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Strengthening Fiscal Transfers in Indonesia Using an Output-Based Approach

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Date
2011-01
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Published
2011-01
Abstract
In 2010 the World Bank approved a US$220 million loan for a Local Government and Decentralization project in Indonesia. The project aims to improve the accountability and reporting of the central government's Specific Purpose Grants (DAK). Piloted in four infrastructure sub-sectors-irrigation, roads, sanitation, and water the project is the World Bank's first to apply innovative Output-Based Aid (OBA) design principles on a large scale to target improvements in inter-governmental fiscal transfers. Under the project, the DAK grants will work in a similar way to OBA subsidies, which reimburse service providers for independently verified, pre-agreed physical outputs. Up to 81 local governments in five provinces are eligible to take part in this project. This note presents an overview of the project objectives and design.
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Ellis, Peter; Mandri-Perrott, Cledan. 2011. Strengthening Fiscal Transfers in Indonesia Using an Output-Based Approach. OBApproaches; Note No. 40. © World Bank, Washington, DC. http://hdl.handle.net/10986/10905 License: CC BY 3.0 IGO.
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