Improving Education Finance In Indonesia

This book results from a collaborative research project on the costs and financing of education in Indonesia. It focuses on all levels of education, and presents important data not only on public expenditures but also on household, community and other non-government expenditures. The analysis of private costs and financing includes focus on Islamic madrasahs and other religious institutions. The book is a seminal work which will be of value in the international framework as well as in the Indonesian one.

This report provides guidance on how Indonesia can consolidate gains in access to basic education and develop an education system that will support an economy in transition towards high-income status.

What are the current trends and main characteristics of public education spending in Indonesia? Is education spending insufficient? Are expenditures in education efficient and equitable? This study reports the first account of Indonesia's aggregated (national and sub-national) spending on education, as well as the economic composition of education spending and its breakdown by programs. It presents estimations of the expected (average) level of education spending for a country with its economic and social characteristics. This analysis sheds light on the efficiency and equity of education spending by presenting social rates of return by level of education, by assessing the adequacy of current teacher earnings relative to other paid workers and the distribution of teachers across urban, rural, and remote regions, and by identifying the main determinants of education enrollment. It concludes that the current challenges in Indonesia are no longer defined by the need of additional spending, but rather the need to improve the quality of education services, and to improve the efficiency of education expenditures by re-allocating teachers to undersupplied regions and re-adjusting the spending mix within and between education programs for future additional spending in the sector. The study finds that poverty and student-aged labor are also significant constraints to education enrollment, stressing the importance of policies aimed at addressing demand-side factors.

This book documents experimentation with various policy and governance approaches that produce structural differences in the composition and organisation of Asia’s higher education systems. In view of the wide variation in the public and private provision of higher education, it showcases how issues of access, equity and modes of participation are addressed, how institutional and programme quality are managed and how academic labour is treated and developed. The book both maps these differences and analyses the country-level dynamics, policy approaches and the problems faced by a variety of states in Asia in the race to develop competitive higher education systems. Focusing on the intersection of governance and higher education policy, it addresses the challenges facing higher education in Asia and the national responses of governments in terms of the organisation of the sector.

Globalization, Poverty, and Income Inequality examines the relationship between globalization and trade liberalization, and poverty and income inequality, using Indonesia as a case study. Contributors examine how advances in coffee certification, treatments for visual disabilities, and property rights, among other factors, have had both meritorious and deleterious effects on the local population. Ultimately, they describe an ambiguous relationship between trade liberalization and inequality, both of which can increase or decrease in proportion to one another depending on region and sector. This empirically driven work provides a nuanced view of the trade-poverty relationship, contributing balanced testimony to policy debates being held internationally.

This 2016 OECD Economic Survey of Indonesia examines recent economic developments, policies and prospects. The special chapters cover: Regional Development and Public Spending.