Working Paper: March 2001

Design and Implementation of the Indonesian Social Safety Net Programs:
Evidence from the JPS Module in the 1999 SUSENAS

Sudarno Sumarto, Asep Suryahadi, Wenefrida Widyanti*

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Abstract

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 findings of this study indicate that implementation of the programs was plagued by problems of targeting beneficiaries and delivering benefits to intended target groups. The programs suffered from the problem of undercoverage, with a large number of the poor not being reached by the programs. At the same time, all of the programs faced the problem of leakage, as a large proportion of program benefits went to the non-poor. These problems point to the difficulties in designing and implementing any program that provides cash or in-kind transfers in a developing country as large and diverse as Indonesia.

* We would like to thank John Maxwell for useful comments and suggestions. We are also grateful to Statistics Indonesia (BPS) for providing access to the data.

Table of Contents

I. Introduction

II. The Indonesian Social Safety Net Prior to the Crisis

Overview of the Indonesian Social Safety Net Prior to the Crisis
Social Safety Net Programs as a Response to the Crisis

OPK: Sale of Subsidized Rice
Padat Karya: Employment Creation
Scholarships and Block Grants to Schools
Health

Method of Targeting

III. Methodology and Data Sources

Method: Coverage and Targeting Effectiveness
Data: The SUSENAS JPS Module

IV. Program Coverage and Targeting

Sale of Subsidized Rice (OPK)
Employment Creation Programs
Scholarship Programs

Primary School Scholarship
Lower Secondary School Scholarship
Upper Secondary School Scholarship

Health Program

Medical Services Program
Nutrition Program

V. Recapitulation

VI. Conclusion

References

Appendix