Local Solutions to Poverty (LSP) Achievement Brief 2017 Local Solutions to Poverty (LSP) Multi-Donor Trust Fund: Improving the lives of poor and vulnerable Indonesians In recent years, Indonesia has made which marks a new phase of decentraliza- • Village Development: Strengthening persistent and successful efforts to re- tion and rapidly shifts responsibilities and village institutions, as participatory and duce poverty and boost shared pros- large funding increases to Indonesia’s inclusive platforms for rural develop- perity. Over the past decade and a nearly 75,000 villages. Since 2015, the ment and poverty reduction, to help half, the Government of Indonesia (GoI) GoI has transferred nearly US$ 18 billion improve the effectiveness of US$ 7.3 has allocated 20 percent of the state to villages (2015-17). In parallel, the GoI billion in annual village funding; budget to education, decentralized de- is seeking to transition and “mainstream” • Basic Service Delivery: Institutional- velopment responsibilities to local gov- long-term CDD projects and metho- izing and scaling up demand-driven ernments, and rolled out large-scale, dologies, which are long supported by approaches to improve frontline and globally recognized community-driven the World Bank, into the much larger basic services that reduce poverty and development (CDD) programs. These Village Law related regulations, systems improve livelihoods, particularly in poor efforts have contributed to significant and transfers.6 However, not surprisingly, and remote areas; and development progress and poverty rates building village government capacity and • Analytics: Producing and disseminat- have fallen from 19.1 percent in 20001 to incentives to do this remains a significant ing high-quality data and analytics, and 10.1 percent in 2018.2 challenge. strengthening the GoI’s existing moni- However, about 35 percent (88 million) In line with the GoI’s major transition, the toring and evaluation (M&E) systems to of Indonesians remain poor or vulner- World Bank’s long-term support for vil- support more effective village develop- able to poverty and most are concen- lage development and basic service de- ment and local service delivery. trated in rural areas.3 Rising inequality, livery is undergoing major shifts as well. poor service delivery performance and The World Bank, in close collaboration FIGURE 1 lagging health and education outcomes with the Australian Department of Foreign LSP’s End-of-Facility continue to persist, particularly in rural Affairs and Trade (DFAT) and the Millenni- Outcomes and remote areas, despite increases in um Challenge Account-Indonesia (MCA-I), the GoI’s spending in these areas. For continues to support the GoI to ‘move the example, Indonesia has the second high- needle’ on poverty and inequality. How- est incidence of child stunting in South- ever, in recent years, the focus and deliv- More responsive Improved east Asia (37.2 percent of children under ery of its support has shifted dramatically and inclusive service age five), and an estimated maternal from designing and implementing large- delivery to local mortality rate of 126 women per 100,000 scale community development projects governments beneficiaries births in 2015.4 (which often operated outside formal gov- ernment systems) to focusing on strength- The GoI is increasingly focusing its at- Better use ening the GoI’s own systems, capabilities tention on addressing inequality, and of financial and knowledge. In 2017, LSP focused on resources by lagging rural service delivery and de- strengthening the GoI’s institutions and governments velopment outcomes. A cornerstone of systems in three main areas: this effort is the Village Law (No.6/2014),5 1 The World Bank, 2017, Indonesia Economic Quarterly December 2017: Decentralization that work for community development in Indonesia’s 74,954 rural villages (desa). The law increas- Delivers. http://pubdocs.worldbank.org/en/657051513163708686/IEQ-Dec-2017-ENG.pdf. es the authority and responsibility of villages. Under the Village Law, village fiscal transfers 2 Partnership for Knowledge-based Poverty Reduction (PKPR), 2018, PKPR Semi-Annual (Dana Desa and Alokasi Dana Desa) were substantially increased beginning in 2015. In 2017, Progress Report: July 2017 to January 2018. The World Bank. villages received on average around Rp. 1.2 billion (US$100,000), seventy percent of which 3 The World Bank, 2017, Aspiring Indonesia: Expanding the Middle Class. The World Bank. villages are required to spend on village development and community empowerment. The 4 In comparison, the maternal mortality rate is 20 in Thailand, 40 in Malaysia, 54 in Vietnam remainder is for village administrative functions. and 114 in the Philippines (WHO, 2015). 6 For example, Village Law and associated regulations include multiple provisions reflecting 5 Enacted in early 2014, Law 6 of 2014 (the Village Law) established a new institutional frame- Indonesia’s CDD experience (provisions on transparency, participation, accountability, etc.). 1 LSP ACHIEVEMENTS BRIEF 2017 In 2017, LSP supported the GoI in these areas through nine main projects and initiatives (Table 1).7 The LSP MDTF’s progress and achievements are measured against three End-of-Facility-Outcomes, which cut across projects and initiatives (Figure 1). TITLE OBJECTIVE PARTNERS VILLAGE DEVELOPMENT MELAYANI8 Support local governments to use a problem-driven ap- Ministry of Home Affairs (MoHA) proach9 to tackle local service delivery issues. and Ministry of Finance (MoF). Village Innovation Program Improve village capacity to plan and implement invest- Ministry of Villages, Development (VIP) ments that focus on village entrepreneurship, human capi- of Disadvantaged Regions and tal formation and village infrastructure. Transmigration (MoV). Village Law Programmatic Support the GoI’s efforts to ensure accountable village MoHA, MoV and MoF. Advisory Services and governance and participatory village development. Analytics (PASA) BASIC SERVICE DELIVERY Early Childhood Education Increase the availability of high-quality, affordable and pro- Ministry of Education and Culture and Development (ECED) fessional training for ECED teachers in poor rural districts. (MoEC). Generasi Empower local communities in poor, rural sub-districts in MoV, MoEC and Ministry of Health Generasi provinces to increase utilization of health and (MoH). education services. Investing in Nutrition and Increase simultaneous utilization of nutrition interventions Secretariat Office of Vice Presi- Early Years by 1,000-day households in priority districts. dent (SoVP), TNP2K,10 Bappenas,11 and MoF. KIAT Guru Improve the presence and service quality of primary school MoEC. teachers in targeted areas by making teachers more ac- countable and empowering communities to participate in education. ANALYTICS Evaluations Understand the direct impact of LSP-supported initiatives Bappenas, MoEC, MoV, MoHA, (KIAT Guru, Generasi and ECED pilot project) to inform BPS.12 program planning and decisions, along with the GoI policy frameworks, institutions and systems. Special Studies Improve understanding about local development priorities Bappenas, MoEC, MoV, MoHA, in Indonesia through conducting in-depth research, such as BPS and MoEC. Sentinel Villages Study, Civil Service Data Analysis project and just-in-time (JIT) analytics. Progress and Achievements EOFO 1 Local governments (LGs) are responsible for most health and education services in Indone- sia and spend almost half of the entire state budget on these services. However, the quality of this spending remains low and does not always reflect the needs of the community. While the More responsive World Bank previously supported the GoI to implement large-scale CDD projects that often pro- Improved and inclusive service vided small block grants directly to communities, today LSP’s support focuses on strengthening local delivery to governments beneficiaries the GoI’s core regulations, systems and institutions to enable village governments to convert larger village budgets into productive investments and services that reflect local needs. In 2017, Better use LSP supported the GoI to better understand the quality of village spending, the extent to which of financial it reflects community needs and the constraints limiting its impacts. Building on this work, LSP resources by governments supported the GoI to strengthen its regulations, systems and processes so they better support more inclusive, responsive and accountable village development. 7 LSP also supports the Local Economic Development (LED) Pilot and Data for Results projects. Assessment and Action Plan (the predecessor of MELAYANI). However, both projects will commence in 2018 so are not reported in this brief. 10 Tim Nasional Percepetan Penanggulangan Kemiskinan (National Team for the Acceleration 8 Menguraikan Permasalahan Perbaikan Layanan Dasar di Indonesia (Untangling Problems of Poverty Reduction, or TNP2K). to Improve Basic Services in Indonesia). 11 Kementerian Perencanaan Pembangunan Nasional/Badan Perencanaan Pembangunan 9 The approach draws on several different methodologies, such as problem-driven iterative Nasional (National Development Planning Agency, or Bappenas). adaptation (PDIA), Deliverology and an earlier World Bank pilot instrument called the Rapid 12 Badan Pusat Statistik (Central Bureau of Statistics). 2 LSP ACHIEVEMENTS BRIEF 2017 LSP’s Village Law Programmatic Advisory Services and Ana- which is expected to be issued in 2018. LSP was instrumental lytics (PASA) provided the GoI with in-depth analysis on ac- in ensuring the Permendagri LKD and LAD draft incorporated tual Village Law implementation practices and constraints to strengthened participatory principles and elements, including help strengthen national regulations so that citizens in Indo- for women and other marginalized groups. LSP also support- nesia’s 74,954 villages have an opportunity to have a say in, ed the Ministry of Villages, Development of Disadvantaged and are informed about, how LGs are using village funds to Regions and Transmigration’s (MoV) ongoing revisions to the promote local development. The LSP-supported Sentinel Vil- regulation on Village Development and Rural Development lages Study, which began in 2015, examines community partici- (Permendagri No. 114/2014), which sets the rules and framework pation, transparency and accountability in village development for village planning and implementation processes, including processes, as well as district and sub-district support for these for inclusion and participation. LSP fostered policy dialogue by processes.13 In 2017, LSP completed two Sentinel Village case conducting a workshop with legal experts to provide feedback studies on facilitation and village fund utilization to complement and recommendations on the latest version of the draft. It is the Sentinel Villages baseline survey, which was undertaken anticipated that the revised Permendagri No. 114/2014 will be over 2015 and 2016. To date, analysis from the Sentinel Villages finalized in 2018. Study found that not all village meetings are inclusive, and that The Village Law PASA provided the GoI with the most in-depth hamlet-level meetings are often more open and better attend- analysis on how Indonesian villages spend their funds, which ed. The study’s analysis also revealed that generally women highlighted key challenges limiting the quality and impact of are less likely to attend village- and hamlet-level meetings than US$ 7.3 billion (Rp 100 trillion) in village spending. In 2017, men. In general, villagers tended not to participate in meetings the LSP Village Law PASA, in partnership with MoHA, expanded due to high opportunity costs and the perception that discus- the Village Public Expenditure Review (ViPER) analysis, adding sions only related to village government and community lead- 1,868 villages to the sample,14 to provide the GoI with the most ers. The findings also indicated that village activists frequent in-depth review currently available in Indonesia on how villag- and partake in village and hamlet meeting discussions, and that es spend their increased funds.15 The analysis highlighted that female village activists were almost as engaged as their male villages spend almost 40 percent of their funds on administra- counterparts during meetings. LSP leveraged these findings tion,16 but only about five percent on health and education. The to strengthen and ensure that Village Law related regulations analyses also revealed inconsistencies in how villages classify are more inclusive and incorporate structured participation their finances hinders accurate reporting on village spending. and representation. For example, LSP, through policy discus- Complementing this work, the LSP-supported Sentinel Villages sions, analysis and regulation drafting, supported the Ministry of analysis also found that villages tend to fragment development Home Affairs (MoHA) develop the MoHA regulation (Peraturan budgets into many small projects rather than financing larger Menteri Dalam Negeri, or Permendagri) on Village Communi- projects, which are likely to have a greater development im- ty Institutions (Lembaga Kemasyarakatan Desa, or LKD) and pact. Initial developments suggest that ViPER is being increas- Village Customary Institutions (Lembaga Adat Desa, or LAD), ingly institutionalized into the GoI’s systems and mechanisms. 13 The Sentinel Villages Study focuses on five districts across three provinces. 14 The World Bank has collected more than 5,500 documents comprising APBDes, Revised APBDes and APBDes realization reports from financial year (FY) 2015 and 2016. The results outlined in this brief focus on the ViPER analysis from the 1,868 Village APBDes from FY 2016. 15 As part of the ViPER Analysis, LSP, in collaboration with MoHA, collected village budgets and spending reports, and reclassified village budgets and expenditures, using standard classifica- tions, to provide a more reliable view of village revenue spending. 16 This is above the 30 percent ceiling. 3 LSP ACHIEVEMENTS BRIEF 2017 FIGURE 2 For example, MoHA plans to revise an existing regulation on villages budget (Ang- garan Pendapatan dan Belanja Desa, or APBDes) evaluation and to incorporate the Characteristics of village- ViPER methodology as the main tool to assess village budgets and realization reports. and hamlet-meeting at- MoHA also initiated work to present the ViPER methodology to LG officials to improve tendees and non-attendees their skills in aggregating and analyzing village financial data and expenditures. T E N D E D N OT TO PA RT I C I PAT E LSP-generated analysis on key governance constraints and risks around village funds is being used to help ensure the GoI’s support to sub-national governments is more effective. In 2017, LSP supported a joint World Bank-GoI (MoHA and the MoV) Spot Check of Village Governance and Financial Management17 and a Village Com- FEMALE plaints Handling System Assessment.18 Analysis from the spot checks and assessment found that the most significant governance risks around village funds are at the district HOUSEHOLD level; the limited capacity of village staff in managing village finances pose signifi- H E A D E D BY F E M A L E cant risks; and that village-level complaint handling systems need to be strengthened. Building on this analysis, the Village Law PASA began an assessment on districts’ capacity (institutional, financial and human capacity) to provide adequate support and D I S TA N C E TO V I L L AG E HEAD OFFICE (KM) supervision to villages. Drawing on LSP’s and other programs (Village Innovation Pro- gram (VIP) loan and DFAT-funded KOMPAK) findings, it is evident that many districts lack clear guidance, capacity, incentives and funds to perform these roles effectively. NO FORMAL The district assessment is systematically unpacking these challenges and using the E D U C AT I O N findings to support the GoI to shape more effective, demand-driven and sustainable support to villages. B OT TO M - 4 0 Village Law PASA analyses on Village Law implementation bottlenecks informed a cross-ministerial decree to harmonize Village Law implementation. Leverag- ing the Sentinel Villages and ViPER analyses, LSP prepared an analysis about Vil- lage Law implementation bottlenecks and recommended actions to senior GoI T E N D E D TO PA RT I C I PAT E officials (MoHA, Kementerian Perencanaan Pembangunan Nasional/Badan Pe- rencanaan Pembangunan Nasional (National Development Planning Agency, or Bappenas), the Ministry of Finance (MoF), the MoV and the Kantor Staf Presiden C O M P L E T E D S E C O N DA RY or KSP). The results of the analysis contributed to the GoI issuing a Joint Ministerial A N D B E YO N D Decree on harmonizing and strengthening Village Law implementation among four ministries (MoHA, MoV, MoF and Bappenas).19 This analysis also informed the Village C U R R E N T LY Law PASA’s support to MoV and MoHA to improve the rules, regulations, training, and WO R K I N G M&E that strengthen village planning and budgeting. Under the MoV’s Generasi project, LSP continued to support Generasi facilitators SUBMITTED COMPLAINTS to empower communities (including women) to participate in community deci- OR REPORT PROBLEMS sion-making to increase prioritization of health and education services. In 2017, LSP continued to support Generasi incentivized block grants and capacity building in West AC T I V E I N Kalimantan, Central Kalimantan and South Sumatera to help communities identify lo- LO C A L O R G A N I Z AT I O N cally appropriate ways to improve access and use of health and education services.20 Across the three provinces, about 74 percent of the block grants were used for health AC T I V E I N activities, while 26 percent were used for education activities. LSP also supported P O L I T I C A L PA R T Y training for all 38,314 (51 percent female and 49 percent male) Generasi village actors (local facilitators, village officers, and health and education cadres) in 11 provinces. V I L L AG E H E A D IS RELIABLE IN LSP helped institutionalize lessons learned from the MoV’s Generasi project to I M P L E M E N TAT I O N strengthen LG capacity to plan and budget for basic service delivery in health and education. LSP expanded its support for the Generasi Integration Strategy from 17 The Spot Checks were conducted in September 2017 in 64 villages across 27 sub-districts in 12 districts and six provinces. 18 The complaints handling assessment was carried out in four provinces (Central Java, East Java, West Sulawesi and East Nusa Tenggara) over 2016 and 2017. 19 Joint Decree regarding the Harmonization and Strengthening of Implementation Policy of Village Law No. 6/2014 about the Village (No.140-8698/tahun 2017 (MoHA), No. 954/KMK.07/2017 (MoF), No. 116 Tahun 2017 (MoV) and No. 01/SKB/M/PPN/12/2017 (Bappenas). 20 Up until 2016, Generasi was operated in 499 sub-districts across 11 provinces. Following the enactment of the Village Law, in 2016, LSP supported the gradual phase out of Generasi incen- tivized block grants and implementation of the Generasi Integration Strategy, which aims to reorient Generasi’s facilitation support towards assisting village governments and communities to utilize Village Law transfers to address health and education issues. In 2017, only 130 sub-districts in three provinces still received the incentivized Generasi block grants. 4 LSP ACHIEVEMENTS BRIEF 2017 to fund health and education services under the APBDes. BOX 1. On average APBDes allocations for health and education Promoting gender equality and women’s spending in 411 villages in the six NTB pilot districts increased empowerment from 10.9 percent (2016) to 15.8 percent (2017).22 While alloca- tions were mainly for infrastructure, non-infrastructure budget In 2017, LSP supported the National Civil Servant Organi- allocations also rose from 2.8 percent (2016) to 4.8 percent zation (Badan Kepegawaian Negara, or BKN) to analyze (2017). LSP also commenced the MELAYANI (Menguraikan the records of over four million civil servants to better un- Permasalahan Perbaikan Layanan Dasar di Indonesia) pilot derstand the composition of the Indonesian civil service project in October 2017, which aims to help pilot district gov- and the determinants of civil service promotion. From the ernments navigate through a process to breakdown local prob- analysis, LSP found that female civil servants make up lems, and identify and implement solutions that are regularly re- fewer than 28 percent of all echelon in national minis- viewed and adjusted. In 2017, LSP selected three pilot districts tries, and experience substantially lower rates of promo- (Kubu Raya in West Kalimantan, Bojonegoro in East Java, and tion than men. The analysis is being used to inform the Belu in East Nusa Tenggara) and each district identified a pri- GoI’s major policy agendas related to merit-based and ority issue to address.23 The World Bank-supported MELAYANI transparent promotions and more equitable distribution coaches also supported district governments to commence of civil servants. The World Bank governance team is also baseline data collection, which will be used to analyze and sup- leveraging the results about gender disparities in civil port change processes in 2018. The project will be assessed in service promotion to inform and better integrate gender October 2018. into the proposed Human Resource Development for Bu- reaucratic Reform Operation. EOFO 2 Drawing on the BKN findings and other World Bank analy- sis, in May 2017 LSP prepared a policy brief for the GoI on The GoI is increasingly fo- ‘Closing the Gender Gap: Translating the Budget into Im- cusing on improving not More only the availability, but also proved Gender Outcomes’ following a request from MoF. responsive Improved and inclusive service the quality of village service The policy brief outlined key statistics on gender inequal- delivery to local ities; proposed potential activities that MoF could finance governments beneficiaries delivery after increased gov- to increase female labor force employment and improve ernment spending on basic women’s health and nutrition in 2018; and proposed a Better use services has struggled to of financial improve Indonesia’s perfor- MoF-led program “Using the Budget to Improve Gender resources by Outcomes”. MoF incorporated key elements from the governments mance in terms of important World Bank’s policy brief into the GoI’s Macroeconomic human development indica- Fiscal Framework, including a commitment to increas- tors. These challenges tend ingly strive to implement gender budgeting programs so to be exacerbated in rural areas where basic health, educa- that women face less barriers to economic opportunities tion and infrastructure are lacking both in terms of quality and and improved access to health care programs.1 The GoI quantity. To help improve basic service delivery in poor and will use the framework to inform its 2018 national budget rural areas, LSP has increasingly moved away from supporting planning so it better supports gender equality and wom- GoI-executed CDD approaches, which often operated outside en’s empowerment. regular government services, to supporting the GoI integrate and ‘mainstream’ good practices from these CDD projects, and other innovative pilot projects, into regular Village Law devel- the initial six West Nusa Tenggara (Nusa Tenggara Barat, or opment planning and implementation. NTB) pilot districts in 2016 to 44 districts in 2017.21 The inte- gration strategy reorients Generasi’s advocacy and facilita- LSP supported the GoI in addressing supply-side con- tion support towards village governments and communities straints in early childhood education and development to better equip them to plan, budget and address health and (ECED) by ensuring more qualified ECED teachers are avail- education issues under regular planning and budgeting pro- able at the village level. In 2017, the LSP-supported ECED cesses. Results from the six pilot districts in NTB (2016-2017) pilot project successfully established a novel district-based, indicate that village governments are increasingly allocating community-focused training system to improve the availabili- APBDes funding for health and education services. For ex- ty of ECED teachers in remote and rural Indonesia. All 2,674 ample, all six pilot districts in NTB issued draft district head pilot villages nominated teachers through a participatory regulations (Peraturan Bupati, or Perbup) that allow LGs process24 and 15,491 ECED teachers in 25 districts received 21 The Generasi Integration Strategy is implemented in three phases: (1) pilot phase in six districts in NTB (2016-2017); (2) pilot expansion in 44 Generasi districts (2017-2018); and (3) final expansion in all 66 Generasi districts (2018). 22 This figure was calculated by comparing each pilot district’s APBDes 2016 data (baseline data) with their APBDes 2017 data. The data is captured by Generasi-supported facili- tators and collated in Generasi’s management information system (MIS). The data is validated by the province and shared with national-level government. 23 In Kubu Raya, the government is working to reduce incidences of stunting; in Bojonegoro to reduce infant mortality; and in Belu to improve quality of basic education. 24 This process was usually undertaken through an existing platform, such as village meeting (musyawarah desa, or MusDes). However, in villages where MusDes had recently taken place, the selection process was done through a special MusDes (MD Khusus). 5 LSP ACHIEVEMENTS BRIEF 2017 training in ECED provision, including for children with special needs. It is estimated that approximately 170,400 children benefited from the improved ECED services across the 25 pilot districts.25 The training not only helped improve access to, and the quality of, ECED services in rural areas, but also provided women in remote areas with an opportunity to upskill and access formal employment (98 to 99 percent of participants were women). By the end of the pilot project in 2017, demand from villag- es – including those not covered or financed by the project, but with knowledge of the pilot – increased, and village governments began using their own village budget to procure district-level training for ECED teachers. In one case, the district govern- ment in Gorontalo District has led the way by issuing its own district head regulation (Perbup) that enables village funds (Dana Desa) to be used to support the project’s continuation in 2018, and by allocating Rp. 155 million (US$11,650) for advanced ECED teacher training in its 2018 budget. At the national level, the Ministry of Education and TEACHER PRESENCE, Culture (MoEC) plans to use the LSP-supported ECED training materials in the annual AS REPORTED BYMEMBERS district Training of Trainers, which will be rolled out across approximately 100 districts O F T H E S C H O O L- U S E R in 2018. The ECED pilot project was internationally recognized and recently award- COMMITTEES, ed the 2017-2018 UNESCO-Hamdan bid Rashid Al-Maktoum Prize for bringing quality I M P R O V E D F R O M professionally-trained ECED teachers to the poorest and remote areas in Indonesia.26 FIGURE 3 ECED pilot project ECED ONGOING PILOT CHILDREN TEACHERS VILLAGE LO C AT I O N S BENEFITED TRAINED DEMAND WHICH IS BE YOND 8 0 % TA R G E T TO BUD G ET & 2,674 15,491 170,400 PR O C UR E D I STR I C T- L EV EL PERCEIVED TEACHER VILLAG ES EC ED TEAC HER S C HI L D R EN EC ED TR A I N I N G S E R V I C E Q U A L I T Y INCREASED FROM The Improving Teacher Performance and Accountability (KIAT Guru) pilot project improves the availability and quality of teachers in remote areas in Indonesia by empowering communities to provide oversight of teacher presence and perfor- mance. LSP leveraged the GoI spending to maximize the development impact of the GoI’s national teachers’ special allowances (Tunjangan Khusus, or TK) mechanism.27 ( TA R G E T 8 5 % ) Using a combination of service agreements, community scorecards, user committees, IN THE SAME PERIOD capacity building and camera monitoring (KIAT Kamera), the KIAT Guru pilot project empowered communities to verify teacher attendance and evaluate teacher service performance in 203 primary schools across five pilot districts. During 2017, LSP sup- ported the MoEC and the Tim Nasional Percepetan Penanggulangan Kemiskinan (National Team for the Acceleration of Poverty Reduction, or TNP2K) to issue two key ministerial decrees to enable pilot implementation and to pave the way to tie TK payments to teacher performance.28 A subsequent 435 sub-national (district and village) regulations were also issued to implement the pilot in the 203 pilot schools. In 2017, service agreements between provider groups and user groups were estab- lished;29 and user committees and village cadres were appointed in all pilot schools. To maximize ownership and sustainability post-pilot, KIAT Guru also trained 375 government officials, and 2,030 community members and village cadres. Initial KIAT Guru results indicate that tying teachers’ special allowance payments to presence and performance is having a positive impact on teacher attendance, teacher service 25 The ECED pilot project did not collect primary data on the number of children under the care of each ECED training participant’s local ECED service. However, the ECED pilot project conducted a survey of 600 randomly surveyed ECED teachers. Analysis from the survey found that the average ECED teacher-to-children ratio for the surveyed teachers is approximately 1:11. This ratio was used to determine the approximate number of children that benefited from the improved ECED services. 26 UNESCO, 2018, UNESCO rewards outstanding teacher initiatives in Chile, Indonesia and the UK, Available at: https://en.unesco.org/news/unesco-rewards-outstanding-teach- er-initiatives-chile-indonesia-and-uk. 27 About US$ 2.3 million (Rp. 32.7 billion) of GoI’s US$112 million (Rp. 1.6 trillion) spending on TK was paid based on teacher performance. 28 MoEC Decree No. 99/P/2017 on the Priority Program in Delivery of teachers’ special allowance (Tunjangan Khusus, or TK), which identified KIAT Guru as a MoEC priority program; and MoEC Decree No. 11788/B/HK/2017, which provided technical guidelines for its implementation. 29 Provider groups include teachers and principals, and user groups include parents and community representatives. 6 LSP ACHIEVEMENTS BRIEF 2017 performance, and student learning outcomes. The results zation uptake and vitamin A distribution. However, the IE found showed that teacher presence, as reported by members of the that Generasi’s initial impact on stunting (concentrated in Nusa school-user committees, improved from 65 percent (mid-2016) Tenggara Timur (NTT) province) was not sustained beyond the to 93 percent (December 2017), which is beyond the 80 percent 2009 IE.34 The IE’s quantitative findings were presented to Bap- target. Meanwhile, perceived teacher service quality increased penas in early 2018. The complete IE results will be disseminat- from 56 percent to 96 percent (target is 85 percent) in the same ed more broadly in 2018, including at the DFAT-supported Bap- period.30 The direct impact of the pilot project will be better penas-Abdul Latif Jameel Poverty Action Lab (JPAL) Evidence understood following the completion of the KIAT Guru Impact on Stunting from Three Randomized Evaluations in Indonesia Evaluation in mid-2018.31 event in May. The IE’s findings will contribute to Indonesia’s ev- idence base about the drivers of stunting, and the GoI’s future Access to and utilization of basic services have improved priorities related to stunting and Village Law expenditures on in villages across Generasi provinces. Generasi’s continued health and education challenges. The findings will also inform facilitation support, capacity building and integration strategy the GoI requested Investing in Nutrition and Early Years (INEY) have contributed to improve access and service utilization indi- Program-for-Results operation (Box 2 on page 8), particularly cators. For example, in villages across all Generasi provinces, the findings related to the role of communication mobilization, there have been increases in the percent of expectant mothers social accountability and technical measurement of stunting. receiving prenatal care visits; junior secondary enrolment rates; and assisted deliveries by a trained professional. Meanwhile, in LSP is mobilizing specialized village facilitators to con- the three Generasi provinces that continued to receive specific verge multi-sectoral services, at the sub-national level, to block grants in 2017,32 LSP monitoring data also indicated in- reduce stunting. In July 2017, LSP launched the Human De- creases in the percent of women participating in pregnancy and velopment Workers (HDW)35 pilot project following high-level nutrition classes; parents of zero-to-two years old participating discussions between President Joko Widodo, Minister of Finance in monthly parenting and nutrition classes; and the number of Sri Mulyani Indrawati and the World Bank President Jim Yong Kim. male caregivers participating in pregnancy and child nutrition The HDW pilot project aims to support villages to address local classes. Complementing this work, in 2017, LSP also completed service delivery challenges and to implement national priority pro- the “fourth wave” Impact Evaluation (IE) of the Generasi Sehat grams, such as stunting reduction. The pilot project will engage, and Cerdas Project, which originally started in 2007, to learn train and equip HDWs with a range of skills and tools (checklists, about the longer-term impacts of the project.33 The Generasi scorecards, stunting length mats and social mapping) to overcome IE found that since 2009, the overall health and education en- key information gaps, diagnose local drivers of development prob- vironment in Generasi IE districts (including control areas) has lems, and monitor and demand improved service delivery. The pilot improved. The IE highlighted that one of Generasi’s greatest project will be implemented in 3,105 villages across 281 sub-dis- achievements is the sustained revitalization of the village health tricts and 31 stunting priority districts to help promote, incentivize clinic (posyandu). The quantitative IE results found that Gener- and converge multi-sectoral village efforts to reduce stunting. The asi still helps mobilize community members to attend the po- first 30 HDWs were trained in early January 2018. It is intended that syandu for infant weighing, and to attend maternal health and the pilot project will inform the GoI’s national scale-up (up to 75,000 parenting classes. In the lowest-performing districts, Generasi HDWs) as part of the National Action Plan to reduce stunting. also continued to encourage communities to increase immuni- 30 World Bank. 2018. Implementation Status and Results Report. Indonesia: Improving Teacher Performance and Accountability. January 2018. 31 The IE consists of a baseline survey (2016) and an endline survey (2018). The IE results will be complimented with monitoring data and qualitative research to identify aspects that improve teacher presence, teacher service performance and student learning outcomes. 32 As noted earlier, in 2016, following the enactment of the Village Law, LSP supported MoV to gradually phase out Generasi incentivized block grants and to implement the Generasi Integration Strategy to help integrate and institutionalize good practices and lessons learned from Generasi into regular Village Law implementation. In 2017, only 130 sub-districts in three provinces still received the Generasi block grants. 33 The fourth and final wave of Generasi evaluation, which was conducted between October 2016 and February 2017, provided a rare and unique opportunity to learn about the longer-term impacts of the project through a randomized control trial involving over 90,000 respondents. The first three waves of IE were carried out between 2007 and 2010 (Wave I at baseline, Wave II 18 months after implementation, and Wave III 30 months after implementation). 34 There are multiple possible reasons for this, including, among other things, overall substantial improvements in stunting across NTT (in both control and treatment groups) exhausted the ‘long hanging fruit’ and meant there was significantly less room for improvement; and Generasi funding produced crowd-in/crowd-out effects on other program resources that undercut the efficacy of the intervention. 35 HDWs may include health cadres, ECED teachers and staff, and regular village development cadres (Kader Penggerak Masyarakat Desa, or KPMD) who are all involved in village planning and budgeting processes. 7 LSP ACHIEVEMENTS BRIEF 2017 LSP leveraged the GoI’s VIP and Generasi project to gen- erate innovations and learning, across tens of thousands BOX 2. of Indonesian villages, to help solve local service delivery Supporting the GoI design, launch and challenges and improve the impact of district and village implement a multi-sectoral national governments’ fiscal resources. In 2017, LSP provided spe- strategy to reduce stunting. cialized technical and implementation support to the Gener- asi-supported Village Innovations Festival pilot project36 and 37.2 percent or approximately nine million children in Indonesia the VIP Village Innovations Exchanges (Bursa Inovasi Desa) to are stunted, which not only affects quality of life, but hampers help bring villages together to learn from one another about economic growth and labor market productivity in the long local solutions to local development problems. In 2017, 219 run. LSP leveraged its access to international expertise and knowledge, and its extensive experience with implementing district-level Bursa Inovasi Desa events were held across multi-sector programs to help the GoI make stunting a national Indonesia, bringing together 185,900 participants of whom priority agenda and to inform the Presidential National Action 55,300 were estimated to be women from 55,302 villages. Plan to reduce stunting. The National Action Plan aims to con- The events generated over 9,454 village innovations ideas or verge existing national, regional and community programs to “idea cards” (Kartu IDE, or Inovasi Desaku),37 including 5,929 deliver a set of priority nutrition-specific and nutrition-sensitive ideas on entrepreneurship, 3,018 on human capital and 507 interventions in the first 1,000 days of a child’s life and up until on village infrastructure.38 More than 31,600 village “commit- age six. Key LSP and broader World Bank contributions include: ments” to replicate innovations were made by village heads at • Analyzing national and global data to identify major policy the Bursa events.39 and implementation constraints hindering the effectiveness FIGURE 4 and impact of the GoI’s approximately US$ 3.9 billion in Bursa Inovasi Desa spending on nutrition interventions each year; • Leveraging World Bank expertise and networks, including 55,302 185,900 9,454 31,600 the World Bank President Jim Kim, to build momentum and VI L L AGES PA RT I CI PANTS I D E AS CO MM I T M E N TS raise awareness about stunting as a national priority; • Providing technical inputs and briefings to the GoI (including for two Vice President Ministerial Cabinet Meetings in July and August 2017) to highlight the importance on investing in early childhood development, and converging and incentiv- 219 D ISTRICT- LEVEL BUR SA INOVASI DESA EVE NTS izing multi-sectoral interventions to maximize impact; • Providing analyses, along with the DFAT-funded MAHKOTA program, to help the GoI identify 100 priority districts, which EOFO 3 informed the GoI’s “100 Priority Districts for Stunting Interven- tions” book and accompanying database; The quality of village spend- • Leveraging LSP’s access to international expertise and global ing remains a key concern knowledge to support a knowledge exchange field trip with More responsive Improved for the GoI. For village funds key GoI counterparts (from MoSA, MoF, MoHA, MoV, Bappe- and inclusive service local delivery to to have a positive develop- nas and Kemenko PMK) to Peru, in April 2017, to look at the governments beneficiaries ment impact, it is essential country’s positive experiences in reducing stunting; that fiscal resources go to • Helping the GoI build and sustain momentum to support the Better use where the needs are greatest National Action Plan’s early implementation. For example, of financial resources by and that villages use them ef- after the Peru field trip, LSP facilitated multiple Bappenas governments fectively (i.e. village spending Technical Team meetings in July 2017 to gain consensus and is needs-based and focuses prompt action on agreed next steps; and on investments and services that have a high development re- • Providing technical advice and support for early implemen- turn). Without better targeted allocations and effective spend- tation of the National Action Plan, including the Rembuk ing, villages will not be able to convert village funds into invest- Stunting (boot camp) for all 100 priority districts in October ments that reduce poverty and inequality. and November 2017, and the Human Development Worker (HDW) pilot project. 36 The Village Innovations Festival pilot project in NTB brought together over 350 par- ticipants from LGs, civil society and the private sector to showcase and learn about Given the World Bank’s extensive programmatic and opera- service delivery. The festival acted as a pilot to inform the VIP’s Village Innovation tional experience, the GoI have requested a new World Bank Exchanges. 37 Idea cards are for innovation ideas that villages have implemented but are not yet operation – Investing in Nutrition and Early Years (INEY) – and captured and documented. Villages can bring innovation ideas to the Bursa events for additional support from LSP to help implement the Presidential the District Innovation/Sub-District Innovation Teams to review. If the innovation ideas meet the VIP Innovation criteria, the innovations can be captured and showcased as a National Action Plan to reduce stunting. The INEY operation will “village innovation” during the next Bursa event. 38 Types of ideas included innovations on waste recycling, using an online ticketing provide incentives and tools to improve the efficiency and im- system to encourage village-level tourism, village product improvement and packag- pact of the US$ 3.9 billion annual budget allocated for stunting ing, and improving the quality of ECED and health services. 39 Commitments refer to the instances where villages at the Bursa events committed to reduction across 20 ministries and four levels of government. replicating an innovation in their own village. During the Bursa events, these commit- ments were recorded by village representatives on “commitment cards.” 8 LSP ACHIEVEMENTS BRIEF 2017 LSP is strengthening the GoI’s ability to better monitor, ac- to advocate for a fairer and more pro-poor formula. In Decem- count for and understand the impact of the GoI’s US$ 7.3 ber 2017, the new formula was approved and issued by the In- billion spending across Indonesia’s 74,954 villages. LSP donesian Parliament (Dewan Perwakilan Rakyat, or DPR) (PMK leveraged findings from the ViPER, Sentinel Villages and the Spot No. 199/PMK.07/2017).44 The revised formula allocates a greater Check analyses to strengthen the key regulation governing share of money to highly-populated villages and those villages village financial management (VFM) (Permendagri No. 113/2014) with higher numbers of poor people, including those in and the village financial system (Sistem Keuangan Desa, or disadvantaged and remote areas that need basic health, Siskeudes)40 so that villages can more accurately track and re- education, economic development and infrastructure services. port their finances. LSP’s support helped ensure that the It also en-sures that villages receive resources more revised Permendagri No. 113/2014 included simplified budgeting proportionate to their size and fiscal needs (i.e. the cost of classifications, and clarified roles and responsibilities to enable service delivery).45 Given that the Dana Desa Allocation is aggregation of fiscal data.41 LSP also supported the GoI-led up- reviewed annually and is expected to increase in future years, grade and rollout of the national Siskeudes system to help en- LSP will continue to support the GoI to continually assess and sure more standardized budgeting and reporting across village revise the formula, such as for the 2019 Dana Desa Allocation. governments.42 By December 2017, 70,380 villages in 418 dis- tricts had received information on Siskeudes; 68,940 villages in LSP supported and encouraged national cross-agency knowl- 413 districts received training/workshops on Siskeudes; and edge exchanges, which generated ideas to strengthen exist- 64,756 villages in 403 districts were running the Siskeudes ing village governance systems and processes. Through the application. LSP’s support to the GoI is helping set the stage South-South Knowledge Exchange, LSP supported a 15- for how villages track and manage their finances; and provides member Indonesian delegation46 to meet and share critical building blocks to improve understanding about village experiences with Indian counterparts on strengthening village spending, outputs and performance. governance and village poverty reduction using tools to enhance local ownership and downward accountability to LSP supported the GoI to make village transfers (which communities. As a result, the GoI developed and is rolling out a account for four percent of the national budget) fairer, more new module for Siskeudes that tracks village outputs; the pro-poor and service delivery focused.43 In 2017, LSP’s District Inspectorate of Kutai Barat developed Guidelines for Village Law PASA, along with the DFAT-funded KOMPAK, Risk Management, which are being used by all district MAHKOTA and the Knowledge Sector Initiative (KSI) programs, government units; and the Finance and Development provided analytical inputs, technical advice and policy dialogue Supervisory Agency (Badan Pengawasan Keuangan dan to inform the MoF’s revisions for the 2018 Dana Desa Pembangunan, or BPKP) and MoHA Inspectorate General Allocation Formula. Specifically, LSP provided extensive finalized VFM oversight guidelines (monitoring, review, analytical support (including over 20 rigorous village-level evaluation and audit of VFM), which will be used by lo-cal simulations) and advice to MoF to better understand the impact inspectorates providing oversight to villages. of different allocation formulas across thousands of villages, and 40 Siskeudes is used by village governments to submit standardized budgets and realization reports. 41 In 2017, LSP provided extensive analytical support to inform the revision and supported the drafting of the revised Permendagri. 42 Specifically, LSP supported improvements to the Siskeudes system, a trial before the application was launched and training modules to support its rollout. 43 Total Village Fund transfers includes US$ 4.4 billion (Rp. 60 triliion) in Dana Desa (village funds, or DD) and US$ 2.9 billion (Rp. 40 trillion) in Alokasi Dana Desa (village funds allocation, or ADD). The Allocation Formula change applies to the DD (not the ADD) proportion of the Village Fund transfers, which affects the full amount of Village Fund transfers (DD and ADD) to villages. 44 Minister of Finance. 2017. Peraturan Menteri Keuangan (PMK) Republik Indonesia Nomor 199/PMK. 02/2017 Tentang Tata Cara Pengalokasiam Dana Desa Setiap Kabupaten/ Kota dan Penghitungan Rincian Dana Desa Setiap Desa. Available: http://www.djpk.kemenkeu.go.id/wp-content/uploads/2018/01/PMK-199-Tahun-2017.pdf. 45 The revised formula reduces the basic allocation from 90 percent to 77 percent; includes a new three percent affirmation allocation for Disadvantaged and Very Disadvantaged Villages that have a high poor population; and increases the formula allocation portion from 10 percent to 20 percent, as well as adjusting the weight of each variable to be more pro-poor. 46 The delegation included representatives from MoHA, MoF, MoV, BPKP, Bappenas and district governments. 9 LSP ACHIEVEMENTS BRIEF 2017 Future Directions Going forward, LSP will focus on promoting greater sustainabil- 2. Improving basic service delivery and performance for better ity of the policy framework, institutions and systems that guide development outcomes village development and basic service delivery so that these • Completing the KIAT Guru IE and ECED pilot process eval- programs continue to bear fruit long after LSP’s projects have uation to generate evidence on each pilot projects’ im- ended. With LSP’s MDTF expected to close in June 2020, LSP is pacts to inform policy recommendations, future scale-ups ramping up efforts to help sustain LSP-supported GoI activities, (e.g. KIAT Guru Urban pilot project) and other operations financing and structures beyond June 2020, including through across the country. building the capacity of the GoI counterparts and partners, and • Integrating health and education spending into village communicating and institutionalizing LSP lessons learned and budgets to improve villages’ use of Dana Desa for health good practices in the GoI’s systems and programs. In 2018, key and education services in Generasi locations. LSP priorities include: • Preparing the GoI requested INEY Operation and provid- 1. Improving the effectiveness of Village Law for village devel- ing operational, coordination, policy and technical support opment and poverty reduction to help the GoI implement its National Action Plan to re- • Continuing to shift the allocation of Dana Desa to poor vil- duce stunting (including supporting the HDW pilot project lages; driving village spending towards more pro-poor and in 3,105 villages across 31 stunting priority districts). productive investments; and strengthening inclusion and 3. Providing high-quality analytical work to inform the GoI’s pol- transparency across the village development cycle. icy, particularly with regards to village development, poverty • Accelerating reforms to support better coordination of Vil- reduction, basic service delivery and gender equality lage Law implementation, and to enable reliable reporting • Leveraging information from the ongoing Sentinel Villages on village spending and outputs. Study to inform policy and regulations to enhance the im- • Mobilizing districts to play a greater role in village capacity pact of Village Law implementation. building and oversight; and testing alternative models and • Preparing a baseline survey and complementary qualita- sources for facilitation to help deliver more sustainable and tive assessments for the LED pilot project focused on P4; demand-driven facilitation support to villages. village partnership investments; and the inclusion of wom- • Prioritizing, testing and scaling up innovation reforms, en and market groups. through the VIP, to identify, generate and capture solutions • Providing analysis of BKN data to the GoI to inform civ- to local development and service delivery challenges. il servant reforms related to merit-based and transparent • Piloting a “public, private and people partnership” (P4) promotions across Indonesia. model of local economic development (LED) that empow- • Working with Bappenas to conduct a study to analyze fac- ers village farm and non-farm entrepreneurs to aggregate tors that contribute to an enabling environment for sus- and form productive alliances. tainable livelihoods including roles/concepts of “keper- antaraan” (partnership/linkages with market and technical experts) to inform inputs for RPJMN 2020-2024. 10