120Judith Tendler has coined the term ‘donor decentralization gap’ to denote the discrepancies between donor goals that support decentralization in principle and the constraints these donors face as a result of their own money-moving implementation procedures, often leading them to in fact support centralization and top-down planning (Tendler, 1975). In Indonesia, the practice was exemplified not only in the “annual IGGI fix” but also in some of the more typical features of project implementation design, including, most notably the practice of channeling funds through Ministry based Central Project Implementation Units.
121 Kreiner distinguishes donor’s “resource environment” from their “project environment”. Whereas the former includes issues of donor strategy (e.g. at country level) and legitimacy (e.g. accountability vis-à-vis organization, government, or voters…), the latter refers to the core of donor operations (i.e. the project of program cycle of identifying, awarding, disbursing and channeling funds).
122 In sharp contrast, since the fall of the Suharto in May 1998, the issue of good governance and anti-corruption measures has been put high on the agenda of CGI Meetings and donor policies with respect to Indonesia (Koernya Roesad, 2001, p. 21).
123 Such as the changing domestic situation (strong and growing economy of the early 1990s) and priorities in education (i.e. the move to 9 year basic education) (p.c. Lieberman).
124Japan is an exception in that its total bilateral aid for over 70% takes the form of loans. With regard to higher education in Indonesia, however, its effort mostly took the form of technical assistance and financial support for multilateral agencies.
125 An index rating greater than 100 indicates that the donor’s aid program to Indonesia represents a greater than proportionate share of the totality of the donor’s programs worldwide. The Index is calculated as 100 [(Adi/Ati)/(Fdt/Fta)], where:
Adi is aid to Indonesia of donor i
Ati is total aid to Indonesia by all donors
Fdt is total aid flows of donor i
Fta is total aid flows by all donors (to Indonesia) to all aid recipients worldwide
126Donor investments in the manpower sector typically include projects in employment related technical and vocational training. International projects in the Religious sector are exclusively of an educational nature. Recent examples here include projects in support of the development of Islamic Universities (IAIN), in-service teacher training, and basic education. Finally, Science and Technology projects are typically supported by international fellowships and research projects that draw from but at the same time feed into the research capacities of the domestic university system.
127Human capital development emphasizes economic growth as an overall goal of education. According to Buchert, it is the concept most supportive to the introduction of market reforms with a consequent emphasis on technical, vocational and higher education in areas that support the economic structure of society. Key concerns include issues of cost, efficiency and effectiveness (Buchert, 1995: 28).
128For instance, the First University Development Project was more concerned with the physical development of the three selected campuses than with the process of establishing a Master Plan (UDP-I, SAR).
129In contrast with human capital development, this model emphasizes social change and empowerment. Donor efforts in higher education are seen as a way to address social issues—including regional development, poverty, and social problems—and suggest that universities can help support a desired process of societal transformation (Buchert, 1995).
130One Dutch program manager indicates that monthly visits to DGHE, and more occasionally to BAPPENAS, were all that it took to keep the government informed of their presence and to insure continued formal support from that end (e.g. inclusion in the Blue Book). At the institutional level, the decentralized nature of the Dutch project implementation mechanism ensured that conflicts with the institutional decision making structure (e.g. about allocation of resources within department or faculty) would often be defused or solved in an informal way. (p.c. Theo Veenkamp)
131And even within the ODA department, OECD data illustrate the overwhelming and increasing dominance of Japanese aid. Its relative share of ODA-commitments rose from 41 % in 1979-1981 to 62 % in 1992-1993 (OECD, 2001). Other major bilateral donors that made it to the top four list at one point or another during this time period include Germany, the U.S., the Netherlands, Austria, and, albeit more recently, Australia. The U.S., remarkably, disappeared from the top four since 1987-1988 (OECD-Data Query, April 2001).
132Bank support specifically targeted at private institutions was not only limited in size but also indirect and typically passing through the hands of governmental implementing or intermediary agencies. For instance, Bank supported programs would include provisions allowing teachers at private institutions to compete, or allowing private institutions and departments to compete for research grants, or by providing fellowships to teachers at private institutions. And even these minimal provisions for participation of privates needed to be negotiated even though they rarely led to effective private participation in Bank assisted projects The official reason for not taking a more affirmative role in the private sector was that the Bank, by its charter, could not directly support private institutions (Jack Maas, cited in Balderston, 1993). However, the Bank did assist private universities to develop engineering in other countries (including South Korea) through setting up mechanisms for on-lending to private institutions at rates more favorable than the market. (Clifford Gilpin, cited in Balderston, 1993). In other words, the early choice to target on the State sector does reveal a political option that characterized the lending programs and operations throughout the period of this study.
133The President at the time received growing and manifest international recognition reflected by the awards bestowed on him by international organizations in social areas such as basic education (UNESCO), and family planning (WHO), as well as by his political leadership as elected chair and spokesman of the Non-Aligned Movement in 1991.
134During the mid- to late 1960s much of Western aid to Indonesia was sharply reduced if not abandoned (as was the case with the World Bank and USAID in 1965) as a result of charges of capitalist propaganda (cf. Sukarno’s populist phrase “To hell with your aid”). Interestingly, the State University of New York in those days was very strongly involved in Indonesia with a (Ford sponsored) project at the Institute of Education (teacher college) in Malang (East Java). The story of the “The Ousting of Western Professors” can be read in Thomas, 1974: p. 213-217.
135The Bank’s country economic team has always been in Jakarta, rather than in Washington. It’s chief economist for a number of years even had his office at BAPPENAS. (p.c. Gilpin)
136Indonesia’s $300 million Trade Adjustment Loan of March 1987, in the Bank’s phrase, was ‘entirely tied to policy actions previously performed’ (Mosley, 1991, p. 105).
137 Specifically, the document often refers to the doubling of student fees for incoming students in 1986—an area which ironically strictly did not even belong to the authority of the Government (institutions, grouped by region, had to submit their proposal for approval to the Governor, often a military man). World Bank, HEDP-SAR, p. 10-11.
138In education, four Bank projects have been funded as a grant from the IDA (International Development Association), including Education I (1970, 4.5 million US$ ), First Agricultural Training (1072, 6.3 million US$), Education III (14.5 million US$), and, the first project in higher education, Polytechnic I (1978). Grants from IDA became prominent again after the financial crisis of the late 1990s.
139 Unlike secondary and higher education, primary education up to that point had never been the subject of broad-based lending. The only earlier Bank sector work that dealt specifically with primary education dated back to the 1973 sector survey (World Bank, Basic Education Study, 1989, p. ii). Bank lending in primary education started to pick up only hesitantly in 1992, with the Primary School Teachers project (1992), and Primary Education Quality Improvement Projects (PEQUIP).
140The Science and Technology Training Project supported more than 1500 overseas graduate fellowships to support six research institutions (LPND) coordinated by the Minister of State for Research and Technology (PCR, p. iii). The Professional Human Resource Development Project included a competitive fellowships program for overseas graduate training of civil servants (Recommendation to the Board, p. 6).
141 Apart from the numbers, there is the political matter of the Netherlands holding the longtime Chair of the International Donor Group. Interestingly, the vacant position would soon, and at the suggestion of the Indonesian Government, be taken over by the World Bank, as if to highlight the lack of international support the Dutch Minister for Development Cooperation received for his assertive policy regarding human rights in Indonesia.
142Former Director General Soekadji Ranuwihardjo recalls how the President in the mid-1980s “ordered his Minister (then Susanto) to establish an Open University for those students who cannot leave their homes to go study” (p.c. Sukadji Ranuwihardjo). Usually, the influence was less direct than in this instance. Examples would include the carefully worded introduction of the concept of financial autonomy in BAPPENAS and DGHE documents, and even in the late 1990s the Autonomy proposals that were never even submitted for consideration to the President. (p.c. Bagyo Moeliodihardjo)
143 While the distinction between routine (DIK) and development (DIP) expenditures is key to understanding Indonesia’s national development budget, it does at the same time remain a somewhat artificial distinction as all State expenditures do have implications for both national and institutional development. In functional terms, it was understood that DIK covered essential expenditures, whereas the DIP was supposed to be used to support new investments and would vary according to budgetary capacity (or extra-budgetary inputs from either international donors or private investors). In higher education practice, it meant that DIK covered personnel expenditures (80%, an overall percentage that remained stable throughout the period but that did not as such affect the institutional income since paychecks were paid centrally by the Ministry of Finance) and minimal allowances for maintenance and procurement of goods. DIP expenditures then were to cover the residual, which in practice –and often as a result of increasing donor efforts— would increasingly include a mixture of routine (i.e. maintenance, salary supplements…) and investment activity. At the institutional level, DIP income consists of pure government grants, foreign financing, and government counterpart financing of foreign aid projects. Public institutions furthermore have increasingly been able to supplement their income with self-generated revenue (DIK-S, or DRK), comprising tuition fees, contracts and donations (see discussion and figures further on in chapter 3). Formally, and given that institutions are “service units of the State”, all institutional income is considered as part of government.
144 High Assistance Group: IPB; ITB; UGM; UI (Average Assistance 1980-95: 149.7 million US$) Medium Assistance Group: UNAIR; UNCEN; UNPAD; UNPATTI (Average Assistance 1980-95: 35.3 million US$). Low Assistance Group: UNJA; UNSOED; UNEJ; UNPAR (Average Assistance 1980-95: 12.2 million US$). Teacher Training Colleges (IKIP’s), Polytechnics and the Open University were excluded from the sample because of their specific mission.
Chapter IV: Outcomes
145 The term “Third Generation implementation theory” was first coined in the jointly published work of Malcolm Goggin, Ann Bowman, Lawrence O’Toole and James Lester. Their book, Implementation Theory and Practice: Toward a Third Generation, published in 1990, calls for a more systemic (and hence, less linear) perspective on the study of policy implementation. To that end, they set out what they call a ‘communications model’ for the analysis of implementation, with a strong emphasis upon what affects the acceptance or rejection of messages between layers of policy networks. Feedback and communication loopholes loom large in their theoretical assumptions (Goggin, M. et al., 1990: 32), which makes their approach more dynamic and less linear than that of earlier generations.
146 Opinions abound as to what the basic functions of higher education are, or should be. Indonesian higher education policy documents from the beginnings have explicitly chosen the principle of ‘tridharma’, including education, research and service to society as the key functions of higher education. Clark’s book (Clark, 1998) is particularly concerned with the conditions that uphold the research-teaching-learning nexus in modern systems. It is noted, however, that the discussion about what constitutes the basic functions of higher education goes well beyond the scope of this dissertation, which, in addition, pointedly intends to avoid such normative approach. Rather, this chapter looks for the particular settings that ensure an integration of multiple functions of high complexity within institutions of higher education, often in spite of centrifugal forces.
147 Slembrouck’s systemic overview of contributing disciplines and theoretical perspectives is a most helpful resource for further exploration in this field (Slembrouck, 2004)
148 In 1982 the government introduced the so-called KMI (Kredit Mahasiswa Indonesia), a subsidized low interest student loan scheme, which was essentially set up in order to improve internal efficiency and specifically targeted ‘needy’ students in their final years in order to encourage them to finish their studies (Woodhall, 1992) The scheme was abolished in 1990, as part of a larger banking deregulation package, which intended to eliminate subsidized credits in its entirety. Even so, Woodhall recalls, the political commitment to student loans was extremely limited in government circles (personal communication). Interestingly, or ironically as it happens, the World Bank at the time supported the elimination of subsidized credits from a macro economic viewpoint, whereas its education department was supportive of a continuation of the student loan scheme for equity and cost recovery reasons.
149 For the private institutions, public policy was to liberalize the sector in order to absorb surplus social demand for higher education. As a result the private sector expanded dramatically during the 1980’s and well into the 1990s, both in terms of enrollments and (types) of institutions.
150 One might even argue that the suggested management concepts were not all that new for Indonesia, let alone paradigmatic. Following the 5th five year development plan (Repelita V, 1988-1993), which for the first time referred to the idea of ‘financial autonomy’ (as a way to generate more income for higher education institutions), the DGHE established a Task Force for Management Reform and Consolidation of Higher Education. Many of its conclusions (for instance, the need for ‘delegation of authority’ to appropriate levels) are echoed 7 years later in the New Paradigm (Consolidation of Higher Education towards the Second Long Term National Development Stage, 1988, p. 13-14).
151 The discourse of the document differs fundamentally with the current Framework for Long-Term Higher Education Development, which was published in March 2003. The document is much shorter but does go into the practicalities of concepts such as ‘delegation of authority’ and ‘decentralization’ (cf. next chapter). However, the domestic political context at this time has shifted dramatically, making such concepts much less subversive than they were under the bureaucratic-authoritarian rule of the new order regime.
152 While it is probably not unusual for government agencies to respond to donor reviews, what makes this document unusual is that the DGHE explicitly acknowledges that its higher education strategy builds on one particular donor strategy review.
153 The Bank’s approach at the time is not to be seen as monolithic either. There was plenty of discontinuity resulting from newly arriving project managers (p.c. Samuel Lieberman), but also internal conflicts about strategy; some wanting to push harder for policy reforms as condition for additional lending, others favoring a more gradual approach and taking into account the numerous institutional constraints (p.c. Sachi Takeda). The resulting strategy was one that allowed for incremental change at the policy level, but at the same time pressing hard for pragmatic change that would ensure results at the project level.
154 A similar approach is not by necessity an identical approach, and it will therefore be instructive to indicate that the main difference between the DGHE’s own programs and the Bank supported programs relates to the Government’s concern that ‘regional’ and less developed institutions also be able to participate and benefit from the respective projects. Hence, unlike the open competition of the Bank supported QUE, the Indonesian semi-QUE (2002) works from a tiered competition where less developed institutions stand a better chance of winning development funds. In fact, entering the program was restricted to institutions that had not yet received any support from other aid supported programs, nor from the DUE-like program. The DUE-like program (1999) similarly expands on the former DUE program in that more or other institutions are invited to participate. Nonetheless, the basic tenets of the international programs (i.e. transparent selection mechanism, competition based grants, decentralized planning based on self-evaluations) remained the same. In other words, the Government’s DUE-like and semi-QUE higher education development programs (as well as the ADB supported TPSDP project) are seen as a strong indication of domestic integration of internationally negotiated principles.
155 Career paths and intra-institutional resource allocation mechanisms were typically not based on objective or transparent criteria (p.c. Pramoetadi). Apart from the politics at the institutional level (e.g. existing systems of patron ship and seniority), several studies also pointed to the structural constraints resulting from the civil service regulations that in effect determined the incentive system for teaching staff at public institutions (D. Clark & Oey-Gardiner, 1991; Insan Hitawasana Sejahtera, 1999)
156 RAISE stands for Relevance, Academic atmosphere, Internal management and organization, Sustainability and Efficiency-productivity. The criteria are further specified in indicators (for instance, relevance is translated into the indicator “percentage of graduates who find employment within one year after graduation”) that are used as guidelines for self-evaluations and external site visits and evaluations. Entrepreneurship and leadership were later added to the list.
157 The idea of seeing the academy as a moral force in society stems from the social and political protests at universities in 1976 and 1978. These protests were repressed by the Suharto regime, which issued the so-called policy of “Normalization of Campus Life” (NKK) in response (see also our discussion in chapter 2).
158 ‘Institutional’ here in the sense ‘new institutionalism’ uses the term, i.e. referring to the constraints, rules and norms that condition action and contribute to the emulation of established institutions. (Levy, 2004, p. 1)
159 The prospect of channeling official PUO support to private institutions in Indonesia was never considered as a realistic option within NUFFIC, even though many Dutch institutions, including the VU, had developed close links with private universities and supported these with their own (private) means. Harry Brinkman, at the time Chairman of the Board of the VU, confided that consultations with his colleague Rector of the private (Christian) Satya Wacana University in Salatiga generally allowed for more openness to discuss institutional management issues than at the public institutions or at the ministry (interview).
160 Interviews with professor Sukadji (former Rector of UGM, and former Director General DIKTI), Satryo Brodijonegoro (Director General of DIKTI), Hariadi P. Soepangkat (former Rector ITB), Wati Anandy (Budget Officer, Ministry of Finance).
161 The regular teaching staff at Indonesia’s public universities (PTN) has civil servant status. They are subject to civil service personnel rules of recruitment and promotion. The Civil Service structure for academic staff progresses from IIIA (junior staff with only undergraduate degree) to IIID; thereafter one moves on to levels IVA up to IVE, the highest rank for full professor. Doctorate holders start at IIIB. Higher level positions can be filled only through promotion from below. The system inhibits mobility and favors inbreeding. Insan Hitawasana Sejahtera (HIS). Remuneration and incentive system for teaching staff: a policy study. March, 1999, p.3. Oey-Gardiner, 1991.
162 ‘Merit’ in this instance does not need to be restricted to academic merit only, but can, as under the DUE program, also refer to the quality of the institutional consultation process or the self-evaluations that institutions were required to submit.
163 Whether and to what extent private institutions effectively participated in the URGE program is a different matter. From the project’s Implementation Completion Report we learn that in reality private participation was limited (receiving none of the institutional grants), although in one of the project’s sub-components (i.e. the ‘domestic collaborative research grants’) private universities received 36 of the 168 awards (World Bank, Project Implementation Report for the University Research for Graduate Education Project, 2001, p. 7.
164 The assessment corresponds with a broader macro-economic critique, which the Bank has had to swallow in the post-Suharto era, when critics, even from within the Bank, with hindsight argued that the “Bank had not pushed hard enough for fundamental reform in Indonesia”. The ‘structuralist’ explanation for the Bank’s apparent preference for a gradualist approach relates to Indonesia’s position in the international political economy. The internal criticism of the Bank’s relation to Indonesia that emerged in the wake of the financial crisis in 1997 precisely made the point that the Bank had been ‘too close for comfort’ with the Indonesian regime, and as a result had been too little concerned with real institutional change (Internal Memo Dennis de Tray, August 5 1997 in response to “Questions Raised During Board Discussion on 10th June, 1997and also World Bank, Indonesia Country Assistance Note, 1999). The more ‘voluntaristic explanation’, in contrast, focuses on the personalities involved and the dynamics of the process of negotiation between ‘agents’. Our position has been one that starts out from a structural analysis of variables (in inputs, ideas, processes, and efforts) that contributed to institutional reform, but at the same time reveals spaces for agency.
165 To illustrate, at the time of data collection (when regional autonomy had become the ‘talk of the town’ in Jakarta), the mere existence of BAPPENAS as the government’s central planning agency was questioned by many political leaders (p.c. Fasli). For many bureaucrats, the prospect of being sent to a faraway province was becoming all too real…
166 Tuition fees at the University of Indonesia tripled in 1999 from 500,000 rupiah per semester (65 $) to 1,500,000 rupiah (195 $) per semester, thereby approaching the student fees at top private institutions, excluding the registration fees, which students at private institutions have to pay (p.c. Bagyo Moeliodihardjo, p.c. Sutrisno Pardoen). Other state institutions also raised their tuition fees that year albeit to more ‘modest’ levels of 50 to 100% increases.
167 Up to that point, State universities were legally regarded as ‘service units’ of the State.
168 Admittedly, Clark’s comparative analysis in ‘Places of Inquiry’ focuses on the integrating conditions of the particular institutional context of graduate education, and, furthermore, empirically investigates classical types of ‘modern’ higher education systems and university institutions. Nonetheless, and although the ways in which these conditions are materialized may vary widely across systems and sub-sectors, the notion of integrating education, research and service to society seems to holds true for any system of higher education or institution seeking or being granted autonomy (International Association of Universities, 1998).
169 The Indonesian Directorate General for Higher Education has been traditionally managed by academics (usually former Rectors), whereas the bulk of its staff of 300 consists of ‘homegrown government bureaucrats’ (p.c. Sukadji).
170 From an international comparative perspective, the conservative role of the Ministry of Finance (and the progressive role of the Ministry of Education) may seem strange in the context of reforms saving on the national budget. However, there are contextual and structural explanations. First, Indonesia’s DGHE stands out for its own relative autonomy within the bureaucracy of the Ministry of Education. Its leadership consists of former rectors and vice rectors who still have strong links and sympathies with the universities they come from, and with the higher education landscape in general. Secondly, and from a resource dependency perspective, the Ministry of Finance looses its own power leverage of institutions gain more autonomy. MOF’s share in funding public higher (the DIK funds for recurrent expenditures, in particular funds for staff salaries) already has been decreasing during the past two decades, and is expacted to decrease even further if institutions become autonomous in personnel management.
171 Study on reform on higher education legal infrastructure. Terms of Reference. Jakarta, June 30 2006.
172 Funds for higher education consist of Daftar Isian Proyek (DIP, or development funds), Daftar Isian Kegiatan (DIK, recurrent funds), and Daftar Rencana Kegiatan (DRK, or self generated funds). In public institutions, self generated funds typically appear as recurrent revenue as they are intended to cover working expenditures. Resources from international assistance are used for investments and appear in the investment budget.
173 For one because of lack of reliable data. Information is hard to get, partly because of resistance from institutions to share this information, partly because of unreliabilities in the institution’s financial management systems (some sub-units have their own accounts and do not wish to share information with the central management).
174 For ITB the share stood at 35% and for UGM the percentage was 55%. Team for University Autonomy, Directorate General of Higher Education, Ministry of Education and Culture, University Management and Funding Mechanism. Background Paper, Document II, June 1999, p. 11-12.
175 In dollar purchasing power parity terms, the difference was 9,223 $ for one academic year at the high cost end of the public institutions, as compared to 13,747 $ for the high cost private institutions. The suvey was conducted at the University at Buffalo (SUNY), in the frame of the International Comparative higher Education Finance and Accessibility Project, http://www.gse.buffalo.edu/org/IntHigherEdFinance/.
176 Case studies by Martha Finnemore on the impact of UNESCO on the national structures for research policy, and IMF illustrate this point.
177 In Fall 2006 the DGHE ordered a study to explore alternative systems and to recommend a new mechanism to allocate the recurrent budget to institutions.
178 For the criticism from the students on the left, see Jean Duval, ‘Swastanisasi’, ‘otonomie’: hot IMF recipes for Indonesian universities, March 2000. For serious academic criticism from within the campus walls, see Heru Nugroho, The Political Economy of Higher Education: The University as an Arena for the Struggle for Power. In: Social Science and Power in Indonesia, Edited by Vedi R. Hadiz and Daniel Dhakidae, p. 158-163. The public debate focused in particular on concern about rising student fees for students in general, and specific fee schemes for students from wealthy families who had to pass a specially designed entrance test but were required to pay exorbitant entrance fees. See Eny Haryati, Kapitalisme Pendidikan Tinggi, Pasca Tragedi UAN. In: Tempo, 18th June, 2004 (Tempo is a popular but critical Indonesian magazine); or ‘The problems of higher education privatization in Indonesia’, Jakarta Post, January 31st 2007 (Jakarta Post is Indonesia’s English newspaper)
179 BHMN: Autonomous Nonprofit State Higher Education.
180 Following 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, 1986 #274: 260]. Regarding Indonesian higher education policy specifically, Oey-Gardiner provides specific illustrations of creative institutional responses and loopholes in formal policy [Oey-Gardiner, 1991 #384: 91-92].
181 Institutional development is defined by Bank evaluators as “the extent to which a project improves a country’s ability to make more efficient, equitable, and sustainable use of its human, financial, and natural resources, through (a) better institutional arrangements—“rules of the game” (laws and regulations), checks/balances and incentives, what governs organizations and their interactions, and culture—and (b) better alignment of organizations’ mission and capacity with their mandates” (Berk report, 2002, p. 15)
182 Explicit reference is made here to the so-called ICW rules dating from the Dutch period, which required all State service units to report and return self generated income to central State accounts.
183 The World Bank to some extent being the notable exception, as it pushed cost recovery and student loans in the early 1980s (and again in 2005), and put financial autonomy on the agenda in the 1990s (see chapter 2).
184The program at UI was referred to as Program Prestasi dan minat Mandiri (‘self reliant program for achievement and interest’). Entrance fees varied according to discipline, with social sciences at the lowest rate and medicine at the highest rate (Armidas Sasdi, Higher education: balancing financial need and fairness. The Jakarta Post, December 2nd, 2005)
185Concentration may also occur across disciplines or fields of study. The URGE program summaries do in fact suggest that priority will be given to proposals that strengthen "Indonesia's capacity for science and technology". The URC commissions, nonetheless, are broad in scope and include disciplinary fields of Humanities, Education, and Social Sciences, next to Basic Sciences, Agriculture, Health, and Engineering.