Policy Research
Designing and implementing social safety net programs in 1998 was a new experience for Indonesia. The severe social impacts of the crisis, which began in mid 1997, forced the government to act rapidly to safeguard real incomes and access to social services for the poor by instituting new and expanded programs.
The potential benefits of accurate targeting are substantial because public expenditures can be concentrated to the needy, thereby saving money and improving program efficiency. However, targeting also entails administrative costs associated with identifying, reaching, and monitoring potential beneficiaries.
After over 30 years under a highly centralized national government, Indonesia decided to implement a policy of decentralization that became effective on January 1st, 2001. This paper examines the preparations that have been undertaken within the regions, some of the initial implementation measures, and some of the key problems that emerged during the process of decentralization as managed by regional governments.
This paper attempts to answer some questions about the financial capacity of local governments to implement regional autonomy. In the early stages of the implementation of autonomy, financial aspects have been crucial for every kabupaten and kota administration1.
In response to the financial crisis which struck Indonesia in mid-1997, the government of Indonesia, in cooperation with the World Bank, instituted a food support program called Operasi Pasar Khusus, or OPK. The OPK program was designed to provide first 10kg, and later 20kg, of rice per month to every poor family in Indonesia.
