Introduction Research Objectives Preface

In 42 Kabupatens and Cities and 5 Provinces in Indonesia 6

1. Preface

1.1 Introduction

One of the indicators of the extent to which government pays special attention to the poor and women is its budget policies. By looking at governmental decisions on budget allocations, a community can get a sense of whether government is promoting economic growth and delivering an adequate level of basic public services. Accordingly, local budgets are reflections of political intent and determine the level of welfare enjoyed by the general public. As a continuation of their study in 2009, 28 community organizations resumed the study of local budgets Local Budgets Study LBS and completed it during 2010-11. Coordinated by the National Secretariat of the Indonesian Forum for Budget Transparency Seknas Fitra and The Asia Foundation, the study embraced 42 kabupatens and cities and 5 provinces in Indonesia. The LBS covered two areas: i An evaluation of the performance of local governments throughout the entire budget cycle and of the extent to which their budgetary processes were in accord with principles of good governance, viz. transparency, participation, public accountability and gender- responsiveness. This study is called Performance in Management of Local Budgets KIPAD. ii An analysis of local budgets to ascertain the extent to which they have been structured and used to meet the needs of the community, especially the poor and women. This second study is called Analysis of Local Budgets AAD. This current document only presents the findings of the AAD study. KIPAD is the subject of a separate report.

1.2 Research Objectives

The aims of the AAD project were to assess the latest state of local fiscal management and to undertake a comparative study of performance in the provinces, kabupatens and cities studied. The study focused principally on three key elements of local budgets: revenue, expenditure and financing. In order to form a judgment on the extent to which expenditure was pro-poor, the study had a close look at public works, education and health spending in the regions studied. The extent to which governments observed gender-mainstreaming principles was also analyzed. This research represented an effort by civil society to provide inputs to government. We hope that the research findings will become a resource for kabupatens and cities in their efforts to achieve a higher level of pro-poor and pro-women spending, to reduce poverty and to deliver better public services. In the case of provinces and the central government, we hope that our research findings can be used as a tool for monitoring the quality of local government budget management performance; and will help refine budget policies and identify the kinds of technical assistance local governments need in their efforts to lift their performance. Hopefully our research will contribute to improved budget management by government at all levels — the Center, provinces, kabupatens and cities — and help to streamline the supervisory and supportive role of central and provincial governments over front-line public service providers — kabupatens and cities. We hope that comparisons made between the kabupatens and cities studied will create an environment of constructive competition among them. Each of the 42 kabupatens and cities and 5 provinces studied is a distinct entity. Hopefully, in the light of our comparative study, they can learn from each other. They In 42 Kabupatens and Cities and 5 Provinces in Indonesia 7 will also hopefully come to see that what one government is doing can be benchmarked by others — even though that process would not be on a par with following ―best practice‖, from abroad for example. We also hope that our research can contribute to more effective budget advocacy and more productive dialogue between civil society and government. Civil society networks were involved in our research in a number of areas. Hopefully that experience will make civil society organizations CSOs more adept at undertaking research and help them to become more effective advocates of pro-poor and pro-women budgeting and public policy. Evidence-based advocacy will, we hope, enhance the quality of dialogue between stakeholders and increase the likelihood that CSOs’ advocacy campaign will have the desired impact.

1.3 Methodology