PRELIMINARY AND INCOMPLETE FOR DISCUSSION ONLY Local level governance and schooling in decentralizing Indonesia Vivi Alatas Deon Filmer The World Bank February 2004 Introduction In 2000 Indonesia embarked on a broad agenda of decentralization—affecting resource mobilization and resource deployment in a number of sectors. In particular, responsibility for the delivery of all basic education services was transferred from formerly centralized and deconcentrated structures to the district (Kabupaten) level.1 Importantly, districts are now responsible for determining the level of recurrent and investment expenditures to allocate to education. Through its effects on the level and allocation of resources, as well as the newly devolved responsibilities for managing schools and administering education, decentralization will likely affect the quantity and quality of education services delivered. Two fears stand out. First, that faced with tradeoffs between sectors districts will spend only minimal amounts on education—in the extreme funding only civil service salaries— with potentially dire consequences for the quality of education. Second, that due to their limited resources, poor districts will suffer even more than the average leading to an increase in between-district inequality. Decentralization was added on top of an education system that was already under stress. Despite the large gains in enrollment at the primary level—in Indonesia over 90 percent of children of primary school age are in school—the quality of education at that level, as well as transition rates to, and the quality of learning in, secondary schools have remained a constant problem.2 For example in the last available international comparison, the Third International Mathematics and Science Study 1999 which compares test scores on similar test in many countries Indonesia performed significantly worse than its neighbors (e.g. Singapore, Malaysia, Thailand). Moreover, the legacy of the economic crisis of the late-1990s has squeezed the resources that the central government could allocate to schooling. Scores on the national standardized test (NEM) are typically considered to be unacceptable at levels below 6. Figure 1 illustrates the distribution of average provincial scores: no province has an average of over 6—with some at the extreme low average of less than 5. This paper studies the cross-sectional association between school quality and indicators of local level governance, community characteristics, school characteristics— including aspects of school management—as well as teacher and student characteristics. The purpose is to provide a sense of how learning outcomes might change with emerging variability in districts and school administration and management. As new data are compiled over time, the ultimate goal is to supplemented the analysis with time-series information so that inferences about the impact of decentralization can be drawn from actual changes over time rather than predicted from variation across space. 1 2 “Deconcentrated” administration is that done through local branches of centralized line ministries. See Moegiadi and Suryadi (); World Bank (2003). The paper is organized in 3 main sections. A first section reviews some of the background theoretical and empirical findings around decentralization and schooling outcomes—ending with the main research questions for this paper. A second section describes the research design, empirical model, and data used. A third section describes and discusses empirical results. A final section concludes. I. Research on decentralization Both centralized (e.g. France, Japan) and decentralized (United States, New Zealand) school systems around the world have been able to deliver education opportunities for their students. There is general recognition that decentralization has potential benefits but that implementation and the kinds of accountability that it actually produces yields few fast rules for the impact in any given situation (see for example Winkler 1993). Potential benefits of decentralization Decentralization brings with it substantial promise. Traditional economic models emphasize the ability of local level governments to more closely reflect the demands of local populations—a particularly important factor in a large and heterogeneous country such as Indonesia. As local level democratic institutions take hold, voters are argued to be able to better have their preferences reflected in the resource allocations made by local level governments. In addition, local level governments are potentially more accountable to local level populations since the latter are arguably in a better position to monitor and sanction the former. Another strand emphasizes the potential for efficiency gains if local decisionmaking entities, such as local governments or schools, have the flexibility to combine inputs in ways that maximize outcomes subject to local conditions, thereby achieving maximum impact for fixed (and limited) budgets. That is, imposing a one-size-fits-all solution through central decision-making is unlikely to be the most efficient approach if constraints differ across districts. If decentralization results in flexibility then districts will be able to adapt and be more efficient. In addition, local level innovation is likely to lead to successes that can be replicated, and failures that can be dropped—promoting efficiency across districts in the long run. As long as districts feel under some pressure—for example because people or capital is mobile, or because they feel embarrassed by being upstaged by their neighbors—competition between districts will act to promote local governments to try and find ways to do things better. Decentralization may also bring increased flexibility in school-level decisionmaking as well as a renewed sense of ownership (and participation in school affairs) by parents and local communities. Both of these have been associated with improved outcomes in prior empirical research. Risks of decentralization But decentralization brings with it many risks as well. There are four main fears that are frequently heard in the Indonesian context. Central government is asserted to prioritize basic education more than local governments. The fear is that local governments will allocate only the minimum amount of resources to education that they can get away with—perhaps only enough to cover mandatory expenditures such as civil-servant (teacher) salaries— with resulting negative consequences on the quality of education. Local elites will be less responsive to local populations than central elites— perhaps because of historical local level inequalities—which will result in local “capture”. The fear is that even if resources are allocated to education, local elites will redirect them for their own profit, effectively starving the education sector of those resources. The lack of experience in education administration (or administration more generally) on the part of local government staff is feared to result in bad choices, again resulting in poor quality. Regional variation in endowments will lead to increasing disparities in outcomes. Some districts have access to substantial natural resources and can tap these to mobilize funds for all sectors, including education. Poor areas will be unable to do so, and without compensating transfers from central government will be at a serious disadvantage which will get passed down through generations. Selected past empirical findings There are few studies of the impact of decentralization per se on education outcomes. Galiani and Schargrodsky (2001) find that decentralization of secondary schools in Argentina improved the performance of public school students test scores on average. However, the effect was positive in “fiscally ordered” provinces but negative in provinces that had run significant deficits. Typically, however, the argument is sequential—if decentralization leads to X, and if we find that X leads to better outcomes then decentralization has the potential to improve education. James, King, and Suryadi (1996) find that in Indonesia the greater the extent of local finance (i.e. user charges) the better school performance. This is interpreted as evidence that greater sense of ownership, greater ability to hold schools managers accountable, that is greater parental voice can yield good outcomes. Jimenez and Paqueo (1996) find similar results for the Philippines. Jimenez and Sawada (1999) find that schools that are managed by parents in El Salvador, as a part of a government program called Educo that contracted with parent associations, achieve similar results to ones that are traditionally managed—but with fewer resources and in more remote and poor areas. The results are consistent with the greater role that parents take in monitoring the behavior of teachers (e.g. teacher absenteeism is lower with more parent supervision). King and Özler (2000) find that more de facto autonomy in Nicaraguan schools as a result of an education reform was associated with better test scores. Interestingly they find that schools that are formally designated as being “autonomous” are no better than other schools—it is only for the measure of actually more autonomously made decisions that a difference is found. Eskeland and Filmer (2002) find that in Argentina school autonomy and parent participation raise student test scores for a given level of inputs in a multiplicative way. Autonomy has a direct effect on learning (but not for very low levels of participation), while participation affects learning only through the mediation of the effect of autonomy. Di Gropello (2002) finds that in Chile, pedagogical and curricular decentralization to schools (i.e. school autonomy) and the level of school involvement in local financing decisions both had significantly positive impacts on educational achievement. In addition, some municipal level wage incentives that decentralization enabled positively affected educational achievement. On the other hand, measures of municipal administrative autonomy and local financial decentralization were found to be negative Research questions for this paper Given the limited past literature on the impact of decentralization on education outcomes, and even on the proximate determinants (such as autonomy and participation) this paper proposes to assess the role of decentralization in Indonesia on learning outcomes. Because of the limited time that decentralization has actually been implemented in Indonesia, and the obvious lags involved in both the realization and measurement of impacts, this paper is an interim assessment of decentralization so far. The ultimate goals of the study are to answer the following questions. How has the impact of the devolution of administration and financing authority differed across local governments? How have local level changes in funding and organization of the education sector—controlling for local characteristics—interacted with changing governance and capacity to determine outcomes? In sum, has decentralization helped or hurt learning outcomes? What are the main channels of change? The approach used in the paper is to explore indicators that are likely to be affected by the move to greater decentralization of the administration and management of education—including both decentralization across administrative regions as well as increased school autonomy as part of the move to school-based management. The selection of indicators is guided by the main accountability relationships outlined in the World Development Report 2004: Making Services Work for Poor People: the voice relationship between service beneficiaries and the politicians/policymakers that determine the level and allocation of resources; the compact relationship (made up of financing, delegation, monitoring) between politicians/policymakers and the providers who actually deliver services; and the client power relationship between the users of services and providers. All of these are likely to be affected by decentralization. The paper therefore uses baseline cross-sectional variation to explore existing patterns relating variability in learning outcomes to local level funding, governance and management indicators, school level characteristics, parent involvement, as well as local level characteristics. These patterns, it is hoped, will form baseline information that can be updated over time. Once new data have been collected the study will be able to rely on changes over time to identify impacts rather than use cross-sectional data to explore them. II. Research Design, Empirical Model and Data The change in the law and structures accompanying decentralization are being implemented equally across all local governments in Indonesia which rules out a research strategy on a counterfactual of what would have happened in the absence of decentralization. The approach used in this paper is therefore to focus on how the devolution of administration and financing authority has played itself out differently in different local governments, how this has manifested itself in variation in a variety of education inputs, and how this variation subsequently affected outcomes. Empirical specification The education outcome yit of school i observed at time t is assumed to depend on the observed student and school characteristics (Z); the school’s budget (X1); a set of measures of the accountability relationships between client, local governments and schools (X2) which may affect outcomes directly, or though affecting the level and use of resources; and unobserved characteristics , . These are related to outcomes through the “returns” to characteristics in terms of education outcomes () yit Y ( X 1it , X 2it , Z it , it ; t ) (1) Given the cross-sectional data available at this point, equation (1) will be the model of interest. As data are collected at multiple points in time, changes can be decomposed into changes in each of the elements (X1, X2, Z, ). This is an item for future work though. Data Data can be combined from a variety of sources for this analysis. The main novel source are data collected through the recently fielded Governance and Decentralization Survey (GDS). These data are combined with other sources, typically collected through Indonesia’s regular statistical system such as regional national accounts data, data from a census of schools, and regular, detailed household surveys. The specific datasets used for this study are: Governance and Decentralization Survey data The GDS is being conducted by The World Bank together with CPPS-GMU (Centre of Public and Policy Studies-Gajah Mada University). It covers 177 local governments (51 percent of the 348 kabupaten/kotamadya existing in 2002), thereby providing one of the most extensive resources on governance and decentralization. GDS was conducted in 2002 to assess the quality of governance and service delivery just before and right after the 2001 decentralization. The data cover various thematic areas: participation, effectiveness and efficiency, transparency, equity, rule of law, responsiveness, accountability and conflict management. The GDS includes instruments given to local administration officers (including the education Dinas office) as well to school head teachers allowing for analysis of variables derived from both levels. GDS data do not provide details on school characteristics such as teachers background, financial resources, achievement scores, nor do they have information on student and parent characteristics. The data can be linked, however, at the school level to data from the Ministry of National Education’s (MONE) school census, and at the regional and sub-regional level to data from household surveys conducted by the Central Bureau of Statistics (BPS) and national fiscal data. School Census data from the Ministry of National Education The MONE conducts an annual census-type survey distributed to each district and to every primary, junior and senior secondary school, approximately 176,000 primary schools and 33,000 junior and senior secondary schools.3 The detailed questionnaire covers items such as revenues, expenditure, school resources, teacher background, as well as learning outcomes as measured by school average results on national standardized tests (NEM). The school census is administered as a mail-in survey with schools required to fill in the form and return copies to the local ministry representatives, who send raw and processed data up the bureaucratic channels. The most complete data currently available to us are data from the secondary level from 1999 which cover almost 15,000 schools. Data from the primary level are available only in aggregated form and lend themselves to only a limited set of analyses. Data from subsequent years — post-decentralization — suffer from severe non-response. It appears that without the formal centralized structures, schools no longer had the incentive to complete their forms.4 Regional budget data (APBD) The Regional Fiscal Information System (SIKD) of the Minsitry of Finance’s Directorate General of Center-Regional Fiscal Balance (DJ-PKPD) collects recent annual and quarterly budget data for Indonesia’s regions (30 provinces and currently 348 local governments). We use the data from 1994 to 1999 to construct measures of development (investment) and routine (operational) public expenditures. Data from the Household Socio-Economic Survey (SUSENAS) Indonesia’s Central Bureau of Statistics (BPS) annually collects the SUSENAS a nationally representative household survey covering a variety of social and economic themes.5 Since 1993 sample sizes were increased to over over 200,000 households annually in order to provide statistics representative at the district level (Surbakti 1995). We use SUSENAS 1999 to construct district (Kabupaten) average per capita household expenditure and the variability of that indicator (as measured by the standard deviation). Combining the data: The World Development Report 2004 framework The recent World Development Report on Making Services Work for Poor People provides a framework for analyzing how decentralization might play itself out and ultimately affect learning outcomes. The framework is structured around four 3 An estimated 42% of junior and senior secondary schools are public, while an estimated 84% of primary schools are classified as public schools. 4 After decentralization, the return rate significantly declined to roughly 26 percent: only around 11,000 out of 33,000 junior and senior secondary surveys were returned for the 2000/01 school year. Even the offering of a block grant incentive of 10 million rupiah to each school that returns the questionnaire, failed to increase the return rate. If the situation does not improve with time, the lack of this data source will be a serious impediment to future analyses of the impact of decentralization on education. 5 For more about SUSENAS refer to “Indonesia’s National Socio-Economic Survey after Thirty Years of Development”, BPS, 1994 relationship of accountability: Voice, Compacts, Management and Client Power. The indicators used in the empirical specification are organized around these relationships.6 Voice is defined as the ability of citizens to hold politicians and policy makers accountable for mobilizing and allocating resources, and ultimately for performance. When citizen voice with respect to services is weak (either because voice is ineffective or because the political process focuses purely on ideology and not on the quality of services) then services such as education suffer—often becoming the currency of political patronage. That is, rather than being managed for performance, they are managed to extract rents for politicians and those connected to them.7 To examine the extent of voice and the link between client and policy makers, we use the following set of indicators: District level Number of meeting between government and the NGOs The extent of community complaints through NGOs about education services The extent of frequency education problem published in local newspapers Per capita average education development expenditure during the period 1994 to 1999 School level Shares of school income from local government The data suggest relatively weak voice channels. About 60 percent of NGOs said that they had never received any complaint from communities about education services.8 About 60 percent of media outlets described the frequency of coverage of education problems as “low to moderate”. Of course these could be driven by a general satisfaction with the provision of education—an interpretation at odds with the indicators of education quality, as well as any discussion with a concerned citizen. Local governments, at the time of the survey, were minimally involved in the financing of education. The 1999 data show that the share of school income from local government is on average less than 0.1 percent for Junior high school and about 0.15 percent for senior high schools. Clearly local governments had not seen it as their role to finance secondary education prior to decentralization, raising fears about their readiness to take on the responsibility with decentralization. Compacts relate to the extent to which responsibilities and objectives are clearly communicated to schools, and the ability of policymakers to track progress and assess performance—and hold providers accountable for that performance. The basic 6 The cross-sectional variation in the pre-decentralization setting is what this paper analyzes . When the next round of data are available we will be able to compare the changes that occur on those four accountability relationships and assess how these changes affect outcomes. 7 The recent debates and demonstration of National Education System Law illustrate this point. 8 Tables with summary statistics on these, and subsequent, indicators are in the Appendix. decentralization laws were vague and created many ambiguities.9 To examine the extent of the compact link between policy makers and providers, we use the following set of indicators: District and School level The number of times school was invited to attend meetings with local education administrators (Education Dinas). School level The fact that a head teacher was himself involved in setting the vision and mission of a school. The average number of meetings between local government administrators and school held in a year is on the order of once a month (around 11 times a year). Of course this is a crude measure of the interaction between policymakers and providers, if for no other reason than the quality of these meetings can be highly variable. More than 70 percent of head teachers report themselves as being involved in establishing the school’s vision and mission. Having a clear vision and mission is of course just one part of clarity in objectives. Management is the set of actions and incentives that create effective frontline providers. It involves drawing in the right people, equipping them with the right knowledge, giving them the right incentives, and choosing the right mix of complementary inputs (that is the full set of proximate determinants of outcomes). To examine the extent of management capabilities we use the following sets of proxies: School level The extent of autonomy of schools in decision making such as hiring and firing staff, general school-based management, budget allocation, and curriculum and its local content, Proximate determinants of schooling production function such as expenditure per pupil, student teacher ratios, teaching material resources, teachers background. Almost 90 percent of secondary level head teachers report being involved in decisionmaking regarding disciplining teachers. On the other hand, only about 40 percent report being involved in recruitment and promotion of teachers. Likewise, less than half claim involvement in decisions regarding the allocation of the education budget, and the procurement of books and instructional tools. A common problem faced in education management is that teacher salaries crowd out all other inputs. Teachers salary absorb about 60 percent of a secondary school’s overall budget, with an additional 12 percent allocated for officer salary. This set of issues has been highlighted as a particular area of concern in the World Bank’s recent assessment of the education sector (Education Sector Review, 2003). 9 Client power relates to the ability of the beneficiaries of services—students and their parents—in holding the school and school system accountable. The long route of accountability, that is accountability from beneficiaries to policymakers to providers, often breaks down. Directly involving clients in monitoring and disciplining providers can be a way of overcoming this breakdown. To explore the ability of clients to hold schools accountable we use the following set of proxies: School level Number of Parent Teacher Association (PTA) meetings during last year Involvement of PTA in decision making such as budget allocation, curriculum implementation, teacher discipline and school based management Share of school income from parent contributions When asked directly, PTA representatives typically report that their involvement is mainly in setting PTA fees, and in helping to collect those fees. These groups, by all accounts, play only a minimal role in helping to monitor school activities. Nevertheless, they are the only formal body representing parents to interact with the school on a regular basis. The average share of income raised from parent contributions is around 20 percent— much higher than what they get from any other source other than central government. III. Empirical Results There are two main specifications used to explore the cross-sectional data: First: an unconditioned estimation of the relationship between budget, accountability mechanisms and results on the standardized exams test. The model includes all the indicators of voice, compact, management and client power described above. In addition, household survey data are used to derive the level and variability in district household per capita expenditures. School characteristics such as teacher background and proximate determinants— which might be functions of budgets and accountability—are excluded from this basic specification. Second: an augmented version that is closer to what is typically estimated in the “education production function” literature. To the basic set, this specification adds the usual proximate determinants such as class size, teachers education and experience, and indicators of school infrastructure. Each specification is estimated on two samples. The first sample is the set of schools that can be matched between the GDS and School Census. Many of the variables—in particular those collected from the head teacher—are defined at the school level in this sample. The sample consists of about 140 junior secondary and 120 senior secondary schools. The second sample consists of all the schools in the districts in which the GDS was implemented. For this specification, all school level information collected from the GDS is averaged at the district level, and interpreted as an indicator for all schools in that district. This sample consists of about 3,300 junior secondary schools and about 680 senior secondary schools. Results from the matched samples The sample sizes in the matched sample are small, which makes it hard to identify effects. Indeed, almost none of the proxies used to describe the four accountability relationships yield statistically significant coefficients. For junior secondary schools, only two statistically significant results emerge from the augmented models. More community complaints through NGOs are associated with more test scores—suggesting a positive link between voice and learning. Head teacher involvement in setting the school vision and mission is also associated with higher test scores—suggesting that a clarity in objectives contributes to more learning. For senior secondary schools the estimates are even weaker. Only one variable is statistically significant—more school expenditures per student are associated with more learning. The effect operates through observed characteristics as it disappears in the augmented specification—that is after controlling for teacher characteristics, school infrastructure and so on. Interpreting the results from the matched sample is problematic. When the variables from the GDS are removed from the analysis (results not shown here) the coefficients on the other variables in the specification change substantially. Clearly the GDS sample (the matched sample) is not representing the distribution of the population of schools suggesting that the sample needs to be enlarged if national representation is being sought.10 Results from the unmatched samples Voice The unmatched data—which assume that the GDS indicators are indicative of district averages—yield more compelling findings on the indicators of accountability. More NGO involvement—measured by the number of meetings between NGOs and local government as well as the use of NGOs to channel complaints about education services— 10 In addition, with a substantial number of coefficients estimated at least 5 percent are going to be determined statistically significant (at the 95 percent confidence level) even when they are not. The three significant findings discussed above may therefore be spurious. is associated with higher test scores (the latter is insignificant at the senior secondary level). While information is hypothesized to increase accountability—and ultimately learning—more media publication of problems in the education sector is associated with lower test scores. Of course this result could be driven by reverse causation: that is lower test scores prompting more negative stories in the media (future work will need to explore this issue). The share of school income from local government is not associated with higher test scores at the junior secondary level—perhaps not surprising given the overall low level that these resources play. At the senior secondary level, a relatively higher share of local government resources appear to positively affect effectiveness in the use of inputs: the variable is statistically significant and positive in the augmented model. Compact Clarity of the schools objectives—as measured by the head teacher’s involvement in setting the school’s vision and mission—is positively associated with learning outcomes. The other indicator of compact—meetings between local government education administrators and head teachers—is not associated with higher test scores. As mentioned before, however, the quality of those meetings might be so low as to not be of much value to promoting accountability. Management Some of the results on the extent of school autonomy are compelling. Greater head teacher involvement in teacher recruitment and in school based management is consistently associated with better test scores. However, their involvement in curriculum, and even budget allocation, decisions are negatively associated with learning. In addition, involvement in teacher discipline is negatively associated with test scores (although this may be influenced by reverse causation whereby worse discipline— associated with worse test scores—requires greater head-teacher oversight and involvement). Client Power In general the data are consistent with client power remaining a weak force in Indonesian schools. The involvement of Parent Teacher Associations in teaching tools procurement and in curriculum are associated with higher test scores in junior secondary schools—but none of the other indicators are (teacher discipline, school based management, textbooks, …) and none are significant at the senior secondary level. While James and others (1996) found that schools that relied heavily on parental (or other local sources) to be more efficient, our results indicate that higher share of school income from parent contributions are negatively correlated with scores (again, this could be because of reverse causation). Proximate determinants While the focus of this paper is not on the proximate determinants of increased test scores, the third and fourth columns of Tables 1 and 2 report specifications that include a set of teacher and school characteristics. The messages are similar to those in other papers on education production functions: Student characteristics explain most of the variation in learning outcomes. The lowest primary leavers exam score accepted (a measure of student quality at entry) is the only variable that is significantly associated with current test scores in all the specifications for junior high schools (matched, unmatched, basic or augmented). There is no significant relationship between teacher salary and achievement score. Rural areas lag behind urban areas. However, after controlling for teacher and school characteristics and other proximate determinants the difference becomes small (and in some cases insignificant). Schools in which teachers have more experience tend to have higher test scores, as do those where more teachers hold a sarjana degree. More student per teacher (and larger class sizes) appear to be negatively associated with test scores, but the statistical significance of this result is not robust. Conclusions and Further Studies Decentralization can result in both good or bad outcomes for education—on both theoretical and empirical grounds. If decentralization exacerbates the limited capacity of (now) local governments to set up clear accountability targets for schools—backed by adequate funding—and to monitor and hold schools accountable for those targets then it is likely to result in worse learning outcomes. If, at the same time, students and their parents are not wiling or able to get involved and hold schools accountable, again learning outcomes should not be expected to improve. And if (now) local politicians do not listen to the voices of the citizens they represent—especially the poor—then one should not expect decentralization to result in a better, and more pro-poor, allocation of expenditures. Because of the limited time that decentralization has actually been implemented in Indonesia, and the obvious lags involved in both the realization and measurement of impacts, this paper is an interim assessment of the cross-sectional association between some of the indicators that one might expect decentralization to affect and test scores. The preliminary data analysis suggests that some of the indicators of voice and compact are associated with higher test scores, that client power is weak and unable to elicit quality from providers, and that financial resources are not strongly associated with learning outcomes. To be able to evaluate the relationship between local government and schooling outcomes in a decentralizing setting, we can not overemphasize the importance of the availability of complete and extensive data that allows schools to be tracked before and after the change in regulations. In addition, sufficient sample sizes are necessary to detect impacts. References Di Gropello, Emanula. 2002. “An Assessment of the Impact of Decentralization on the Quality of Education in Chile.” Economists Forum Presentation Paper. Processed. http://econ.worldbank.org/files/24684_DiGropello_chapter.pdf Filmer, Deon, and Gunnar Eskeland. 2002. “Autonomy, Participation, and Learning in Argentine Schools: Findings and Their Implications for Decentralization.” World Bank Policy Research Working Paper No. 2766. http://econ.worldbank.org/files/3617_wps2766.pdf Galiani, Sebastián, and Ernesto Schargrodsky. 2001. “Evaluating the Impact of School Decentralization on Education Quality.” Universidad de San Andrés and Universidad Torcuato Di Tella. Processed. http://www.utdt.edu/departamentos/empresarial/cif/pdfs-wp/wpcif-072001.pdf Hannaway, Jane, and Martin Carnoy, eds. 1993. Decentralization and School Improvement: Can We Fulfill the Promise? San Francisco: Jossey-Bass. James, Estelle, Elizabeth M. King, and Ace Suryadi. 1996. “Finance, Management, and costs of Public and Private Schools in Indonesia.” Economics of Education Review 15(4):387–98. Jimenez, Emmanuel, and Vincente Paqueo. 1996. “Do Local Contributions Affect the Efficiency of Public Primary Schools?” Economics of Education Review 15(4):377–86. Jimenez, Emmanuel, and Yasu Sawada. 1999. “Do Community-Managed Schools Work? An Evaluation of El Salvador’s EDUCO Program.” World Bank Economic Review 13(3): 415–41. King, Elizabeth M. and Berk Özler. 2000. “What’s Decentralization Got To Do With Learning? Endogenous School Quality and Student Performance in Nicaragua.” Development Research Group, World Bank, Washington, D.C. Processed. Pritchett, Lant, and Deon Filmer. 1998. “What Education Production Functions Really Show: A Positive Theory of Education Expenditures.” Economics of Education Review 18: 223–39. Winkler, Donald R. 1993. “Fiscal Decentralization and Accountability in Education: Experience in Four Countries.” In Jane Hannaway and Martin Carnoy, eds., Decentralization and School Improvement: can we fulfill the promise? San Francisco: Jossey-Bass. Figure 1. Average Standardized Exam Scores by Provinces Mean 5.5-5.8 5.5 5.8 5.2-5.5 5.2 .5 to5 4 (7 4.9-5.2 46 .9 5 to4.2 6 (6 4.6-4.9 41 .6 .9 ) 8 to 1 Not in8 (5 )(7 4Notodata Sample)) (1) Source: Ministry of National Education data, 1999. Table 1 Correlates of the log of test scores (NEM): Junior Secondary Schools Basic Specification Matched Sample Voice: # Loc.gov.meet NGO # community complain about edu.service published education problem during the last year Per capita routine expenditure devoted for teacher salary 94-99 Per capita education expenditure headmaster: involved in setting vision and mission Management: Inv. in recruitment decision Inv. in budget allocation Inv. in curriculum Inv. in teacher discipline Inv. in school based management Expenditures per pupil Getting DBO Client Power: bp3 member: involved in recruitment decision bp3 member: involved in BP3 decision bp3 member: involved in decision on budget allocation of education bp3 member: involved in curriculum bp3 member: involved in setting vision and mission bp3 member: involved in books procurement decision Bp3member: involved in tools procurement bp3 member: involved in decision on teacher discipline role PTA inv. in school based mng. bp3 member: involved in decision on socialization of Gov.'s program # of PTA meetings Share of income from parents contribution Augmented Specification Matched Sample Unmatched Sample -0.00173 (0.98) 0.07806 (1.25) -0.10846 (1.81) 0.00146 (1.44) 0.00224 (0.42) 0.00081 (2.20)* 0.04195 (3.30)** -0.03858 (2.77)** -0.00012 (0.58) 0.00008 (0.09) -0.02735 (0.31) -0.00011 (0.06) 0.13213 (2.14)* 0.02563 (0.42) 0.00056 (0.53) 0.00267 (0.51) 0.00037 (1.04) 0.04453 (3.61)** -0.02675 (1.98)* -0.00052 (2.49)* -0.00006 (0.07) 0.03732 (0.45) 0.00007 (0.13) 0.02006 (0.61) 0.00043 (1.33) 0.02370 (1.29) -0.00021 (0.39) 0.07148 (2.16)* 0.00044 (1.40) 0.04236 (2.36)* -0.00600 (0.35) -0.00740 (0.34) -0.02721 (1.15) 0.00919 (0.29) -0.03285 (1.17) 0.00000 (1.57) 0.00183 (0.10) 0.04116 (4.80)** -0.04977 (4.60)** 0.00426 (0.38) -0.04993 (2.94)** 0.03968 (2.93)** 0.00000 (0.54) 0.00206 (0.67) -0.00998 (0.61) 0.00015 (0.01) -0.02889 (1.21) -0.03317 (1.05) 0.00273 (0.09) 0.00000 (1.49) -0.00393 (0.23) 0.03761 (4.55)** -0.05597 (5.32)** -0.00234 (0.22) -0.04488 (2.72)** 0.01947 (1.47) -0.00000 (2.76)** 0.00435 (1.47) -0.03663 (1.15) -0.02839 (1.17) 0.01094 0.01764 (1.08) -0.02928 (2.30)* -0.00741 -0.04898 (1.61) -0.01676 (0.71) 0.00497 0.03043 (1.94) -0.02717 (2.19)* -0.00703 (0.43) 0.00858 (0.37) 0.01090 (0.56) -0.02024 (0.88) 0.00876 (0.43) -0.03577 (1.65) 0.01039 (0.53) -0.00274 (0.61) 0.03854 (3.22)** -0.01150 (1.18) 0.00728 (0.56) 0.07887 (7.01)** -0.01229 (1.19) -0.05205 (5.28)** -0.00203 (0.19) 0.02514 (1.15) -0.00653 (0.32) -0.00825 (0.38) 0.00144 (0.07) -0.01905 (0.91) 0.00319 (0.17) -0.01364 (0.60) 0.04183 (3.62)** -0.01294 (1.38) 0.00566 (0.45) 0.07290 (6.73)** -0.00531 (0.53) -0.05570 (5.79)** -0.01419 (0.15) 0.00216 (0.47) -0.08855 (1.36) (0.21) 0.00064 (0.26) -0.08154 (8.93)** (0.75) 0.00076 (0.18) -0.09519 (1.29) (1.51) 0.00009 (0.04) -0.03099 (3.23)** Share of income from local government Compact: # times invited by Dinas Unmatched Sample …continued Table 1 continued Student Characteristics: Lowest National Exams test score accepted Scholarship for the poor Geographic Locations: Rural area Java & Bali Sumatera Kalimantan Sulawesi Average Expenditure per capita in the Kabupaten Standard Deviation of expenditure per capita in the Kabupaten Per capita routine expenditure 94-99 Basic Specification Matched Sample Unmatched Sample Augmented Specification Matched Sample Unmatched Sample 0.00298 (3.62)** 0.06206 (1.77) 0.00118 (9.04)** 0.05414 (3.26)** 0.00307 (3.65)** 0.05264 (1.60) 0.00091 (7.13)** 0.02622 (1.63) -0.07546 (4.94)** 0.05169 (1.77) -0.05627 (1.85) -0.11456 (3.06)** 0.03181 (1.06) 0.00000 (1.98)* -0.00000 (0.10) -0.00139 (1.43) -0.03126 (6.97)** -0.00331 (0.42) -0.04509 (5.93)** -0.08812 (9.28)** 0.04601 (6.02)** 0.00000 (2.65)** 0.00000 (0.10) -0.00005 (0.27) -0.03598 (1.98) 0.01344 (0.44) -0.06077 (2.14)* -0.10780 (3.05)** 0.01970 (0.65) 0.00000 (1.42) -0.00000 (0.67) -0.00069 (0.69) -0.01035 (2.29)* -0.00995 (1.30) -0.04042 (5.49)** -0.08789 (9.48)** 0.03751 (5.00)** 0.00000 (1.78) -0.00000 (1.16) 0.00025 (1.38) -0.00208 (1.46) -0.00274 (0.07) 0.00164 (1.21) -0.00482 (0.41) 0.00099 (0.85) 0.00922 (2.99)** 0.00521 (0.12) 0.00935 (2.91)** -0.00000 (0.97) 0.00013 (0.42) 0.00034 (0.04) 0.00070 (2.97)** -0.00068 (0.39) 0.00032 (1.08) 0.00089 (1.82) -0.00690 (0.69) 0.00605 (12.20)** 0.00000 (1.01) 0.00006 (0.09) 0.00202 (0.83) 0.00267 (1.45) 0.04904 (1.80) -0.00320 (0.10) 0.04165 (2.57)* -0.03990 (0.91) -0.07901 (2.21)* -0.00267 (1.71) -0.00014 (0.34) 0.00922 (2.99)** 1.36218 (11.54)** 140 0.74 -0.00012 (1.71) -0.00165 (4.55)** 0.00239 (5.42)** 0.00044 (0.12) 0.00110 (0.26) 0.00414 (1.42) -0.01168 (2.28)* -0.00675 (1.15) -0.00014 (0.72) -0.00003 (0.39) 0.00089 (1.82) 1.67841 (85.49)** 3218 0.35 Teacher Background: # of teachers with diploma 1-2 # of teachers with master/doctoral # of teachers with s1 from ikip # of teachers with s1 from non ikip # of teachers with diploma 3-4 Additional books per student Average hours of trainings Average length of teacher's exp. Average teacher salary Other Proximate Determinants Class size Pupil teacher ratio # of computer Dummy having laboratory facilities Dummy having library Dummy having photocopy machine Dummy having typewriters Proportion class in bad condition Student books per student Text books per teacher Additional books per student Constant Observations R-squared Absolute value of t-statistics in parentheses * significant at 5% level; ** significant at 1% level 1.63446 (20.81)** 143 0.60 1.68741 (94.65)** 3292 0.28 Table 2 Correlates of the log of test scores (NEM): Senior Secondary Schools Basic Specification Augmented Specification Matched Sample Unmatched Sample Matched Sample Unmatched Sample Voice: # Loc.gov.meet NGO 0.00512 (1.39) -0.17213 (1.22) 0.04100 (0.30) 0.00055 (0.32) 0.00498 (0.69) 1.53298 (1.40) 0.00362 (1.97)* 0.00326 (0.05) -0.04817 (0.63) 0.00116 (1.06) 0.00720 (1.48) 1.08208 (1.39) 0.00366 (1.01) -0.16950 (1.17) 0.01798 (0.14) 0.00329 (1.88) -0.00202 (0.30) 1.00543 (0.91) 0.00349 (1.99)* 0.06609 (0.97) -0.07437 (1.00) 0.00023 (0.22) 0.00420 (0.89) 1.57744 (2.15)* 0.00190 (1.22) 0.01530 (0.27) 0.00141 (0.83) 0.18165 (2.01)* 0.00175 (1.14) -0.02968 (0.50) 0.00184 (1.14) 0.24622 (2.83)** 0.01601 (0.37) -0.01697 (0.40) 0.03779 (1.00) -0.04564 (0.81) -0.01972 (0.34) 0.00000 (3.91)** -0.02273 (0.65) 0.17330 (3.77)** -0.04129 (0.72) -0.10883 (1.89) -0.25959 (3.08)** -0.02066 (0.28) 0.00000 (2.29)* -0.00157 (0.10) 0.01950 (0.46) -0.03226 (0.76) 0.02752 (0.75) -0.06855 (1.20) 0.01468 (0.25) 0.00000 (0.86) 0.00019 (0.01) 0.18847 (4.18)** -0.10358 (1.87) -0.15657 (2.81)** -0.33286 (3.99)** 0.05344 (0.75) 0.00000 (1.35) 0.01149 (0.76) -0.02704 (0.41) Bp3 member: involved in setting BP3 fee 0.02462 (0.49) Bp3 member: involved in decision on budget allocation of education 0.08099 (1.74) Bp3 member: involved in curriculum 0.13980 (2.23)* Bp3 member: involved in setting vision and mission -0.01225 (0.28) Bp3 member: involved in books procurement decision 0.00967 (0.18) Bp3 member: involved in tools procurement decision -0.03653 (0.84) Bp3 member: involved in decision on teacher discipline role -0.03719 (0.70) BP3 inv. in school based management -0.06247 (1.35) Bp3 member: involved in decision on socialization of Gov.'s program 0.01611 (0.38) # of PTA meetings 0.00242 (0.22) Share of income from parents contribution -0.09204 (0.72) -0.07565 (0.89) 0.08866 (1.37) 0.07052 (1.06) 0.09287 (1.43) -0.04671 (0.91) 0.09912 (1.36) 0.01210 (0.20) -0.09213 (1.72) -0.12709 (2.32)* 0.11544 (2.30)* 0.01490 (1.24) -0.15280 (3.15)** 0.00212 (0.03) -0.04139 (0.76) 0.05336 (1.10) 0.09415 (1.44) -0.00987 (0.21) 0.06424 (1.12) 0.02777 (0.63) -0.08518 (1.66) 0.00628 (0.13) 0.02804 (0.66) 0.00184 (0.18) 0.02115 (0.16) -0.08237 (1.00) 0.07575 (1.21) 0.08158 (1.27) 0.09830 (1.54) -0.01693 (0.35) 0.05785 (0.81) 0.01842 (0.31) -0.06416 (1.23) -0.19685 (3.73)** 0.10723 (2.24)* 0.01321 (1.14) -0.04352 (0.88) # community complain about edu.service Published education problem during the last year Per capita routine expenditure devoted for teacher salary 94-99 Per capita education development expenditure Share of income from local government Compact: # times invited by Dinas headmaster: involved in setting vision and mission Management: Inv. In recruitment decision Inv. In budget allocation Inv. In curriculum Inv. In teacher discipline Inv. in school based management Expenditures per pupil Getting DBO Client Power: Bp3 member: involved in recruitment decision …continued Table 2 Continued Basic Specification Augmented Specification Matched Sample Unmatched Sample Matched Sample Unmatched Sample Student Characteristics: Lowest National Exams test score accepted Scholarship for the poor Geographic Location: Rural area Java & Bali Sumatera Kalimantan Sulawesi Average per capita expenditure in the Kabupaten Standard deviation of per capita expenditure Per capita routine expenditure 94-99 0.00105 (0.82) -0.13244 (1.70) 0.00157 (2.43)* 0.00498 (0.06) -0.00017 (0.12) -0.06816 (0.92) 0.00087 (1.39) -0.00484 (0.06) -0.08015 (2.38)* 0.11993 (1.52) -0.02318 (0.33) -0.14677 (1.73) 0.08323 (1.04) -0.00000 (0.71) 0.00000 (1.56) -0.00136 (0.93) -0.07631 (4.08)** -0.13593 (3.28)** -0.23163 (5.65)** -0.33928 (6.76)** -0.01191 (0.28) 0.00000 (0.68) 0.00000 (1.33) -0.00155 (1.60) -0.00154 (0.04) 0.04738 (0.52) -0.00946 (0.12) -0.11616 (1.23) 0.02901 (0.34) 0.00000 (0.22) -0.00000 (0.46) -0.00199 (1.34) -0.01322 (0.70) -0.17129 (4.19)** -0.21084 (5.27)** -0.28187 (5.65)** 0.00879 (0.20) -0.00000 (0.39) 0.00000 (1.60) -0.00068 (0.75) 0.01311 (0.63) 0.07345 (1.83) 0.00514 (2.42)* 0.02518 (1.76) -0.00033 (0.13) 0.04227 (0.46) 0.01980 (2.73)** 0.00000 (0.44) 0.00165 (0.27) 0.02269 (0.78) 0.00406 (5.43)** -0.00087 (0.19) 0.00223 (1.66) 0.00495 (0.12) 0.01388 (4.26)** -0.00000 (1.92) -0.00429 (1.93) 0.00528 (0.69) 0.00087 (0.37) 0.09316 (1.14) 0.06397 (0.82) -0.03302 (0.83) -0.25855 (2.97)** -0.05989 (0.71) -0.00242 (0.61) -0.00165 (0.65) -0.00548 (0.62) 1.38369 (5.42)** 116 0.77 -0.00025 (0.43) 0.00123 (0.47) 0.00247 (1.90) -0.00918 (0.46) -0.01035 (0.53) -0.02074 (1.32) -0.00343 (0.10) -0.02116 (0.52) 0.00053 (0.42) 0.00090 (1.40) -0.00165 (0.60) 1.30611 (11.93)** 665 0.44 Teacher Background: # of teachers with diploma 1-2 # of teachers with master/doctoral # of teachers with s1 from ikip # of teachers with s1 from non ikip # of teachers with diploma 3-4 Average hours of trainings Average length of teacher's exp. Average teacher salary Other Proximate Determinants Class size Pupil teacher ratio # of computer Dummy having laboratory facilities Dummy having library Dummy having photocopy machine Dummy having typewriters Proportion class in bad condition Student books per student Text books per teacher Additional books per student Constant Observations R-squared Absolute value of t-statistics in parentheses * significant at 5% level; ** significant at 1% level 1.46697 (8.65)** 122 0.57 1.49642 (16.30)** 683 0.33 Appendix Tables Table 1a. Junior High School : Student's Scores Bahasa and Sastra Indonesia Bahasa Indonesia English Biology Physics IPA SLTP Chemistry Economics IPS SLTP History and Culture Mathematic PPKN Mean Standard Deviation 5.82 6.09 5.66 5.14 4.84 4.81 3.80 5.15 5.46 5.93 5.71 6.52 0.67 0.63 0.67 0.65 0.77 0.74 1.01 0.68 0.58 0.65 0.63 0.62 Table 1b. Senior High School : Student's Scores Mean Standard Deviation IPA: Bahasa Indonesia English Biology Physics Chemistry Mathematic PPKN 5.80 4.66 4.39 3.61 4.70 3.67 5.75 0.80 1.45 0.97 1.09 1.36 1.31 0.80 IPS: Bahasa Indonesia English Economics Sociology Tata Negara Math PPKN 5.35 4.01 4.20 4.88 4.79 3.17 5.46 0.95 1.44 1.16 1.00 1.03 1.24 0.90 Language: Other foreign language Indonesian and Literary Indonesian English History and Culture Mathematic PPKN 5.70 5.58 5.31 5.00 5.23 3.26 5.62 1.49 0.79 1.10 1.30 0.97 1.20 0.83 Table 2. Teacher Characteristics Junior High School Senior High School Average length of teacher's experience 11.15 [5.77] 10.51 [5.00] Average hours of teacher's trainings 0.06 [0.14] 0.08 [0.17] Number of teachers with diploma 1-2 6.47 [5.67] 0.42 [1.18] Number of teachers with diploma 3-4 6.27 [5.31] 10.11 [8.63] Number of teachers with S1 from IKIP 10.35 [7.83] 27.90 [15.31] Number of teachers with S1 from non IKIP 0.26 [0.79] 0.58 [1.65] Number of teachers with master/doctoral 0.02 [0.13] 0.09 [0.39] 4,554,503 [2,797,112] 5,167,276 [2,715,436] Average of teacher's salary in education year 1999/2000 (in Rupiah) Note: Number in bracket are standard deviation. Table 3. Schools Infrastructure Junior High School Senior High School Total teacher 29.20 [15.02] 39.15 [17.87] Pupil and teacher ratio 17.50 [6.77] 15.74 [4.51] Class size 43.30 [28.81] 44.48 [20.33] Proportion class in bad condition 12.64% [0.23] 9.07% [0.20] Has Laboratory 57.88% [49.38%] 70.89% [45.44%] Has Computer 36.14% [48.04%] 92.20% [26.82%] Note: Number in bracket are standard deviation. Table 4. Voice: Media Involvement Mean Published education problem during the last year Publication influences community Publication influences government No. Observation Source: GDS-1 Note: Refer to GDS-Media questionnaire, page 3 and page 7, variable; MGP1f, MGR3, MGR4. 0.583 0.714 0.757 176 Table 5. Voice: Non-Government Organizations Mean # of meeting between Government and Community 6.65 # of meeting between Government and the NGOs 5.29 # of NGO's participation in policy formulation of Local government 2.66 # of NGO's using aspiration facility of Local Government 4.58 Community complain to NGO about education service 0.52 NGO tells community's complain to Local Government 0.70 Local Government respons to community's complaint 0.68 Local regulation for Education 0.29 NGO's opinion about Local regulation of Education 0.64 Interest on community needs from: - Community leaders 0.66 - University students 0.70 - NGOs 0.73 Source: GDS-1 Note: Refer to GDS-NGO questionnaire, page 3, 7-9 variable; LGP1-LGP4, LGR2, LGR2a, LGR6b, LGR7b, LGR8e-f Table 6. Participation Headmaster in Decision Making Primary Headmaster Junior Senior Recruitment and promotion for teacher and administration 35.98% staff 45.20% 42.61% BP3 fee 60.62% 68.36% 68.75% Education budget allocation 33.71% 36.72% 36.93% Curriculum and local material 58.36% 75.99% 42.61% Vision and mission of school 69.41% 86.44% 86.93% Book procurement 42.49% 44.35% 41.76% Tools procurement 42.21% 50.28% 48.86% Teacher discipline role 69.97% 87.29% 86.65% Implementation of School Based Management 59.49% 85.59% 84.94% Socialization of Gov. program on education 56.66% 73.73% 73.30% Source: GDS-1 Note: Refer to GDS-School questionnaire, page 4 - 5 : SGP3a-SGP3j. Table 7. Responsiveness Primary Junior Senior Dinas met headmaster to discuss learning and teaching process 61.54% 64.41% 60.94% Headmaster told problem to Dinas 53.33% 59.11% 59.38% Dinas discussed budget allocation 27.90% 30.72% 30.75% Source: GDS-1 Note: Refer to GDS-School questionnaire, page 7-8 : SGR1, SGR2, SGR3 Table 8. School Capability to run Education programs Primary Junior Senior Budget 28.05% 29.10% 32.39% Professional staff/teacher 50.71% 50.28% 51.14% Infrastructure 23.80% 27.12% 28.69% Technology and Information 20.11% 37.01% 38.07% Networking 62.61% 62.99% 70.74% Authority 88.39% 92.66% 92.05% School authority to manage its budget 71.16% 76.38% 77.39% Source: GDS-1 Note: Refer to GDS-School questionnaire, page 11-12 ; SD2.1, SD2.1d, SD2.2-SD2.6 Table 9. Headmaster: Main Problem of Education in District Primary Junior Senior Lack of teacher 34.84% 38.70% 36.36% Teachers had low skill 27.76% 33.90% 32.39% Inequality of teacher distribution 19.83% 21.75% 20.74% School infrastructure 43.91% 43.50% 44.60% Salary and incentive for teacher 24.93% 20.06% 18.47% Book and tools procurement 22.66% 9.89% 7.10% Juvenil delinquency 5.10% 5.65% 4.55% The discipline of teacher 5.10% 4.80% 4.26% School budget 35.69% 39.83% 40.91% Community participation 13.31% 16.67% 15.91% Others 12.18% 16.67% 30.11% Source: GDS-1 Note: Refer to GDS-School questionnaire, page 15 ; SD9 Table 10. Dinas: Main Problem of Education in District Percentage Lack of teacher 55.43% Teachers had low skill 34.29% Inequality of teacher distribution 28.00% School infrastructure 51.43% Salary and incentive for teacher 13.14% Book and tools procurement 9.71% Juvenil delinquency 1.14% The discipline of teacher 2.86% School budget 36.57% Community participation 12.00% Others 12.00% Source: GDS-1 Note: Refer to GDS-Dinas Pendidikan questionnaire, page 14, Variable: ED11 Table 11. School: Shares in Income and Expenditure Junior High School Mean Standard Deviation Senior High School Mean Standard Deviation Income: Student parent 17.95% 21.88% 21.63% 21.20% Yayasan 0.17% 2.92% 0.32% 4.35% Central Government 79.46% 24.23% 75.58% 23.28% Local Government 0.07% 1.62% 0.15% 1.69% DBO 2.34% 8.40% 2.32% 6.41% Teacher's salary 60.63% 25.78% 59.58% 24.49% Officer's salary 11.56% 15.57% 12.10% 15.71% Teaching and learning process 11.53% 14.16% 11.67% 12.68% Maintenance 5.01% 6.86% 4.70% 6.16% Rehabilitation 1.04% 3.81% 1.02% 2.75% Infrastructure procurement 4.19% 7.54% 4.37% 7.34% Expenditure: Table 12. School and BP3 Frequency of meeting with student parent for: Primary Junior Senior BP3 fund management 1.869688 2.149718 2.28125 Repot of BP3 fund 1.478754 1.522599 1.480114 Source: GDS-1 Note: Refer to GDS-School questionnaire, page 6-7 : SGT3-SGT4 Table 13. Participation BP3 member in Decision Making BP3 member Primary Junior Senior Recruitment and promotion for teacher and administration staff 14.45% 8.76% 7.95% BP3 fee 67.42% 81.64% 82.39% Education budget allocation 22.95% 20.06% 21.02% Curriculum and local material 12.46% 18.93% 11.08% Vision and mission of school 33.14% 49.72% 48.86% Book procurement 13.60% 16.38% 17.61% Tools procurement 17.28% 27.68% 29.26% Teacher discipline role 18.98% 24.29% 23.01% Implementation of School Based Management 27.20% 50.28% 46.31% Socialization of Gov. program on education 24.36% 32.77% 31.82% Source: GDS-1 Note: Refer to GDS-School questionnaire, page 4 - 5 : SGP3a-SGP3j.