The cost of public primary education in Indonesia: do schools need more money?

In the international context, the quality of public primary education in Indonesia is sub-standard. The assumption of officials at all levels of government is that a significant increase in funding will be required to improve education performance. The analysis in this paper shows that money does indeed matter for the attainment of primary education goals, although probably not as much as many observers might think. The examination also demonstrates that local public primary education is delivered very inefficiently in Indonesia. The evidence suggests that schools might be able to reach significantly improved education outcomes and simultaneously decrease total spending by a non-negligible amount. Overall, the analysis does not offer much support for government's apparent view that large and rapid increases in funding are the sine qua non of improving education sector performance.