Indonesia: Subnational Education Public Expenditure Review 2020 - Vol 1 of 2 - Revealing How Subnational Governments Spend Their Money on Education

Jul 19, 2026

Revealing how Indonesia’s subnational governments spend education funds examines the variation in education mandates, budget resources, and expenditure management across districts and cities. It explains the legal and institutional framework, the structure of education budget allocations (including general and special funds), and how planning, budgeting, reporting, and actual spending operate at the subnational level. The review links education budget decisions to school conditions and student outcomes, offering summary findings and main recommendations for improving efficiency and effectiveness in education financing.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages126

Reading Time5 h 18 min

AccessFree to download

Foreword

Executive Summary

1. Introduction

1.1 Why do we need a subnational education PER?

1.2 Conceptual Framework

2. Variation, Divergence and Inequality between Districts/Cities

3. Education Mandates and Resources at the Subnational Level

3.1 Legal framework in education service delivery

3.2 Overview of the education budget

4. How Do Subnational Governments Manage Their Education Budgets?

4.1 Planning and budgeting

4.2 Education resource allocation and reporting

4.3 Actual spending on education

5. Impact on School Conditions and Student Outcomes

5.1 School conditions

5.2 Student outcomes

6. Summary and Main Recommendations

Annex

References

Pub lic Disc losure Authorized THIS REPORT WAS PREPARED BY: RYTHIA AFKAR-JAVIER LUQUE-SHINSAKU NOMURA-JEFFERY MARSHALL This work is a product of the staff of The World Bank, supported by funding from the Australian Government. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions © 2020 The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; [Internet: www.worldbank.org](Internet: www.worldbank.org) Some rights reserved The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for non-commercial purposes as long as full attribution to this work is given. All queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: [pubrights@worldbank.org](pubrights@worldbank.org). Attribution Please cite the work as follows: Afkar, R; Luque, J; Nomura, S; Marshall, J. 2020. Revealing How Indonesia’s Subnational Governments Spend their Money on Education, World Bank. Jakarta. © World Bank. Contact Information The authors can be contacted at [rafkar@worldbank.org](rafkar@worldbank.org) Photo Credits Page xiv: Achmad/World Bank, page 54: Fauzan Ijazah/World Bank, all other photos: Akhmad Dody/World Bank CONTENTS List of Figures ii List of Tables iv List of Boxes iv List of Tables (Annex) iv Foreword v Acknowledgment vii Abbreviations and Acronyms viii Executive Summary x 1. Introduction 1 1.1 Why do we need a subnational education PER? 2 1.2 Conceptual Framework 5 2. Variation, Divergence and Inequality between Districts/Cities 8 3. Education Mandates and Resources at the Subnational Level 14 3.1 Legal framework in education service delivery 16 3.2 Overview of the education budget 20 3.2.1 General allocation funds (Dana Alokasi Umum, DAU) 24 3.2.2 Special allocation funds (Dana Alokasi Khusus, DAK) 28 4. How Do Subnational Governments Manage Their Education Budgets? 32 4.1 How do subnational governments conduct their planning and budgeting? 34 4.2 How much do subnational governments allocate resources to education? 38 4.3 How do districts/cities report their education expenditures? 50 4.4 How are resources actually spent on education at the subnational level? 54 4.4.1 Education spending by education level 55 4.4.2 Salary spending 62 4.3.3 Non-salary spending 73 5. How Do District/City Education Budgets Impact on School Conditions and Student Outcomes? 80 5.1 How does district/city spending impact the provision of school conditions? 83 5.2 How are key student outcomes affected by education spending? 86 6. Summary and Main Recommendations 92 Annex 97 References 105 Indonesia: Subnational Education Public Expenditure Review 2020 i listofFIGURES | 1. | FIGURE 1.1 | Theory of change framework: Education budget allocations, school inputsand student outcomes 7 | | --- | --- | --- | | 2. | FIGURE 2.1
FIGURE 2.2
FIGURE 2.3 | More than 200 districts/cities have above 90 percent lower secondary GERs, but many still have below 80 percent 11
High levels of heterogeneity for UN scores observed across districts/cities with varying NERs 12
Performance over time across district/city quintiles on adjusted UN tests and overall NERs remain relatively consistent, 2016–18 13 | | 3. | FIGURE 3.1
FIGUR

FAQs

Why is a subnational education public expenditure review needed in Indonesia?

The review frames the need for analyzing education spending at the subnational level, motivating the assessment of how local education budgets translate into inputs and outcomes.

How are education budgets structured for subnational governments?

The document outlines the education budget framework, including general allocation funds (Dana Alokasi Umum, DAU) and special allocation funds (Dana Alokasi Khusus, DAK), and summarizes how these support education.

How do districts and cities manage and report education expenditures?

It describes how subnational governments conduct planning and budgeting, how they allocate and realize education resources, and how districts/cities report their education expenditures.

What impact does subnational education spending have on schools and student outcomes?

The review links spending patterns to school conditions and to key student outcomes, analyzing how district/city education budgets affect what schools can provide and how students perform.

Jul 19, 2026

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