Financing and equity in the social sectors in Indonesia : some policy options
Meesook, O.
This paper examines the role of the private sector and the potential for recovering costs in the public sector in the provision of education and health services in Indonesia, with particular attention to their budgetary and equity implications. The study concludes that the option of encouraging a greater role for the private sector is feasible and desirable in both the education and health sectors. Using data from the 1978 National Socioeconomic Survey, government subsidies per student are estimated for the different educational levels. These are applied to the estimated numbers of public students to obtain the shares of government subsidies going to different household groups. The concusion is that the present distribution of government subsidies in education is skewed toward the rich, especially in urban areas, because the rich are more likely to use the higher levels of service where the subsidies per student are greater. A similar exercise is done for health. An overall increase in user fees, which incorporates a more progressive fee structure, would have the effect of reducing the fiscal burden on the government while making for greater equity in the distribution of benefits.
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