Paper short abstract:

This paper seeks to explain, using political settlements analysis: i) why the Indonesian government has significantly increased education spending since the fall of the New Order and ii) why this has failed to translate into improved education quality and learning outcomes.

Paper long abstract:

Since the fall of the authoritarian New Order regime in 1998, the Indonesian government has significantly increased education spending in line with a constitutional requirement for it to spend at least 20 percent of its budget on education. Yet, while this increase appears to have contributed to improvements in access to education in subsequent years, it has not enhanced the quality of education or learning outcomes. The country has regularly placed towards the bottom in international standardised tests of student learning such as the OECD’s Programme for International Student Assessment (PISA). The most recent PISA, conducted in 2022, saw Indonesia’s scores in reading, mathematics and science fall sharply due to the impact of school closures during COVID-19, signalling a deepening learning crisis. This paper seeks to explain, firstly, why the Indonesian government has significantly increased education spending since the fall of the New Order and, secondly, why this has failed to translate into improved education quality and learning outcomes. It argues that both outcomes reflect the nature of the political settlement that has characterised the post-New Order period. Specifically, it reflects the fact that while the Asian economic crisis and the shift to a more democratic political regime empowered technocratic and progressive elements in Indonesian politics and society, predatory oligarchic elements nevertheless retained their dominance, enabling them to shape how increased education resources have been used.