Indonesia’s economic performance impressive: growth averages 7 % per annum during 1979-1997. A new economic stage began in mid-1980s when expansion of labor-intensive manufactures became the main source of growth in turn fueling social demand for higher education in specific areas. Indonesia’s improvements in education meanwhile were also pushing demand: universal primary enrollment was achieved in the early 1980s, and secondary school enrollments increased almost threefold between 1970 and 1996.
Whereas the new order government at first was firmly based on the basic building blocks of a centralized bureaucratic polity, its economic success and growing entanglement with international players –donors as well as markets (e.g. oil and other natural resources, private investments in emerging industries)— has confronted it at all levels with the critical question of what the appropriate role of government should be. This has been the case in “soft” social service sectors such as education and health as much as in macro-economic policy, where successive deregulation packages in 1983, 1988 and 1991, marked the 1980s as the decade of deregulation (credit Susastro).
Economic growth underscored the success of technocrats and reformers pushing for more deregulation of the economy, implying both reduced roles for government intervention and wider and more creative participation by public. The process has been managed in gradual fashion, with plenty of muddling-through. Deregulation has not been pursued by ideology, but rather as a direct assault on Indonesia’s high-cost and internationally un-competitive economy of the early 1980s. Its driving force has been a more efficient allocation of resources. A continued uncertain oil market (drop in prices in 1983 and again in 1986) created the strong sense of crisis that was sufficient to keep alive the deregulation process. Deregulation policy was initiated within the government, yet was implemented first in departments where little opposition existed, i.e. those governed by technocrats (civilians).
4. Domestic Indicators
While overall public expenditure on education as a proportion of public spending has increased (late 1970s-1990s), it is still below average for the region, and especially so in higher education, where government has relied predominantly on private sector and foreign aid. Domestic willingness to invest public funds in higher education has been low traditionally. However, DGHE managed to convince the Government early on in the 1980s to lend for higher education for lack of domestic resources. The massive expansion of higher education enrollments, and its distributions between public and private sectors is graphically presented in annex (graph 2).
5. International Assistance in the State Budget
In budgetary terms, the principle of a “balanced and dynamic budget” was the central plank of its fiscal policy: in principle, it implied that the State budget needed to reflect a balance between revenues (including development assistance and loans) and expenditures. In practice, the dynamic budget concept suggested a commitment to expand budget expenditures, if needed with external revenues, in order to “maintain the momentum of development” (BAPPENAS, 1994: 85). For much of the 1980s, when the country faced decreasing domestic revenues from oil, aid became the principal gap-filling revenue source in the national accounts. The situation changed only in the early 1990s, when oil-dependency decreased, and foreign private investments came to take on a larger chunk of the country’s capital inflows. Adherence to the balanced and dynamic budget principle required foreign aid to become the balancing item that would fill the shortfall between domestic revenues and expenditures. Foreign aid during much of the eighties contributed about one third of budgeted development expenditures.143
This section investigates international donor efforts in higher education in greater detail, specifically documenting the size, distribution (by institution, by province), and changing composition and mechanisms of international assistance. The data presented in this section demonstrate:
The sheer magnitude of the international donor effort overall –on average representing 41.5 % of Indonesia’s higher education development budget (1980-1998)— and the relative position of the two donors selected in this study;
The high degree of selectivity of the international assistance effort. Specifically, donors explicitly directed their efforts to a range of institutional innovations and in doing so at least implicitly supported greater institutional differentiation. Indeed, ‘projects’ that attempted otherwise (for instance, by putting funds unselectively in a sector-wide slice of the budget) were abandoned for their perceived lack of sustainability, and were instead followed on with initiatives that specifically put forward new ways and procedures (i.e. competition, peer review) to allocate resources (see ‘mechanisms’). Furthermore, these innovative approaches and funding schemes all seemed to presuppose a radical shift in the nature of the State’s role in managing the system of public higher education, more specifically suggesting a departure from the State as sole provider (demiurge) and/or central funding agent, towards a role of inducing change, ensuring quality and productivity;
The HED-portfolio of selected donors, and in particular the changes over time as to the composition of their efforts over different types of assistance. International donor inputs traditionally included provisions for equipment, technical assistance (which in turn includes domestic and international training as well as technical consultations), and infrastructure or civil works, all of which were typically part of a pre-agreed schedule or plan of operation. Particularly notable, however, is the profound shift in project spending patterns towards a situation in which donor inputs are no longer specified a priori but where funds are allocated directly as block grants to selected beneficiaries, be that institutions or specific units within. These newly styled programmatic interventions are significant not only for the multiple challenges they impose on the more classical model of donor’s internal mode of operations (e.g. in project design, implementation, monitoring and supervision), but also for their intent to foster greater participation from target beneficiaries;
That during the 1990s the typically centralizing mechanisms in project design and implementation were being replaced with more decentralized procedures, involving increased levels of participation from students, parents, faculty, and the local community. Frustrated with the lack of sustainable results from its earlier massive investments in the higher education sector, the World Bank in the years 1994-1998 launched a new series of projects, which it considered to be better in line with modern management principles. Under this so-called New Paradigm of donor assistance, universities and their units are required to submit plans, rationales, and budget proposals, indicate what their own contribution will be, and compete for the available funds. Target institutions and units are selected on a competitive basis, on the basis of a number of criteria agreed upon with a newly set up Board of Higher Education. All the while, the Bank advised Government to use this mechanism also for allocating regular development funds to institutions. Funding is provided in block grants, but continuation is contingent on continued progress on quantitative sets of project performance indicators. This new generation of projects, which have taken up an increasing share in the Bank’s lending portfolio, comprises hundreds of very small projects supporting a multitude of widely dispersed activities (small contracts, payments…), and have a different disbursement and flow of funds than is characteristic from the more traditional project. On the donor side, the approach has already proven to require strong monitoring capacities at the Resident Mission, especially in the area of procurement.
Graph 1: Funding Sources for Higher Education in Mid- to Late 1980s
Graph 2 : Distribution of Project Components Old Paradigm (World Bank Projects)
Graph 3 : Distribution of Project Components New Paradigm (World Bank Projects)
IV. Donor Efforts and Funding at the Institutional Level
Finally, section 4 investigates quantitative expressions of international donor efforts in light of structural changes over time in the funding patterns at the institutional level. The purpose is not so much to suggest a statistical correlation between the share of international assistance and the changing composition of the institutional budget as to provide a graphical demonstration of the place of international assistance in the context of institutional resource diversification. Donor assistance, because of its size and shape, was in a position to leverage on institutional choices and possibilities. In so doing, the section provides the link to a more detailed discussion of assistance outcomes in the next chapter. The evidence presented in this section indicates that:
Donor investments in the development of Indonesia’s public higher education have coincided with a changing pattern of funding at these institutions, suggesting a decreasing dependence on direct government funds and increased reliance on fees and other extra-governmental income. Data do not indicate that these changes thus far have been substituted with an increased dependence on international assistance. Corresponding tables 4 and 7 in annex illustrate distribution of international assistance by institution and by region, as well as their share in the institutional budget.
Increased diversification of resources clearly is more prominent for those institutions that received international assistance than for those institutions that received no or little assistance from 1980-1995. Data support the argument that assistance increases opportunities of institutions to improve their position on the market of extra budgetary resources. Graph 4 indicates distribution of institutional funding patterns for three groups, each consisting of 4 institutions144, representing the following categories: high recipients of assistance; medium recipients of assistance; and low to no recipients. The graph demonstrates the decreasing reliance on extra-budgetary resources from the ‘high group’ to the ‘low group’.
Graph 4: Institutional Budgets by Level of Assistance Received (1980-95)
From the 1970s, Indonesia’s domestic policy context suggested ongoing constraints to the availability of public resources for higher education, whereas the international political climate at the time was conducive to increased levels of international investments into the Indonesian economy and human resource base. Some donors gradually came to find themselves in positions from which their interventions would start to create an environment (more) conducive to decentralized or less strictly coupled State-university relations. At times, these donors explicitly acted as a catalyst or provider of ideas in trying to get the Indonesian Government or its institutions to focus on ‘decentralization’ as a key element of State-university relations and a necessary condition for improving public higher education. Most of the time, however, donor efforts were implicit, indirect or suggestive, occasionally responding more explicitly to scarce opportunities provided by changes of leadership in the Ministry, the Directorate for Higher Education, or at the universities with which they collaborated.
Donor inputs, be they in infrastructure, training, management, planning and policy, or, most prominently, in university staff development, were to raise but at the same time to redistribute domestic capacities of the State university system to levels that would have not been achieved without external assistance. Both the relative import (i.e. size of the effort in relation to domestic resources) and the degree of selectivity of donor efforts in general suggest a gradual, at times painstakingly slow, but nonetheless fundamental departure from the more typical State-controlled mode of distributing resources evenly across the system.
At the system level, growth and selectivity of donor assistance have gone hand in hand with an increased and intended diversification of institutional types, a process which in turn has put effective pressure on centralizing forces of State control. The introduction and diffusion of new institutional types and educational functions (i.e. engineering education in polytechnics, graduate education and research at selected universities…) undoubtedly complicated centralized management of an expanding and quite elaborate system. The World Bank, in an effort to assist with the implementation of a new paradigm in higher education funding, explicitly introduced competitive mechanisms in the domestic resource allocation process. Following Suharto’s fall in 1998, this donor even started to collaborate with the DGHE and with selected State universities to explore ways and procedures, quite possibly including legislative measures, designed to increase the autonomy of ‘State’ institutions to an unprecedented (legal, financial and academic) level. Whereas the size and shape of the smaller donors’ efforts were much less dramatic and system-wide than they were for their highly leveraged multilateral counterparts, their position at the institutional level nonetheless is seen to be similar Capacity building staff development, transfer of power (not authority) in allocating resources.
At the institutional level, donors explicitly targeted their efforts at increasing academic and managerial capacities, and thereby, often implicitly, acted as a catalyst in creating further opportunities to generate external resources. In this context, the mechanics of the assistance process has gained special prominence over time. Whereas smaller donors such as the Netherlands early on confined their efforts to staff development and academic linkages, the World Bank most notably, moved from infrastructure to explicitly seek to introduce and optimize competitive mechanisms in the domestic resource allocation process. While efforts have been predominantly oriented towards the departmental or sub-unit level –more so than the central university administration– data nonetheless suggests that especially those institutions and units receiving the bulk of the assistance efforts have generally become less dependent on central government funding.
International Assistance and State-University Relations
in Indonesia (1978-1998)
Seeking Autonomy within a Bureaucratic Polity
“Outcomes are the things that are actually achieved, whatever the objectives of policy may have been. Outcomes are real results, whether intended or unintended, and are not restricted to the result of agency” (Lane, 1994: 63)
“An innovation fails because it is either incompatible or unprofitable or both, with profitability as the stronger determinant of the two”(Clark in Cerych & Sabatier, 1986: 264-265)
The policy implementation literature provides a productive framework for sorting out conceptual differences between policy implementation and evaluation, inputs and outputs, outputs and outcomes. The intention in this introductory session is not to review that literature (Hill & Hupe, 2002; O’Toole, 2000), but rather to clarify what I mean by outcomes, in a conceptual and an operational sense, in the context of this dissertation research.
At the conceptual level, the design of this dissertation was not set up to evaluate Indonesian tertiary education policy reforms. Hence, outcomes of domestic reforms are not the object of this chapter. Our target is not the success or failure of the Indonesian policy reforms, but rather the extent to which selected reforms have been influenced by international assistance. Furthermore, the analysis does not (even) intend to provide evidence of the degree of success of international assistance in contributing to an improvement of Indonesia’s higher education. Such an assessment would require a set of educational and/or managerial quality indicators, based on a more or less fixed set of objectively verifiable policy goals, and leading to normative judgments that go well beyond the institutional perspective on university autonomy that we have identified as our dependent variable (cf. chapter 1).
Instead, the analysis in this chapter will recognize the continual interaction between policy goals, inputs and outcomes over a specified time period. The purpose is to describe and try to explain what happened in the process of implementation, seek causal connections and relationships on the basis of analytical judgments, more so than to assess the output of a particular policy goal and/or effort. In other words, the analysis in this chapter does not conceptually start from the assumption that goals (chapter 2) lead (or do not lead) to inputs or efforts (chapter 3), which in turn lead (or lead not) to specified effects (outputs). Following the substantial “third generation” implementation research literature145, efforts are not always rewarded with results, ideas can have direct effect without much input intermediation, and various feedback loops to and fro intervening and mediating variables interfere with such linear logic.
The outcome analysis in this chapter conceptually leaves the door open for unexpected logics and relationships. Obviously, by explicitly choosing to explore for ‘outcomes’ (instead of ‘outputs’ or ‘effects’) as the main object of this chapter, the analysis does not become less complex at the conceptual or the operational level. On the contrary, analyzing the process of implementation implies the inclusion of intervening variables; it suggests an openness towards a broad range of theoretical perspectives, moving beyond agency and instead including more process related themes (such as socialization, language, academic/organizational culture) and relational variables (such as power relationships, organizational culture, inter-organizational networks).
At the same time, the chapter needs to empirically define these variables in order to address the central questions of relevancy, efficacy, and efficiency that provide guiding criteria for any assessment of outcome. Relevance, in the context of this dissertation, is regarded in terms of the level of congruence with domestic conditions at the level of national higher education policy, selected institutions and academic units. An assessment of relevance therefore not only suggests the inclusion of material related to the context of Indonesia’s national higher education policy framework –and the changes therein— but also an analysis of stakeholders’ opinions, as well as a sense of the power relationships within institutions. Efficacy, in turn, concerns the extent to which assistance goals have been achieved (the product sense of the efficacy criterion), or conditions have been established for these goals to be achieved (process sense of the efficacy criterion). Finally, with efficiency I will refer, first, to the extent to which outcomes are a reflection of donors’ strategic choices (rather than from other intervening factors), and, second, to an assessment of the profitability of donor goals and efforts in terms of their value as compared to alternative approaches (or what economists call the opportunity cost of the investment).
Thematically, the chapter substantiates the ways in which international assistance has been instrumental in the establishment of domestic conditions that are needed in order to promote increased levels of autonomy at the institutional level. Suggesting Clark’s “Places of Inquiry” as a guiding analytical frame of reference, the analysis follows his distinction between the enabling conditions, the formative conditions, and the enacting conditions that on the whole constitute the basis for institutionally integrating basic functions of higher education in Indonesia146. Throughout, the chapter explores the extent to which donor assistance in Indonesia either reflects or else deviates from the internationally dominant higher education reform agenda so prominent in the World Bank’s higher education 1994 policy paper (World Bank, Lessons of Experience, 1994).
At the operational level, the burden of proof for this chapter lies in providing evidence for the relationship between selected changes in Indonesia’s higher education system on the one hand, and the goals and efforts of 20 years of international assistance on the other. Specifically, I will try to lay out the various ways in which the politics of the so-called ‘New Paradigm’ has been affected, inspired, influenced or contradicted by donor policies and assistance programs. In effect, in this chapter I will argue how international assistance became one source of influence, providing inspirational, technical and policy support that together helped create an enabling environment for decentralization in the Indonesian higher education system. The communication of ideas, the particular experiences with specific projects and programs –often embedded in a process of “policy dialogue” and sub-sector “upstream work”– came to be reflected into successive “frameworks for long-term higher education”, which in turn set the stage for further institutionalization of reform. Notably, the analysis indicates how international assistance:
gradually built up a discourse for State higher education ‘reforms’, involving a different set of government roles, notably implying systems of quality assurance (through peer review, benchmarking and accreditation), procedures for decentralized management (including more institutional autonomy in financial areas, and incentives for bottom-up planning at institutional levels), and alternative funding mechanisms (suggesting increased accountability and efficiency);
for over two decades continued to invest in a long term process of “trials and errors”, allowing for successful ideas and efforts to gradually seep through and ultimately to take root within the domestic environment at both national and institutional levels;
helped foster changes in the way the Indonesian government went about in managing its public higher education at the system level, thereby creating ‘the enabling environment’, which in turn is expected to lead to increased levels of institutional autonomy;
contributed to particular outcomes fostering institutional differentiation (at system level), resource diversification (at department and institutional level) and cost recovery (at institutional level) that enabled the establishment of ‘the formative conditions’ for institutional autonomy;
supported the introduction and systematic implementation of selective and transparent distribution mechanisms (i.e. competition, performance based approaches, benchmarking, peer evaluation and accreditation) that are instrumental in sustaining ‘the enacting conditions’ at the level of the academic work floor.
Words matter: donors and the language of ‘reform’ in Indonesia’s higher education
The term discourse analysis has many different meanings, typically referring to various disciplinary fields, ranging from literary studies to sociolinguistics, and theoretical perspectives and methods147. This section is specifically concerned with the use of language (both written and oral) in the particular social context of Indonesian higher education policy, and in its historical interaction with the language of foreign assistance. The policy discourse, in other words, will be traced and analysed as an outcome of donor-recipient relations.
Theoretically, this approach starts from the basic assumption that the use of language is tied into social relations, political power and the continuous struggle to obtain more of it. At a more practical level, the method of reviewing and connecting policy analytical papers, project preparation documents, and interviews intends to reveal how and to what extent the language of the donor became the policy language of the recipient. Thematically, the analysis uncovers certain parallels between domestic and international assistance policy discourse highlighting not only the presence of external influence but also, at least to some degree, the internalization of that influence at the level of policy language and reports suggesting (needs for) change and reform in the management of higher education.
For sure, convergence of policy language does not allow any firm conclusion about donor’s effect on actual decision making or implementation (ie. “real change”). The ensuing sections of this chapter will focus on these more ‘hardware-like’ components of assistance outcomes. Also, it is acknowledged that the international donor discourse was not always easily accepted, let alone taken over by the Indonesian government, at times it was even rejected (for instance the abolishment of the subsidized student loan scheme in the 1980s148, or, the political decision to discontinue all on-going Dutch assistance in the early 1990s), and often adjusted to local circumstances (cf. infra the prudent crafting of the definition of institutional autonomy in the New Paradigm document) or complemented with alternative domestic variations and home-grown concepts or flavours (cf. infra the reference to higher education as a ‘moral force’ in society).
The key observation, however, remains that the dominant discourse in Indonesia’s higher education policy today can be traced in great part as an outcome of international assistance goals and efforts, more specifically the World Bank’s engagement since the mid 1970s but especially in the course of the 1990s. The genesis of the ‘New Paradigm’ in the mid-1990s illustrates that point very well. The official document appeared in May 1996 as part of the Framework for Long Term Higher Education Development (1996-2005), but an early draft circulated in August 1995 in the frame of a so-called policy dialogue with the World Bank, which in reality was part of a negotiating process that started in 1992 and was meant to identify a follow-on project to the sector wide time slice loan HEDP-II (cf. discussion in chapter 2). Apart from these project concerns, however, the Bank’s conceptual international work in developing its own higher education policy paper (ie. the preparatory drafts of the Bank’s ‘Lessons of Experience’ paper) also informed the Indonesian policy dialogue. Table 4.1 not only suggests a particular timeline and flavor of this dialoguing process, but at the same time indicates in what particular context and to what extent key concepts, such as ‘new paradigm’, ‘autonomy’, ‘accountability’, ‘accreditation’, and ‘quality’, were introduced into the process and ultimately became part of the official policy discourse of the DGHE, as reflected in the Third Framework for Long-Term Higher Education Development.
The discourse of policy change and ‘paradigmatic reform’ in any case contrasts sharply with the preceding ‘Long Term Higher Education Framework’, where ‘consolidation and stabilized growth’ was the name of the game, at least for the State universities149. Whether or not this change of discourse was a direct result of explicit or implicit external pressure is not the main argument here. As can be expected, and will be further discussed in the next session, there was a mix of external influences resulting from ‘policy dialogues’ or project evaluation issues on the one hand, and home-grown concerns about the financial continuity of the system on the other150. Our key point here is that the strategy of the New Paradigm clearly echoes the essential orientations of the Bank’s broader international as well as its Indonesian strategy for higher education, both suggesting a breakaway from the central role of the State in planning, funding, and managing higher education.