![]() The latter figure is particularly concerning, because capital expenditures are important to public services, especially in rural districts, which are hungrier for development. From 2014 to 2021, growing fiscal transfers to the villages reduced district personnel and capital spending by 10.6 percent and 9.4 percent, respectively. (Photo: USAID ERAT) A Zero-Sum Gameīudget allocation is a zero-sum game: increasing the budget for one line-item means decreasing it for others. Districts are still responsible for most public services, and fiscal transfers to the villages have strained districts’ ability to meet their statutory budget obligations. Through several initiatives, The Asia Foundation is working to address this imbalance by encouraging “collaborative governance” in the form of district-village cooperation on public services.Ī community health clinic in the Luwu Utara district of South Sulawesi. At the same time, villagers and village governments sometimes have limited ideas for how best to use these new funds. The districts are still responsible for most public services, however, and these transfers to the villages have strained districts’ ability to meet their statutory budget obligations. District governments are required to pass along to villages 10 percent of their locally generated revenues, and 10 percent of any uncommitted transfer funds from the central government. The law recognized the importance of the village as the administrative unit closest to the community, and significantly increased fiscal transfers to villages-both directly from the central government and from the district governments. In 2014, Indonesia adopted a new Village Law to reinforce local self-government. Most of these district services are paid for with funds transferred from the central government. ![]() Frontline health services, water and sanitation, nine years of public education for every child, and services involving certification of legal identity are among these devolved responsibilities. (Photo: USAID ERAT)Īfter the “big bang” of government decentralization in 2001, the national government of Indonesia transferred responsibility for many public services to district governments. Luwu Utara district head Indah Putri Indriani discusses fiscal transfers to villages in her district with a USAID ERAT public financial management specialist. Donate now – Give through our secure online form.Lotus Leadership Awards Gala – Join us Apin New York City.President’s Leadership Council – Equipping young people to address complex challenges across Asia and the Pacific.Lotus Circle – A vibrant community empowering women and girls across Asia and the Pacific.Program snapshots – Updates from Asia Foundation programs. ![]() Publications – Reports, surveys, program overviews.InAsia blog and podcast – Insight and analysis on Asia and the Pacific. ![]() News – Media coverage and news releases.Our Annual Report – Learn about our work.What we do – Good governance, women’s empowerment and gender equality, inclusive economic growth, environment and climate action, and regional and international relations.Where we work – Across Asia and the Pacific.Learn about our impact, approach, mission, vision, and values. About us – The Asia Foundation is a nonprofit international development organization committed to improving lives and expanding opportunities across Asia and the Pacific.
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