Publication: Investing in Indonesia's Education : Allocation, Equity, and Efficiency of Public Expenditures
Loading...
Date
2007-08
ISSN
Published
2007-08
Editor(s)
Abstract
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.
Link to Data Set
Citation
“Arze del Granado, F. Javier; Fengler, Wolfgang; Ragatz, Andy; Yavuz, Elif. 2007. Investing in Indonesia's Education : Allocation, Equity, and Efficiency of Public Expenditures. Policy Research Working Paper; No. 4329. © World Bank. http://hdl.handle.net/10986/7280 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication The Macroeconomic Implications of Climate Change Impacts and Adaptation Options(Washington, DC: World Bank, 2025-05-29)Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.Publication Global Poverty Revisited Using 2021 PPPs and New Data on Consumption(Washington, DC: World Bank, 2025-06-05)Recent improvements in survey methodologies have increased measured consumption in many low- and lower-middle-income countries that now collect a more comprehensive measure of household consumption. Faced with such methodological changes, countries have frequently revised upward their national poverty lines to make them appropriate for the new measures of consumption. This in turn affects the World Bank’s global poverty lines when they are periodically revised. The international poverty line, which is based on the typical poverty line in low-income countries, increases by around 40 percent to $3.00 when the more recent national poverty lines as well as the 2021 purchasing power parities are incorporated. The net impact of the changes in international prices, the poverty line, and new survey data (including new data for India) is an increase in global extreme poverty by some 125 million people in 2022, and a significant shift of poverty away from South Asia and toward Sub-Saharan Africa. The changes at higher poverty lines, which are more relevant to middle-income countries, are mixed.Publication Geopolitical Fragmentation and Friendshoring(Washington, DC: World Bank, 2025-06-26)This paper examines the relationship between geopolitical fragmentation and friendshoring of foreign investments over time, countries, and sectors. The analysis uses comprehensive data on foreign direct investments covering greenfield projects, mergers and acquisitions, and stocks of affiliates, as well as data on four alternative measures of geopolitical distance between countries. The gravity estimations suggest that, first, geopolitical differences have a negative effect on foreign investments and the magnitude has heightened in the post-pandemic period compared to a decade ago. Second, it is primarily the companies from advanced Western economies whose foreign investment decisions are increasingly shaped by friendshoring forces. Finally, the paper shows that friendshoring is not only confined to strategic industries, implying that allocations of foreign direct investments may not solely reflect national security or resilience considerations.Publication Soaring Food Prices Threaten Recent Economic Gains in the EU(Washington, DC: World Bank, 2025-07-02)The surge in food prices following the 2021 economic rebound has become a significant concern for households, particularly low-income ones, in Bulgaria, Croatia, Poland, and Romania. Food price inflation, which surpasses general inflation rates, risks worsening poverty and food insecurity in these countries. This paper explores the distributional impacts of rising food prices and the effectiveness of government response measures. Low-income households, who allocate a larger share of their income to food, are disproportionately affected and are struggling to cope with unexpected expenses, leading to increased difficulties in accessing proper nutrition. Simulations indicate that rising food prices contribute to higher poverty rates and greater income inequality, especially among vulnerable populations. They also suggest that the main poverty-targeted social assistance schemes offer critical support for the extreme poor, but expanding both coverage and benefits is vital to shield all at-risk individuals. Targeted policies that balance immediate relief with long-term resilience-building are essential to addressing the challenges posed by escalating food prices.Publication Disentangling the Key Economic Channels through Which Infrastructure Affects Jobs(Washington, DC: World Bank, 2025-04-03)This paper takes stock of the literature on infrastructure and jobs published since the early 2000s, using a conceptual framework to identify the key channels through which different types of infrastructure impact jobs. Where relevant, it highlights the different approaches and findings in the cases of energy, digital, and transport infrastructure. Overall, the literature review provides strong evidence of infrastructure’s positive impact on employment, particularly for women. In the case of electricity, this impact arises from freeing time that would otherwise be spent on household tasks. Similarly, digital infrastructure, particularly mobile phone coverage, has demonstrated positive labor market effects, often driven by private sector investments rather than large public expenditures, which are typically required for other large-scale infrastructure projects. The evidence on structural transformation is also positive, with some notable exceptions, such as studies that find no significant impact on structural transformation in rural India in the cases of electricity and roads. Even with better market connections, remote areas may continue to lack economic opportunities, due to the absence of agglomeration economies and complementary inputs such as human capital. Accordingly, reducing transport costs alone may not be sufficient to drive economic transformation in rural areas. The spatial dimension of transformation is particularly relevant for transport, both internationally—by enhancing trade integration—and within countries, where economic development tends to drive firms and jobs toward urban centers, benefitting from economies scale and network effects. Turning to organizational transformation, evidence on skill bias in developing countries is more mixed than in developed countries and may vary considerably by context. Further research, especially on the possible reasons explaining the differences between developed and developing economies, is needed.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Public Health and Education Spending in Ghana in 1992-98 : Issues of Equity and Efficiency(World Bank, Washington, DC, 2001-04)Using primary data from the health and education ministries, and household survey data from the Ghana Statistical Service, the authors analyze equity, and efficiency issues in public spending on health, and education in Ghana in the 1990s. Public expenditures in the education sector, declined in the second half of the 1990s. Basic education enrollment has been stagnant, or declining in public schools, but increasing in private schools, resulting in a moderate increase in total enrollment. Regional disparities are significant, with lower public resource allocations, and lower enrollment ratios in the three poorest regions. The quality of basic education in public schools remains poor, while it has steadily improved in private schools. Enrollments in higher levels are lagging behind those in basic education. Ghana ranks high among West African countries in health indicators, although its health expenditures tend to favor the non-poor. While more of the rural population have gained access to health services in recent years, many still have limited access, or none. Moreover, there is no link between the pattern of public expenditures - especially the pattern of immunization across Ghana - and health outcomes. To ensure that social services are efficiently, and equitably delivered in a fiscally constrained economy, the authors argue, public expenditures need to be linked to outcomes.Publication Tracking Basic Education Expenditure in Yemen : Analyses of Public Resource Management and Teacher Absenteeism(Washington, DC, 2006-12)Yemen faces significant challenges in expanding access and promoting quality for improved educational outcomes. The study employs both qualitative and quantitative methods to provide recommendations for tracking public expenditure and improving service delivery in the basic education sector in Yemen. To this end, it documents the management of public resources in Yemen's education sector and potential inefficiencies in the use of these resources. This report, through its various components, revealed significant impediments-teacher deployment and salary payment, materials provision, student and teacher attendance, among others-on the path to improving education service delivery in Yemen. This study examines four main research issues related to Yemen's education sector: 1) leakage in the flow of funds, 2) compliance with financial management standards, 3) incentives to provide better quality services, and 4) teacher management issues. The study investigates the disparities and inconsistencies between formal regulations and informal practices in teacher deployment, wage payments, and resource allocations to schools. The study explores how absenteeism correlates with a wide range of potential determinants of the quality of education at the individual, facility, and national levels.Publication Niger - Public Expenditure Tracking Survey : Education and Health - Survey Questionnaire(World Bank, 2009-11-18)The objective of the first Public Expenditure Tracking Survey (PETS) for Niger is to increase understanding of the link between public spending and service delivery at the facility level in order to contribute to improving the effectiveness and accountability in the use of public funds. Specifically, this PETS focuses on identifying the discrepancies, inefficiencies and delays in public spending execution for selected expenditures in the education and health sectors. The medium to long term goal of these PETS is to launch a process aimed at continuous improvements in public expenditure efficiency and equity by focusing on capacity building in this area in the ministries of education and health and in the Institute of National Statistics (INS). The main challenge faced by a tracking survey in a country like Niger is the availability and accuracy of records keeping. The Niger PETS highlights a general lack of systematic information recording. The quality of records in the education sector is low and data often incomplete. This is especially a problem when a higher level agency distributes resources to lower level agencies. The absence of downstream records indicates a lack of systems for downward accountability and can facilitate the diversion of resources. This compares unfavorably with a country such as Ghana, where the quality of record is good between the central agency and district offices.Publication Niger - Public Expenditure Tracking Survey : Education and Health - Main Report(World Bank, 2009-11-18)The objective of the first Public Expenditure Tracking Survey (PETS) for Niger is to increase understanding of the link between public spending and service delivery at the facility level in order to contribute to improving the effectiveness and accountability in the use of public funds. Specifically, this PETS focuses on identifying the discrepancies, inefficiencies and delays in public spending execution for selected expenditures in the education and health sectors. The medium to long term goal of these PETS is to launch a process aimed at continuous improvements in public expenditure efficiency and equity by focusing on capacity building in this area in the ministries of education and health and in the Institute of National Statistics (INS). The main challenge faced by a tracking survey in a country like Niger is the availability and accuracy of records keeping. The Niger PETS highlights a general lack of systematic information recording. The quality of records in the education sector is low and data often incomplete. This is especially a problem when a higher level agency distributes resources to lower level agencies. The absence of downstream records indicates a lack of systems for downward accountability and can facilitate the diversion of resources. This compares unfavorably with a country such as Ghana, where the quality of record is good between the central agency and district offices.Publication Turkey - Education Sector Study : Sustainable Pathways to an Effective, Equitable and Efficient Education System for Preschool through Secondary School Education, Executive Summary(Washington, DC, 2007-12)This Education Sector Study (ESS) is the World Bank's response to the need for a comprehensive study of Turkey's education system, in light of the dramatic changes that are sure to alter the country's social and economic landscape over the next decade. The study was prepared in association with the Education Reform Initiative of the Istanbul Policy Center on the basis of research and dialogue with a wide array of education stakeholders and actors. The overall objective of the ESS is to provide an assessment of current challenges to the education system in Turkey and identify policy options that can complement the country's existing pre-tertiary education strategy. Volume one provides a complete description of challenges, conclusions, and policy options for the reform of pre-school, primary, and secondary education. It includes an Annex that summarizes the research studies and policy notes commissioned to inform the report. Volume II is a collection of the complete research studies and policy notes commissioned for the ESS report.
Users also downloaded
Showing related downloaded files
Publication Global Economic Prospects, June 2024(Washington, DC: World Bank, 2024-06-11)After several years of negative shocks, global growth is expected to hold steady in 2024 and then edge up in the next couple of years, in part aided by cautious monetary policy easing as inflation gradually declines. However, economic prospects are envisaged to remain tepid, especially in the most vulnerable countries. Risks to the outlook, while more balanced, are still tilted to the downside, including the possibility of escalating geopolitical tensions, further trade fragmentation, and higher-for-longer interest rates. Natural disasters related to climate change could also hinder activity. Subdued growth prospects across many emerging market and developing economies and continued risks underscore the need for decisive policy action at the global and national levels. Global Economic Prospects is a World Bank Group Flagship Report that examines global economic developments and prospects, with a special focus on emerging market and developing economies, on a semiannual basis (in January and June). Each edition includes analytical pieces on topical policy challenges faced by these economies.Publication State and Trends of Carbon Pricing 2024(Washington, DC: World Bank, 2024-05-21)This report provides an up-to-date overview of existing and emerging carbon pricing instruments around the world, including international, national, and subnational initiatives. It also investigates trends surrounding the development and implementation of carbon pricing instruments and some of the drivers seen over the past year. Specifically, this report covers carbon taxes, emissions trading systems (ETSs), and crediting mechanisms. Key topics covered in the 2024 report include uptake of ETSs and carbon taxes in low- and middle- income economies, sectoral coverage of ETSs and carbon taxes, and the use of crediting mechanisms as part of the policy mix.Publication Women, Business and the Law 2024(Washington, DC: World Bank, 2024-03-04)Women, Business and the Law 2024 is the 10th in a series of annual studies measuring the enabling conditions that affect women’s economic opportunity in 190 economies. To present a more complete picture of the global environment that enables women’s socioeconomic participation, this year Women, Business and the Law introduces two new indicators—Safety and Childcare—and presents findings on the implementation gap between laws (de jure) and how they function in practice (de facto). This study presents three indexes: (1) legal frameworks, (2) supportive frameworks (policies, institutions, services, data, budget, and access to justice), and (3) expert opinions on women’s rights in practice in the areas measured. The study’s 10 indicators—Safety, Mobility, Workplace, Pay, Marriage, Parenthood, Childcare, Entrepreneurship, Assets, and Pension—are structured around the different stages of a woman’s working life. Findings from this new research can inform policy discussions to ensure women’s full and equal participation in the economy. The indicators build evidence of the critical relationship between legal gender equality and women’s employment and entrepreneurship. Data in Women, Business and the Law 2024 are current as of October 1, 2023.Publication State and Trends of Carbon Pricing 2020(Washington, DC: World Bank, 2020-05-27)This report provides an up-to-date overview of existing and emerging carbon pricing instruments around the world, including international, national and subnational initiatives. It also investigates trends surrounding the development and implementation of carbon pricing instruments and how they could accelerate the delivery of long-term mitigation goals. Specifically, this includes the use of carbon taxes, emissions trading systems and crediting mechanisms. International cooperation on carbon pricing and the status of work surrounding Article 6 of the Paris Agreement is also canvassed.Publication Falling Long-Term Growth Prospects(World Bank : Washington, DC, 2024-02-01)A structural growth slowdown is underway across the world: at current trends, the global potential growth rate is expected to fall to a three-decade low over the remainder of the 2020s. Nearly all the forces that have powered growth and prosperity since the early 1990s have weakened, not only because of a series of shocks to the global economy over the past three years. A persistent and broad-based decline in long-term growth prospects imperils the ability of emerging market and developing economies to combat poverty, tackle climate change, and meet other key development objectives. These challenges call for an ambitious policy response at the national and global levels. This book presents the first detailed analysis of the growth slowdown and a rich menu of policy options to deliver better growth outcomes.