Chapter 1: Introduction 1. Excluding the period of political turmoil from the mid- to late sixties when much of Western development assistance to Indonesian higher education was sharply reduced –and in some cases (as with the USAID in 1965) abandoned altogether- in response to charges of capitalist propaganda. The episode was quite forcefully reflected in Sukarno’s famous phrase “to hell with your aid”. For an historical account of the story of the “Ousting of Western Professors” see (Thomas, 1973)
22. While further data and analysis of donor resources in education will follow in chapter 3, it is noted here that from 1984 through 1998 international ‘project aid’ on average accounted for over 41% of the government’s total development budget, a figure that may be on the rise even further in the aftermath of the financial crisis of 1997/98 (World Bank, 1999) Indonesia overall has enjoyed a broad base of external support in the donor community, possibly for a variety of political and economic reasons. While the World Bank, the Asian Development Bank, and Japanese bilateral assistance are now the dominant providers of official external assistance to the country -from 1994/95 to 1996/97, these three donors on average jointly committed a total of $ 4.3 billion annually in loans and grants, accounting for 81% of the total international assistance to Indonesia (ADB 1998: 22). Many other donors have given Indonesia a prominent place in their respective assistance portfolio’s, including Australia, Germany, the United States, France, the Netherlands (the latter until March 1992, when the Dutch-Indonesian aid relationship was abruptly ended), and various UN agencies. Annual meetings between donor agencies in the Consultative Group on Indonesia, a formalized inter-agency consultation body formed in the early years of Suharto’s New Order, provide a forum for regular discussions with the government and among donors. Since 1992, the Consultative Group is chaired by the World Bank. Before that time, the meetings of the donor group, then called the Inter-Governmental Group on Indonesia, were led by the Netherlands.
33. The World Bank, easily the country's largest source of official assistance loans from the 1970s onwards, made lending in education and health the second largest sector (following infrastructure) in Indonesia, growing from 7.3% in the 1970s, 11.6% in the 1980s to 16% in the 1990s (World Bank 1999: 13). Altogether, its education lending over the years represented over $2.5 billion worth of loans from 1970 to the present, in turn making Indonesia not only the largest recipient of Bank education assistance in the region –a share currently estimated at 37% of its total East Asia portfolio (and well ahead of China)- but also invariably including this country among its largest education portfolio’s worldwide (World Bank 1999). Not surprisingly perhaps, Dutch educational assistance before the dramatic rupture in the bilateral aid relationship with Indonesia in 1992 was even more heavily concentrated on that country, in 1990 representing slightly over 20% of its total international education assistance portfolio (Van Den Bosch 1992: 70, 74).
44. From 1970 through the 1990s, higher education accounted for over 40% of total international education assistance to that country. To illustrate with data on individual donors, higher education in the early 1980s represented no less than 54% of World Bank educational lending portfolio to Indonesia, and while its share has been on the decrease since, that decrease at least until very recently has been attributed as much to the increasing volume of projects in other education sub-sectors as to a shift in policy or country strategy (World Bank 1991; World Bank 1999: 22). Further, Indonesia is the Bank’s second largest borrower for tertiary education worldwide (Salmi 1998). A similar, albeit less dramatic picture emerges from the data of another major multilateral donor, the Asian Development Bank, which during the 1990s was investing about 30% of its social sector lending in Indonesia (including education, health, and nutrition) to higher education projects (ADB 1998: 21). Corresponding figures for bilateral donors are not easy to make, in part because data are not readily available or comparable over longer periods of time. Nonetheless, and with regard to Dutch educational assistance in particular, data do indicate a remarkable growth of expenditures in higher education in the 1980s (up to 43.9% of total educational assistance), which in 1990 accounted for 37% of educational assistance to Indonesia (Van Den Bosch 1992: 33, 70-74).
55. From the early 1980s through 1995, international aid on average accounted for 40% of the nation’s public higher education development budget. The specific period referred to here goes from 1986/87 to 1989/90, when international assistance accounted for 51.5% of the higher education development budget (World Bank 1991: 2). Funding sources for public higher education in Indonesia basically include the routine budget (DIK), consisting for most part of salary expenditures for its civil service staff paid and by the Ministry of Finance, the development budget (DIP), comprising physical and non-physical investments, international assistance projects, and since the late 1980s also some recurrent expenditures; and the self-generated income (DRK or DIK-S), which includes income from tuition and other revenue generated by institutions (e.g. contracts). Further analysis of the composition of these different funding sources, and specifically of the place of international assistance in it, will be provided in chapter 3.
66. The term ‘sub-sector’ is used here in a generic sense as the subdivision of a larger sector (in this case, education assistance), which in turn can be part of an even broader whole (for instance, social sector assistance). Some of the assistance jargon, however, uses the term ‘sub-sector’ in a more narrow sense, sometimes depending on the particular donor agency. Notably, the World Bank’s lending strategies for higher education have been classified as ‘sub-sectoral’ (i.e. sequential and integrated support for higher education), ‘inter-sectoral’ (i.e. education projects having components or objectives related to other sectors), and ‘sectoral’ (i.e. higher education projects linked to other levels of education, for instance teacher training projects) (Eisemon 1992 : 16).
77. Jones' analysis of World Bank education lending notes that a sub-sector perspective, often involving long-term investments in consecutive projects, overall has not been typical for World Bank projects in education (Jones 1992: 211). The Bank’s most recent education sector strategy papers in fact advocates a general preference for a holistic approach to educational lending at the level of the sector –rather than the sub-sector (World Bank 1999: 24).
88.In the early nineties, assistance to education comprised 10.5% of total Dutch assistance, of which 43,9% went to higher education (Buchert 1994; Dubbeldam 1991). In 1990, Indonesia represented 20,3% of all expenditures of Dutch educational assistance, while higher education development assistance to Indonesia accounted for 20.9% of all higher education expenditures of Dutch education assistance (Van Den Bosch 1992).
99. Since the early 1990s cost recovery from tuition fees is reported to have risen sharply at most public institutions, now representing well over 20% of their income. In addition, some of the more prestigious institutions either became increasingly successful in attracting self-generated income in the form of contracts (often with government agencies), or have become more open about its existence (see further discussion in relation to international assistance in chapter 4).
1010. Notably, proceeds from tuition and other self-generated institutional income continue to be regulated by the formerly colonial State budget law (Indische Comptabiliteitswet, 1927) and the law on ‘non-tax government income’ specifically. As recent as 1998 the Ministers of Education and Finance in a joint letter of agreement granted universities and hospitals the privilege to retain their self-generated income.
1111. Ironically, the Team for University Autonomy, headed by a former UI Rector, and formally established by Decree of the Director General of Higher Education in November 1998 provides a most telling example (GOVDOC - 426/DIKTI/Kep/1998).
1212. A further argument to be made for ‘assistance’ is that the term happens to correspond well with the general OECD category of “official development assistance” denoting grants or concessional loans “provided by the official sector with the promotion of economic development and welfare as the main objective” (OECD 1999).
1313. Student protests have played spectacular roles on Indonesia’s political stage at crucial moments in the country’s history. The student riots in 1978 marked the second serious moment of opposition against Soeharto, and received backing from retired army officers (Bresnan 1993: 197-202). The regime, however, reacted forcibly and successfully crushed the opposition, in the process consolidating its power for almost 20 years. Troops were sent in on the ITB campus (i.e. the leading engineering school in the country and at the time the hotbed of the student protest), the Rector was removed from office, hundreds of students were put in jail (some for several years), and student organizations disbanded (p.c. N. Schulte Nordholt). The ITB Rector’s successor recalls how during those days he spent most of his time trying to get students out of jail, keeping them out, and in the meantime answering phone calls from worrying parents (p.c. Hariadi). The increasingly dogmatic rigidity that characterized the regime during the years following the 1978 events left its mark on campus life with campaigns to “normalize campus life” (NKK, 1978), or to “reeducate civil servants in the Pancacila beliefs” (P4, 1979/80) (Thomas 1981). Little room was left for intellectual debate or criticism inside or outside academia for some time to come (p.c. N. Schulte Nordholt).
1414. The World Bank started its first major project in higher education development (excluding earlier efforts in teacher training) in 1978 with the approval of the first Polytechnic project. Meanwhile, Dutch assistance had reoriented its programs in higher education to further concentrate its assistance on a limited number of long-term collaborative inter-university linkages with selected partner universities in Indonesia, all starting in 1978.
1515. The author acknowledges the links and overlaps between these concepts, thereby accepting a certain lack of conceptual validity (Buchert 1995: 28).
1616. These are: (1) 'human capital development' underscores economic growth as the primary purpose of education and emphasized costs, efficiency, and effectiveness as its dominant themes; (2) 'human development', by contrast, has a social welfare orientation in which education is related primarily to self-development and societal improvement, with much attention being paid to issues of access, quality, and equity; (3) 'human capacity development' implies the abandonment of the 'relative autonomy' of education, and instead views support to education exclusively in function of broader social changes and empowerment specific groups in society. Relevance, equity, and gender are emphasized; finally (4) 'human resource development', finally, includes education aid policies that support a comprehensive integration between economic growth and social welfare strategies, covering capacity- and institution-building, donor co-ordination, and program and policy support for the long haul (Buchert 1994: 28-37). It is noted that Buchert's conceptual typology is echoed in Mundy's historical analysis of aid ideologies of educational multilateralism over the post-war era documenting a shift away from 'redistributive multilateralism' -Unesco and Unicef being the main examples- towards 'disciplinary' forms of cooperation that "emphasize the use of market mechanism and a more limited role for the State" (Mundy 1998 : 453).
1717. Specifically, and in line with the Pressman model, donors 1) are pressed to move money, 2) need information about recipient and other donors, 3) want to increase their control over the implementation process, 4) seek legitimization, and 5) request stability and continuity. Recipients, on the other hand, 1) are pressed to attract money, 2) want to achieve a steady flow of funds, 3) desire autonomy, and 4) prefer donor stability and support (Kreiner, 1984: 125).
1818.In a later article, Jones sees agency policy as a directly dependent on how these organizations secure their funding (Jones 1998).
19 Significantly, and as will be discussed in chapter 3 in relation to the Indonesian case, donors today explicitly advocate policies in which funds are allocated on a competitive basis.
20 Some observers, in search of operational definitions, have been tempted to regard “the absence of dependence upon a single or narrow base of support” (Babbidge and Rosenzweig, cited in Clark, 1998) as a proxy of institutional autonomy. However, such a resource dependency perspective does have limitations and will therefore not be pursued in this dissertation. Most importantly, while resource diversification may be part of strategies to increase the financial autonomy of institutions, it is not necessarily indicative of increasing discretionary powers at the institutional level. In effect, our finding at some of the more successful university departments (in terms of resource diversification) was that the Faculty level –and the Dean in particular— gained power often at the detriment of the institutional level.
21 One of the architects of the models in a more recent article on the ‘Evaluative State’ notes some of these (e.g. about operationalizing the ‘distance’ implied in notions of ‘remote steering’) and in doing so seems to soften the ideal typical division line that runs between them (Neave 1998).
22 At least one significant exception in that context would be the growing attention which scholars on higher education in Western Europe are now devoting to the implications of European integration on the relationship between Governments and higher education (Darvas 1997; Neave 1994).
23 One analyst notes that “the 1980s will be recorded in Indonesia’s history as the decade of deregulation” (Soesastro 1989: 853)
24 Both types of Bank reports became public information in 1994 and can now be consulted on the World Bank’s website.
25 Although revenue diversification is one of the dominant themes on the higher education policy reform agenda, surprisingly little attention has been given in the literature to the role that international aid plays –or should play- in diversifying the resource basis of universities in developing countries. One of the more recent works on university funding in developing countries does not even make reference to foreign assistance as a possible element of such a strategy (Ziderman 1995: 101).
Chapter 2: Donor Goals
26While NUFFIC was established as a University Foundation –witness its original name “Netherlands University Foundation for International Cooperation”— its mission and scope have expanded significantly ever since. Today, NUFFIC is known as the Dutch Organization for International Cooperation in Higher Education (including non-university higher education) and its relationship with the higher education community as well as with government has gone through significant change. Notably, as semi-public organization, NUFFIC has become more heavily involved in the management of publicly funded international programs on behalf of (various sections of) the Dutch government, thereby nurturing a relationship of contractual accountability to government. At the same time, and in line with its increased professional status, relationships to the higher education support base, which now also includes the so-called HBO-sector (i.e. higher vocational education), have loosened. Meanwhile, NUFFIC’s tasks have expanded well beyond the confines of international assistance, and include European exchange programs, study abroad, international credential evaluation, Dutch UNESCO Commission, scholarship programs, and international consulting work.
27In response to the limited accessibility of mainstream higher education for foreign students (cf. language of instruction, degree structure), the Dutch government in the 1950s and 1960s decided to set up a separate system of institutions known as ‘International Education’ (IO). IO-institutions were designed and set up specifically to accommodate training needs of overseas students from developing countries. The Dutch government takes charge of study grants awarded to course participants (the so-called Netherlands Fellowship Program) and provides direct institutional support through the line ministries organizing such courses (i.e. foreign affairs, education, and agriculture). Under agreement with the OECD Development Assistance Committee, these grants, with the exception of new premises-related investments, are all classified as Dutch Official Development Assistance. In 1991, IO-institutions received 70,613 million guilders ($ 31 million at the current exchange rate) worth of institutional grants (not including fellowships to participants), which were attributed to the cash ceiling for development cooperation (Ministry of Foreign Affairs, 1992: 161-163, 195). In addition to the study grants for participants and the institutional grants from government, IO institutions since the mid-1970s have their own program to develop and strengthen training facilities in developing countries, albeit initially with the explicit purpose of transferring a number of their own activities to the developing world. However, these IO-overseas activities mostly have been oriented towards training institutions outside the mainstream higher education system (e.g. technical training facilities of ministries or other government agencies, professional service agencies etc.). Furthermore, they later on were merged for some time with the other education linkages to form the program for Inter-institutional Cooperation Program (SV) (Ministry of Foreign Affairs, 1993: 48; Ruijter, 1993: 9-10). Apart from their significance in budgetary terms, however, the activities of the Dutch institutions for International Education are relevant to Dutch higher education assistance as they provides evidence of the internal complexity of ‘donor’ goals and policies, and of the various domestic constituencies to which bilateral donors need to respond.
28Funding from the development budget initially was very limited, with a total budget of 1 million guilders (about half a million US $ at the present exchange rate) when the program first got off the ground in 1970, but growing steadily to 26 million guilders between 1970 and 1975. However, besides the funds provided by development assistance, Dutch universities themselves continued to contribute significantly to the ‘linkages’, notably in the form of salaries of professors on short-term missions overseas, and training expenses of fellows from partner institutions. Only much later, in the aftermath of budget cuts imposed by the Minister of Education in the late 1980s, would universities request –and be granted— cost recovery and financial compensations from the Development Cooperation budget. The new financial arrangement, concluded in 1989, made participation in the program financially more attractive to Dutch universities. But at the same time, it also changed the nature of their involvement and commitment to the program, and to the partner institution overseas (Dulfer, 1995: 299-300). Still, and as a matter of principle, the own financial contribution of the Dutch institutions nonetheless remains one of the defining characteristics of the linkage programs supported with Dutch aid money. Notably, the now on-going ‘Joint Financing Program for Cooperation in Higher Education’ (MHO-Program) which came to succeed the earlier linkage program in 1993, as its name suggests is based on a joint financing arrangement between official development assistance and Dutch institutions (NUFFIC, 1997).
29While still prominent, the university focus has become less outspoken over the years, a development that is reflected inter alia in the successive name changes of the Dutch linkage program i.e. from ‘Program for University Development Cooperation’ (PUO) to ‘Inter-institutional Cooperation Program’ (SV), to ‘Joint Financing Program for Cooperation in Higher Education’ (MHO). At the Dutch side, increasing the participation of the so-called ‘hogescholen’ (non-university institutions for higher professional education) became a matter of policy when the MHO Program was launched in 1993. Nonetheless, given the procedure by which counterpart institutions were nominated, the program continues to be biased in favor of universities having longstanding relations and international networks (NUFFIC, 1997: 49-50). The focus on university development becomes even more prominent, and more persistent, when taking into consideration the type of partner-institutions overseas selected to participate in the successive Dutch linkage programs. Institutions outside the university sector have generally not been given much prominence, even at the time of the SV program, when the cooperative linkages of Dutch IO-institutions were included (mostly these involved training divisions within certain ministries). The current MHO program includes one polytechnic out of a total of 12 overseas partner-institutions (NUFFIC, 1997: 21).
30The Dutch government has also used more typical mechanisms of direct bilateral assistance (i.e. from government to government), including the provision of direct support to training institutions or regional scholarship programs, or the supply of Dutch experts to temporarily ‘supplement’ the staff of Indonesian institutions (with no further project money attached). Overall, however, the bulk of Dutch assistance in higher education (well over 70% in 1990) is channeled through linkages and other programs of ‘international education’ (Ministry of Foreign Affairs, 1993: 193). This tendency has been even more outspoken in the Asian region, and specifically in Indonesia, where Dutch assistance in the area of higher education has always been overwhelmingly supported through such mechanisms (Ministry of Foreign Affairs, 1992: 35). Nonetheless, when the 1992 education aid policy paper was released (in April 1992), the plan was to increase the share of the bilateral programs (in particular DSO) in the Dutch overall higher education portfolio in general, as well as in Indonesia in particular (Ministry of Foreign Affairs, 1993: 92). These policy intentions, however, never materialized in the Indonesian case in light of Suharto’s formal rejection of further Dutch development assistance around that same time (March 1992). As a result, the budgetary significance of the bilateral programs overall has remained relatively small during the period of this study.
31Such complexity is generally not a-typical of the consociational model of political decision-making found in the Netherlands, involving close consultations in policy advisory bodies and committees at various levels and with various interest groups inside and outside of government (Lijphart, 1999). In an early evaluation of the first PUO program, Kraak identified at least 8 groups of actors involved in the implementation of the program (Kraak, 1976). At the Dutch side, these include the Minister for Development Cooperation and her policy administration, several policy advisory committees (e.g. to advise on program criteria and design, on selection of institutions, on selection of projects, or on specific issues), the NUFFIC, which has managed and coordinated linkage programs, the universities (and their International Bureaus), contracted to implement parts of the program, and their academic units responsible for project implementation, and coordinating committees to oversee implementation issues at the linkage level. In practice, an inter-institutional linkage arrangement under the PUO-II program typically involved several Dutch universities and one overseas institution, and usually comprised a rather large number of projects (ranging from 4 to 7 in the Indonesian case) implemented in several faculties and/or departments of that institution.
32The Dutch experience with inter-university linkages is documented in some of the contributions to the NUFFIC conference ‘Linkages revisited’, held in The Hague in March 1995 (van Dongen, 1995; Dulfer, 1995).
33Most of the specific cooperation projects typically originated from individual contacts of Dutch academics, as many informants and former participants pointed out (p.c. Brinkman, Veenkamp), and these were often continued for many years. In other words, the influence of academia extended well beyond issues of technical implementation, but indirectly also affected such basic choices as the selection of institutions and academic fields. In addition, through their representation in the NUFFIC Board, Dutch institutions at least formally also participated in program policy development, albeit within the margins set by the Minister. Their influence, nonetheless, was not exclusive or all encompassing. Apart from taking critical strategic decisions (e.g. which countries, how much funding…), the Minister for Development Cooperation and the Dutch administration for International Cooperation (DGIS) determined the policy framework and the conditions within which university linkages were to operate. Further, as a result of its changed composition and task structure over the years, the NUFFIC itself has come to play a much more prominent and independent role as broker and mediator, including in the area of program design (Van Audenhove, 1999].
34Pronk, a social-democrat, has been a prominent figure in Dutch development aid for many years. His role furthermore was particularly important with regard to Dutch relations with Indonesia, where he was known as a vocal critic of the New Order regime from the first time he became Minister for Development Cooperation in the seventies (1973-1977). At that time already he had pleaded strongly –albeit unsuccessfully— in favor of discontinuing or at least phasing out Dutch aid to Indonesia. Pronk again became Minister for Development Cooperation in 1989, under very different international and domestic circumstances. Notably, as the protagonist of the strategy to link aid to political reforms he soon became Suharto’s main antagonist in the events that ultimately led to the ‘rupture’ in March 1992 (Schulte Nordholt, 1994: 8-12).
35King notes that the early 1970s had produced a “climate of questioning and criticism about the university” (King, 1991: 243), which at least initially was not sharply focused but rather involved a general critique of the perceived lack of relevancy of the university to national development (Eisemon, 1994: 277). Some donors who before had been heavily involved in overall university development during the 1950s and 1960s –“the golden age of university assistance” (Levy, 2005) — around that time decided to disengage from that area altogether (cf. USAID and Ford Foundations). However, many others –including the Netherlands, these would include, inter alia, the Rockefeller Foundation, Swedish SAREC, and Canadian IDRC—began to specifically support the developmental role of universities in the developing countries through projects in such areas as “integrated rural development” (as in the Dutch link with the Universitas Gajah Mada), or “community health care” (supported by NUFFIC at the University Hasanuddin, and successively by Rockefeller Foundation and NUFFIC at Gajah Mada as well). The idea of supporting ‘development universities’ –or rather, focusing support on the university’s development and service functions rather than of its traditional role in teaching and research— captured the minds of many as reflected in the donor-commissioned report by Fogel and Thompson for the International Council for Educational Development (ICED, 1976). The upshot of this story is that university linkage programs such as NUFFIC’s did not suffer all too heavily from the then emerging –and later increasingly growing—criticism of the ‘Third World university’ as they had been able to co-opt much of that criticism in their own goals and rationales. For a review of the Rockefeller experience with supporting development universities see Coleman and Court, 1993: 295-310.
36Not surprisingly, the diverging objectives of Dutch universities and policy makers regarding international assistance were paralleled domestically by diverging views on higher education policy (p.c. Brinkman).
37None of the decision-making powers required for institutions to enter into such agreements are self-evident. Although regulations and practices vary widely across countries, many have an immediate bearing on the nature of State-university relations. For instance, university rectors don not usually have the authority and/or power to sign agreements without any prior clearing from the ministry or from other government agencies. As linkages involve contractual obligations that often impinge on existing government regulations in a wide range of areas –typical examples here include the duty free importation of goods and equipment usually required by donors, but also the provisions regarding assignment and remuneration of (civil service) university staff, provisions for overseas training etc.—such authorizations are in fact quite common. Within PUO it was in fact standard policy that the inter-institutional agreements were further formalized in intergovernmental accords. As will be discussed in greater detail in chapter 3, the Dutch linkages in Indonesia similarly involved prior agreements and regular consultation with various agencies in the Ministry (DGHE) and the National Development Planning Board (BAPPENAS). In spite of these precautions, the political vulnerability of the linkage formula nonetheless remains, as was forcibly demonstrated in April 1992 when all on-going linkage agreements were formally ended as a result of Suharto’s decision to refuse further aid from the Netherlands.
38As inter-institutional agreements, the linkages under the PUO program formally ran from 1978/79 to 1988. However, most of the individual projects that had been part of these linkages in fact were continued well beyond that time and often were still ongoing at the time of the bilateral aid-rupture in 1992. Even though starting from 1989 linkage projects with other Indonesian institutions (including two universities) were added, the impact of the initial selection of institutions (and projects) in other words extended over a period of more than 14 years.
39The Dutch institutions at that point (July 1977) had already suggested a total of nine Indonesian institutions, five of which the PUO-Board, established to advise the Minister on the selection of institutions and project, considered viable candidates (NUFFIC, 1984: 5).
40The Vrije Universiteit Amsterdam (VUA), prominently influential in developing and promoting the new Dutch linkage policy, had built a strong case for choosing the symbolically important University of Gajah Mada (“the university of the revolution”), one of the nation’s the top universities. Specific arguments included the institution’s academic status, its reform-minded leadership and relative independence from Jakarta, its leadership role in Indonesian higher education in general, and in Central Java in particular (VUA, 1980), but also the presence of other international donor agencies (p.c. Veenkamp). Somewhat in contrast, the second partner institution in the program, the University Brawijaya (UNIBRAW), is a relatively new and less established institution focused on rural development (founded as State university only in 1963). Notably, UNIBRAW’s specific mission and commitment to develop itself as an institution working for the rural communities in East Java (“the university of the ‘village’ or ‘desa’”) resonated well with the policy priorities of Dutch assistance at the time. The University of Hasanuddin (UNHAS), finally, was the only non-Javanese institution selected into the program. At the time of its selection into PUO-II, UNHAS’s internal organization was “different from the usual one in Indonesia” (van Olden, 1983: 8) as it had been selected by the Ministry of Education for a pilot project seeking a new division of responsibilities between the faculties (i.e. control of resources) and the study programs (i.e. academic programming) following a matrix structure. Probably of more immediate importance to its selection as partner university in the Dutch linkage program, however, was the existing cooperation with the medical faculty of the Erasmus University. Whereas cooperation initially was directed almost exclusively towards upgrading of medical teaching and research, both donor and NUFFIC soon began to express a strong interest to include institutionalized cooperation in the field of primary health care and community health (van Olden, 1983: 22).
41These political rationales and justifications not only figured prominently at the time the proposals for collaboration were to be submitted and ‘defended’ (VUA, 1980), but also became a regularly reoccurring subject of debate once the linkages were approved (p.c. Veenkamp).
42One informant notes that it was generally understood that the Indonesian government would not have accepted direct participation of private institutions in the PUO program (p.c. Brinkman). Some Dutch institutions did have extensive formal links with Indonesian private universities, but these were usually funded from their own budgets.
43The linkage program at the time operated on the principle that each linkage should constitute a coherent package, the significance of which would ideally surpass the sum of the constituent parts (i.e. projects). In practice, however, evaluations would soon indicate that such coherence was difficult to accomplish in the absence of mechanisms that could help ensure integration of activities in partner institution plans (Kater, 1984: 8-11). Meanwhile on the Dutch side, apart from an overall ‘indicative budget’ set apart for each linkage, the individual project in fact continued to operate on its own terms and budgets. Occasionally, budgetary pressures would facilitate conflict rather than cooperation between projects (Hordijk, 1987: 17-18).
44This shift is reflected, inter alia, in Altbach’s suggestive “From Dependence to Autonomy” (Altbach, 1989), and broadly coincides with the end of the “golden age” of international assistance, when donor efforts usually included activities in such areas as campus development, planning, and management (Levy, 2005). The Rockefeller Foundation’s experience with university development during that period is documented in Coleman and Court (1992). In particular the Foundation’s experience with the Education for Development Program (EDP), which from the 1950s to early 1970s included strengthening the administration of universities in developing countries, illustrates how the international receptivity of many universities for this type of activity had critically decreased by the mid 1970s. Of twelve institutions that received support from the Foundation’s EDP, Indonesia’s Gajah Mada University was the only one where no specific projects were undertaken in that area. Significantly too, it was the last institution to enter the program, collaboration starting only in 1973 (Coleman & Court, 1992: 267, 270).
45Part of the confusion derived from the fact that the project was first introduced as a direct follow-up to the earlier medical training project in the Medical Faculty, a situation which continued to be reflected in the project’s name (Wiggers, 1991).
46Dutch higher education itself had experienced major domestic policy changes –notably involving increased autonomy and much less direct and different government control mechanisms— from the mid- to late 1980s (van Vucht, 1993]. The noted policy change in Dutch international educational policy in other words seemed to parallel the reform agenda at home rather well (p.c. Zijlstra, p.c. Maassen, p.c. Hagen).
47As a result of inter-agency agreements between the Ministry of Education (OCW) and the Ministry for development cooperation (DGIS) in the Netherlands, projects from the education budget were restricted to a budgetary limit of 50,000 guilders a year (slightly over $ 20,000 at the current rate).
48The phrase ‘financial autonomy’ was first introduced into the fifth five year development plan (REPELITA V) in 1988, following a process of internal consultations within the DGHE, and with BAPPENAS, the National Development Planning Board (p.c. Sukadji Ranuwihardjo Ranuwihardjo). The education law Nr. 2 dates from 1989 and the government regulation pertaining to financial autonomy was issued in 1990.
49Study tours of ITB delegations in The Netherlands were a prominent part of this project. Increasingly, from the mid-1980s, similar study tours –with a focus on university management—were to be organized and funded by other donors as well.
50CHEPS itself had started only in 1984/85, following budget cuts in The Netherlands in the early 1980s and the suggestion of the government that “the universities study themselves” (Clark, 1998: 51). Its increasingly international appearance received explicit support from the Ministry of Education.
51The PUO progress report in 1984 notes an increasingly critical attitude on the part of the Minister of Development Cooperation vis-à-vis ‘technical’ project decisions and advice from 1982 onwards (NUFFIC, 1984: 11). Apart from donor criticism, however, growing budgetary pressures at Dutch universities in the mid-1980s forced the institutions in the Netherlands to take a more sober look at their own financial contribution to the linkage program (Dulfer, 1995: 299).
52The changing roles and contractual responsibilities under the program in the Netherlands need not be further elaborated in this context. Most significant was that the donor agency (DGIS) became increasingly and more directly involved with project management (including the conclusion of contracts with Dutch institutions), whereas NUFFIC took on the role of an independent monitoring agency. The new arrangement further included updated agreements on financial tariffs for Dutch institutions participating in the linkage program [NUFFIC, 1991)
53These efforts included the drawing of multi-annual plans for each of these two institutions pertaining to ‘the fourth phase of the Dutch-Indonesian cooperation’ (i.e. following three consecutive four-year periods starting from 1978) (NUFFIC, s.d.).
54The construction was unique at both ends. The DGHE was usually not a direct partner in the Dutch linkage program, whereas the NUFFIC’s in principle did not take on any implementation tasks.
55Termination of the project, however, does not necessarily suggest failed institutionalization of the ‘applied approach’ within the universities. Institutions still require their lecturers to take the training, as was observed during field visits.
56The DGIS Indonesia policy plan of 1988 mentions that the goal was to respond to initiatives that support increased involvement of all segments of the population in the development process. The plan acknowledges that opportunities to work outside the realm of government control are restricted and therefore limited in general –the lack of significant institutionalized contacts between Dutch and Indonesian unions is noted as a particular case in point. Institutional contacts between institutions of higher education and NGO’s, on the other hand, are examples of where the linkage-strategy can built on notable precedents (Ministry of Foreign Affairs, 1988: 32).
57In spite of the opportunities created by the sector program, these did not result in any direct (aid-sponsored) linkage projects with Indonesian private institutions, even though several Dutch institutions –as noted— continued to entertain (privately funded) collaborative agreements with some of these. To be sure, private universities may have benefited indirectly from Dutch assistance (e.g. by staff upgrading programs offered at assisted institutions). In light of both absolute and relative size of the private sector in Indonesia, the continued concentration of assistance to public institutions nonetheless was remarkable. It furthermore was not typical of the linkage program only, but also held for other areas of higher education assistance. For instance, a survey of alumni (1984-1988) of the Dutch fellowship program for Indonesian professionals in 1990 identified 93.5% of the respondents as government employees, 15% of which were employed by State universities (other categories included central or regional governments and State enterprises). Only 0.9% of the respondents (4 out of 437) were employed at a private university at the time of the survey (CESO, 1990: 97). A similar picture emerges from the academically oriented Indonesia Academic Fellowship Program (PIAF), which provided scholarships for young Indonesians to undertake university studies in The Netherlands (Ministry of Foreign Affairs, 1992: 35).
58The New Order’s macroeconomic policy was essentially designed by a small group of U.S.-trained university economists from the Faculty of Economics at UI who had managed to gain the confidence of the military –and Suharto— in the aftermath of the political succession of 1966 (Bresnan, 1993: 60-64). The program, which was inspired by theories of macro-economic development holding sway in the 1950s and 1960s, put forward a central role for government as the major institutional source of plans, guidance, and direction for economic growth (James, 1993). Foreign assistance from international institutions such as IMF and World Bank as well as from bilateral donors was welcomed in again to finance the technocrats’ development agenda. While their economic agenda and political influence have changed since, many of the leading ‘technocrats’, in group sometimes referred to as the “Berkeley Mafia”, remained influential throughout most of the 1970’s and 1980s, some even holding key government positions well into the 1990s (Bresnan, 1993; Schwartz, 1994: 52-53). To this day, the University of Indonesia is known by its nickname as “the ministers’ school” (The Jakarta Post, 11 March, 1996). While as a case of the international transfer of ideas broad parallels and similarities can be identified with the Chile project of the later Chicago School of Economics (i.e. the “Chicago Boys”) the substantive differences between these two cases are probably more telling for the purpose of this study. Notably, whereas the Chicago project explicitly sought to oppose the influence of development economics as a particular kind of economics, Indonesia’s technocrats were eager to promote and adjust it in their own country setting. Further, to the extent that there ever was an explicit “Berkeley project” (in fact some of the core members of the group were trained at other places in the U.S.) its core idea of an interventionist State was completely at odds with Chicago’s free market (Valdés, 1995).
59The Bank’s Resident Mission in Indonesia, the first of its kind, was established in 1968, only two years after the country resumed its membership of the UN, and during the first critical years was headed by known advocates of the economic policies furthered by the economists (Bresnan, 1993: 83). Rather unusual in those days, the Bank’s country chief economist was based in Jakarta rather than in Washington, and the Mission for a long time was even physically housed in the offices of the National Planning Board (p.c. Gilpin).
60At the government side, the commitment to investments in education was manifested first in the second five-year development plan (REPELITA II 1974-79), and has grown markedly since, in the 1970s greatly helped by increasing oil revenues. Bank lending in education and health grew steadily throughout the period of this study, rising from 7.3% (1969-79), to 11.6% (1980-89), up to 16.0% (1990-98) of its lending portfolio in Indonesia (World Bank, 1999: 13].
61Early World Bank interventions in education (including all those carried out before the 1973 National Survey, which formally started the dialogue process) were funded with credit lines from the International Development Association. The Polytechnics I project (1978) was the last IDA financed Bank project in education.
62It is noted in this connection that the calendar of policy dialogue was often organized explicitly around ‘benchmark events’ in the bureaucratic planning cycle (e.g. preparation of annual budgets, five year plans, or even, in higher education specifically, ten year plans). Further, the policy dialogue was essentially seen as a vehicle to “exchange views with a member Government on the present situation of a sector…” (World Bank, 1991: 65). The principle that participation in the dialogue process was restricted to government officials at “a relatively high level of responsibility” was rather consistent with the nature of Indonesia’s bureaucratic polity, and until very recently (World Bank, 1999: 18) went largely unquestioned.
63Government expenditures on education at the time were notoriously low, representing less than 2% (2.5% when adding private expenditures) of GDP in 1971 (Data from UNESCO, cited in: World Bank, 1975: Annex 1). Even so, and apart from political willingness or international support to increase public expenditures, the budgetary muscle to facilitate such increased government spending was greatly enhanced by the massive public revenues resulting from oil price hikes in 1973. To illustrate, in 1974 Indonesia expected to earn over US $ 3 billion in net oil revenues, compared with US $ 0.5 billion in 1972 (World Bank, 1975: 5).
64The report notes almost prophetically that “…the principal constraint on educational development is not likely to be financial but rather administrative capacity” (World Bank, 1975: 14).
65Teacher training for secondary education was the Bank’s formal entry point into higher education (cf. 1st teacher training project, 1977). This project was soon followed by interventions having a more specific sub-sector focus on higher education development per se, as with the first Polytechnics project (1978).
66Key actors within this institutional framework include the Ministry of Education (and DGHE in particular), BAPPENAS (National Development Planning Board), and the Ministry of Finance. Government budget operations are divided into two subsets following parallel tracks: the routine budget and the development budget. Routine budgets are prepared by the Ministry of Finance, whereas the development budget –which includes revenues from international assistance—is coordinated under the responsibility of BAPPENAS.
67This, however, does not necessarily suggest that reformers from academia had no significant say in matters of policy making. Rather, it implies that academic influence was exerted most effectively at the level of the central bureaucracy (i.e. and by making use of regular bureaucratic procedures, often through a process of ‘co-optation’ (e.g. key-appointments or committees within the Ministry). The process has allowed external donors such as the Bank—which at the time was used to working with and through governments only—to construct policy dialogues and alliances within the bureaucratic polity.
68The Bank’s consecutive country strategies for Indonesia have included “the enhancement of human resources development” in its list of priority objectives throughout the period of this study (Country Assistance Strategy, 1996). Manpower goals have also continued to provide the basic economic rationale for the Bank to invest in higher education projects in particular, including the most recent ones (QUE, SAR p. 7). From a an outsider’s perspective, Jones in this regard takes the view that “the bank’s rationale has barely changed in 35 years, a celebration of the elegance of human capital theory” (Jones, 118). Both perspectives suggest that the Bank’s investments in higher education at least to some degree —and this is where agreement stops— are grounded in terms of labor market payoffs.
69A later OED internal evaluation report on the Bank’s education lending experience in Indonesia questions many of the assumptions of the forecasts used in the Polytechnic project (World Bank, 1991: 90). That same report further suggests that the limitations of the use of these manpower forecasting techniques were well known to the Bank at the time the loans were approved in the 1970s. However, reservations about unselective expansion policies pursued by the Indonesian government at that time reportedly had led the Bank to cater more prudently (and more narrowly) for specific technical and vocational skills in high demand (World Bank, 1991: 40, 48-49).
70In that sense, the decentralization strategy in Indonesian higher education broadly echoes John Bresnan’s conceptualization of the Indonesian political economy in the early 1990s as “managed pluralism” (Bresnan, 1993: 293-94). The term is an indication of the political constraints and limitations of Indonesian pluralism at the time, but at the same time suggests a increasing managerial capacity and room for autonomous action.
71An indication in itself of the centrality of manpower development in this donor’s lending rationale.
72In 1978, less than half a million students had access to tertiary education, representing a relatively meager 4% of the relevant age group (DGHE, 1978). At that time, 200.000 of these were at State institutions, a number that from then onwards rose sharply in only five years time to 390,000 students in 1983 (IEES, 9-15). During that time period, the government established four new public universities outside Java, and created, with the support from bilateral donors, the Open University in 1984 to accommodate increasing social demand for higher education. (Oey-Gardiner, 1991).
73In the case of the polytechnic project, project designers at an early stage had looked into alternative channels of provision in the private sector but soon decided to support the government’s plan to create a new network of publicly provided polytechnic schools within selected universities (POLY-PPAR: 1). Regarding the identification of project institutions, the Bank’s internal evaluation study on educational lending in Indonesia notes that it was not uncommon for the Bank to give the Indonesian government a powerful say in the choice of target institutions (OED, 92), albeit within certain constraints (e.g. number of institutions). In the case of the UDP-I project, the three institutions that were targeted included two leading universities (i.e. UGM and UI) and one less-established university outside Java (i.e. UNAND), a choice representing the uneasy balance between national prestige and considerations of regional equity.
74The validity of such a claim will be subject of discussion in chapter 4. Instead, here the statement is used as indication of the importance attached to more effectively centralized control.
75The latter notably included the capacity to absorb increasing amounts of international aid in the DGHE, as implementation experience during the first series of Bank projects had reportedly been mixed (e.g. slow disbursements, inexperienced management), and as the number and volume of projects would soon start to expand.
76These included the four traditional top public universities (i.e. ITB, IPB, UGM, and UI) as well as the Open University (Universitas Terbuka), which then had only recently been established to help accommodate growing social demand for higher education in Indonesia (p.c. Sukadji Ranuwihardjo).
77The sector studies were carried out from 1983-85 with advisory support from the Bank (World Bank, 1986), and fed directly into the drafting of the second ten-year higher education development plan (Departemen Pendidikan dan Kebudayaan (Ministry of Education and Culture), 1986). A parallel joint review of implementation experience in Bank-funded education projects was conducted in 1985 (World Bank, 1985).
78Given the government’s emphasis focus on investments in primary and secondary education, and taking into account the particular needs in higher education —i.e. typically biased towards foreign exchange components, such as fellowships, technical assistance or scientific equipment— the rationale was that the Bank had a comparative advantage in higher education (p.c. Gilpin). In addition, and fully compatible with human capital theory, social rates of return to higher education had been estimated at fairly high levels (15-20%).
79Domestic developments that may help explain this growing willingness to borrow on Bank terms notably include: a changed and reform-oriented leadership in DGHE —the term ‘fixers’ comes to mind (Cerych, 1986: 250— as well as in government (i.e. growing influence of science and technology-oriented growth strategies), but also the budgetary difficulties resulting from consecutive drops in the oil price in the mid-1980s (p.c. Bagyo Moeliodihardjo).
80Definitional issues have not been settled in the literature on ‘institutional development’, or even ‘institutions’, and theoretical perspectives continue to diverge. This particular definition was chosen because it was taken from a study from that time period which analyzed World Bank experience with institutional development in different sectors.
81In practice, though, projects such as HEDP-I and II combined a firm commitment to the development of a centralized management information system with project components supporting planning and decision-making at the institutional level (cf. infra).
82In contrast, the Bank never aspired for parallel systemic reforms in human resources management, as that would involve a major overhaul of the civil service status of university staff. Instead, the Bank tried to find alternative arrangements (e.g. salary increments) to reward performance in the framework of its projects (p.c. Sukadji Ranuwihardjo).
83The World Bank 1986 discussion paper on education financing in particular, articulates these priorities very well (World Bank, 1986: 2). Although the paper was highly controversial at the time — reportedly preventing its issue as a formal statement of Bank policy (Jones, 1997)— its recommendations have guided education lending negotiations in various countries. Resource diversification in public higher education later formally became one of the pillars of the Bank’s higher education policy paper ‘Lessons of Experience’ (World Bank, 1994: 40-54).
84Consecutive drops in oil prices in 1986-87, the increased value of the Yen, and the fall of primary commodity prices were among factors causing an economic slowdown, which in turn resulted in severe budget cuts in a range of sectors, including higher education (World Bank, 1988: 1). The gradual erosion of government funding in relation to enrollments fueled worries about decreasing quality overall. A specific cause of concern was the inadequacy of non-salary recurrent expenditures for operations and maintenance (typically close to 90% of recurrent budgets was taken up by salaries) to match investment projects (some funded with international assistance, cf. chapter 3). Meanwhile, the growing size and complexity (cf. differentiation of missions) of the system had made higher education increasingly difficult to manage centrally (Task Force for Management Reform and Consolidation of Higher Education, 1988: 8).
85Already in 1983 the government had launched the idea to establish Inter-university Centers (IUCs) as a way to coordinate the use of scarce physical and human resources while concentrating them at selected institutions. Their main purpose was to support programs of study and research at the graduate level, and to facilitate professional interaction among universities. The idea materialized later in the Bank assisted UDP-II project (UDP-II, SAR: 8).
86Tuition fees for incoming students at public universities were doubled in September 1986. In 1986-87 the cost of tuition fees was estimated to represent on average 20% of the operational budget per student at the State universities. Student fees varied by region, but basic fee categories were determined jointly by the Ministry of Finance and the Ministry of Education and Culture (Mc Meekin, 1986). Restrictions on the establishment and operation of private institutions were gradually being lifted as part of the government’s policy to stabilize the expansion of public education, and instead allow private institutions to accommodate the greater share of social demand for higher education (p.c. Sukadji Ranuwihardjo).
87The Task Force for Management Reform and Consolidation of Higher Education within DGHE had studied ramifications of various control mechanisms to accompany increased financial and academic autonomy for different groups of institutions. During consultations with BAPPENAS, the proposal later was restricted to include reference to financial autonomy only (p.c. Sukadji Ranuwihardjo).
88Increasing government support for research and technology, spurred by the technology-minded and increasingly influential Habibie from the late 1980s onwards, represented such an opportunity, as it would later provide the seedbed for the introduction of competitive funding schemes, both inside and outside of Bank assisted projects (cf. infra). Ironically, Habibie’s technology based economic growth strategy (‘habibienomics’) was built on a strongly interventionist government and did not at the time receive much support from the economists at the World Bank (Schwartz, 1994: 90).
89The distinction between ‘level of change’, ‘depth of change’, and ‘functional breadth of change’ is derived from the study by Cerych & Sabatier on higher education policy reforms in Western Europe (Cerych & Sabatier, 1986: 244). The institutional reforms suggested by the Bank under HEDP I and II at the system level were predominantly finance related (not including, for instance, structural reforms of personnel policy in higher education institutions), and furthermore were mostly congruent with either domestic norms or practices (e.g. income generating practices).
90For instance, the process of selecting ‘strategic disciplines’ to be developed in UDP-II and determining the institutional locations of the IUC’s took place in committees of leading academics brought together at DGHE. Occasionally compromises would result in the establishment of competing IUC’s in the same disciplinary area. The Bank on its part initially was in favor to pilot only a small number of IUC’s but gave in early in project identification (UDP-II, PCR: 12, 15).
91Rather than supporting the development of locally adjustable management and information systems, consecutive HEDP projects ambitiously —yet unsuccessfully, as it turned out—sought to standardize and extend a prototype MIS-model into an integrated Higher Education Monitoring and Evaluation System (HEDP-I, SAR: 21; HEDP-II, PCR: 5).
92According to Indonesian State budget laws, tuition fees and other non-budgetary sources of income at public institutions are formally accounted as (non-tax) State income, and therefore continue to be considered by the Ministry of Finance as Government income. State institutions in 1990 in principle were granted more financial autonomy to retain and manage these resources (PP30, 1990), but the implementation of that regulation was made subject to many restrictions, controls, and ‘veto-points’ imposed by the MOF (e.g. spending approvals, reporting requirements, interest earnings, roll-over of unspent funds…). See Interviews Sukadji Ranuwihardjo, Bagyo Moeliodihardjo, Wati.
93This process has been reconstructed largely on the basis of internal communications, aide memoires, mission reports, official correspondence, and interviews. Further documentation was derived from appraisal and supervision reports pertaining to URGE, DUE and QUE project respectively.
94Several factors contributed to this growing recognition within the Bank, notably including growing concerns about the sustainability of ongoing and closing projects, changes in operational and technical Bank staff, both in Washington and at RSI, but also the broader intellectual influence of higher education experts who at that time advised the Bank’s on its higher education ‘best practice’ policy paper, which appeared in 1994. Drafts of that paper were presented during Bank missions at the DGHE in late 1993 in order to identify in the Indonesian context “major systemic weaknesses [that needed] to be addressed for a long term viability of sectoral investments” (AM-11/24/93: 5).
95The Bank never formally identified its evolving strategy in these exact terms, although ‘decentralization’ from that time period onwards is increasingly used in Bank documents and reports. The World Bank at that time also begins to advocate ‘more decentralized and participatory’ development strategies in the context of it’s Country Assistance Strategy (CAS) for Indonesia (World Bank, 1995: 9-10)
96 See, for instance, letter to the Minister of Education and Culture, dd. July 11, 1995, one of the more openly critical Bank documents on this topic, expressing deep concern about the quality and responsiveness of the existing higher education system, calling for “’much more decisive steps to permit individualized institutional development of universities”. The Bank instead underscores the need for decentralization and autonomy, “not for its own sake, but as critical step in making universities responsible for educational processes that cannot be effectively governed centrally for the country.”
97See Aide Mémoires dd. 11/23/93; 10/07/94. Besides its general recommendations and advice to the government, the Bank itself increasingly will make selectivity and fine-tuning of decentralized funding mechanisms a core feature of its own operations (cf. infra).
98Both elements would figure prominently in the discussions leading up to the identification of new Bank loans following up on HEDP-II (AM, 02/17/95; IEPS, 04/05/95; AM, 06/21/95).
99The main components of strategic decentralization seem to correspond well with the ‘State-supervision model’ of higher education system integration, in which the political authority of the State sets out broad parameters but decisions about institutional missions and goals —and the ways to achieve these— are left to autonomous institutions guided by academic professionalism and market-principles (van Vucht, 1993: 27). The model, which is based on conceptual and empirical studies of higher education policies in Western Europe in the 1980s (Neave, 1991), represents a theoretical blend of authority-based and exchange-based models of decision making, in turn suggesting an alternative both to State-controlled and market-led coordination mechanisms in higher education.
100Consultations to follow-up on UDP-II were initiated in October 1992 —at a time when investments in higher education were increasingly scrutinized within the Bank— and continued up to May 1994, when the URGE project was approved by the Board. Preparatory missions to identify lending priorities following up on HEDP-II started in late 1994, feeding directly into DGHE’s long-term strategy formulation, a process which was initiated early in 1995 (i.e. Higher Education Strategy Task Force), at least partly at the instigation of the Bank. Loan negotiations were concluded with the board approval of the DUE project (May 1996) and the QUE project (June 1997) respectively.
101Like the earlier sector-loans in higher education (i.e. HEDP-I and II) the chosen strategy once more illustrates the Bank’s ‘special relationship’ with the Indonesian government and virtually ruled out ‘policy conditionality’ as a politically feasible alternative (World Bank, 1999: 15).
102Aide Mémoire and Back to Office Report, Higher Education Lending Development Mission, 10/06/94.
103The Bank started to encourage DGHE to articulate a more coherent long-term strategy at the time when it was considering the identification of a follow-up loan for HEDP-II (AM, 10/7/94). Soon thereafter, successive Bank missions began to provide input to the DGHE Task Force for Higher Education Reform, which was established early in 1995. Joint workshops and advisory missions were organized throughout much of 1995, in parallel with project preparatory activities (AM 2/17/95; 7/11/95; 10/12/95). The ‘Paradigm’ concept paper (‘Paradigm for Restructuring the System of Higher Education’), referred to in later documents as the ‘New Paradigm’, appeared in July 1995 when it was presented at a meeting with university Rectors.
104This strategy emerges as the dominant pattern of official higher education policy development in Indonesia, even though in practice the more influential universities in fact contributed heavily to the formulation of official policy at the central level. In the DGHE Long Term Development Plan the strategy is legitimized as follows: “The proposed higher education model’s starting-point is the hierarchical relationship between four different strata (i.e. the central authority, the universities, the basic academic units, and the civitas academica). Even though the paradigm of reform very much emphasizes autonomy, the link between universities (as organizational units in the implementation of higher education) and economic, political, and social development requires hierarchical relationships that act as adhesive in the pursuit of higher education’s national goal.” (Soehendro, 1996: 45).
105This awareness becomes increasingly manifest during the preparation of the Higher Education Support Project—the name initially given to the follow-up project of HEDP-II, but later split up into two separate loans (cf. infra)—and appears in particular from the Mission Reports (i.e. Aide Memoires, and Back to Office Reports) and other communications with DGHE from May to October 1995. See: BTO 06/20/95; AM 07/11/95; AM 10/12/95.
106In spite of the broad agreement on principles, this change of Bank strategy did not always sit very well with DGHE concerns. Notably, the discontinuation of ‘time slice’ loan format, which had ensured the DGHE of a steady flow of development funds, was to be replaced by a mechanism that on the one hand re-affirmed the Bank’s role in overall project design, and at the same time decentralized implementation to academic units. DGHE reportedly not only feared that such would lead to management inefficiencies, but also doubted the capacity of the universities to prepare and manage more projects on their own (BTO, 06/20/95). In addition, decentralized project implementation put pressure on DGHE to limit the number of institutions to receive support (cf. increased selectivity), and in so doing increasingly seemed to question the ‘equality principle’ that has guided DGHE (Oey-Gardiner, 1991: 84).
107Earlier Bank projects had included provisions for small research grants that were awarded on a competitive basis. But apart from that, the Indonesian government from the early 1990s onwards started to expand public resources for university research funding on a competitive basis, either through the DGHE or through the Ministry of Science and Technology (Hill, 1995; Koswara, 1999).
108The Bank’s investments in Indonesian higher education continue to be overwhelmingly oriented towards the public sector policy concerns, even though URGE and QUE for the first time allowed private schools in principle to compete with public institutions for Bank-supported funding opportunities. However, rather than supporting private higher education, the Bank’s approach suggests giving public institutions the responsibility to “behave more as if they were private-sector institutions” (SAR, DUE: 9).
109The term “Evaluative State”, introduced in connection to broadly similar policy reforms in much of Western Europe in the mid-1980s (Neave, 1988: 11; Neave, 1998), captures the idea of increased evaluative powers and capacities accompanying the State-supervision mode of governmental steering. While operating under vastly different circumstances, the Bank projects in Indonesia seek to further a different kind of government role, emphasizing competitive funding and selection processes, and using evaluation mechanisms that are based on third party reviews of plans or initiatives submitted by targeted beneficiaries. See: Staff Appraisal Reports for URGE, DUE, and QUE respectively.
110The National Accreditation Board was first provided under the Education Law No. 2 in 1989, but was formally established only in late 1994. The URC was initially created to implement the URGE project’s competitive funding mechanism. The Board of Higher Education, finally, was established in the aftermath of the DUE project, with the broad mandate to assist DGHE in the task of overseeing the higher education system, and to further the implementation of competitive funding in research, graduate, and undergraduate education (SAR, DUE: 58-61).
111Following Clark’s use of the concept of ‘reform’, the term ‘policy’ is used here in the broad sense to include acts and processes of formal policy (e.g. formal rules and regulations) but also the informal procedures and activities originating from both institutional and intra-institutional practices that are tolerated, implicitly encouraged, or simply beyond control of any particular agent (i.e. ‘reform by drift’) (Cerych & Sabatier, 1986: 260). Regarding Indonesian higher education policy specifically, Oey-Gardiner provides specific illustrations of creative institutional responses and loopholes in formal policy (Oey-Gardiner, 1991: 91-92).
112The strata being ‘central authority’ (i.e. the State, but explicitly including also the intermediary bodies established and used by the State), ‘higher education institutions’, ‘basic academic units, and ‘civitas academica’ (Soehendro, 1996: 46-52).
113The citation here foremost is meant to strengthen the point of shifting Bank goals in regard to institutional decision-making and therefore needs not be seen as an indication of success (or failure) in bringing about more centralized control throughout the system.
114While the concept of ‘de-concentration’ was never explicitly put forward in any Bank document to describe or motivate these particular initiatives, it captures rather well the agency’s position regarding institutional planning at the time. Unlike the earlier period (i.e. late 1970s early 1980s), when centralization was explicitly advocated by the Bank, there was a growing recognition from the mid-1980s onwards of the benefits of system-wide decentralization, reflected in a growing attention to institutional needs in planning (cf. MIS), academics (cf. differentiation of missions), and financing (cf. resource generation). However, the Bank up to that point at least implicitly continued to support a policy framework where the specifics of these ‘institutional needs’ were managed and controlled by the center. The resulting figure at the institutional level during that time period therefore seems to be one of ‘de-concentration’, rather than decentralization. The Bank’s ambition to contribute to development of a system-wide management information system reflects that model rather well, as does the centralized procedure to assign target beneficiary institutions for its projects (e.g. IUC’s).
115Because of their broader inter-university mission (i.e. training and research facilities for other Indonesian universities), IUC’s initially were established as independent units financed directly by the DGHE, with only informal linkages with the host universities. Weak ownership by host universities soon came to be seen as a major bottleneck to institution building, and therefore the decision was taken to integrate IUC’s within the host institutions. While the university senates largely determined their own specific formula for bringing about this integration (e.g. some continued as IUC under the Director of Graduate Programs or as unit under the Deputy Rector for Academic Affairs, others were subsumed into the relevant faculties), DGHE did insist that the host institutions would maintain their inter-university role, and that the ‘centers’ would continue to be assigned a critical mass of trained academic staff (UDP-II, PCR: 12). For discussions and evaluations on IUC developments at time of URGE project preparation see AM, January Feb. 16: 4-7 (1993); June 17: 4 (1993). On ‘project mentality’ see Moeliodihardjo (Moeliodihardjo, 1999: 2).
116Apart from its support to the central URC, the URGE project consists of seven different competitive grant and fellowship programs. The project component with the strongest link to institutional decision making is the ‘Center Grant Program’, which includes investments to upgrade the physical, managerial, and human resource infrastructure of selected academic units. Significantly, this is also the only program component for which the URC guidelines make provision for universities to organize an internal screening procedure for ‘pre-proposals’ involving university staff (URGE, SAR: 37-38). It is one of only few places in the appraisal document where one finds a direct reference to the involvement of the institutional middle-level.
117The workshops were organized specifically at 17 of the least established institutions. The consultation procedure itself was innovative compared to earlier project preparations, as it involved Bank staff, government staff, rectors and/or vice-rectors, young academics, and —even— sessions with students. The purpose of these workshops was to disseminate the concept of the new paradigm, solicit their responses, and gain better understanding of the ‘institutional realities’ (Moeliodihardjo, 1999: 4).
118In order to ensure broad participation within the institutions, the majority of the members of the respective task forces were to be “young academics” (i.e. less than 35 years old, and with some overseas training or experience). In order to ensure compatibility with the university management, the task forces were to be chaired (‘ex-officio’) by the vice-rector for academic affairs of these respective institutions. This regulation, which was issued in the process of DUE-project preparation, in fact illustrates rather well the delicate balance, which the Bank and government sought to establish between the need for more ‘bottom-up planning’ in many of these institutions, and the observation that formal authority (and, in many instances, power) continues to move from the top downwards (Moeliodihardjo, 1999).
119Like the DUE project, QUE aims at quality improvements of undergraduate education. Unlike the DUE project, however, the QUE project is open to all study programs in specific fields (including in principle study programs at private institutions), and is not directed at any type of institution in particular. Its purpose is to reward institutions that can demonstrate excellence in undergraduate education (Moeliodihardjo, 1999: 8).