to be built up over time. It is the matrix below of appropriate policies to
also essential to examine how teacher salaries adopt, the kind of actions required to imple-
depend upon districts’ budgets and how this ment the policies, and some ideas about who
affects the degree to which schools can recruit should be responsible for implementing them.
teachers. To illustrate what might be involved
155
Education Sector Review Volume 2
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Education Sector Review Volume 2
Content knowledge:
x Understanding subject matter deeply and flexibly to help students to create cognitive maps, link
ideas, and address misconceptions
x Seeing how ideas connect across fields of knowledge and to life
x Making ideas accessible to others and understanding the perspective of the learner
Learner knowledge:
x Knowledge of child and adolescent development and how to support cognitive, social, physical, and
emotional growth, to interpret learners’ statements and actions, and to shape productive learning ex-
periences
x Understanding of and respect for differences in culture, family experience, forms of intelligence, and
approaches to learning and the ability to teach in a way that connects with students
x Inquiring sensitively, listening carefully, looking thoughtfully at student work, and structuring situa-
tions to allow students to express themselves
Motivating students:
x Understanding what individual students believe about themselves, what they care about, and how to
give them encouragement
Capacity to reflect:
x Assessing their own teaching practices and how to refine and improve them
x Continuously evaluating students’ progress and reshape lesson plans accordingly.
160
Chapter 4 Teacher Management System
161
Education Sector Review Volume 2
ating teachers than on their years of schooling, ensure that his or her students perform
training, and experience, since these inputs well academically. This is a measurable
were not significant in explaining variations in task – through student test scores, for
school outcomes. These findings are also example. However, another of their ob-
likely to apply to education in Indonesia jectives is to ensure that students are so-
(Kingdon, 1996). cially and emotionally well adjusted.
This objective is not easily measurable.
Kenya Therefore, if an incentive is based on the
measurable objective, teachers will tend
Kenya has pilot-tested a performance-based
to focus on that task above all others and
incentive system that would reward all teach-
may neglect the other non-measurable
ers in a given school based on improved stu-
but equally important tasks.
dent performance in grades four to eight in
that school. There were two ways in which x Fourth, teachers object to being judged
schools could distinguish themselves in this based solely on their students’ academic
performance-based scheme – either by having performance if they are teaching a diffi-
the highest test scores of all of the schools in cult or disadvantaged population, per-
their district or by having the most improved haps because the school is located in a
test scores of all of the schools in their district. poor community where student perform-
ance has historically been weak. In this
The pilot project set out to measure the impact case, it would not be fair to have teach-
and cost-effectiveness of this performance- ers in better-off communities judged by
based incentive system that rewarded all the same criteria as those teaching in
teachers in schools whose performance had disadvantaged communities.
improved. The program was designed to take x Fifth, basing teacher incentives on stu-
note of five important criticisms of perform- dents’ test scores can cause teachers to
ance-based incentive systems in which per- neglect or force out weaker students in
formance is judged by student outcomes: order to concentrate on those students
who will perform well on the tests
x The first objection is that teachers are (Glewwe et al, 2001).
not solely responsible for the academic
performance of their students. In order to Teacher Performance Standards
produce good student outcomes, teachers
in a school need to cooperate with each The United Kingdom
other, and it is important that they do so The United Kingdom (UK) school inspection
rather than competing against each other. system sets performance standards and, on
x The second objection to performance- school visits, its inspectors ask questions such
based incentives is that a teacher’s per- as: How high are standards in the school
formance is largely unobservable, and, (based on the school’s results and achieve-
even when it can be observed, it is diffi- ments)? How well are the pupils taught?
cult to verify objectively. What consti- How good are the curricular and other oppor-
tutes good performance by a teacher is tunities offered to pupils? How well does the
not simple or easily quantifiable; there- school care for its pupils? How well does the
fore it is difficult to compensate teachers school work in partnership with parents? How
based on their performance. well is the school led and managed? What
x The third difficulty in establishing per- should the school do to improve further? The
formance-based incentives is that a Office of Standards in Education (Ofsted) pre-
teacher’s job involves many different pares detailed inspection reports and sets pri-
tasks, some of which are easily measur- orities for school and teacher development
able and some of which are not. For in- programs. The key question asked in review-
stance, one objective of a teacher is to ing classroom teaching is: How well are pupils
162
Chapter 4 Teacher Management System
taught? The assessment is based on classroom quality of education. During the school
observations of teaching; interviews with par- observations conducted for the Indonesian
ents, teachers, school principals, and students; Primary Education Quality Improvement
and reviews of teachers’ and students’ portfo- Project, many management-related prob-
lios of work. The kind of suggestions that in-
lems appeared, such as frequent teacher
spectors make are reflected in this extract from
and student absenteeism, inefficient use of
a school report (available on the Ofsted web-
site, www.ofsted.gov.uk): instruction time, and under-qualified or
unmotivated teachers. The principals of
x Review the curriculum (as the project schools focused too much on
taught), ensuring that it has ap- administrative tasks (for example, keeping
propriate breadth and balance records of students’ test results and finan-
and that the required coverage is cial tasks) rather than on educational lead-
provided for subjects other than ership tasks. An evaluation of the project
the core subjects of English, as well as international research into edu-
mathematics, and science. cational effectiveness has shown that ef-
x Improve and broaden the range fective principals generally undertake the
of teaching approaches that are following activities: sitting in on class-
often adopted in the non-core
rooms to observe the quality of teaching;
subjects, particularly where
teachers feel constrained by the creating conditions for teachers to improve
detail of the lesson plans. their teaching skills; selecting high-quality
x Improve the quality of assess- teachers, guiding less able ones, and re-
ment in the non-core subjects. placing those who do not improve; rein-
x Give more attention to educating forcing teachers’ motivation; ensuring that
pupils for life in a multi-cultural school time is used efficiently; preventing
society. teacher and student absenteeism; control-
x Ensure that training is provided ling the implementation of the curriculum
for staff in child protection and in all grades; promoting an orderly and
in health and safety issues (Of- friendly school climate; and getting par-
sted, 2003). ents and the community involved effec-
tively in school matters. These aspects of
Indonesia effective educational leadership should be
included in management training for prin-
Management at the school level is the cipals, which will mean changing current
most important factor for improving the training methods and content(Van der
Werf et al, 2002).
163
Education Sector Review Volume 2
164
Report No. 29506
INDONESIA
EDUCATION IN INDONESIA:
MANAGING THE TRANSITION TO
DECENTRALIZATION
(In Three Volumes) Volume 3
STATISTICAL ANNEX
1
Table 1. Highest Level of Education, cont.
2
Table 2. Net and Gross Primary Enrollment Rates, by Gender
INDONESIA 91.38 91.53 92.05 92.11 92.13 92.45 92.65 92.75 107.31 106.67 107.95 107.22 108.03 107.30 105.98 105.98
Source: SUSENAS, several years
Note: Missing values due to civil unrest or governmental changes (as several provinces developed post 1999)
3
Table 3. Net and Gross Junior Secondary Enrollment Rates, by Gender
4
Table 4. Net and Gross Senior Secondary Enrollment Rates, by Gender
5
Table 5. Net and Gross Primary Enrollment Rates, by location
6
Table 6. Net and Gross Junior Secondary Enrollment Rates, by Location
7
Table 7. Net and Gross Senior Secondary Enrollment Rates, by Location
8
Table 8. Percent of Primary Students Enrolled, by Type of School
9
Table 9. Percent of Junior Secondary Students Enrolled, by Type of School
Junior Secondary School Students Enrolled Junior Secondary School Students Enrolled
Public School Private School Public Madrasah Private Madrasah
Province 1995 1998 2000 2002 1995 1998 2000 2002 1995 1998 2000 2002 1995 1998 2000 2002
Aceh 80.59 89.21 89.22 4.03 3.94 0.90 11.14 6.04 8.98 4.25 0.81 0.90
North Sumatera 54.36 53.81 59.13 58.62 33.02 37.08 31.37 31.60 2.67 1.45 1.92 1.79 9.95 7.66 7.58 7.99
West Sumatera 75.40 78.62 80.17 79.51 4.26 5.13 4.69 3.81 13.26 11.84 10.88 12.21 7.07 4.42 4.26 4.47
Riau 72.35 68.76 67.97 74.99 9.25 15.24 18.32 12.10 7.88 5.11 4.26 3.81 10.52 10.90 9.44 9.10
Jambi 76.09 74.22 72.13 70.08 8.27 8.42 7.63 10.24 9.77 13.54 12.52 10.80 5.87 3.83 7.72 8.89
South Sumatera 63.57 62.92 69.07 71.56 21.99 28.88 21.76 20.50 5.09 2.33 3.03 3.60 9.34 5.86 6.15 4.34
Bengkulu 90.36 91.83 89.53 87.41 3.16 4.10 5.42 4.31 4.51 2.61 4.13 6.09 1.97 1.45 0.92 2.20
Lampung 50.34 49.65 52.33 60.29 29.69 35.30 30.59 26.62 6.56 4.07 3.70 3.26 13.40 10.97 13.39 9.84
Bangka Belitung 71.11 19.90 0.79 8.20
Jakarta 64.00 63.03 65.57 64.20 27.65 32.32 31.35 32.13 2.96 0.55 0.98 1.27 5.39 4.11 2.11 2.41
West Java 62.78 61.94 65.14 66.04 19.64 23.54 20.61 21.05 6.55 2.75 3.05 3.12 11.03 11.77 11.20 9.78
Central Java 62.30 62.11 65.15 63.85 14.74 21.74 19.29 19.47 7.01 3.32 3.49 3.58 15.95 12.83 12.08 13.10
DI Yogyakarta 51.50 63.02 69.04 77.32 22.82 30.98 26.31 20.15 7.54 4.44 4.22 1.75 18.14 1.55 0.44 0.78
East Java 54.93 54.52 60.13 60.57 20.30 25.87 20.57 19.04 7.20 4.38 5.33 5.01 17.57 15.23 13.97 15.37
Banten 58.14 24.05 3.25 14.57
Bali 75.32 74.82 79.74 78.20 21.34 23.61 19.17 21.02 0.87 1.45 1.02 0.62 2.47 0.11 0.07 0.16
West Nusa Tenggara 65.96 70.80 72.21 76.12 4.17 3.49 2.96 4.85 6.64 4.36 3.58 5.10 23.23 21.36 21.24 13.93
East Nusa Tenggara 53.57 63.84 63.76 65.97 21.61 34.91 34.24 31.54 7.95 0.77 1.10 1.51 16.88 0.48 0.90 0.98
East Timor 84.77 84.00 6.69 16.00 3.62 0.00 4.92 0.00
West Kalimantan 67.62 65.61 61.95 69.52 21.07 24.29 27.80 23.43 4.68 2.81 4.78 1.68 6.63 7.29 5.46 5.38
Central Kalimantan 81.22 71.61 82.87 85.51 8.42 10.70 8.08 5.04 7.60 7.31 3.59 3.08 2.77 10.37 5.46 6.37
South Kalimantan 52.12 53.11 58.22 59.85 7.83 8.66 6.37 4.49 18.55 20.96 21.21 20.42 21.51 17.27 14.20 15.25
East Kalimantan 68.97 70.99 74.19 80.75 18.99 19.67 17.04 14.03 4.26 3.33 3.05 1.54 7.77 6.01 5.72 3.68
North Sulawesi 81.39 78.49 81.80 82.46 7.97 18.85 16.04 16.54 4.32 1.20 1.05 0.48 6.32 1.46 1.11 0.52
Central Sulawesi 75.55 83.21 83.79 84.48 8.34 6.33 5.61 6.92 5.19 3.68 4.13 3.65 10.92 6.79 6.47 4.95
South Sulawesi 76.27 80.59 83.04 85.35 9.42 11.43 9.33 8.48 7.07 3.17 2.88 2.35 7.24 4.82 4.75 3.82
Southeast Sulawesi 84.46 88.49 90.63 88.91 4.97 2.02 3.80 2.26 5.67 3.63 3.44 5.28 4.90 5.87 2.12 3.55
Gorontolo 91.01 0.00 5.85 3.14
Maluku 77.64 77.47 93.27 14.79 15.53 5.88 5.01 2.47 0.85 2.56 4.53 0.00
Irian Jaya 83.07 82.63 86.20 94.27 7.32 16.32 12.43 5.73 3.95 0.33 1.01 0.00 5.66 0.72 0.36 0.00
North Maluku 92.39 5.95 1.67 0.00
INDONESIA 63.37 63.54 66.29 67.05 18.42 22.99 20.22 19.55 6.46 3.69 3.91 3.84 11.76 9.77 9.58 9.56
Source: SUSENAS, several years
Note: Missing values due to civil unrest or governmental changes
10
Table 10. Percent of Senior Secondary Students Enrolled, by Type of School
11
Table 11. Adult Literacy Rates
12
Table 12. Primary School Classrooms and Teacher Profiles
13
Table 13. Teacher Profile in Junior Secondary Schools
14
Table 14. Teacher Profile in Senior Secondary Schools
15
Table 15. Test Scores of Junior Secondary Students
16
Table 16. Test Scores of Senior Secondary Students
17
Table 17. Average Monthly Household Income
(Rupiah)
18
Table 18. Education Expenditure as a Proportion of Total Household Expenditure
Province Mean Std dev Mean Std dev Mean Std dev Mean Std dev
Aceh 3.79 9.39 2.57 5.09 4.08 12.61
North Sumatera 4.37 9.23 3.46 7.48 2.82 7.08 2.24 4.96
West Sumatera 3.61 7.54 3.29 8.42 2.59 8.05 2.11 6.53
Riau 2.28 6.46 2.63 5.36 2.08 4.96 2.00 5.74
Jambi 2.81 8.07 2.37 5.36 2.00 6.89 1.51 4.71
South Sumatera 3.08 6.46 2.64 6.05 2.70 9.26 1.98 6.46
Bengkulu 2.98 6.48 2.99 8.88 2.52 7.82 2.04 6.61
Lampung 4.18 11.49 2.54 6.15 1.97 5.54 1.61 3.67
Bangka Belitung 1.31 2.84
Jakarta 6.17 13.60 7.34 18.57 4.86 10.87 2.91 5.52
West Java 3.99 9.48 3.41 9.42 2.43 6.66 1.80 5.25
Central Java 3.53 7.28 3.33 7.47 2.53 6.07 2.32 6.59
DI Yogyakarta 8.15 16.24 7.32 15.48 8.50 23.52 4.99 14.10
East Java 3.16 7.48 2.94 7.06 2.41 5.78 2.01 5.08
Banten 1.74 3.76
Bali 3.35 9.22 2.98 6.31 2.17 4.91 1.90 5.87
West Nusa Tenggara 2.58 5.76 1.67 4.17 1.68 4.80 1.12 3.17
East Nusa Tenggara 2.79 7.37 2.25 7.41 1.43 4.18 1.48 4.99
East Timor 1.53 3.73 1.40 3.29
West Kalimantan 2.20 4.92 1.97 4.70 1.86 4.91 1.31 4.19
Central Kalimantan 2.21 5.66 1.78 4.71 1.23 3.43 1.24 3.78
South Kalimantan 3.01 6.82 2.07 9.15 1.51 5.18 1.09 3.23
East Kalimantan 2.87 5.77 2.96 6.12 2.22 4.99 2.38 6.78
North Sulawesi 2.32 5.83 2.19 7.97 1.38 4.44 1.83 5.71
Central Sulawesi 2.43 7.78 2.35 5.21 1.61 5.96 1.16 4.72
South Sulawesi 3.38 8.70 2.56 6.20 1.79 6.34 1.72 4.76
Southeast Sulawesi 2.53 7.20 1.94 6.26 1.57 4.98 1.52 7.23
Gorontolo 0.99 2.30
Maluku 2.57 5.09 2.51 4.62 2.32 5.83
Irian Jaya 1.83 5.06 1.64 3.82 1.24 3.47 2.27 6.40
North Maluku 3.70 12.33
INDONESIA 3.25 7.71 2.85 7.06 2.38 6.67 2.02 5.86
Source: SUSENAS, several years
Note: Missing values due to civil unrest or governmental changes
19
Table 19. National Education Development Expenditure, 2001
Total Development
Province Expenditure Rp ('000,000) % of total
North Maluku 16,500 0.23%
Maluku 37,500 0.51%
East Kalimantan 47,000 0.64%
Bali 49,200 0.67%
Bengkulu 51,600 0.71%
Jambi 52,700 0.72%
West Nusa Tenggara 54,700 0.75%
Irian Jaya 59,900 0.82%
West Kalimantan 60,300 0.82%
East Nusa Tenggara 63,200 0.86%
Southeast Sulawesi 64,000 0.88%
Riau 76,600 1.05%
Lampung 80,100 1.10%
Central Sulawesi 89,300 1.22%
West Sumatera 95,200 1.30%
North Sulawesi 104,000 1.42%
South Sumatera 108,000 1.48%
DI Yogyakarta 127,000 1.74%
Aceh 136,000 1.86%
South Sulawesi 142,000 1.94%
Central Kalimantan 146,000 2.00%
North Sumatera 153,000 2.09%
Central Java 188,000 2.57%
North Kalimantan 192,000 2.63%
East Java 253,000 3.46%
West Java 442,000 6.05%
Jakarta 4,420,000 60.47%
INDONESIA 7,310,000 100%
Source: 2001 APBN
20
Table 20. Gross Regional Domestic Product at Current Market Prices, 1998-2000
1998 2000
GRDP GRDP per GRDP (Billion GRDP per
Province (Billion Rps) capita (Rp) % of total Rps) capita (Rp) % of total
Aceh 24,957 6,348,920 2.81% 28,626 7,282,293 2.45%
North Sumatera 50,706 4,352,575 5.70% 68,212 5,855,281 5.85%
West Sumatera 17,643 4,152,339 1.98% 22,368 5,264,383 1.92%
Riau 17,643 3,558,759 1.98% 55,430 11,180,752 4.75%
Jambi 42,838 17,746,783 4.82% 55,430 22,963,354 4.75%
South Sumatera 6,859 994,105 0.77% 9,061 1,313,250 0.78%
Bengkulu 33,072 21,099,480 3.72% 45,669 29,136,192 3.92%
Lampung 18,482 2,741,551 2.08% 23,253 3,449,264 1.99%
Jakarta 138,564 16,516,472 15.58% 188,036 22,413,407 16.12%
West Java 142,764 3,995,686 16.05% 181,630 5,083,469 15.57%
Central Java 84,610 2,709,346 9.51% 118,405 3,791,515 10.15%
DI Yogyakarta 9,864 3,159,242 1.11% 12,965 4,152,430 1.11%
East Java 135,753 3,902,783 15.26% 177,274 5,096,476 15.20%
Bali 13,526 4,292,385 1.52% 16,510 5,239,337 1.42%
West Nusa Tenggara 7,549 1,882,891 0.85% 11,937 2,977,357 1.02%
East Nusa Tenggara 4,868 1,231,694 0.55% 6,329 1,601,355 0.54%
West Kalimantan 14,635 3,627,735 1.65% 17,863 4,427,894 1.53%
Central Kalimantan 8,610 4,636,511 0.97% 10,871 5,854,066 0.93%
South Kalimantan 12,245 4,101,848 1.38% 17,688 5,925,152 1.52%
East Kalimantan 51,505 20,978,608 5.79% 72,178 29,398,970 6.19%
North Sulawesi 9,449 4,696,093 1.06% 11,762 5,845,640 1.01%
Central Sulawesi 6,630 2,988,593 0.75% 8,240 3,714,330 0.71%
South Sulawesi 21,951 2,723,575 2.47% 26,596 3,299,905 2.28%
Southeast Sulawesi 4,377 2,403,250 0.49% 5,730 3,146,132 0.49%
Maluku 5,226 4,334,990 0.59% 4,531 3,758,485 0.39%
Irian Jaya 19,053 8,578,823 2.14% 20,714 9,326,707 1.78%
INDONESIA 955,753 4,633,626 100% 1,290,684 6,257,419 100%
Source: Indonesian Bureau of Statistics, www.bps.go.id
Note: Discrepancies due to rounding
21
Table 21. Per Capita Provincial Revenues, 2001
Share non-tax
Own source from natural DAU 2001 +
Province revenue resources Share tax contingency
Aceh 23,000 276,000 28,000 538,000
North Sumatera 31,000 6,000 27,000 299,000
West Sumatera 31,000 8,000 20,000 442,000
Riau 66,000 863,000 88,000 479,000
Jambi 33,000 32,000 33,000 451,000
South Sumatera 22,000 97,000 24,000 247,000
Bengkulu 22,000 8,000 19,000 494,000
Lampung 14,000 32,000 13,000 272,000
Bangka Belitung 34,000 25,000 33,000 351,000
Jakarta 202,000 11,000 289,000 92,000
West Java 29,000 8,000 22,000 179,000
Central Java 27,000 2,000 12,000 266,000
DI Yogyakarta 45,000 1,000 20,000 366,000
East Java 31,000 5,000 21,000 265,000
Banten 38,000 1,000 33,000 158,000
Bali 215,000 2,000 33,000 426,000
West Nusa Tenggara 22,000 16,000 16,000 344,000
East Nusa Tenggara 14,000 3,000 14,000 577,000
West Kalimantan 23,000 10,000 21,000 421,000
Central Kalimantan 33,000 102,000 52,000 589,000
South Kalimantan 40,000 72,000 38,000 399,000
East Kalimantan 67,000 1,657,000 136,000 761,000
North Sulawesi 35,000 7,000 19,000 486,000
Central Sulawesi 38,000 11,000 18,000 549,000
South Sulawesi 31,000 9,000 23,000 377,000
Southeast Sulawesi 22,000 7,000 14,000 535,000
Gorontolo 20,000 6,000 14,000 448,000
Maluku 25,000 14,000 24,000 662,000
Irian Jaya 31,000 130,000 107,000 1,315,000
North Maluku 8,000 48,000 24,000 632,000
Source: MOF Budget Department, SIKD, and Staff Estimates
Hofman, Bert, Kai Kaiser, and Soraya Goga. 2003. Decentralizing Indonesia. The World Bank, Jakarta.
Note: Figures rounded to nearest 1,000
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