Estimating Corruption in Indonesia’s Education System: Evidence from the BOS Program* Notes on findings Daniel Suryadarma Research

School of Social Sciences, The Australian National University daniel.suryadarma@anu.edu.au 15 October 2008 I. Reason for choosing BOS to measure corruption in education a. BOS per student allocation for the 2005/2006 school year is Rp.235,000 and Rp.324,500 for primary and junior secondary school (PS and JSS) students, respectively. b. It is for every student in a school. Thus, if a school reported receiving less than this amount per student, there is leakage. II. Data source: Governance and Decentralization Survey 2 (GDS2) a. Interviewed school principals, school committees, and collected school secondary data. b. School principals and school committees are asked the amount of BOS received by the schools. c. School principals are asked the number of students receiving BOS. d. School secondary data contains information regarding the number of students in the 2005/2006 school year. e. So, there are two sources of information for the amount of BOS each school receives (school principal and school committee) and there are two sources of information on the number of BOS recipients (school principal and school secondary data). III. Sample description a. GDS2 visited 1251 schools. The following are dropped from the sample: 1 school was interviewed before May 2006; 23 schools did not receive BOS; and 9 observations do not have school identification. Thus, there are 1218 schools left. b. Out of 1218, principals of 1176 schools answered the amount of BOS received and number of BOS recipients; school committees of 846 schools answered the amount of BOS. In sum, 823 schools have BOS information from both sources. c. From the school secondary data, 1229 schools have greater than zero number of students in the 2005/2006 school year.
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These are very preliminary findings from a chapter in my dissertation.

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2) 443.8) Junior secondary school (N=230) BOS Amount Student size 116. such as the Ministry of Finance or Ministry of National Education (see Section VI. In economic terms.8) Notes: standard errors in parentheses. IV.0 (78. on the other hand.7 485. Looking at the table.7 (30. Source of information Principal School committee Secondary data Primary school (N=473) BOS Amount Student size 41.8 (258. I end up with 703 schools: 473 primary and 230 junior secondary schools. below).d.5% at the bottom).0 (80. Table A provides the mean BOS allocation per student based on the combination of information sources. V. where the differences in BOS amount and student size are 13 million Rupiah and 41 students respectively. Comparing the different sources of information.6) (280. Comparing different sources of information Limiting the sample to schools that have all four sources of information. it appears that the most meaningful differences are at the junior secondary level.6) 202.2 (128. Results I begin by calculating the amount of BOS received by each student in each school.5% at the top. using total BOS amount from school principals always yields a higher per student allocation than using school committee information. 2.8) 103. the large standard deviations mean that the differences are not statistically significant. given that enumerators record secondary data from school records. BOS amount in millions of rupiah It is unclear which source of BOS information is trustworthy. one would think that schools records are more reliable compared to the principal’s response. This is also the case 2 . holding the source of student size information constant. The table below shows the mean and standard deviation of BOS amount and student size from different sources of information.a.6) 39.9 (127. With regards to student size data. One way would be to get the information from a third. source.2) 214. sample limited to schools with non-missing values in all four sources of information. and more reliable. However.0 (29. it appears that school principals overstate BOS amount and understate student size. meanwhile. I remove 5% of the sample to avoid excessively large or small values (2.

it appears that regardless of the source of information on BOS amount.7 249.3 3 . BOS allocation per student is 235 thousand and 324. Table A.3 146 63. i. Schools experiencing leakage Source of Information BOS Amount Student Size Principal Principal Principal Secondary data School committee Principal School committee Secondary data Primary School (out of 473) N % 310 65.5 158 68.9 Principal Secondary data 196. Regardless of the source of information. especially when student size data is taken from school records. while the share is slightly lower among junior secondary schools.1 Junior Secondary School (out of 230) N % 141 61. between 61% and 74%. It always yields a higher per student allocation compared to using school secondary data.6 360 76. meanwhile.e. Table B shows that between 66 and 76 out of 100 primary schools experience leakage.5 390. shows the share of schools that experienced leakage.5 thousand Rupiah for primary and junior secondary schools respectively. Table B.6 School committee Principal 240.6 Note: According to the law.7 171 74. Interestingly. Looking at primary schools.6 329 69.2 338. their BOS allocation per student is less than the stipulated by regulations. Given that BOS allocation per student is supposed to be 235 and 324. holding source of BOS amount constant. using principal information on student size results in a per student allocation that is higher than stipulated by regulations and vice versa when using information on student size from school secondary data. Table B.7 231.7 School committee Secondary data 193.when I use student size information from school principals. while it ranges from 232 thousand Rupiah to 391 thousand Rupiah for junior secondary schools. Table A indicates the existence of leakage. the mean BOS allocation per student ranges from 194 thousand Rupiah to 266 thousand Rupiah depending on source of information.5 thousand Rupiah for primary and junior secondary levels.5 329 69. Mean BOS received per student (in thousands of Rupiah) Junior Secondary Source of Information Primary School School BOS Amount Student Size Principal Principal 266.

6 (58. while the leakage is higher in junior secondary schools. Table C shows the mean leakage in primary and junior secondary schools. corruption in the BOS program appears to be much less seriously. the large standard deviation indicates that some schools experience much worse leakage.0) Principal Secondary data 16. where the average leakage is 87%.1 (44.2) (251. Unsurprisingly given the results in Table A. In addition. Gain access to either Ministry of Finance or Ministry of National Education. values are calculated using the following formula: (1 (Actual BOS received /BOS that should have been received))*100. Comparing this to results from Uganda (Reinikka and Svensson. Gain access to the schools’ names from GDS2 confidential data.Although thought provoking.4 (130. Determining who took the money 4 . around 16% to 18% of BOS money did not reach primary schools. However. between 23% and 29%. When calculated using student size data from school records.3 23. 2004). ii. Source of Information BOS Amount Student Size Principal Principal VI.6 28.2 -4.5 (288.8) (37.3) School committee Secondary data 17. an average leakage of 20% is still substantial. negative values mean the amount of actual BOS received is larger than the amount that should have been received. given the large resources allocated to this program. Table C. Mean leakage Junior Secondary Primary School School % % -13. to check the actual amount of money sent to the GDS2 respondent schools.3) (31. Ways to improve and future work a.7) (394. meanwhile.1) School committee Principal -2. Table B does not show the extent of BOS allocation that is actually missing from the schools. b. the mean share of money missing is negative when calculated using student size information from principals.4) Notes: standar deviations in parentheses. In order to get an indication of the extent of corruption. More data i.4 -20.

education district office. Randomising BOS recipient (education provincial office. school principal. ii. Given the randomised nature of the above potential study. 5 .i. one could also compare usage of the BOS funds. school committee) and revisiting the schools at the end of the school year to ask how much they received.

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