My second case study of a successfully scaled-up development intervention that could provide lessons for adaptation is from Indonesia: the Kecamatan (sub-district) Development Programme (KDP). KDP had what has been described as an “explosive” scaling up, from initial pilots in 25 villages in 1998, to more than 28,000 villages by 2003.
The programme aimed at alleviating poverty in rural communities and improving local governance. It was initially funded through government budget allocations, donor grants and loans from the World Bank. The funds were transferred into a special designated account in the Bank of Indonesia, and used to provide “block grants” of Rupiah 500 million – 1.5 billion (US$ 50,000-150,000) directly to sub-districts consisting of 20-50 villages for small-scale infrastructure, social and economic activities.
There were two forms of block grants: one to support investment proposals made by villages and selected by consensus in inter-village decision meetings; and the second to support participatory planning processes to develop these proposals.
The first two phases of the programme, KDP 1 and KDP 2, were designed to promote village empowerment and reduce official corruption as key elements in poverty reduction, by (i) making block grants directly to sub-districts instead of channelling money through line agencies; and (ii) providing intense social and technical facilitation to build village-level capacity and promote participation, transparency, and accountability in community-driven activities.
KDP 3, implemented in 2003 when Indonesia was undergoing a phase of “big bang” decentralization, shifted its focus from poverty reduction to governance, with the aims of (i) building local government capacity to support community-driven development; and (ii) supporting the development of permanent inter-village bodies to implement multi-village projects, mediate disputes, and give villages a stronger voice vis-à-vis higher levels of government.
At the sub-national level, development plans under KDP were prepared through a participatory process that typically lasts between four to six months. Villagers could propose virtually any investment they would like – from infrastructure provision to small-scale economic activities. KDP followed an “open menu” policy, where villagers could choose to submit proposals for any productive infrastructure, social and economic activities, except those on a short list that excluded: activities for military or paramilitary purposes; civil works for government administration or religious purposes; manufacture or use of environmentally hazardous goods, arms, or illegal drugs; financing of government salaries; and land acquisition.
Each village could submit up to two proposals to the Kecamatan council, which made the final decision on which proposals to fund within their budget envelope. This requirement that villagers compete for KDP resources promoted the development of high-quality project proposals. The decision of the Kecamatan council could not be overruled by anyone else. Funds were then directly released from the provincial branch of the national treasury to a bank account held by the village. This direct transfer of funds allowed villages more autonomy in their development activities.
In the early stages, the programme did not involve provincial and district governments, and contracted consultants to support the planning process and in the implementation of programmes from the private sector. Although this helped with more rapid scaling up than if government employees had been used (they would have had to be redeployed and retrained), the decision was contentious, as it was a lost opportunity for important institution building in the public sector, resulting in a trade-off between rapid scaling-up and longer-term institution building. These concerns were address in the third phase, which focused on governance.
Strict enforcement of sanctions, emphasis on transparency, a hard line on corruption, and the use of non-governmental organisations as independent monitors were all measures taken to ensure that project objectives were met. Effective transparency and accountability mechanisms enabled communities to identify and report corruption and abuses by local officials; helped minimise the leakage of project funds; and assert the power of communities vis-à-vis local officials.
The rapid response by project managers and local police, often leading to arrest and prosecution, had a dramatic effect on villagers’ belief in the justice system and their own legal rights. The programme led to the development of project-related skills among communities through learning by doing; training in democratic decision-making, and intensive awareness building about villagers’ legal rights. This resulted in a shift in power between communities and local government.
An independent review of the economic impacts of the first two phases found that KDP’s approach to infrastructure development “had very significant impacts on the economies of the villages analysed. Even by conservative calculations, significant benefits had accrued.”
In 2007, the KDP evolved into the Program Nasional Pemberdayaan Masyarakat Mandirithe (PNPM, or the National Program for Community Empowerment). PNPM is the largest Community Driven Development project in the world. Implemented by the ministry of development planning, Bappenas, and the Ministry for People’s Welfare, PNPM provides “incentivised” block grants to villages, where subsequent grant allocations are partly based on the village’s performance. Each village has an elected six-member financial management/ implementation committee, and a village implementation team. All villagers are involved in approving the design and budget, and the rules state that poor villagers must benefit as labourers/ suppliers during the project implementation. Village “accountability meetings” are held, where the implementation committee reports to all villagers on work progress and the use of funds.
KDP’s innovative funding mechanism, based on a simple set of rules for community-level disbursement, has also influenced the design of poverty-alleviation and empowerment programmes in a number of other countries.
The key factors attributed to the success, and hence replication, of KDP include:
- The direct transfer of funds to sub-districts, which enabled villages to be autonomous in their development activities, and focus on their own priorities.
- The focus on transparency and accountability, which enabled communities to identify and report corruption and abuses by local officials. A mechanism for reporting abuses made it possible for villagers to help minimize the leakage of project funds and assert their power vis-à-vis local officials. The rapid response by project managers and local police, often leading to arrest and prosecution, had a dramatic effect on villagers’ belief in the justice system and their own legal rights.
- The emphasis on empowerment, which included not only capacity building and the development of project-related skills through learning by doing; but also training in democratic decision-making, a public posting of project accounts, and intensive awareness building about villagers’ legal rights.
- The development of high-quality project proposals, through introducing the requirement that villagers compete for KDP resources.
- The modular nature of the project, which allowed for coverage over large areas without a big management structure, and also for variations based on local circumstances.
In addition to the lessons it provides for scaling up adaptation, the KDP/ PNPM approach also points to a way in which climate finance can be channeled to empower local communities, and enable them to implement locally-relevant adaptation solutions to (what could be) very localised climate impacts.