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Improving public expenditure on child well-being in Indonesia

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Revita Wahyudi

Dwi Rahardiani, Kevin Carr, Nick Travis, Revita Rahyudi, OPM Indonesia, OPML Indonesia

The overall objective of this assignment is to produce a comprehensive, evidence-based assessment of the allocation and expenditure of public finance on child-related services and to develop recomendations on how UNICEF can work with Aceh authorities in Indonesia to improve child welfare in this province. The research focuses on quantifying the level and composition of child-specific expenditures in Aceh, and analysing the data collected to help shed light on the following three key research questions:

  1. To what extent are child-related public expenditure allocations aligned to strategic priorities?
  2. To what extent are these expenditures cost-effective and efficient?
  3. To what extent have these expenditures resulted in the achievement of child-related outcomes?

Specifically, the field research aims to determine the allocative efficiency of public expenditure for children by examining the links between child-focused policies and plans on the one hand, and the allocated budget and actual expenditures on the other. This analysis will help identify the extent to which public expenditure is aligned to overall needs as reflected in planning documents, and where the major gaps in implementation currently exist. The research therefore includes identification of the relevant child-focused policies, sector plans, and budget allocations/expenditures, in order to understand the size of investments in children and the priorities attached to them.

Challenges

Budgets are a key part of the enabling environment for the realisation of children’s rights and are the medium through which policies are funded and executed. This is therefore the key mechanism through which activities and outputs in support of children’s well-being are delivered. A budget is arguably one of the single most important public documents – fulfilling economic, political, legal, and managerial functions – as it translates a country’s national development goals into annual spending plans. No matter how good a policy may be, unless it is accounted for in the national budget, financial resources will not be leveraged to make a difference for children. Effective public financial management systems are therefore critical to achieving sustained improvements in sector service delivery performance.

In recent years, Indonesia has seen improvements in significant world development indicators that attest to improvements in people’s live; for example, an increase in life expectancy at birth and a decrease in the poverty headcount (World Bank, 2016). Indonesia has also established an impressive legal and policy framework for children’s rights and has ratified a number of relevant international treaties. However, gaps remain, and the connections between policy, strategy and implementation are still under construction (UNICEF, 2015). Evidence shows that while various policies and programmes have successfully improved child health and survival at the national level, special attention and assistance is still needed for children in income-poor households, and in rural and remote areas. So more resources and collaborative efforts still need to be directed at the most deprived children.

Our approach

UNICEF East Asia and Pacific Regional Office, in collaboration with UNICEF Pacific Island Countries (PICs) and government partners, with technical assistance from Oxford Policy Management (OPML), recently undertook a study to pilot an innovative 13-step approach to track, assess, and monitor expenditure on children (Jones, A. & Feruglio, N., 2016). The objective of this approach is to ensure quality and consistency in analysis, and in turn improve the overall usefulness of the tracking and monitoring of expenditures on children to government decision makers. This assignment draws on the 13-step approach, specifically in conducting the following steps:

  • collect expenditure data from MDAs (at all tiers of government) involved in the delivery of child-related services in the four thematic areas identified;
  • analyse the data to identify relevant programmes and activities under each MDA that can be categorised as related to children;
  • compare actual expenditure against strategy and planning documents, to assess the extent to which expenditure is aligned with the needs and priorities of children;
  • use a simplified Benefit Incidence Analysis (BIA) to assess the proportion of public service provision that is reaching the intended target beneficiaries; and,
  • apply the Data Envelopment Analysis (DEA) to assess the efficiency of public expenditure

Outcomes

The assignment will provide evidence to support the work of UNICEF in Indonesia, in particular efforts to influence the equity, transparency, quality, and size of public investment for children in line with the Public Finance for Children (PF4C) initiative. It is envisaged that as a result, UNICEF will be in a better position to advocate for improvements to public finance management systems and budgetary processes in general, and to ensure such systems and processes have an increased focus on children. Evidence gathered during the research aims to inform future policy dialogues among the relevant stakeholders, especially key government ministries/agencies, the legislature, and civil society organisations (CSOs), in addition to advocating for greater debate on the allocation of resources to children.

Areas of expertise