Table 4.1: Overview and brief discussion of key documents regarding the World Bank’s HED ‘policy dialogue’ with Indonesia in years preceding formulation of New Paradigm
Type of document
Calls for review of government role in HED, with focus on quality improvement at undergraduate level, and new mechanisms for revamping developing domestic graduate education and research capacity.
Initial Executive Project Summary
Calls for quality improvement as overriding policy focus in sharp contrast to earlier years where quantitative and equitable expansion were at least as important. Government role is to invest in quality assurance, and in key public goods that are important for quality enhancement (i.e. research & graduate education). Makes a case for effective financial autonomy, concentrating resources in selected institutions,competitive funding mechanisms, peer review.
Letter with Draft for Higher Education Strategy
This document from Bank RSI staff is presented as a ‘think piece’ for developing the long term goals for Indonesia’s HED, and calls for a re-examination of the public role focusing on quality assurance mechanisms (ie. accreditation system for both private and public HED) and concentrating scarce resources in university research and graduate education through competitive funding mechanisms. The document criticizes shortcomings of the 1990 autonomy law and calls for ‘full financial autonomy’ for institutions in setting fees and spending privately raised funds.
First draft of World Bank’s Policy Paper (later to be known as ‘Lessons of Experience’)
Calling for comprehensive strategies for improving the quality of HED, supporting reforms involving increased levels of institutional autonomy. Erik Thulstrup’s critical analysis of the results of the Bank’s investment in Indonesia’s ‘centres of excellence’ (IUC’s) is highlighted in the draft paper, but interestingly not in the final version that appears in 1995.
Back to Office Report with Aide-Memoire
Expresses concerns over sustainability of Bank investments and calls for a change of government strategy involving a reform of the financing system of HED and for granting more financial and academic autonomy to institutions.
Establishing the main components of the URGE project and its intended relationship to ‘necessary Government reforms’, including increased private financing of public higher education, granting greater autonomy to public universities in how they raise and utilize resources.
Discussion of Best Practice Paper with government. Recognition of ‘systemic weaknesses that need to be addressed for a long term viability of sectoral investments’, including the lack of financial autonomy at public institutions. ‘Complete financial autonomy of public institutions’ is called for, in order to enable them to cross-subsidize graduate education and research activities. At the same time, the issue of autonomy in higher education is recognized to be part of broader government policies regarding autonomy of public institutions.
Back to Office with Letter and Aide-Memoire
Critical document at critical time in ‘policy dialogue’ towards a new government HED strategy. Notably, the Bank expressed here a number of key concerns with DGHE’s articulation of the Repelita VI strategy in which the Bank would be ‘filling the gaps left behind by various donor support’. The letter explicitly sums up and elaborates the major critiques: ‘lack of vision/strategy; lack of diversification; lack of efforts to enhance efficiency and sustainability of investments; needed review of role of government in quality assurance (ie. accreditation), financing (ie. incentive framework and autonomy), and lack of provisions for improved planning mechanisms at the institutional level’.
DGHE is concerned with expected delays in continuing critical elements of the time slice project HEDP II. The Bank responds that it will not recommend a time slice format this time, instead suggesting lending instruments allowing for decentralized disbursement of expenditures in relation to proposals coming from HED institutions.
Calls for a much more decentralized approach where institutions themselves are held accountable for their performance. The follow-up project will “assist DGHE to move away from a centralized system of managing university decisions towards one where the DGHE sets and enforces broad policies leaving individual institutions to make decisions how best to implement these policies”. The document calls for granting a separate legal status to public universities so that they can be autonomous in their resource allocation decisions even as some of the funding is channelled from public sources.
Document highlighting the State guidelines (GBHN 1993) in relation to HED. Emphasis is on expansion of opportunity, improving relevancy, quality improvement by investments in infrastructure and training. University autonomy is defined as a “mechanism” to increase income of institutions from contracts with industry.
Establishment of Commission for Higher Education Reform, to review options and recommend a strategy for the long run.
Initial Executive Project Summary (HESP, later to be split up in DUE and QUE projects respectively) with Letter
Summarizes approach of a follow-on project on HEDPII, starting from ‘lessons learned’. ‘The most powerful lesson learned is that providing inputs does not necessarily lead to effective use of these inputs. Based on capabilities built from past projects, it now appears timely and important to focus on ownership and participation at the institutional level. The key to developing planning and management capacity is through tangible delegation of planning and managerial responsibilities’. The strategy is to support the gradual re-definition of the role of the central government through decentralized planning and management responsibilities to institutions themselves, and in establishing mechanisms such as accreditation to ensure accountability to the public.
Letter to DGHE with Aide-Memoire
First time reference to the desirability of a ‘new paradigm of higher education management’ that would use ‘institutional self-evaluation as the entry point for developing university capacity for planning and management’. It was further agreed that the Commission for Higher Education Reform work closely with the project preparation team such that the project design supports the longer-term objective of developing capabilities in universities for autonomy with accountability.
Back to Office with Aide-Memoire
Report’s assessment indicates that university level planning is generally weak with much capacity differences at faculty and department levels. Self-evaluation and proposal development at the Department/Faculty level is seen as the most effective entry point for new project.
Letter to Minister
Calls for more ownership and participation in the design of new projects, as well as in the development of a new vision and strategy. Underlines “the need for decentralization and autonomy, not for its own sake, but as a critical step in making universities responsible for educational processes that cannot be effectively governed centrally for the country”. Proposes to assist in the articulation of a strategy and vision for higher education.
First Draft of DGHE New Paradigm
The New Paradigm for restructuring the system of higher education involves 5 principles that are used as reference both at system and at institutional level. These are quality, evaluation, accreditation, autonomy & accountability. The document makes the point that Quality is central to any future development, that Quality requires Evaluation of the current situation (through institutional self-evaluation), which brings in Accreditation (through an independent board). Autonomy of institutions is the organizing principle that goes hand in hand with Accountability.
Support of Japanese Grant Facility
The new approach to decentralized planning (bottom-up) is tested in a variety of institutions with support from the JGF. The DGHE terms of reference for carrying out these project preparation activities indicate that the change of approach is so fundamental that an evaluation of interest, readiness and capabilities of institutions is deemed required.
Framework for Long-Term Higher Education Development 1996-2005
Although the ‘new paradigm’ constitutes one of the core programs of the framework (next to ‘relevance’ and ‘geographical and social equity’), the document’s approach to planning very much fits traditional concepts given its starting point from a clear hierarchical relationship between the various levels (‘strata’) of the higher education system (centre, institution, academic unit, academic community). Institutional autonomy is instrumental to the higher, national goals formulated at the central level. The discourse is one of ‘social engineering’, containing master plans, regulations, arrangements, hierarchy, and many references to Repelita VI quantitative targets. Concepts such as delegation or decentralization do not appear in the 300 page document151.
Letter DGHE Academic Affairs with draft Higher Education Strategy
This DGHE document is meant as a response to the Bank’s draft education sector review for Indonesia152. The bulk of the content goes into the development of alternative funding mechanisms for the allocation of public resources to institutions. Specifically, the new paradigm would be reflected in increased shares of competitive and performance based funding.
As can be expected also, the convergence of discourse is not necessarily an indication of agreement on the rationale or the specific meanings of the key concepts (such as, ‘autonomy’, ‘quality’ or ‘decentralization’, to name just these few), nor does it preclude the variety of motives, opinions and interpretations within the Indonesian government as well as within the Bank. Apart from the variety of individual opinions of participants, the interpretation of discourse is coloured by the institutional perspectives of stakeholders at a particular point of time. Table 4.2 summarizes some of these institutional perspectives on the concept of ‘autonomy’ in the mid-1990s.
Table 4.2 Institutional perspectives on autonomy in Indonesia
Discourse and rationale
Autonomy is a way to save on the HED budget
Autonomy is an exception to general rules of accounting for ‘service units of the State’ that make all extra budgetary revenues (i.e. tuition and contract revenues) de facto government income and in principle prevents public institutions to decide autonomously or carry over to the next fiscal year.
Autonomy is a management tool to mobilize much needed resources for public HED institutions, based on a “right, granted by a competent party or the government, to execute its functions as long as this does not contradict generally valid regulations in society” (KPTJ: 72)
Initially, sharp focus on financial autonomy and avoidance of political connotations of the term (p.c. Soekadji)
Later (post-1996 and especially post-1998), broader perspective (including governance, and attention to required legislative reforms (e.g. directive 60/61 in 1999 or law 20 in 2003) to create separate legal entities
Autonomy for strong university institutions allows government to spend more resources into less established institutions
Autonomy stands for consolidation of accounts, intra-institutional rules for encouraging income generation and cross-subsidization
Autonomy stands for loss of control over income generated
Autonomy (including the power to set fees, recruit and retrench personnel, and use budgetary allocations flexibly across expenditure categories) is “a sine qua non for successful reform aimed at resource diversification and more efficient use of resources” (World Bank, 1994, 63). The translation of this international strategy in the context of Indonesia took place along the following phases:
1990-93: Indonesia’s 1990 autonomy regulation was initially welcomed as an instrument to help ensure sustainability of investments in higher education. Autonomy was associated with cost recovery (as it was during the 1980s).
1994-98: The apparent failure to fully implement these regulations was recognised well before the new paradigm, and was questioned in the course of URGE and HESP project discussions, but the Bank undertook little action at the level of domestic policy153. Autonomy was mentioned as a desirable policy objective that would assure project sustainability. Nonetheless, the Bank steered away from domestic legalities and focused on project implementation mechanisms, such as competitive funding, and bottom up planning procedures, self-evaluation, accreditation…
post 1999: After the downfall of Suharto, the Bank began to provide direct policy support to DGHE plans to grant ‘legal autonomy’ (ie. to make them legally separate from the Ministry of Education) to a selected number of State universities. At this stage, autonomy is seen as part of a broader policy framework involving legal (and political) reforms in funding, governance, and management of higher education. (chapter 5)
Notwithstanding intra-institutional differences, there are clear indications that the Bank’s policy discourse by the late 1990s had reached a high level of integration within the domestic policy discourse of the DGHE. The government’s own higher education development programs soon started to take over not only the approach (e.g. competitive funding schemes, bottom up planning) but also the terminology of Bank projects. Most prominent are the Ministry’s ‘DUE-like’ program or ‘semi-QUE’, where even the title of the project explicitly refers to earlier Bank supported projects, suggesting similarities in approach154. But apart from this particular example, the data indicates that the Directorate’s development budget increasingly departed from the centralized control mechanism that was typical for line item budgeting instead setting up tiered competition schemes, in which universities were to submit activity plans that were generated in a decentralized fashion. Throughout, the idea was to avoid “the project mentality” typical of the earlier “top-down approach”, instead suggesting a greater sense of “ownership” and a greater concern for “sustainability” of new investments (all quotes from Moeliodihardjo, 1999).
In addition, key informant interviews confirmed that the DGHE was pushing other donors to design their future projects along the same lines, with a greater sense for encouraging bottom-up planning mechanisms within institutions (p.c. Satryo, p.c. Pramutadi). Notably, the government at the time of data collection (late 1999) was in the process negotiating a loan with the ADB, later to become the Technical Professional Skills Development Project, which in effect was guided by the same principles: awarding grants to institutions on a competitive basis, involving institutional self-evaluations and proposals based on decentralized planning from the study programs upward (ADB, TPSDP Guidelines, 2001). Even the typical activities of bilateral donors, including Australia, Germany, and others, fit in well as they often pursued non-monetary, ground level academic links, international scholarships and twinning operations, which all turned out to be helpful in the process of self-evaluation and proposal development. Notably, bilateral agencies had invested heavily in staff development by means of international scholarships, but many who returned were soon drawn from the university as they typically did not get the chances or necessary support in their home institution155. Merit based competition schemes, and decentralized self-evaluation processes provide a range of new opportunities for young academics to successfully compete for resources and to effectively participate in the institutional planning process (p.c. Pramoetadi).
In sum, the World Bank’s international agenda for public higher education by the late 1990s clearly had become the dominant discourse in Indonesia’s higher education policy. The five pillars of the ‘New Paradigm’ (i.e. quality, autonomy, accountability, accreditation, and evaluation) reflect the change of policy discourse very well as they capture a different set of government roles in higher education. Taking into account that discourse implies relationship, the new paradigm definitely suggests a reconfiguration of the State-university relationship. With reference to Peter Evan’s classification of State roles (Evans, 1995: 78-81), the role of the Indonesian State in higher education shifts from the central ‘demiurge’ to a role of ‘custodian’, who protects and ensures quality education by establishing supervising institutions (i.e. Board of Higher Education, Board of Accreditation), procedures (i.e. competition, self-evaluation, peer review), and criteria (i.e. the so-called RAISE framework156) for evaluation and accreditation. It is a selective State, which corresponds with competitive funding schemes and output based funding formulas, away from across the board, line-item funding mechanisms that were common practise. Finally, the State takes on the position of ‘midwife’ in the sense that it sets goals and criteria, but leaves implementation and proposal formulation to the institutions themselves. In principle, the State remains largely dependent on the responsiveness of the universities, even though a sophisticated incentive framework may encourage them to react in ‘desired ways’. Institutions, on the other hand, are expected to get their house on order internally (for instance, in consolidation of budget and financing structure, but also in academic programs, curriculum development, and governance structure). The idea comes close to the notion of “maximizing induced decision making” (Ellerman, 2005), or, perhaps more appropriate to the world of higher education, “governmental steering” as I will further discuss in section 3 of this chapter.
With reference to Clark’s triangle, there is little doubt that the now dominant discourse of the new paradigm suggests a stronger market component of Indonesia’s public higher education. This is reflected in the operational definition of ‘quality education’, which puts a heavy weight on job market related skills and competencies, and values the development of particular subject areas that are in high need for the nation’s economic competitiveness. But it is also expressed in the introduction and expansion of competitive procedures for allocating resource (allowing that some get more than others), the emphasis on merit based criteria, and the discourse on decentralized and demand oriented planning of higher education. The new discourse definitely implies a departure from existing values and practices of higher education at different levels, from resource allocation (across the board) and career paths (following the rules of the civil service) to class room pedagogies, curricula, and quality standards.
As the policy discourse of the new paradigm was becoming the dominant policy discourse, alternative discourses have developed. Notably, some critics using contesting discourses question the withdrawal of the State from public higher education institutions and its replacement by market forces on social or regional equity grounds (Muljani, 1999). Other contesting discourses associate the management paradigm with an erosion of the ideal of the academy as a “moral force” in society157, and point out that the spirit and ideals of the ‘civitas academica’ have been replaced by the “money making business” that higher education has become. As one critic wrote: “The change to campus autonomy has not really done anything more than institute a change form State tyranny to market domination. The reality is that the civitas academica has not been able to critique the social marginalization that has resulted from this policy.” (Nugroho, 2005: 147).
Whether, as critics seem to argue, the discourse corresponds with a ‘neo-liberal agenda’ of ‘privatization’ and ‘commoditization’ of higher education remains largely to be seen. For one, the ‘custodian State’ that is emerging from the new paradigm discourse, typically is a regulating State, with the necessary power and capacity to select, to protect, to set rules and to sanction. The establishment of specialized government agencies, such as the National Accreditation Board (BAN), or the Board of Higher Education (HED), can be seen as an expression of the different yet powerful role that the State has been taking on since the mid-1990s. Furthermore, whereas at the level of the institutions, the managerial reforms suggested by the new paradigm may have granted the universities greater latitude in generating income (i.e. fees, non-degree programs,…), it is still uncertain to what extent university governance will continue to be influenced by State rules and regulations in terms of ‘the hire and fire’ of managers or personnel in general (cf. the civil service status). Again with reference to Clark’s triangel, I will argue in the following sections that the system changed from State control to a different kind of State control.
II. Process outcomes: how one thing leads to another…
(Higher) education and international assistance are fields widely known and often criticized for their reflection of a profound and optimistic belief in the possibilities of social engineering. Participants’ belief in rational planning and man-made change (‘human agency’) is prominent. Nonetheless, and following the analysis in chapter 2, the picture that emerges from 20 years of international assistance to Indonesia’s higher education does not provide any proof of a “grand design” or “master plan” with a clearly defined strategy implying a move from ‘State control’ to ‘institutional autonomy’. Instead, assistance policy goals and efforts (described in chapters 2 and 3) suggest ample room for experimentation with a variety of approaches, much ‘muddling’ with centralized projects as well as decentralized grants and linkages, much standard project work (i.e. infrastructure development, training, scholarships, technical assistance…) but also, and progressively so, recognition of and specific actions directed at the broader policy framework of Indonesia’s higher education.
In order to be able to assess the outcomes of international assistance in terms of increased levels of autonomy for public institutions, we need to explore the particular type of structural characteristics (the ‘institutional design’158) engendered in the actions of international assistance during these decades, and how these affected the preferences of key actors and the dynamics of political exchange. In this section, therefore, I will focus on those intervening variables that helped to ensure that international assistance –in this particular context- were supportive of institutional autonomy. Specifically, from the interviews and documentation, I was able to construct four process variables that help explain how, and to what extent, international assistance goals and efforts came to be congruent with the Indonesian higher education environment. These variables include: time perspective, levels of legitimacy, consultation, and institutional embeddedness. Figure 4.1 transposes these variables into a multidimensional framework for assessing congruency.