When financial crisis and weather-related natural disasters ravaged Indonesia’s economy in 1997, national leaders searched for ways to cushion the impact on poor rural households. A team of public servants within Bappenas, the country’s powerful national development planning agency, suggested an aggressive, nationwide expansion of an experiment in community-driven development. The Kecamatan Development Program (KDP), which worked at the kecamatan, or subdistrict, level, furnished block grants directly to poor communities and empowered villagers to determine how they wanted to use the funds—whether for building roads, bridges, schools, or health clinics. Communities chose, planned, implemented, and maintained projects on their own, supervised by village volunteers, subdistrict committees and verification teams, and specially trained facilitators. Planners at Bappenas worked with the World Bank to modify and scale up the original KDP experiment. The Ministry of Home Affairs, which also participated in the early phases, took over the program two years later. During an eight-year period, the new KDP provided direct benefits for more than half of Indonesia’s 70,000 villages, helping communities move out of poverty in greater proportions than their counterparts in non-KDP areas did.
Rushda Majeed drafted this case study based on interviews conducted in Jakarta, Indonesia, in October 2013. The research benefited from additional interviews conducted by Jonathan Friedman in May and June 2013. This case study is the first in a two-part series; see “Expanding and Diversifying Indonesia’s Program for Community Empowerment, 2007 – 2012.” Case published February 2014.
Asian Financial Crisis
Ministry of Home Affairs
Short route accountability
Country of Reform