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Abstract
Empirical studies have consistently shown that simply allocating government funds to public goods and services would not guarantee desired outcomes if the budgeting process is flawed. This study explores how local governments can optimize their education budgets to improve educational outcomes through effective governance. Specifically, it examines the impact of local government budgets on access to basic education in Indonesia, focusing on junior secondary education, which remains a critical issue. The study also takes into account the total government education budget, including both local and central government funding. Using panel data from 455 districts in Indonesia between 2017 and 2019, the results reveal that as long as budget allocations are strategically aligned with current challenges in student access, and there is consistency between planning and execution, the budget will lead to the desired outcomes. The findings suggest that education budgets will only improve access to junior secondary education when good governance is practiced throughout the budgeting process. Conversely, in districts with poor governance, the budget has little to no impact on student access.
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This work is licensed under a Creative Commons Attribution 4.0 International License.
How to Cite
Widarthi, Y., & Jasmina, T. (2025). How Local Governance on Educational Budget Affects Access to Junior Secondary Education in Indonesia. Jurnal Ekonomi Dan Statistik Indonesia, 5(2), 286-301. https://doi.org/10.11594/jesi.05.02.05
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Plank, D. N. (1987). The expansion of educa-tion: a Brazilian case study. Comparative Education Review, 31(3), 361-376.
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Aghion, P., & Howitt, P. W. (2008). The eco-nomics of growth. MIT press.
Al‐Samarrai, S. (2006). Achieving education for all: how much does money mat-ter?. Journal of International Develop-ment: The Journal of the Development Studies Association, 18(2), 179-206.
Al-Samarrai, S., & Cerdan-Infantes, P. (2013). 6. WHERE DID ALL THE MONEY GO? FI-NANCING BASIC EDUCATION IN INDO-NESIA. Education in Indonesia (pp. 109-138). ISEAS Publishing.
Arze del Granado, J., Fengler, W., Ragatz, A. and Avuz, E. (2007). Investing in Indone-sia's Education: Allocation, Equity, and Efficiency of Public Expenditures. World Bank Policy Research Working Paper No. 429.
Baldacci, E., Clements, B., Gupta, S., & Cui, Q. (2008). Social spending, human capital, and growth in developing coun-tries. World development, 36(8), 1317-1341.
Bardhan, P. (2002). Decentralization of gov-ernance and development. Journal of Economic perspectives, 16(4), 185-205.
Barro, R. J. (1991). Economic growth in a cross section of countries. The quarterly jour-nal of economics, 106(2), 407-443.
Barro, R. J. (2001). Human Capital and Growth Robert J . Barro The American Economic Review , Vol . 91 , No . 2 , Papers and Proceedings of the Hundred Thirteenth Annual Meeting of the American Economic Association . (May , 2001), pp . 12-17 . The American Economic Review, 91(2), 12–17.
Becker, G. S. (1962). This PDF is a selection from a published volume from the National Bureau of Economic Research Volume Title : Investment in Human Beings Volume Author / Editor : Universities-National Bureau Committee for Economic Research Volume Publisher : The Journal of. In The Journal of Political Economy (Vol. 5, Issue 2).
Channa , A. (2015). Decentralization and the Quality of Education. Paper commis-sioned for the EFA Global Monitoring Re-pot 2015, Education for All 2000-2015, UNESCO.
De La Croix, D., & Delavallade, C. (2009). Growth, public investment and corruption with failing institutions. Economics of Governance, 10(3), 187–219. https://doi.org/10.1007/s10101-008-0057-4
Gupta, S., Verhoeven, M., & Tiongson, E. R. (2002). The effectiveness of government spending on education and health care in developing and transition economies. European Journal of Political Economy, 18(4), 717–737. https://doi.org/10.1016/S0176-2680(02)00116-7
Hanushek, E. A., & Kimko, D. D. (2000). American Economic Association Schooling , Labor-Force Quality , and the Growth of Nations Author ( s ): Eric A . Hanushek and Dennis D . Kimko Source : The American Economic Review , Vol . 90 , No . 5 ( Dec ., 2000 ), pp . 1184-1208 Published by : America. 90(5), 1184–1208. http://www.jstor.org/stable/2677847
Hardjono, J. (2004). The integration of poverty considerations into the nine-year basic education program in Bali and West Nusa Tenggara. unpublished report for the Asian Development Bank, Manila.
Hofman, B. and Kaiser, K. (2006), Decentrali-zation, Democratic Transition, and Local Governance in Indonesia. In P. Bardhan, and D. Mookherjee, Decentralization and Local Governance in Developing Coun-tries. Cambridge: The Massachusetts In-stitute of Technology Press.
Hu, B., and Mendoza, R. (2013)." Public Health Spending, Governance and Child Health Outcomes: Revisiting the Links", Journal of Human Development and Capabilities, Vol. 14, No. 2, pp. 285-31.
Jasmina, T. (2016). Public spending and learn-ing outcomes of basic education at the district level in Indonesia. Economics and Finance in Indonesia, 62(3), 5.
Jasmina, T. (2017a). Public Spending and Learning Outcomes of Basic Education at the District Level in Indonesia. Economics and Finance in Indonesia, 62(3), 180. https://doi.org/10.7454/efi.v62i3.556
Jasmina, T. (2017b). The Role of Government Spending on Basic Education at the District Level in Indonesia. Policy Science, Policy Science Association of Ritsumeikan University, 135–152.
Jasmina, T., & Oda, H. (2018). Does Local Government Capacity Hamper Improvement Of Basic Education? An Analysis at The District Level in Indonesia. International Journal of Economics and Management, 12(January 2018), 181–196.
Jasmina, T., & Oda, H. (2022). Nonlinear Relation between Government Spending and Education: Theoretical and Empirical Evidence from Districts in Indonesia. Southeast Asian Journal of Economics, 10(1), 1–36.
Jones, G. (2003). Pengamatan Cepat SMERU tentang Permasalahan Pendidikan dan Program JPS, Beasiswa, dan DBO di Em-pat Provinsi. SMERU’s Rapid Assessment on Educational Problems and Social Safe-ty Net, Scholarship, and School Assistance Fund Programs in Four Provinces] SMERU Research Institute, Jakarta.
Kaufmann, D., Kraay, A., & Zoido-lobatón, P. (1999). Governance Matters October 1999. World Bank Policy Research Working Paper, August, 1–61. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=188568
Keller, K. R. (2006). Education expansion, ex-penditures per student and the effects on growth in Asia. Global Economic Re-view, 35(01), 21-42.
Khairunnisa, K., Hartoyo, S., & Anggraeni, L. (2014). Determinan angka partisipasi sekolah SMP di Jawa Barat. Jurnal Ekonomi dan Pembangunan Indone-sia, 15(1), 91-112.
Khusaini, M. (2006). Ekonomi publik: Desen-tralisasi fiskal dan pembangunan daerah. Badan Penerbit Fakultas Ekonomi Uni-versitas Brawijaya.
Khusaini, M. (2014). Local government plan-ning and budgeting process: A case of dis-tricts and cities in Indone-sia. International Journal of Economic Policy in Emerging Economies, 7(2), 141-156.
Kis-Katos, K., and Sjahrir, B. (2014). The Im-pact of Fiscal and Political Decentraliza-tion on Local Public Investments in Indo-nesia. IZA Discussion Paper No. 7884.
Kristiansen, S., and Pratikno. (2006). Decen-tralising Education in Indonesia. Interna-tional Journal of Education Development 26 (2006), 513-531.
Krueger, A. B., & Lindahl, M. (2001). Education for growth: Why and for whom?. Journal of economic literature, 39(4), 1101-1136.
Kwon, D.-B. (2009). Human Capital and Its Measurement. OECD World Forum. Busan, Korea: OECD.
LAN, B. (2000). Pengukuran kinerja instansi pemerintah, Modul Sosialisasi Sistem Akuntabilitas Kinerja Instansi Pemerintah (AKIP). Jakarta: Lembaga Administrasi Negara.
Lewis, B. D., & Nguyen, H. T. (2018). Policy failure and educational attainment in In-donesia (No. 2018-17).
Lewis, M., and Petterson, G. (2009). Govern-ance in Education: Raising Performance. University of Sussex and World Bank.
Muttaqin, T. (2018). Determinants of unequal access to and quality of education in In-donesia. Jurnal Perencanaan Pem-bangunan: The Indonesian Journal of De-velopment Planning, 2(1), 1-23.
Oey-Gardiner, M. (1991). Gender differences in schooling in Indonesia. Bulletin of Indone-sian Economic Studies, 27(1), 57-79.
Plank, D. N. (1987). The expansion of educa-tion: a Brazilian case study. Comparative Education Review, 31(3), 361-376.
Pradhan, M. P., & de Ree, J. (2014). District governance and student learning in Indo-nesia. Asian Development Bank Econom-ics Working Paper Series, (397).Prasetyia, F. (2019). The role of local government policy on secondary school enrolment decision in Indonesia. Eurasian Economic Review, 9(2), 139-172.
Rajkumar, A. S., & Swaroop, V. (2008). Public spending and outcomes: Does governance matter? Journal of Development Economics, 86(1), 96–111. https://doi.org/10.1016/j.jdeveco.2007.08.003
Richards, J., & Vining, A. R. (2015). Universal primary education in low-income coun-tries: The contributing role of national governance. International Journal of Ed-ucational Development, 40, 174-182.
Romer, P. M. (1990). Endogenous technological growth. Journal of Political Economy, 98(5), 71–102.
Schultz, T. W. (1961). American Economic Association Investment in Human Capital : Reply Author ( s ): Theodore W . Schultz Source : The American Economic Review , Vol . 51 , No . 5 ( Dec ., 1961 ), pp. 1035-1039 Published by : American Economic Association Stable URL : http:/. American Economic Association, 51(5), 1035–1039.
Suryadarma, D. (2012). How corruption diminishes the effectiveness of public spending on education in Indonesia. Bulletin of Indonesian Economic Studies, 48(1), 85–100. https://doi.org/10.1080/00074918.2012.654485
Suryadarma, D., Suryahadi, A., Sumarto, S., & Rogers, F. H. (2006). Improving student performance in public primary schools in developing countries: Evidence from Indonesia. Education Economics, 14(4), 401–429. https://doi.org/10.1080/09645290600854110
World Bank Group. (2013). Local Governance and Education Performance : Governance, Local Education Districts, Indonesian. 1–16.
Zufri, D., & Oey, M. (2012). Analisis Dampak dan Determinan Belanja Pendidikan Pemerintah Daerah terhadap Pendidikan Tingkat Sekolah Menengah Pertama Ta-hun 2011. Jurnal Kebijakan Ekonomi