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Budgets are instruments used by government to implement policies and action programs. The essential aims of decentralization in Indonesia are to bring the delivery of public services closer to the people, and to stimulate regional economic development more in accord with local conditions. Budgets translate government policies and plans into programs and activities; they also reflect the extent to which a particular local government provides for—or fails to provide for—local economic growth and more effective delivery of public services attuned to the needs of the poor and—via gender-sensitive budgeting—of women.

The National Secretariat, Indonesian Forum for Budget Transparency (Seknas FITRA), in cooperation with local civil society organizations (CSOs) and The Asia Foundation (TAF), has already completed two studies of local budgets. This third study was undertaken under the aegis of the Kinerja program (funded by USAID)—part of a consortium led by Research Triangle Institute (RTI) International. The hope is that this study will provide basic data before implementation of the consortium’s program. The Local Budgets Study (LBS) project has two components:

(i) Local Budget Management Performance (KiPAD for short), also known as the Local Budget Index (LBI): This is a study of the extent to which local governments applied principles of good governance—transparency, participation, accountability and gender equality—in their management of four key parts of the budget cycle—planning, framing & adoption, implementation and accountability.
(ii) Analyses of Local Budgets (AAD for short), also known as Local Budget Analysis (LBA): This part of the study assesses how efficiently and effectively local budgetary policies respond to people’s needs.

This document only presents the findings of the AAD study. KiPAD is the subject of a separate report

Seknas FITRA

The Asia Foundation