CDD SCALING-UP ACTION RESEARCH INITIATIVE

THE SECOND KECAMATAN DEVELOPMENT PROJECT: EVALUATION OF SCALING UP ISSUES

BY

DEBORAH DAVIS

Section 1. Design Elements

1.1 Overall sociopolitical context and aim of project
1.1.1

The Second Kecamatan Development Project1 is taking place in an environment of

political and social upheaval.

The fall of Suhartos authoritarian New Order regime in 1998, after 33 years in power, left Indonesia
in chaos, with massive poverty and social unrest, weak and corrupt institutions, and factional power
struggles. The New Order had attempted to create national unity in this country of nearly 18,000
islands by imposing a uniform village administrative structure on thousands of autonomous
communities with many different languages and cultures, and by dismantling social capital through
such measures as banning local construction and maintenance of schools and other facilities,
stigmatizing local resource management groups, channeling women into non-public roles, and
defining family and community values in terms of how they helped or hindered the national
development program. Local action was seen as incompatible with centralized investment decisions,
but those decisions did not match local needs, and left large numbers of people in both urban and rural
areas with inadequate (or an absence of) infrastructure and public services. The resulting lack of trust
between communities and government, including village officials, who were appointed from above,
was exacerbated by the corruption, nepotism, and lack of institutional transparency that pervaded
every aspect of government. Social cohesion at the hamlet level was maintained by religious and
traditional leaders (who, in many areas, had been chosen by election for more than a century before
the New Order came to power); and in some ethnic areas by kinship networks. But these informal
sources of authority remained separate from the government institutions that had been set up to
replace them, and their existence was not acknowledged.
After Suharto was driven from office by economic crisis of the late 1990s, which deepened the already
severe poverty and unrest and led to a violent uprising, reformers and donors began to identify
corruption and poor governance as key factors in the persistence of poverty in the country. To address
the intrinsic connection between poverty and poor governance, the countrys first freely elected
president, Abdurrahman Wahid, initiated a dramatic decentralization program in January 2001, which
aimed to reduce poverty by focusing on institutional transparency, anti-corruption measures, improved
public services, and participation of the poor in planning and managing development programs. The
decentralization was supported by a new CAS, which also gave high priority to strengthening local
informal institutions, to enable them to channel local demand and provide the checks and balances
necessary for accountable local government. The Kecamatan Development Project, which supports
small infrastructure and economic projects designed and implemented by villagers each kecamatan, or
subdistrict, comprises about 20 villages), is an integral part of this decentralization and reform effort.
1

A kecamatan, or subdistrict, comprises about 20 villages. A village comprises about 1,750 people.

1.1.2

The innovative approach of KDP and its predecessor, the Village Infrastructure Project,
was the result of a confluence of factors in Indonesia and in the Bank.

KDP is an outgrowth and elaboration of the Village Infrastructure Project (VIP), initiated in 1995 in
response to the Governments concern about increasingly dangerous levels of social unrest. The VIP
and KDP projects marked a change in the Banks thinking about poverty reduction, which had begun
to shift due to a confluence of factors: (i) disappointing results worldwide with poverty projects
managed by central government line agencies; (ii) strong criticism from the NGO community that
Bank money in Indonesia was not reaching beneficiaries, but was being siphoned off by corrupt
officials; (iii) a growing literature on the importance of developing (or at least not working against)
local social capital, and on the need for beneficiary ownership if projects are to be sustainable; (iv) a
recognition that earlier projects in Indonesia with (what were then considered minor) elements of
community participation had higher levels of beneficiary satisfaction, better maintenance of
infrastructure, and other more encouraging results.
As the Bank was beginning to debate all of these issues, the Suharto Government asked, in 1994, for
assistance with its new poverty program, the Program for Villages Left Behind (IDT), which aimed
to quell the growing unrest in rural areas by making block transfers to villages. As in past Banksupported projects, the funds were to be controlled by government officials, while the Banks role,
aside from providing resources, was to be limited to monitoring. Because of the factors noted above,
however, as well as pressure from reform-minded Bank staff, particularly social scientists in the field,
the Bank chose not to participate in IDT, but instead to launch its own rural poverty projectthe
Village Infrastructure Project for Java (VIP 1). The design of the project was significantly influenced
by a study of local-level institutions 2 carried out during project preparation, which found that self-help
projects were a normal part of village life, but were constrained by official corruption and bureaucratic
regulations (see Annex 2 on LLI study).
In a radical departure from the line agency approach, and from a parallel project on Sumatra by
the Overseas Economic Cooperation Fund (OECF), which was using contractors for infrastructure
works, VIP 1 (1995-1998) aimed to reduce poverty by fostering participation, transparency, and
decentralization at the village level. The project was carried out on Java, where villages had a strong
tradition of self-help, and villagers chose from a menu of possible infrastructure projects. Villagers
who contributed their labor were paid in cash, as had been the practice in an earlier infrastructure
project carried out with the International Labour Organisation (ILO)thereby breaking with
government practice of requiring village laborers to work on infrastructure projects for free. To ensure
true transparency, all project accounts were posted on bulletin boards in the villagesand this proved
crucial for creating trust in the project. To ensure true decentralization to more than 1,000 target
villages, the project systematized a set of basic rules for disbursement to the villages from local
branches of a major bankand this simple disbursement system proved to be a core element in the
rapid and successful scale-up when the economic crisis hit during VIP 2 (1996-2000) and KDP 1
(1998-2002), with the latter becoming the countrys main program for community-based relief as the
poverty rate climbed toward 50 percent.

Pieter J. Evers (1999), Village Governments and their Communities, Local Level Institutions Study,
World Bank and the National Development Planning Agency (Bappenas), Jakarta.

3
In addition to these important new practices, VIP, and later KDP, were also based on innovative
elementsand some difficult lessonsfrom several earlier poverty projects in Indonesia. In
particular:

The Kampung (Urban Slum) Improvement Program (KIP, funded 1974) was initiated, without
Bank involvement, by the Governor of Jakarta in 1969. It was financed one-third by the central
government, and two-thirds by local governments. From 1969 to 1974, KIP brought communities
into the planning, implementation, and maintenance of water supply, sanitation, primary health,
and education facilities, as well as roads and footpaths. The Bank became involved in 1974 and
provided 50 percent of the program funds; and the participatory approach was eliminated in favor
of strengthening the Ministry of Public Works and the infrastructure departments of local
governments. When Bank funding ended in 1984, local governments took over 100 percent
financing of the program, and the participatory approach was revived. The Bank became reengaged with the program in 1990, this time with an appreciation of what was coming to be called
community-based development. The new loan included support for: (i) community
development coordinators, to train local leadership in each kampung; (ii) establishment of
community-level working groups on sanitation, garbage management, and management of clean
water supply; and (iii) self-financing groups in the kampungs, which provided seed money for
small-scale enterprises and help create new jobs. KIP is now one of the worlds largest and most
successful urban poverty programs, and many of its projects are considered best practice. VIP and
KDP incorporated the elements of beneficiary participation, community-level training and
facilitation, and support for economic activity through local funding groups.

A series of locally managed small irrigation projects on Java (late 1960s - early 1990s), some
carried out with the Food and Agricultural Organization (FAO), included grassroots participation
in provincial-level planning and design, employment of villagers for construction, and user
responsibility for maintenance. VIP and KDP adopted the practice of paying villagers for their
labor.

The Yogyakarta Upland Area Development Project (1992) provided credit and grants for
productive investment by upland hamlets and villages, as part of a broad effort to develop the
agricultural economy of the uplands area. VIP and KDP adopted the practice of making villagers
the subjects, not the objects, of development.

The Water and Supply and Sanitation for Low-Income Communities Project (1993) included
villagers in decisionmaking about service levels within the funding allocation, and in mobilizing
cash and in-kind contributions to further upgrade the standards of the works. In addition, as a
technique for involving women in the project, participants in the initial womens meetings in each
village were given responsibility for poverty mapping, which included determining the criteria for
poverty in the village, identifying its root causes, and constructing a color-coded map showing the
location of poor households. Womens meetings and poverty mapping were adopted by both VIP
and KDP as the earliest core activities in target villages.

1.1.3

KDP 2 aimed to reduce rural poverty through a program of village empowerment and
local governance reform.

Summary of objectives and description, capturing key CDD elements, both means and ends, and their
initial quantification.

4
The Banks approval and the Governments acceptance of the Kecamatan Development Project
represented the institutionalization of community-based planning for poverty reduction, which had
been considered experimental under the Village Infrastructure Project. KDP 1 was appraised during
the turbulent last spring of Suhartos regime (March 1998), and began operations in the summer.
Suhartos hand-picked successor, B.J. Habibe, assigned high importance to the project, seeing it as a
key part of not only the countrys poverty reduction strategy, but also its anti-corruption strategy,
through its focus on more transparent and accountable local governance. The project originally
targeted 725 kecamatan, comprising about 14,000 villages, but the currency devaluation that
accompanied the economic crisis had the effect of doubling the projects budget, enabling KDP 1 to
eventually reach more than 1,000 kecamatan, or 20,000 villagesa total of about 35 million people
with some 50,000 infrastructure, economic, and social projects. 3 By the time KDP 2 was initiated in
the spring of 2001, two months before the impeachment of Habibes successor, President Wahid, the
project had gained so much credibility with the Bank, the Government, and the Indonesia population
that KDP 2 was able to broaden its scope to include more intensive work on local governance as a key
element in poverty reduction, in addition to targeting an additional 10,000 villages for infrastructure
and economic activities. KDP is now active in nearly one out of four villages in Indonesia.
The following sections on project design, implementation, and lessons learned focus primarily on
KPD 2 and the issues involved in scaling up to KDP 3, which is about to be launched. However, VIP
and KDP 1 will also be discussed where appropriate.
The objectives of KDP 2 were to:
Support participatory planning and development management in villages;
Support a broad construction program of social and economic infrastructure in poor villages; and
Strengthen local formal and informal institutions by making them more inclusive, accountable,
and effective at meeting villagers self-identified development needs.
These objectives were to be achieved by involving villagers in a process of democratic
decisionmaking, which was to continue through every stage of the projectfrom hamlet and villagelevel development meetings to identify collective needs; through the villagers design of infrastructure
projects and economic activities that would benefit the entire community; to the election of
representatives to the inter-village forum, to vote on which projects in the kecamatan should be
funded; to the requirement that all project accounts be posted in a public place, as a way to hold
village leaders and elected officers of the local financial management unit accountable for every
rupiah of project funds. The overarching purpose of this approach was to empower villagers to
become agents in their own development, while demonstrating that the connection between poverty
and poor governance could be broken by eliminating corruption from the funding equation. Results
were to be measured in terms of economic outputs and impacts from community investments; changes
in the ability of communities to plan and manage development projects; the increasing involvement of
civil society in monitoring development projects; and the increasing interest of local government in
responding to community needs.

Ministry of Home Affairs (2002), Kecamatan Development Program, Phase One: Final Report 19982000.

5
1.2 Specific elements and their design
1.2.1 At the community level, the project focused on socialization, facilitation, and technical
support.
The project included a number of design elements that in KDP 1 had proved crucial to developing
villagers capacity to select and carry out projects in a democratic manner, and to hold local financial
managers accountable for their handling of project funds. KDP 1 provided a list of possible projects;
an important innovation of KDP 2 was to provide unconditional grants for an open menu of
infrastructure projects, except for a short negative list,4 as well as low-interest loans for economic
activities, as in KDP 1.
The elements were introduced sequentially so that the project was constructed in each village in an
incremental manner, giving both villagers and facilitators a solid foundation for collective project
activities and problem solving:

Training of kecamantan-level facilitators, who then introduced the project in the hamlets and
villages and provided support for village-level facilitators and operations. Most had been active
in their own villages during KDP 1, and had applied for this salaried job with KDP 2. The
kecamatan facilitators attend 18 days of formal training in a nearby city before going to the
villages. The four-inch thick training manual5 covers the full range of issues involved in
facilitating the project, including social psychology, methods of empowerment, mediation, gender
equality, accounting, development of a logical framework for microcredit projects, and simple
engineering for roads, bridges, and buildings (see Annex 3 for excerpts from the training manual).

A six-month socialization and preparation process consisting of:

o Posting of project information, including recruitment notices for village-level facilitators,
on a public bulletin board (see Annex 4). Applicants must have a high school diploma.
They are interviewed, and, if approved, their names are submitted for election at the first
village development meeting;
o

Small group meetings at the hamlet level, where facilitators explain the projects open
menu approach, and use colorful flipcharts (see Annex 5) and other materials6 to
introduce the projects core principles of participation, transparency, competition, and

Project funds cannot be used for bribery, political activities, toxic chemicals (including pesticides), the
military, boats, child labor, religious buildings, or activities that will damage the environment.
The manual was originally written during KDP 1 by NGO consultants familiar with participatory
community development projects, and has been revised every year based on feedback from local
facilitators.
The flipcharts were produced by the national office, with illustrations by a professional artist. They
show people living in hopeless poverty before the project, and then drinking tea and asking questions at
village meetings (without fear, in front of military officials), raising cows and chickens on lush green
farms, building bridges and collecting tolls to pay for maintenance, running kindergartens, making food
to sell at a kiosk (an economic activity). Other materials show the KDP logo (PPK in Indonesia) and the
KDP mascot, a traditional little smiling broom named Si Kompak, (Mr. Compact), made of corn stalks
and used to sweep away corruption. The name is an acronym for transparanSI (transparency);
Keberpihakan pada (side with); Orang (people); Miskin (poor); PArtisipasi (participation); Kompetisi
(competition). Transparency, side with the poor, participation, competition. Next to Mr. Compact are the
words The key to our success.

6
accountability as a way to fight the nepotism, collusion, and corruption that are keeping
them in poverty.7 The facilitators encourage participants to suggest ideas for projects, and
give women the responsibility of making a poverty map of the village, based on local
perceptions of poverty;
o

A first village (multi-hamlet) development meeting, to which all villagers are invited by
public notice, including police and local officials, to encourage their buy-in. The village
head opens the meeting by thanking Allah, and introduces the kecamatan facilitators as
friends who will guide you on the path to KDP. The facilitators say that KDP is a
poverty alleviation project; that the money belongs the village, not the government; and
that the villagers can get out of poverty by managing the money responsibly. They also
discuss the core project principles at length, using graphics prepared by the national
office, and take questions from participants.

The election, from among the qualified candidates, one man and one woman to be village
facilitators, who are then sent for training. Villagers also choose candidates for a project
manager to coordinate with the kecamatan-level project manager; the latter serving as the
Governments local link to the project, working out of the kecamatan-level office of the
Community Development Agency under the Ministry of Home Affairs. The results of the
development meeting are posted on the bulletin board;

Special meetings with womens groups to discuss proposal ideas (women generally want
clean water projects and funding for micro-economic activities, while men are generally
more interested in road and bridge projects). A team is selected to prepare womens
proposals for presentation at the second village development meeting;

A second village development meeting, to discuss and prioritize proposal ideas and select
teams for proposal writing, proposal verification, implementation, monitoring,
maintenance of project-funded infrastructure, and cross-visits to villages where KDP is
ongoing; all of the teams receive training, and cross-visits are carried out several times
during the project. Also at this meeting, a project manager is elected. The results of the
meeting are posted on the bulletin board;

Competition for funding. Two or three written and verified proposals from each village (of which
one is from a womens group) are presented by at the Inter-Village Development Forum, where
they compete for funding with proposals from other villages in the kecamatan. Elected
representatives from each village then collectively decide on which projects will best meet the
development needs of the entire kecamatan by creating jobs, improving access to markets, helping
the poorest families, or other criteria that are important to the villagers;

Finally, release of project funds from the state treasury to the kecamatan-level financial units
(UPKs), staffed by villagers who have been trained by the project in simple accounting. The
UPKs release funds to the villages as needed to purchase materials and provide cash payments to
workers involved in the chosen infrastructure projects. The UPKs also release the approved

These concepts are taught and retaught at every project meeting, and become part of the language and
thinking of every participant. They serve as a moral compass to keep the project on track and identify
dishonest or counter-productive behavior that could undermine the success of community activities.

7
amount of money as loans to the winning micro-enterprise projects; each UPK decides on what
interest rate to charge, and ensures that the loans are repaid on time.

Implementation, with technical facilitators providing guidance on the procurement of high-quality

materials at the lowest price, sound construction techniques, and maintenance; and social
facilitators available to resolve any conflicts that might arise. Throughout the life of the project,
the project teams, facilitators, and local officials report to the community on progress with
implementation and the use of project funds. Updated project accounts and other information are
posted regularly on the bulletin boards.

1.2.2. The project has scaled up not only physically, but also socially and conceptually.
KPD and its predecessor, VIP, were conceived as large-scale projects that would address the needs of
hundreds, and later thousands, of villages at considerable speed. To achieve this objectiveand given
the space created by the crisis to institutionalize a new approach to community developmentVIP
systematized a set of basic rules for disbursing funds directly to villages, and disseminated a simple
project manual covering the mechanics of project operations, including reporting, monitoring,
evaluation, and procurement issues (the manual included procurement forms).These two elements,
which were adopted by KDP, constituted the framework for the physical scale-up of the project; i.e.,
its ability to easily replicate the same proven disbursement and decisionmaking mechanisms in
increasing numbers of villages, in what has been described as a kind of franchise operation. 8
The physical scale-up was also made possible by the presence of professional engineers, who under
KDP 1 were seconded to the project by Indonesian engineering firms, and under KDP 2 were hired by
the project directly. The engineers, who worked at the district level, provided guidance for village
infrastructure activities in a number of kecamatans. Using the simple technical manual provided by the
national project office, they trained facilitators and project teams in the construction of low-cost roads
(sand, stones, asphalt); bridges (steel beams with a wooden surface), water supply systems (pipes to
bring water from springs or rivers to village water tanks), markets (permanent roof, water, electricity,
toilets), and so on. They also taught project teams and facilitators about procurement issues, including
how to solicit competitive bids, and how to judge the quality and quantity of materials when they were
delivered. For KDP 2, engineers were hired directly by the project, and a number left their jobs to
continue working with KDP or other community development projects.
KDPs success in scaling up was not only physical, however, but also social and conceptual:

In terms of social scale-up, the disbursement and construction framework created the potential for
empowering villages, and later clusters of villages (the kecamatans) with money and self-help
tools, but the real empowerment came from changes in attitudes and behaviormost importantly,
from villagers believing that they could make their lives better, and being willing to act on that
belief. These changes were fostered by a number of design elements that gave villagers the
experience of success by stages: the small group meetings and proposal writing; the poverty
mapping; the open and inclusive meetings; the project teams; the locally controlled financial
units; the cross-visits; the election of representatives to the Inter-Village Forum; the competition
for funding (which forces villagers to prioritize their needs and prepare high-quality proposals);
the financing for micro-businesses; the soundness of the infrastructure projects (from the
procurement of high-quality materials at a good price to the collection of user fees); the cash
Second Village Infrastructure Project, Implementation Completion Report (December 26, 2000).

8
payments for workers; the extensive training for facilitators, who then transfer their technical and
social skills, including mediation skills, to the villagers; and the linkages with NGOs and
universities that provide training and other support. Also of considerable importance were the
projects mechanism for reporting corruption and its hiring of lawyers to bring charges against
offenders, which has resulted in the prosecution of a number of village and kecamatan officials,
often with the assistance of local police who have internalized the idea that project funds belong
to the community.
All of these project elements have worked synergistically (like gears of a bicycle, one official
explained at a village meeting) to increase villagers hope for the future, and the skills and
confidence to act on their own behalf. As a result, communities have begun to reach out to other
villages and other sources of assistance; and both men and women who started as village
facilitators have stayed with the project through successive stages, bringing their experience to
other parts of the country and training the next generation of facilitators. Others have left their
jobs as teachers, traders, or engineers to become full-time community development workers; and
still others, their world opened up by the learning in the project, have gone back to school to
pursue college degrees.9 Several have been elected to district parliaments. Local officials are now
highly conscious of their relationship with villagers and of the need to avoid even the appearance
of corruption or nepotism; and virtually all (except those accused of corruption) believe the
project has improved their villages and enhanced their reputations. Those without KDP are asking
for the project to come to their villages, and many district parliaments have voted to fund part of
the (new or continuing) project in their kecamatans out of their own budgets.

In terms of conceptual scale-up, the core principles of KDP have become synonymous, in the
view of project participants, with democracy and decentralization. If a government program does
not meet the KDP criteria of transparency, accountability, and participation, villagers often reject
it, and demand to be consulted before another development program is brought to their village. 10
From the government side, KDP has demonstrated the linkage between poverty and good
governance, and the importance of community participation for the success of development
projectsand the wide acceptance of these principles has led to KDP principles being used as the
framework for many new poverty programs, both inside and outside of the country. KDP
principles are also influencing the approach to poverty in, for example, Guinea, Vietnam,
Cambodia, Laos, and Afghanistan, representatives of which have all visited KDP villages and
have expressed an interest in having KDP-style programs. Finally, the programs best practice
rating has given the Bank and other donors the scope to expand their community-driven approach
to development.
Another aspect of conceptual scale-up is KDPs evolution from a poverty/community
development project to a governance project, as it will be under KDP 3 (see next section). As long
as KDP was a poverty project it was legally restricted to targeting only the poorest 35 percent of
kecamatans. But many districts (the level above the kecamatan) want to have KDP-style
development projects in their non-poor kecamatans (which still contained many poor people).
With the project now in the governance category, these kecamatans will be to buy the rule book
and facilitators from the project to provide a framework for their self-funded or matching grant

One kecamatan head is now going to school at night for a Masters Degree in governance, and is writing
his thesis on KDP.
10
There have also been cases of villagers sending back substandard materials delivered by government
contractors.

9
activities. The Government, project managers, and the Bank all see this approach as preferable to
what would otherwise be a proliferation of micro-programs that would likely lose the focus and
discipline that make KDP successful.
Finally, KDP has expanded the meaning of community development to include justice for the poor
and conflict mitigation issues. Justice for the poor, which encompasses legal advocacy for
villagers and anti-corruption activities, will be given more emphasis under KDP 3 (see next
section and Annex 6). Conflict mitigation activities have become important components of KDP
and KDP spin-off projects (as in East Timor) in areas suffering from separatist violence (see
Annex 6).
1.2. 3. The next phase of the project will help create a more solid legal and administration
foundation for village empowerment.
KDP 1 and KDP 2, as community empowerment projects, were based implicitly on the idea of
decentralization. For KDP 3, the project has been redefined as a governance project, with
decentralization the main focus. This change in approach was determined to be necessary for two
reasons:

the increasing devolution of money and power to the districts, 11 which will eventually control
more than 40 percent of total public spending, and will be responsible for enacting laws and
regulations affecting village autonomy and empowerment; and
the persistent lack of microfinance funding by formal banking institutions, which has left the
projects microfinance units as the only available option for many villagers. A number of these
units have declared themselves independent after the project ended in their villages, and continue
to fund community self-development using the interest they earn on loans. However, they lack
legal status, and there are no regulations or guidelines to give them a framework for operating in a
sustainable and prudential manner.

In light of these uncertainties created by the decentralization process, the third phase of the project
aims to create: (i) a more solid legal and administrative foundation for village empowerment, in order
to protect their autonomy, improve their capacity to represent themselves vis--vis higher
institutions,12 and enable them to develop inter-village cohesion and a strong collective voice; and (ii)
a rationalized management framework for community microfinance, to enable project financial units
to continuing functioning, after the project ends, in a sustainable and prudential manner.13

11

12

13

In support of village empowerment, the project design encompasses:

The two basic decentralization laws, Law 22 on regional autonomy and Law 25 on financial balance,
were passed in 1999, shortly after Indonesia held its first democratic elections. These laws gave
tremendous power to the district governments; however, they were not accompanied by regulations or
guidelines, resulting in tremendous uncertainty at the local level, and the emergence of local private
interests seeking to capture the decisionmaking process.
Under the decentralization law, kecamatan heads become employees of the district rather than
independent officials, leaving them unable to effectively represent village interests.
The village financial units remain, in many areas, the only source of microcredit, and a number of these
units have declared themselves independent entities and continue to make loans, using the interest
earned on project funds, after the project has closed in their villages. Project managers want to ensure
that they do not become subject to arbitrary or damaging rules.

10
o

o
o
o

technical assistance, at the national level, for the creation of binding outlines and best
practice models for district legislation, to ensure that districts adhere to requirements for
village autonomy in the decentralization law;
training for members of district parliaments in drafting consistent and transparent pro-village
legislation, in managing resources, and in creating budgets that provide sufficient financing
for independent village activities;
support for the development of representative village councils, to replace or work in
cooperation with (where they still exist) the more traditional council of elders;
training in administrative and monitoring skills for village administrators;
civic information and education programs for villagers and village leaders, disseminated
through group discussions, schools, religious institutions, and the media;

KDP 3 also enhances village empowerment by supporting the creation of permanent, wellfunctioning inter-village forums, to give villagers a strong collective voice vis--vis high levels of
government, carry out inter-village projects (such as roads and markets), and mediate inter-village
disputes. In addition, the project provides for continuing anti-corruption efforts, which have been
solidified in a Justice for the Poor component (see Annex 6). Justice for the Poor provides
barefoot lawyers (young lawyers and interns) to help villagers document and prosecute
corruption cases, and to act as advocates for villagers who need individual representation.

In support of sustainable microfinance institutions, the project will support, at the national and
district levels, the development of a consistent policy vision for microfinance, along with enabling
legislation and prudential regulations. It will also provide technical assistance to the financial
units, along with the supervision necessary for them to develop into sustainable communityowned financial service providers. Wherever possible, the project will also help develop linkages
with banking institutions as other sources of support and financing.

11

1.2.4 The projects tools for community developmentparticipation, transparency,

accountability, training, and technical supporthave been integral to the learning,
implementation, and monitoring processes for all sector activities.
The project elements discussed above (competition to create the best proposals, simple project
operations and technical manuals, district-level training and technical facilitation, cross-village
visits, monitoring of implementation by village-level project teams) supported activities in a
number of sectors: not only infrastructure, microfinance, and governance, but also agriculture,
livestock raising, water supply, trading, health clinics, and education (see Annex 7 for a
description of two kindergartens). District-level engineers provided consistent support for
infrastructure projects; for other sectors, particularly where facilitators did not have the
necessary knowledge, the project design allowed for them to hire outside experts from NGOs
and universities (many of whom had already contributed to facilitator training). Because of the
projects community focus, it did not address any policy-level sectoral issues, except in the case
of governanceand the project has had an important upward effect on this issue (see section
above on conceptual scaling up). KDP 3, as a governance project, is developing additional
tools to influence district and national policy in the governance and microfinance sectors. Some
of these activities will not be community based. However, for village-level anti-corruption and
governance monitoring activities, villagers will receive training and support from the projects
Justice for the Poor program; and the financial units will receive focused technical support from
the project and possibly from banks, to assist in their transition to independent community
microfinance institutions.

Section 2. Implementation Successes, Failures, and Challenges

2.1 Overview of implementation and scaling-up experience
2.1.1

The project has changed dramatically since VIP 1, with each new phase addressing
empowerment and governance issues that emerged in the previous phase.

Viewed as a long-term program, the five stages of VIP and KDP together show a progression from
centralized control to decentralization and democratization, with increasing village-level management
of project funds and operations; more technical assistance and anti-corruption activities; increasing
inter-village cohesion and gender equality; a growing willingness on the part of districts to provide
counterpart funding; and a changing relationship between villages and district government. District
government was heavily involved in VIP, kept at arms length in KDP1, and kept at arms length but
included in the socialization process in KDP 2. In KDP 3, which coincides with the second major
decentralization, district parliaments will control village budgets, decide on matching funds for project
activities, and be responsible for drafting laws affecting village autonomy. A major project objective,
therefore, will be to strengthen relations between villages (and inter-village forums) and the districts.
In terms of specific implementation and scaling up issues:
VIP was considered a large-scale experiment, based on emerging evidence from smaller projects
(see section 1.1.2) that villagers might be capable of constructing and maintaining their own
infrastructure works. Villagers ostensibly controlled decisionmaking, implementation, and
financial management, but in reality the central government was involved in the daily workings of

12
the project; district governments had final approval of village activities; and monitoring,
consisting mainly of surveys, was done mainly by outsiders. 14 Nevertheless, VIP received high
ratings for ongoing learning by doing, village participation, well-conceived project design, strong
government commitment, good leadership by individuals involved in designing and implementing
the project, and excellent supervision and engineering support. 15 The project also exceeded
expectations in terms of number of villages reached, amount of infrastructure constructed, number
of jobs created (1,942,144 persons worked on the project for 49.22 million person-days), and
economic rate of return.16

As the project evolved into KDP, it was able, due to the economic crisis (see section 1.1.3), to
focus more on governance as a key element in poverty reduction. Although not stated explicitly in
the project documents, the conceptual changes in KDP, based on the assertion of a povertygovernance link (see section 1.2.2), were driven mainly by government corruption and
misappropriate of project funds.17 In other words, project managers claimed they could be more
successful in reducing poverty and fostering community development if the government werent
stealing project money. Given the Governments reliance on KDP to channel money quickly to the
villages to quell social unrest, it was in no position to refuse the resulting design changes. These
included a virtual exclusion of district officials from all project operations and processes; the
introduction of kecamatan and village-level social and technical facilitators; the addition of
informal members to village and kecamatan bodies, unrestricted block grants, with absolutely no
interference with villagers choice of projects; introduction of a complaints database, and of anticorruption monitoring by NGOs and the Association in Independent Journalists (which had been
illegal under Suharto); and aggressive prosecution of corruption cases (a particularly sticky point
during negotiations). KDP 3 does not change the village-level design elements, except for
assisting the financial units in becoming free-standing microfinance institutions. However, it adds
elements to strengthen inter-village cohesion, train district parliaments in drafting legislation, and
foster joint planning between villages and district branches of line agencies in health, education,
irrigation, and other centrally funded activities. The main differences between the community
empowerment and governance strategies in VIP and KDP are shown in Table 1.
Table 1. Progressive Strategy for Village Governance Reform in VIP and KDP

Decentralization/
democratization issue
Selection of form of
village government

VIP 1 and 2
(1995-1998, 19962000)
Standardized, based on
national law

Strengthening village
leadership

De facto selection by
district

14

KPD 1
(1998-2002)

KDP 2
(2001-2003)

KDP 3
(2003-2006)

Use of standard, preexisting formal and

informal groups

Addition of non-voting
members to village and
inter-village forums

National and district

regulations to support
village and intervillage institutions

Addition of informal
members to village and
subdistrict bodies

Village leadership
training, joint
monitoring with
members of district
parliaments

Elected village
parliament and intervillage forums

Outside monitoring was downscaled in VIP 2, and village-level monitoring, which could better establish
outcomes and impacts, was increased.
15
Operations Evaluation Department assessment of VIP 2 (December 26, 2000).
16
ibid.
17
Quality of Supervision Assessment of KDP 1, Quality Assurance Group (October 30, 2002).

13

Revenues provided by
project

3-year block grants to

villages for menu of
project choices, plus
one-year extension
during which project
changed from a
targeted program to a
recurring budget
program
None

3-year unrestricted
block grants to
kecamatan-level
financial units for
village projects

3-year unrestricted
block grants to
kecamatan-level
financial units for
village projects

2-year block grants to

complete 5-year cycle
in KDP 1 and KDP 2
villages that have good
maintenance of
infrastructure and wellfunctioning financial
units

None

Matching grant pilot

Matching grants
standardized for all
districts

Funding decision for

community projects

Proposals approved at
district level or higher

Kecamatan

Kecamatan

Kecamatan

Village infrastructure
needs assessment

By sectoral agencies

Project specific

Village-wide
assessment

Village-wide
assessment

Relation to district
government

Reporting to district
executive (and higher);
projects approved by
district engineers

Reporting to district
executive (and higher);
projects approved by
district engineers

District executive has

no decisionmaking
authority; but
executive and members
of district parliaments
included in village
socialization process

Relation to line
agencies

District-level line
agency branches
(dinas) provide all
technical services;
projects supervised at
dina level or higher

None

Dinas present plans to

inter-village forums
presentations

Strengthening of
district parliaments
capacity for local
governance, including
the drafting of sound
legislation related to
village empowerment
and autonomy
Joint dina-village
planning for
specialized services
(health, education,
irrigation, etc.)

Microfinance

Subsidized, directed
credit

Commercial interest
but low repayment

Limited capacity
strengthening to
standard project
financial units

Technical support and

supervision to freestanding institutions;
no new loan funds;
private bank linkages

Grievance and dispute

resolution

Complete domination
by executive

Introduction of
complaints database
and monitoring by
press and NGOs;
national and regional
offices respond to
complaints in
investigate corruption

Continuation of
complaints database
and NGO and press
monitoring; barefoot
lawyer / pilot paralegal
services in villages to
respond to complaints
and investigate
corruption

Continuing NGO,
press, monitoring and
paralegal program, and
prosecution of
corruption cases;
introduction of
extended communitybased monitoring

Gender equality

Women defined by
household roles

Promotion of womens
participation in

Special planning
stream for womens

Support for women in

local government

Counterpart funding
from local government

14
decisionmaking;
women facilitators

Source:

2.1.2

groups; competitive
reward for promoting
womens participation;
women engineers
program

Adapted from the Project Appraisal Document for KDP 2 ((May 23, 2001), and the draft Project
Appraisal Document for KDP 3 (March 15, 2003).

Project outcomes and impacts were mixed, but overall were highly satisfactory.

The mission assessed a number of infrastructure projects, economic and social projects, and
empowerment/governance activities, through interviews and focus groups with several dozen project
staff and beneficiaries. The results in all the sample villages were extremely positive, but field reports,
aides-memoire, and the draft ICR for KDP 2 give a more balanced picture:18

Infrastructure achievements were greater than expected, with at least one significant
infrastructure project in each KDP kecamatan. About 35,000 km of roads built or upgraded (250
percent more than specified in the PAD), as well as 3,500 bridges, 5,100 clean water and
sanitation units, 400 public markets, and 260 rural electrification schemes. The projects generated
25 million workdays for more than 2.8 million villagers, with community contributions, in cash
and in kind, averaging about 17 percent (even matching or exceeding KDP funding in some
areas). The projects cost, on average, about one-third less than equivalent government projects,
and their economic rate of return averaged about 60 percent. Villagers were required to have
operation and maintenance plans and committees in place once the infrastructure projects were
completed, and field reports indicate that 86 percent of infrastructure built during the first year of
KDP 2 is still being maintained, either by the O&M teams (94 percent) or independently by
community members. Field studies and household surveys show a high level of satisfaction with
the infrastructure projects, which have opened up opportunities in villages and kecamatans by
improving access to markets, town centers, education and health facilities, and clean water
systems, which by themselves have saved an estimated 50 million person days in womens labor. 19
The mission found villagers to be extremely proud of their infrastructure projectsnot just the
structures themselves, but also of the process by which they were decided upon, designed, and
built. Many see these projects as a tangible symbol of democracy coming to their villages, and of
their empowerment to carry out infrastructure projects on their own in the future.

Economic activities were judged by project managers to be unsatisfactory, based on a countrywide repayment rate of only 45 percent. More than 18,000 groups, representing 280,000 people,
mostly women, received micro-loans to help finance activities such as trading, savings and loan
groups, and home manufacturing of toys, bricks, backpacks, dried fish, tofu and tempeh. The
participants in these activities enjoyed increased income and increased links with traders who sold
their products in larger markets;, but aside from creating a small number of jobs, the activities
seem to have had little village-wide effect. Moreover, supervision missions found many cases of
poor fund management, and of beneficiaries not wanting to repay the money, which they saw as

18

Quantitative information was not available in the field, so was taken from the ICR for the Kecamatan
Development Fund (KDP 1 and KDP 2; February 14, 2003). A separate ICR for KDP 2 has not yet been
prepared.
19
A statistical analysis of the impacts of these activities will be carried out under KDP 3.

15
government money to which they were entitled. Financial unit managers often had to go to
peoples houses to collect their payments, or use social pressure to shame them into paying. There
were also cases of financial unit managers stealing project money, in one instance in collusion
with a facilitator.20 Many of the villages with such problems were not allowed to finish the threeyear project cycle, and none has been included in KDP 3.
On the other hand, some financial units did extraordinary work, which could not have been
captured by standard indicators. Particularly in Central Java and Yogyakarta, where the Javanese
tradition of village self-help is still very much in evidence, some financial units developed, on
their own initiative, special games and other methods to reach the very poor (see Annex 8), who
had been written off as unreachable in most project villages. 21 For example, in one kecamatan, the
financial unit, which had declared itself an independent entity after the project ended, hired a
facilitator to help a group of eight very poor men and women to become goat farms, and another
group to become duck farmers. 22 These people were living in the mountains in dirt-floored huts
and had never heard of the project. The facilitator took them to visit working farms, taught them
how to keep simple accounts (which were written, in the goat-raising group, in childrens lesson
books), brought in experts to teach them how to care for the animals, and met with them regularly
to guide their efforts. Both groups repaid 100 percent of their loans within a few months from the
sale of baby goats and ducklings. For these people, the additional efforts of the financial unit
literally changed their lives, and there are similar examples.

Social activities were infrastructure and economic activities designed to improve health and
education. These activities were not actively promoted under KDP 2s open menu approach, and
villagers generally did not propose them. As a result, out of 50,000 projects across the country,
only 140 village health posts and 475 schools were built or rehabilitated, which project managers
considered disappointing. However, where such activities were carried out, they had significant
impact, particularly the kindergartens (see Annex 7). The wealthier financial units also provided a
total of 380 scholarships for students and 85 grants for school equipment and materials. Despite
the limited output in these areas, the project created important linkages with local offices of the
health and education ministries, many of which are now engaged in joint planning with the
villages.

Empowerment and governance activities were successful as far as they went, but both villagers
and local officials have indicted that they want more training. Villagers were to be empowered by
working to make the projects principles of transparency, accountability, and participation a reality

20

The facilitator was fired, and the woman in charge of the unit paid back the money. The villagers
forgave her and did not want to prosecute, but the local police, who had been socialized to believe that
the money belonged the villagers, still arrested her, and she was sentenced to a year and a half in jail.
Most financial unit managers and facilitators interviewed during the mission said they had not attempted
to reach the very poor, with reasons ranging from (i) they were happy the way they were; to (ii) they
wouldnt be able to understand the project; to (iii) they needed more help than the project could provide.
This unit, like a number of others, had gone to a notary to sign papers declaring itself independent after
the project ended. Instead of returning the loan funds, it continued to make micro-loans to the
community, using KDP principles, and used the interest earned to finance activities for the poorest
members of the villages. Project managers were initially opposed to the units becoming independent out
of concern that they would be captured by the banking system. To help ensure that this doesnt happen,
KDP 3 will provide considerably more training for financial unit managers and staff, and create
guidelines for linkages with the formal banking system.

21

22

16
on the ground.23 In fact, their awareness of and believe in these principles often resulted in
frustration because they perceived that they did not have enough money or training to continue or
increase the scope of work they felt was important. The staff of every financial unit seen during
the mission wanted more training in accounting; micro-enterprise groups wanted more training in
how to manage and save money, and more help in marketing; facilitators wanted more training in
engineering, and so on. Project managers, for their part, report that KDP fell short in training
facilitators in a number of competencies that are necessary for fuller empowerment: community
facilitation, the inclusion of women and marginal groups, field supervision, technical and
engineering skills, project management, and monitoring and reporting. However, even the level of
empowerment that was achieved caused local officials to worry about how villagers were
perceiving them, and to change their behavior.24 In addition, some local branches of central
ministries are now encouraging villagers to participate in district-wide planning.
2.1.3 The assumptions made at the planning stage were largely accurate, although some of the
risks did not materialize.
The projects development goals were in line with the CAS objective of empowering and investing in
the poor, and with the Governments objective of reducing poverty through bottom-up programs. As
predicted, problems were reported and recorded in the database (which now has thousands of entries);
and villagers were willing to make contributions, in cash and in kind, to project activities. In terms of
critical risks, the countrys macroeconomic problems actually helped rather than hurt the project by
effectively doubling its budget for one year, and by making available professional engineers who had
lost their regular jobs. Other risks, however, did have negative impacts, particularly separatist violence
in Aceh and East Timor, which forced facilitators to abandon those areas. 25 The risks of politicization
of local institutions and of takeover by technical agencies did not materialize under KDP 2, but with
greater power being devolved to the districts, these are even greater risks under KDP 3.
2.1.4 Assessment of the evidence for success [2]
The mission findings were based on a small number of villages in Central and West Java in which
road, water supply, micro-enterprise, and school projects were considered by project managers to be
good examples of success. In-depth and interviews and focus groups in these villages could not turn
up any serious problems, except for the theft of money from one financial unit (see note 20), and
villagers spoke about that as a success in fighting corruption. Supervision reports and aides-memoire,
however, went into great detail about problems encountered in the field: people receiving loans under
false names; poor bookkeeping; money missing because of price mark-ups on construction materials;
a facilitator being pressured into signing an agreement by the kecamatan head, who in turn claimed
that he was pressured by the district head; a group fish-raising project failing because profits had to be
divided among too many members; bridges not being strong enough because the project team bought
inferior concrete and steel rods; roads not being finished, or cutting through forests (which the project
prohibited); and so on. These problem were not hidden, but were readily reported.
23

The village meetings at which the project principles were introduced were extremely well attendedup
to 75 percent of the men in the village, and one-third of the women. Villagers wore their best clothes to
the meetings, and tea and sweets were served, according to local tradition. The money for the food and
drink was provided by the project.
24
Two kecamatan heads repeatedly assured the missionwithout being askedthat they were honest and
knew that the money from KDP was the villagers money.
25
New CDD projects with conflict-mitigation components are being prepared for those areas.

17
With regard to the projects overall method of supervision and the robustness of its reporting: the
project was initially criticized for not adhering to the Banks standard reporting procedure
(quantitative data input into an inflexible PRS form); but Bank reviewers later agreed with the project
managers claim that the PRS form was not well designed for CDD projects, particularly for
performance indicators,26 and recommended that the projects multi-sectoral, thematic model of CDD
supervision be adopted for the entire CDD portfolio. The KDP instrument consists of: (i) case studies
documenting lessons learned27; (ii) field monitoring by members of district parliaments; (iii)
community participatory monitoring in every village; (iv) monitoring contracts with 40 NGOs and 31
journalists (v) an impact survey of 4,600 households; (vi) yearly financial audits of 30 percent of the
kecamatans; and, as noted above, (vii) supervision reports (which result in rapid follow-up action);
and (viii) aides-memoire that focus on implementation problems and constraintscorruption,
management capacity, quality of facilitation, participation of women, maintenance of infrastructure
and provided suggestions for improvement. The instrument also made use of data from the
governments National Expenditure Survey. This broad-based approach not only captured standard
progress indicators, but also allowed for quick corrective action (ineffective facilitators being fired,
corruption being exposed); for the refinement of processes and operations (a separate stream for
womens proposals, more resources shifted toward training); and for the exploration of new
hypotheses and issues unearthed in the field (such as the possible need for a legal assistance program
for communities, and for conflict mitigation elements in the project in some areas).
2.2 Factors for success or challenges to scaling-up
2.2.1

Participation and participatory processes were intrinsic to KDP, since the projects
overarching purpose was to empower and develop the capacity of villagers.

The project was designed to maximize opportunities for village empowerment created by the political
and economic crisis, and by two major factors in particular: the new governments strong
commitment to decentralization, and related to that, its need to channel resources down the villagers
as quickly and effectively as possible, to give the rural population a stake in the new system and
prevent further violent uprisings. Without this external enabling environment, the highly
participatory nature of KDP in 20,000 villages would not have been possible. Rather, KDP, if it had
continued, would have faced the same external barriers to scaling up as VIP: the (former)
governments insistence that projects be approved at the district level, that funds be controlled and
disbursed at the national level, that women remain in traditional roles, and that all grievances be
presented to the head of the district, which villagers considered dangerous. The only major external
barrier to scaling up was the pervasive corruption in the country, which resulted in missing project
money and a lack of trust in local officials, who controlled institutions that were important for
sustaining village empowerment. These concerns were addressed by inviting local officials and police
to village meetings, where they all received the same training in the principles of transparency and
accountability. Project managers also insisted, during negotiations, on the right to prosecute corrupt
officials, which they felt would be an important statement to villagers, and the Government
reluctantly agreed.
26
27

Quality of Supervision Assessment of KDP 1, Quality Assurance Group, October 30, 2002.
Internal monitoring case studies funded under KPD 2 include: Lessons Learned from KDP Year One;
Participation of Women and the Poor in KDP; Conflict Resolution in KDP; KDP and Community
Conflict Negotiation; Information Dissemination and the Role of the Village Facilitator; Community
Participatory Monitoring; The Role of Women Leaders in KDP; the Impact of KDP 1 on Local
Governance; and Infrastructure Best Practices under KDP 1.

18
In terms of internal barriers to scaling up participation, there were two major issues: the reluctance of
women to speak at meetings, out of fear they would not be taken seriously; and the virtual exclusion
of the very poor from all aspects of the KDP process. The gender bias of the decisionmaking process
had been recognized during KDP 1, which had provided for an equal number of men and women
facilitatorsgenerally a male technical facilitator and a female social facilitatorbut had done
nothing to ensure that womens proposals were funded. KDP 2 remedied that situation by involving
women in poverty mapping and instituting a separate planning stream for womens projects, with a
facilitator to assistance in womens groups in proposal writing. Further, KDP 2 required that at least
one of the proposals (out of two or three) sent to the kecamatan to compete for funding had to be
from a womens group. (Women could also be part of mixed-gender groups, but proposals from those
groups did not count as womens proposals.) In addition, in recognition of their own gender bias in
hiring staff, project managers in KDP 2 sought out women engineering students at universities to hire
as technical facilitators, and initiated social facilitation training for their male counterparts. The joke
in project villages was that PPK (the projects acronym in Indonesian) stood for Women Without
Enough To Do. In reality, however, women who made an effort to participate were well accepted and
regularly elected to important positions, including management of financial units.
The exclusion of the very poor was a much greater problem, since barriers to their participation were
rooted both in the project design and in a deep-seated bias against the very poor on the part of project
staff. As to the first point, although the project was defined as a poverty project, in reality it was a
multi-sectoral empowerment effort that did not include any poverty targeting, beyond locating the
project in the poorest 35 percent of kecamatans (based on government statistics) and assigning
women to do poverty mapping of their villages. There was a pro-forma requirement that in selecting
projects to submit for competition, villagers had to consider whether they benefited the poor; but all
of the villagers considered themselves poor, and there was no requirement to consider the very poor,
who were largely invisible. Moreover, even the few regional project managers who had designed
methods for reaching this groupon their own initiative and outside of normal project channelsdid
not believe the very poor had the ability to think or speak for themselves. For example, the mission
visited a kindergarten where a group of very poor mothers had come to be interviewed at the request
of the teacher. The regional manager, who had been an advocate for the very poor, was translating
between English and Javanese, but he spoke only to the teachers and ignored the mothers; when
asked to translate a conversation with the mothers, he said they wouldnt be able to say anything
meaningful. When pressed to ask the mothers what they thought they needed to make their lives
better, they responded, with one voice, everything. When the mothers were asked what kind of
future they wanted for their children, they said, in this order: teacher, soldier, doctor, lawyer. (More
positive examples of work with the very poor are discussed in section 2.1.2 and Annex 8.) In
recognition of the need for more outreach to vulnerable groups, KDP is now spinning off a project
targeting widows and orphans, but there is still no KDP program that targets the very poor.
In the projects defense, poverty targeting is an enormous undertaking that would have interfered with
KDPs more urgent goals, in Indonesias chaotic political environment, of building villagers capacity
to manage their own development and create sound local governance institutions before the window
of opportunity closed. It would have been difficult, for a variety of reasons, for the project to
explicitly exclude the very poor, but as long as KDP was a poverty project, it perhaps would have
been useful to create a separate planning stream with intense facilitation, or to link with a project that
did focus on this population, so that their exclusion from the participatory processes of KDP would
not have seemed so egregious. Now that it has become a governance project, however, this is no
longer an issue in KDP 3.

19

2.2.2 Social and political challenges

The main social challenges in scaling up KDP, other than the challenge relating to the very poor, were
the projects relationship with traditional institutions and customs, and the difficulties of working in
conflict-ridden areas. On the first point: the project design provided for working with and through
traditional institutions, as a way to gain villagers trust and support the reemergence of local
leadership, which had been decimated during the Suharto era. In reality, however, many traditional
village councils were composed of old men who had a vested interest in the status quo, including the
ability to demand bribes from villagers, material suppliers, etc.; and who saw the projects principles
of transparency and accountability as a threat to the limited power they still had. Thus the project was
in the position of having to find a way to function not only outside of central government line
agencies, but outside of traditional institutions as well; of wanting to channel money directly to the
villages, but having to keep it out of the hands of traditional village leaders, who expected to control
it. Further, the projects prohibition against funding religious buildings, as a way to avoid religious
and ethnic conflict, was a barrier to developing strong working relationships with religious leaders
who could have acted as a counterweight to corrupt village elders. The task, then, was for the project
to develop a new generation of leaders who believed that transparency, accountability, and
participation in public life were the key to a better future. In fact, many project facilitators in KDP 2
managed to get onto village councils as non-voting members, and KDP 3 will provide support for the
creation of an elected village parliament. Other former facilitators have been elected to district
parliaments, where they will receive training under KDP 3 in the drafting of legislation related to
village empowerment and autonomy.
The second social challenge was villagers resistance to the projects requirement for competition, to
which they had a strong aversion. This was particularly apparent in the Javanese areas visited by the
mission, where traditional community processes have operated for centuries to minimize social
conflict and maximize cooperation. Many villagers did not want to participate because they could not
accept the idea that there would be winners and losers, and they had to be persuaded, over a period of
weeks, that competition was the democratic way to fund the best proposals out of limited project
resources. Competition at the kecamatan level did, in fact, create inter-village tensions; once the
veneer of harmony had been broken, there were loud arguments and physical fights, and some of the
losers, including one village head, were too ashamed to return home. On the other hand, in keeping
with their tradition, many winners offered to incorporate losing projects into their own projects,
which created stronger group cohesion and, in many cases (as with road projects), helped to foster
inter-village linkages. KDP 3 will build on this tendency toward cooperation by strengthening the
informal inter-village decisionmaking bodies that had been assembled to vote on project funding into
permanent inter-village forums.
The project faced the opposite problem in conflict-ridden areas, where different factions could not be
persuaded to stop killing each other, let alone compete on a friendly basis for project funds. In some
of these areas, such as East Timor and Central Sulawesi, where facilitators were being threatened by
all factions and also by government troops, the project had to be discontinued (although a new spinoff project is currently being developed for East Timor. In other areas, such as Aceh and Papua, the
project has become one of the few vehicles for conflict mitigation by providing a framework for
negotiations and consensus building. In these and five other conflict-ridden provinces, the project
design has been modified to fit local circumstances. In Aceh, for example, a special operations
manual provides facilitators with guidelines for maintaining transparency and open communication

20
among all parties. And the special operations manual for Papua emphasizes the importance of using
village heads and tribal and religious leaders as advisors to the project, to assist in solving problems
and conflicts.28 To deepen and enrich its conflict-mitigation work, the project is currently carrying out
a study to determine: (i) what factors affect local capacity to manage conflict, (ii) how boundaries
between different groups are constructed and sustained, (iii) what types of conflict can mediated by
more inclusive, transparent, and accountable local institutions; and (iv) how different actors
(villagers, local leaders, facilitators) together negotiate, or fail to negotiate, different types of conflicts
in different settings.29

2.2.3 Decentralization processes and institutional issues factors in success or challenges to

scaling up
KDP included a number of decentralization elements designed to empower communities in their
relationship with local government. These elements were added to the project incrementally over the
three phases of the project, as external circumstances made it possible to do so. Under KDP 1, when
the governments main concern was channeling money to the villages to mitigate poverty and social
unrest, the project was able to incorporate elements giving villagers the right to assess their own
infrastructure needs, and to control project funds and project choices (as they had not been permitted
to do under VIP), with no interference by district engineers, village heads, or any other government
official.
KDP 2, during the unstable last months of the Suharto regime, was able to incorporate decentralization
elements that were much more far-reaching (see Table 1). In fact, KDP 2 represented a complete
change in focus, away from using infrastructure projects to create employment and alleviate poverty,
and toward using them to increase villagers capacity for project planning, implementation, and
monitoring, as key skills necessary for self-directed development and an empowered relationship with
local government. As discussed above, the projects internal processes for empowering villagers
open meetings; training in the principles of accountability, transparency, and accountability;
community monitoring; technical facilitation, election of representatives; inter-village funding
decisions, prosecution of corruptionhad a significant effect on villagers perception of their own
rights and abilities, which enabled them to move outward and demand more transparency, better
services, and joint planning from the institutions above them.
Other decentralization elements in KDP 2 had a more direct external focus, with the aim of creating an
institutional framework that would allow for, and financially support, village empowerment and
autonomy. Under that phase of the project, district officials and members of local parliaments were
included in the socialization process and invited to participate in joint monitoring missionsin direct
contrast to KDP 1, from which they were excluded due to corruption and fear that they would
dominate the planning process. The design of KDP 2, however, recognized that village empowerment
and autonomy would not be sustainable without local government support, and provided a learning
28

29

For a more detailed discussion, see Kecamatan Development Program: KDP in Conflict Areas
(Ministry of Home Affairs and National Management Consultants, June 2002).
Study on KDP and Community Conflict Negotiation: Summary Note (Claire Smith and Patrick Barron,
KDP Jakarta office, March 2003).

21
ground for local governments to become real stakeholders in poverty alleviation and pro-poor
investment efforts. An important forward-looking aspect of that approach under KDP 2 was to offer
districts a chance to buy additional coverage by providing matching grants, and nearly ____ percent
of the district parliaments voted to do so. Under KDP 3, financial participation will be mandatory for
all districts that have villages involved in the project.
KDP 3 will be operating in a very different institutional and fiscal environment than KDP 2, since the
new decentralization laws (see notes 11 and 12) give the districts control over 40 percent of public
spending, and require them to regulate village government in 13 separate areas that go to the heart of
village autonomy and empowerment. These include, in summary, how village heads should be elected;
how village councils should operate and who may be elected to them; how informal village
institutions should be created; how village budgets shuld be drafted; and how inter-village cooperation
should function. The uncertainty about what kinds of regulations would be issued was a major
constraint in designing the village empowerment activities of KDP 3, until project managers decided
to pro-actively address the potential problems this situation held for villages by focusing on local
governance directly. The project design now being negotiated (June 2003) includes: (i) training for
district officials in poverty alleviation and community-driven development, (ii) technical assistance for
district parliaments in drafting laws that support village autonomy and empowerment, and (iii)
assistance in drafting budgets that provide discretionary funds to villages to use for self-identified
needs, and allow village control of contracting and procurement. Project managers expected this
approach to meet resistance at both the district and central levels, but enthusiasm for the design of
KDP 3 has been much greater than anticipated.
In terms of other decentralization issues, KDP 3 continues to support the development of inter-village
forums to fill the gap left by the decentralizations disempowerment of kecamatans, which had
mediated between villages and districts on a variety of issues. The inter-village forum is envisioned as
a permanent body, with elected representatives from a cluster of villagers who will speak with one
voice to higher levels of government, and will oversee inter-village development. There is one major
area, however, in which the decentralization elements in KDP 3 fall shortother than promoting
linkages between the financial units and commercial banks, the project does not assist villages in
developing other sources of revenue, to make them less dependent on transfers from district budgets.

2.2.4

Scaling-up logistics

The project used several strategies for scaling up, each of which is evaluated below in terms of its
state of practice:

Direct organizational growthbest practice. The projects original and most important strategy
for scaling up was to systematize a set of basic rules, especially for the disbursement system, that
would allow for the KDP model to be replicated in hundreds, and then thousands, of villages
within a short period of time, using non-experts (villagers) as financial managers. Early in the
scaling-up process, this model had the effect of creating demonstration projects all over the
country, and provided evidence from multiple settings and many expert reviews that projects
controlled by villagers, both operationally and financially, could be successful. Lessons of
experience were integrated into organizational learning (seminars for project managers and staff,
internal studies [see note 27], facilitator training), and disseminated to government stakeholders,
and necessary corrections were made quickly, both at individual sites and project-wide. On a
number of occasions, project resources were shifted from statistical studies (which will now be

22
carried out under KDP 3), toward additional training, with the agreement of the Minister of
Finance.30

Indirect organizational growthgood practice. The KDP model for community-based

development has been spontaneously adopted by a number of rural poverty, urban poverty, and
education projects in Indonesia and other countries (representatives from government and NGOs
in Guinea, Vietnam, Cambodia, Laos, and Afghanistan have all visited project villages; and KDP
spin-off projects are now being prepared in Cambodia, Laos, and Afghanistan). In KDP 3, nonparticipating districts will be able to buy the KDP rule book, manuals, and facilitator services
and finance KDP-type projects out of their own resources. KDP 3 is also spinning off its financial
units into independent micro-enterprise institutions that will operate according to prudential
microfinance principles. However, the project has not catalyzed partnerships or fostered joint
ventures, instead relying on NGOs, universities, and other possible partners as expert resources
and project monitors.

Direct institutionalizing, mainstreamingbest practice. KDP 2 mainstreamed the basic principles

of village empowermenttransparency, accountability, and participationinto village and intervillage institutions and practices. KDP 3s strategy for scaling up focuses mainly on ensuring that
these principles are integrated into district-level policy and institutions, and that village autonomy
and empowerment are protected and supported in district legislation. To this end, the project will
provide training and technical assistance to district legislators, at district meetings and regional
workshops.

Indirect influence on institutions and policygood practice. Aside from the outreach work
involved in scaling up and supporting spin-off and replication projects, KDP has not engaged in
any significant awareness-raising activities, which project managers see as a weakness. Publicity
has mainly taken the form of newspaper articles about the prosecution of individual corruption
cases in KDP villages, written by journalists hired by the project (with the consent of their
newspapers) to act as independent project monitors. Conferences, cross-visits, and direct lobbying
have been aimed mainly at informing and influencing villagers, project staff, and government
officials, but the general public still has little awareness of the project. Policy advocacy, however,
is an ongoing activity, and has had an important effect on governments commitment to expanding
the KDP model to a new generation of community-based development projects. As awareness of
these projects has spread, an increasing number of communities are demanding transparency,
accountability, and participation in projects being planned for their villages, and see their
participation in such projects as a way to create democracy on the ground.

2.2.5

Total and or fiscal costs

The total original loan amount for KDP was US$225 million. .
Checklist 12 as to how the project fared financially, and the implications for scaling-up.
Susan need your help for this.
2.2.6
30

Co-production issues

The Minister of Finance was reluctant to deviate from the original project budget, but was convinced of
the benefits of more intensive training, to build villagers capacity, after visiting the field.

23
Stakeholders in the project (KDP 2 and KDP 3) include:

villagers (members of project teams, officers of the financial units, elected representatives to intervillage forums)
village heads and members of traditional village councils;
tribal and religious leaders in some conflict-ridden areas;
kecamatan heads;
district heads and members of district parliaments;
district-level line agency staff;
civil society organizations
journalists
private sector actors (contractors and suppliers for infrastructure projects; traders and agents for
economic projects);
the Government of Indonesia (the Ministry of Home Affairs and Regional Autonomy, Department
of Community Development; the Department of Planning; the Ministry of Finance; the interministerial coordination committee);
the World Bank.

The co-production relationships that have had the greatest impact on the projects ability to scale up
are discussed below.

Relationships among villagers. The most significant co-production issue, in terms of overall
scaling-up impact, was the diversification of roles among villagers, based on their selfidentification of the range of abilities present in their communitiesincluding the ability of
women to be engineers, financial managers, and elected representatives. This diversification of
roles was, in effect, the beginning of an embryonic but potentially broad-based leadership and
institutional structure in the villages that could, given the proper enabling environment (see
below), continue to develop and respond appropriately to internal and external issues. Critical to
this beginning of village empowerment was the projects learning-by-doing training, 31 which has
helped a core group of activists to become nascent specialists in a variety of sectors (roads, water
supply, livestock raising, microfinance), and has created the potential for them to play important
roles in a future village government. Equally important was the projects rule of absolute noninterference with funding decisions, which gave villagers the experience of being responsible for
their development choices, even those that project managers considered questionable (such as,
for example, deciding to fund a micro-business before they had clean water supply).
With regard to specialized roles and their importance for the project:

31

Each infrastructure team had a foreman who was responsible for procurement and the
quality of the works on the ground.

The village-level social and technical facilitators, selected because they were well-liked
by the community, were responsible for making the initial approaches to village groups,
and gaining their acceptance for the outside facilitators.

Project facilitators were also trained by this method before they were sent to the villages. Technical
facilitators, for example, learned to build different types of roads and bridges by actually building them,
under the guidance of a professional engineer.

24

Officers of financial units were responsible for disbursing all grants for infrastructure
projects and loans for economic activities, and for keeping and publicly posting
accurate and up-to-date disbursement and repayment information, including interest
earned on loans. They also reported regularly at village meetings on how the funds
were being used. In the well-functioning financial units visited by the mission,
detailed running accounts for every project activity were posted on a wall in the
(usually tiny) office, and computer-generated hard copies were also available (for this
purpose, unit officers went to larger towns to rent time on a computer). In an
environment where villagers were accustomed to development money being stolen or
misappropriated, the transparent behavior of financial unit officers was the single
most important factor in winning villagers trust and willingness to participate in the
project. In cases where dishonest behavior became apparent later in the process, after
villagers had become committed to the project, such behavior was seen as a betrayal
and met with outrage, and villagers often took it upon themselves to investigate and
bring charges against the offender. Under KDP 2, some financial unit officers took
the initiative of creating and funding projects for the very poor, which they did not
submit to the competitive process, funding these projects with interest earned on
microfinance loans. Others declared their units independent and began to function as
commercial microfinance institutions or savings and loans. The projects plan under
KDP 3 to transform all financial units into free-standing institutions, and to provide
technical support and foster commercial bank linkages, was in response to these
spontaneous scaling-up actions. Linkages with commercial banks are an area of risk,
however, due to the possibility of capture.

25

o Villagers elected to inter-village forums were responsible for trying to secure funding for
heir communitys proposals, while at the same time considering the value of proposals
from other villages. By working with 30 or 40 counterparts (one man and one woman
from every village in the kecamatan) to prioritize needs and allocate project funds among
the entire group of villages, and by fairly balancing competing interests, they became the
primary agents of inter-village cohesion. The relationships, skills, and collective vision
they developed through this process laid the groundwork for the forums to become the
permanent inter-village decisionmaking bodies that are envisioned under KDP 3.

o Traditional village heads and council members were expected to be a source of resistance
to the project, since they stood to lose power and money-making opportunities. That
resistance largely did not materialize, due to the training provided specifically for this
group as the project was starting, and to other factors that need more study. The support
of traditional leaders helped to legitimize the project in the eyes of the villagers, and
made it seem safe for them to participate. The symbolic role of the village heads was
incorporated into village meetings (they introduced the facilitators), and they were given
part of the credit for project successes.

o Tribal and religious leaders are hired as special consultants to the project in conflictridden areas, using their position of trust with different factions to help them work
cooperatively on project activities.

32

Relationships with external stakeholders. These relationships were largely negative during KDP
1, and presented a number of barriers to empowerment. In particular: (i) project funds flowed
through line agencies (and up to 40 percent of the funds disappeared); (ii) village infrastructure
needs were determined and technical services were provided by district-level line agency
officials; (iii) funding decisions were made by district engineers; and (iv) district heads handled
complaints about corruption and poor project management (see Table 1). These barriers to
empowerment and autonomy kept villages in a subservient position vis--vis the central and
district governments, and had the effect of making KDP 1 little more than an infrastructure
project carried out with community labor. However, these relationships changed dramatically
under KDP 2, when the new political environment made it possible to limit central government
involvement to hands-off oversight and support by the Ministry of Finance and the implementing
agency, the Department of Home Affairs (see below) 32; and limit local government involvement
to coordinating with central government and project facilitators. KDP 2 marked the beginning of
the empowerment process, with its unassailable principles of transparency and accountability,
which quickly resulted in an informal but very real power shift between villagers and district
officials.

The Department of Home affairs has since become the Department of Community Affairs under the
Ministry of Home Affairs and Regional Autonomy.

26
o

Kecamatan heads were government officials with the closest relationship to the villagers.
While district heads were seen as remote, kecamatan heads were involved in day-to-day
village issues. Before KDP 2 they were often accused of misappropriating or
mismanaging money, but when the empowerment process began, many began to act as
advocates for the villages and report favorably to district heads about the benefits of the
KDP process. The kecamatan heads have been largely disempowered by the
decentralization, and now are appointed by district heads instead of being selected by the
traditional village councils. KDP 3s focus on strengthening the inter-village forums is
designed to compensate for this power gap, since the forums will now be the only entities
capable of mediating between the districts and the villages.

o District heads and members of parliament suddenly found themselves, under KDP 2, in
the position of having to attend village meetings to defend their honesty and learn new
behaviors. Their cooperative response to these changes made it possible for villagers to
prove, without externally imposed difficulties, that they were capable of handling funds
and development projects. In a synergistic upward spiral, their efforts, in turn, persuaded
district parliaments to channel more money to villages in the form of matching grants.
These matching grants had tremendous symbolic significance in KDP 2, marking the
districts acceptance of villagers control of their own development activities. Under KDP
3, by the terms of the loan agreement with the central government, the matching grants
will be mandatorythat is, the districts provision of development funds to the villages
will be institutionalized in the revenue sharing structure for the remaining three years of
the project. In the KDP 3 project design, these grants will be the single most important
factor in scaling up to the long-term sustainability of self-directed community
development activities, and thus to the projects eventual exit strategy. Members of
district parliaments, who will draft laws relating to village empowerment and autonomy,
and will have oversight of village budgets (see section 2.2.3), will be key actors in this
process, as will the project staff who train and assist them.
o

District-level line agency staff, including engineers, provided all technical services and
supervised all projects under KDP 1, and engineers had final approval of all infrastructure
projects. This arrangement was a serious barrier to the development of villagers capacity
to design and manage their own projects. Under KDP 2, to enable village empowerment
to take hold, line agency staff acted as consultants to the project but had no authority over
project choices. They oversaw the work of the kecamatan facilitators, assisted with
especially difficult proposal designs, and supervised construction, in close coordination
with local government. They also presented district-wide development plans to the intervillage forums. In addition, some line agency staff promoted KDP to villagers on their
own initiative, particularly in schools and health clinics. Under KDP 3, villages and line
agencies will engage in joint planning for specialized services (health, education,
irrigation, etc.), which will be crucial to the institutionalization and long-term
sustainability of community-based development after the project has ended.

Civil society organizations have supported the project in two important ways. NGOs with
experience in community-based development helped to draft and revise the operational
manuals, particularly the sections having to do with facilitating participation and
cooperation. Twenty-eight NGOs based in the provinces also served as independent
project monitors. Universities assisted with facilitator training; they provided classrooms

27
for the initial 18-day facilitator training courses, as well as experts in such areas as social
psychology, conflict mediation, engineering, accounting, legal issues, and (in one region,
at the request of the regional project manager), gender issues.

Journalists acted as independent monitors for KDP. The project contracted with 31
journalists belonging to the Association of Independent Journalists (AIJ) to write stories
on any aspect of the project they chose. Some newspapers also assign reporters to cover
the project, and are compensated for the time their reporters spend covering project
issues. Journalists attend national training workshops each year to exchange ideas and
experiences. At the most recent meeting, project managers asked them be more pro-active
in discovering and reporting on cases of corruption. The involvement of journalists in the
monitoring process has enormous symbolic as well as practical significance, since AIJ
had been illegal under Suharto, and journalists had been killed for writing about
corruption during his regime. The inclusion of AIJ in the project was, in fact, the Banks
only conditionality for the project loan.

Private sector actors played a small but central role in scaling up, by linking villagers to
services, supplies (cement, steel, fuel, etc.), and commercial outlets for their products.
The KDP design allows for villagers to hire contractors and outside experts when needed
for difficult infrastructure projects, which has enabled them to develop skills in managing
competitive bidding and procurementboth essential for sustainable self-directed
development. For villagers engaged in economic activities, linkages with traders and
agents has made it possible for them to sell their products in larger markets, and thereby
generate the income needed for their businesses to continue to develop. 33 Other private
sectors included training and engineering companies hired by the project.

The Government of Indonesia. The Government provided an institutional home for the project
during a very difficult time in the country. The project was originally lodged with the national
planning agency, BAPPENAS, which provided a strong central management unit staffed with
people experienced in VIP. Due to changes in the roles of these agencies, KDP was later moved
to the Ministry of Home Affairs, Community Development Agency, which formed a central
management secretariat to provide operational and policy guidance to the project All three core
agencies (BAPPENAS, Ministry of Home Affairs, and Ministry of Finance) introduced and
implemented new, more efficient financial management procedures to ensure smooth
implementation of the project. From the outset, the Government also formed an inter-ministerial
coordination committee that included the ministries of Home Affairs, Finance, Public Works,
Education, Health, and Agriculture. Its strong support of the projects innovative approach to
community development enabled KDP (1 and 2) to rapidly scale up without undue difficulties.
Further, the Government is now supporting the projects conceptual scale-up to focus on
governance and legal advocacy for villagers under KDP 3. More specifically:
o

33

The Ministry of Home Affairs and Regional Autonomy, Department of Community

Development, the borrowing agency, had primary responsibility for managing the
US$300 million program, including the training and supervision of 34,600 consultants
and facilitators. Despite four changes in directors and project managers during the six

In one village in West Java, an agent increased the sales of a three-person group (two men, one woman)
of toymakers from 20 to 600 pieces every two weeks. Their tiny guitars, bass fiddles, and drums were
sold in department stores and souvenir shops in Jakarta.

28
years of the project (KDP 1 and 2), the ministrys performance was rated satisfactory to
highly satisfactory.
o

The Department of Planning was responsible for selecting the poorest kecamatans to
participate in each project cycle. Due to its inexperience with____, the department had
great difficulties with poverty targeting for the project, which led to criticism that the
project did not pay sufficient attention to poverty targeting.

The Ministry of Finance was responsible for transferring funds to the villages in
accordance with the allocations agreed upon for different components, and carried out its
responsibility without significant problems, as confirmed by the annual project audits
carried out the government audit agency. Its strict adherence to the budget lines could
have been a barrier to the projects ability to meet additional needs identified during
implementation, particularly the need for additional training for villagers and villagelevel facilitators. After visiting the field with project managers, however, the Minister of
Finance agreed to fund more training, which proved crucial for the success of, and level
of satisfaction with, project activities.

The World Banks commitment to KDP, and to the community empowerment ideas it
embodied, was essential for creating an enabling environment for the project in
Indonesia. KDP represented a corporate risk for the Bank, since its approach to
community development was largely untested; and that risk was compounded by the
unstable political and social environment in the country. The Banks support for the
project under those circumstances was critical to the ability of in-country project
managers to address larger governance and corruption issues as an integral part of
community empowerment. Also important was the Banks insistence on allocating
significant funds for monitoring and evaluation studies, and for monitoring by civil
society organizations. The Bank was also deeply involved in overseeing financial
management and procurement, to avoid the leakage that had plagued other Bank projects
in Indonesia.

Section 3. Lessons for scaling-up

3.1 What scaling-up has been achieved [2] success of the project, in terms of scale-up and impact
relative to other efforts within country and/or elsewhere, as perceived by stakeholders and in-country
analyst.
KDP is one of the most successful CDD projects ever carried out by the World Bank, in terms of
number of beneficiaries, level of beneficiary commitment and satisfaction, commitment of local and
national government, and degree of impact on government policy and other development programs.
During its two phases, the project scaled up physically (in terms of number of villages) by 40 percent a
year, reaching a total of 20,000 villages and 35 million beneficiaries with 50,000 infrastructure
projects and economic activities. Infrastructure projects included the construction, upgrading, or
rehabilitation of 35,000 km of roads, 3,500 bridges, 5,100 clean water and sanitation units,
400 public markets, 140 village health posts, 475 schools, and 260 rural electrification schemes.
Economic activities were carried out by 18,000 groups (mostly womens groups), comprising about
280,000 people. In addition, villagers elected to use project funds to provide 380 scholarships for

29
students and 85 grants for school equipment and materials. This rapid scale-up was made possible by
two key elements in the project design: a set of basic rules for disbursing funds directly to villages,
and a simple project manual covering implementation, reporting, monitoring, evaluation, and
procurement issues. These elements made it possible for KDP to easily replicate the same proven
disbursement and operational mechanisms in increasing numbers of villages.
In addition to its physical scale-up, the project also scaled up socially and conceptually, both of which
are essential for the sustainability of KDP and all other self-directed community development over the
longer term. Social scale-upthe changes in attitudes and behavior that enable villagers to believe
they can be agents in improving their own lives, and make them willing to act on that beliefwas
fostered by a number of design elements that gave villagers the experience of success by increments,
including success in negotiating among themselves and with representatives from other villages, and
in holding local officials accountable for their behavior toward all villages in the kecamatan. These
successes, in turn, made possible the projects conceptual scale-upthe deepening understanding at
all levels of government of what the projects principles of transparency and accountability mean for
poverty reduction and democratization. As a result, the KDP model has formed the basis for a new
generation of poverty and community development projects in Indonesia, as well as for similar
projects in other countries.
3.2 Key factors and processes conducive to scaling-up [9]
to compare different projects under the CDD umbrella, in terms of :
Comparable elements (e.g. working with the enabling environment, local
institutional level and/or directly with community implementation)
Quantified scale (e.g. number of beneficiaries) to assess the planned coverage and
depth of scaling-up
Nature of impacts (e.g. which target groups, empowerment or service delivery?)

3.2.1 Identification of key make or break factors and design features, including how risks were
addressed.

Given the unstable environment in which the KDP was to be implemented, as well as villagers
negative experiences with past development projectsmost of which had enriched government
officials while leaving villagers disenchanted, disempowered, and no less impoverishedKDPs
first and most difficult challenge was to win and retain villagers trust, so they would be willing
to participate in the project and adhere to its principles over a long period of time. This challenge
was addressed by several core design elements, without which the project could not have
functioned:

Village-level control of project funds and choices, to reduce opportunities for corruption and elite
capture, and maximize opportunities for empowerment. Villagers remained skeptical about this
initial promise of KDP throughout the six-month socialization period, fearing that project funds
would not materialize until the moment they were actually transferred to the village accounts.
Once this occurred, villagers became seriously committed to protecting the money from
mismanagement, and to achieving the empowerment it represented.

30

Training for villagers, to enable them to benefit from their financial and decisionmaking control
of the project. The long socialization and planning process addressed a number of potential risks,
including the risk of conflict, by encouraging villagers to rely on each other to improve their own
lives and to balance among competing interests. It also reduced the risk of mismanagement and
leakage of funds by training villagers to solicit bids from competing suppliers, assess the quality
of materials, and recognize that deviations from the principles of transparency and accountability
could be indications of corruption. As a result, the satisfaction with KDP activities was high and
leakage was an extremely low 4 to 5 percent, as compared to 40 percent for most other
development projects in the country.

Technical assistance to help ensure the quality of infrastructure projects and economic activities,
and to transfer the knowledge necessary for the activities to be sustainable.

The other make-or-break factor for the project was the Governments agreement that: (i) funds would
flow directly to villages instead of through line agencies; (ii) interference with village-level funding
choices would be strictly prohibited; and (iii) officials who stole project funds could be prosecuted.
Without the Governments willingness to accept the project on these terms, the KDP model for selfdirected community development would not have existed.
3.2.2 Sequencing and stages
At what sequencing/stages were various design features introduced, what organizational strategies
were most useful at different stages. Checklist 8b.
The projects guiding principles of transparency, accountability, and participation were introduced
during KDP 1, first to small groups at the hamlet level, and then at the initial village socialization
meetings. Also at these first meetings, villagers were informed about the projects organizational
design featuresthe direct flow of funds to the villages, the open menu of project choices, the
democratic decisionmaking by which projects would be prioritized and funded, the set of basic rules
for disbursement. These design features were replicated by direct organizational growth in, eventually,
20,000 KDP villages, and by indirect organizational growth in other community development projects,
in Indonesia and other countries. KDP 3 will not fund any new projects and so is not adopting the
funding mechanism, but the projects abiding principles of transparency, accountably, and
participation will be the basis for a wide range of governance activities (see below).
The projects social and governance design features were added progressively over the three stages of
the project, using the strategies of direct organizational growth and direct institutionalizing:

To improve gender equality, KDP 1 promoted womens participation of women in

decisionmaking, and trained women to be facilitators; KDP 2 added a special planning stream for
womens groups and trained women engineers; and KDP 3 will support an expanded role for
women in local government.

To provide a channel for complaints and dispute resolution, KDP 1 introduced a complaints
database and monitoring by journalists and NGOs; KDP 2 piloted a legal advocacy services for
villagers; and KDP 3 will include a full-fledged legal advocacy program and introduce extended
community-based monitoring.

31

To strengthen village and inter-village leadership, KDP 1 supported the inclusion of informal
members in traditional village bodies, and the election of villagers to inter-village forums to
determine funding priorities. KDP 2 strengthened the inter-village forums, in anticipation of their
becoming permanent bodies, and added village leadership training and joint monitoring with
members of district parliaments. KDP 3 will support the creation of elected village parliaments
and of permanent inter-village forums, and will provide extensive governance training to local
officials to support their expanded role under decentralization; including training in drafting
legislation related to village empowerment and autonomy.

3.2.3

Learning processes
Drawing from Checklist 9 and 11, what were the important internal processes for
assimilating and generating new ideas, adapting systems to new conditions and new scale of
operation?

The KDP design included a number of internal processes for learning, generating new ideas, and
adapting systems to new conditions.

For villagers, there were two kinds of learningconceptual and practical. Conceptual learning
about the importance of participation, transparency, accountability, democratic decisionmaking,
gender equality, and about the causes of and solutions to poverty (through hard work and
responsible money management)took place at open village meetings. Practical learning took
place continuously throughout the project, (i) at small group meetings, where villagers put forth
and discussed project ideas, with the help of facilitators; (ii) at proposal writing meetings, where
the proposal teams learned to transform those ideas into feasible projects; (iii) during the
verification process, when the verification teams learned to assess the validity of the project
proposals; (iv) during implementation, when implementation teams learned to procure and
evaluate the quality of materials, and to use sound, simple, and low-cost construction techniques;
and (v) during participatory monitoring and evaluation, when villagers learned to assess the
projects in terms of sustainability (quality of construction, maintenance arrangements, mechanism
for collecting user fees); and also learned, during joint M&E missions with NGOs and local
officials, how to understand other perspectives and work cooperatively with outsiders who could
be sources of future support.

For project managers, the KDP design provided the flexibility to continually incorporate new
learning and adapt systems to new conditions, without having to modify the loan agreement.
Project manuals, training materials, and training courses were revised yearly, based on reporting
from the field about problems, shortcomings, and new ideas. Regional managers acted as the
communications link between facilitators on the ground and the national office, and conveyed this
information either at face-to-face meetings or via email (the project provided each regional
manager with a computer and computer training). Regional managers were also given the
flexibility to incorporate their own new ideas into regional-level training, as in Central Java,
where the regional manager added a course on gender sensitivity, a more advanced accounting
course, and workshops on how to reach the very poor through games and other trust-building
techniques, which he had learned from an obscure book written published by an NGO.

Susan, Vic, Scott - say more here?

32
3.2.4 Comparison with other Bank and non-Bank experiences.
What are other partners experiences that you have encountered or are familiar with, what
are the Banks relative strength and key entry points.
The Banks development partners in Indonesia have included the International Labour Organisation
and the Food and Agricultural Organisation (FAO). In the case of the former, the Bank and the ILO
jointly pioneered the use of paid village labor for village infrastructure projects in Indonesia. In the
latter, the Bank and the FAO jointly experimented with grassroots participation in provincial-level
planning and design, and with user responsibility for maintenance. The Banks comparative advantage
in these cases was its broad-based involvement with the Government in a number of different sectors
community health, primary and secondary education, university education, agriculture, cattle
development, roads, railroads, thermal and solar power, telecommunications, land administration,
biodiversity, water resources management, forestry, export management, ports development,
transmigration, swamp reclamation, water supply and sanitation, financial sector reform, private
provision of infrastructure, earthquake reconstruction.and the list goes on. The depth of the Banks
understanding of the full range of development issues facing the country, and its longstanding
relationships with key people in the Government, gave the Bank leverage to promote and support
innovative approaches, including those of other development agencies.
In addition to the ILO and FAO projects, the Bank also coordinated with the Overseas Economic
Cooperation Fund (OECF), which carried out a village infrastructure project at the same time as VIP,
but in different parts of the country. The OECF model also included villagers identification of their
own infrastructure needs; but construction was done by private contractors hired by sectoral agencies,
instead of by villagers. Comparative reviews of water supply and rural roads built under the two
projects found that the works cost less under VIP, and were of equal quality.
Donors with projects not related to Bank operations have included GTZ GTZ (decentralization
monitoring), SwissAid and AusAid (community-built infrastructure in East Indonesia), and IFAD
(support for economic investments). More on experiences and Banks relative strength vis--vis these
projects?
Susan, Vic, Scott need your input
3.3. What if done differently [2]
Speculate on what could have happened if different design elements, assumptions, logistics
processes, sequencing had been used; based on knowledge and suggestions of interviewed
stakeholders.
The design and processes of KDP were based on the critical assumptions that: (i) the Government
would remain committed to decentralization, and as part of that commitment, would complete the
transfers of project funds directly to the villages; (ii) districts would continue to appropriate normal
operating funds for the kecamatans and villages; (iii) districts and kecamatans would not capture the
project funds or planning processes; (iv) communities and inter-village councils would be capable of
working together effectively, in a transparent, accountable, and participatory manner; (v) the quality of
facilitation would be adequate to ensure effective procurement, engineering, and maintenance; (vi)

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localized problems with political competition and civil violence would not interfere with project
operations; and (vii) the Governments methodology for poverty targeting was reliable.
Different assumptions would, of course, have resulted in a much different project. Without the
Governments agreement to transfer funds directly to villages, which involved bypassing the line
agencies, villagers would not have had control of project funds, and thus would not have been able to
develop their own project proposals or decide which of them would be funded. Under such conditions
although there still might have been village meetings to identify needsthere would have been no
socialization process to train villagers in democratic decisionmaking or the transparent handling of
project funds. There would have been no group proposal writing, no self-directed implementation, no
village-controlled procurement, little or no participatory monitoring, and no experience in balancing
among conflicting interests. Villagers would have had much less motivation to retain any knowledge
transferred, or to maintain the infrastructure. In other words, without the direct transfer of funds to the
villages, the entire sequence leading to village empowerment would not have occurred.
As to assumptions about the quality of facilitation, civil unrest, and poverty targeting: in the wellfunctioning sites visited by the mission, most stakeholders had a high level of satisfaction with every
aspect of the project, and, rather than suggesting changes, only wanted more of the samemore
money, more training, more facilitation, more infrastructure projects, more time to ensure the
sustainability of their economic activities before they were (as they saw it) abandoned to fall back into
hopeless poverty when the project ended. Even those emerging as leaders in their villagesincluding
officers of the financial units, who had declared their units independenthad little confidence that
they could sustain the process of empowerment and self-directed development on their own. If the
project were to have ended after KDP 2, villagers negative perceptions of their own abilities would be
a major weakness. KDP 3, however, includes the more intensive facilitation in engineering, financial
management, and other areas that villagers themselves believe are necessary for continued selfdirected development; as well as new governance elements designed to create the necessary external
environment to sustain the process of village empowerment (see section 1.2.3). Without both more
intensive facilitation and the concentration of governance in KDP 3, villagers would not be capable of
maintaining the progress they achieved under KDP 2.
As to project sites that did not function as well as expected, field reports indicate that operations
suffered mainly from poor quality facilitation, due to gaps in the careful selection, training, and
supervision of facilitators during the rapid scale-up. A slower-paced scale-up might have prevented
these problems, although the majority of facilitators were able to perform as expected with the same
level of training. At other sites, implementation was delayed or suspended due to localized violence.
Although resolution of violent conflict was never within the scope of the project, conflict mediation
training has been added for KDP 3, and has already been part of the specialized training for facilitators
working in conflict areas. Without this training in both conflict and non-conflict areas, the project
would be much less effective in creating an environment conducive to village-level empowerment and
self-directed development. Finally, as to the assumption of reliable poverty targeting, the
Governments methodology was known to be problematic before the project began. The project used
official poverty statistics to target the poorest 35 percent of kecamatans, but beyond that, this
assumption was relatively unimportant, since the project relied on poverty mapping and self-targeting
by the villagers themselves.

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34. Recommendations [7]
3.4.1

Future scaling-up research.

rBased on the experience, are there issues that need further exploring, suggestions on issues and
approaches.
The scaling-up experience of KDP highlighted several issues that merit further exploration:

How to better reach the very poor. What kinds of approaches, including games, can be used to
win the trust of the very poor, and make them feel comfortable with project facilitators? This
research can expand on the work of the regional manager in Central Java (see section 3.2.3).

How to bring justice to the villages. The projects preparatory studies for its Justice for the Poor
component focused mainly on supporting village-level anti-corruption efforts and assisting
villagers with resolving individual problems in district-level courts. Additional research is needed
on the possibility of creating village-level courts, which perhaps could build on traditional
dispute-resolution mechanisms, such as the council of elders, who under KDP have lost their role
of governing the villages, but would be well-suited to serving this mediating function. The
approach would also address the related issue of how traditional leaders can be encouraged to
support change.

How to identify different types of conflicts, and the most appropriate conflict-resolution
techniques for each type of conflict. The project is already carrying out a study on this issue, but
this work needs further support. Research in this area could also focus on the conflict-resolution
techniques of traditional and tribal leaders, and how to integrate these leaders and their methods
into community-development projects.

3.4.2

Lessons for future program implementation.

KDPs scaling-up experience has produced the following lessons for the expansion of CDD projects
and programs:

Direct expansion of the project. The KDP experience has shown that projects can successfully
expand through direct replication by systematizing a basic set of rules for disbursement, and by
using a simple manual that provides clear guidance on all operational aspects of the project,
including socialization, procurement, implementation, participatory monitoring and evaluation,
and maintenance.

Strategies for institutionalization and policy support. KDP has shown that village empowerment
and autonomy can be mainstreamed into institutions and policy, but only with enormous effort.
Community-based development and empowerment activities need to be protected at every stage,
from negotiations through implementation, and the conditions for this to occur need to be set
during negotiation and vigilantly enforced. Continuing policy support will depend on the project
achieving the expected resultspoverty reduction, reduced civil unrest, or whatever else was
promised. Progress toward achieving these goals may not be readily apparent to government
officials, whose offices may be hundreds or thousands of miles from the project sites, so their
support needs to be cultivated through field trips. In KDP, government officials who had been

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skeptical about the project almost universally became enthusiastic supporters after witnessing how
empowerment activities had energized entire communities. Government officials also need to
have a theoretical understanding of empowerment issues, which can be promoted through
seminars and workshops, as well as personal meetings with project managers. The next step is to
concretize this policy support in laws and regulations relating to village empowerment and
autonomy. This may need to be done under a separate governance project. In addition, a separate
project may be needed to institutionalize the principles of village empowermentincluding
villagers individual rightsin the justice system.

Implications for relationships with government and other partners. Scaling up of communitybased development and village empowerment requires that villages be allowed to build their own
internal capacity without interference with higher levels of government. This implies that outside
support for village activities should not be tied to restrictions on how funds are used.

How to support learning, planning and networking processes which enhance the process of
scaling up. The scaling-up process involves increasing the number of villages reached, the quality
of interventions, the quality of planning for continued development, the base of support both
within and outside of government. This process depends on a range of outreach activities,
including cross-visits among villages; intensive training of facilitators, and regular regional
meetings at which facilitators share experiences and receive fresher training; field visits by
government officials; partnerships with NGOs and universities; and the cultivation of supportive
relationships with private sector sources of support, including suppliers, commercial bankers, and
traders.

How can expansion be accelerated. The most effective method for rapid expansion is through
replication of a basic set of rules for disbursement and use of a field-tested operational manual in
every new village, in what project mangers have described as a franchise operation. The project
framework needs to be flexible enough to adapt to differences among villages, which implies that
all aspects of the project framework should not be written into the loan agreement, but rather
described in a separate document. The project design needs to specifically allow modifications to
suit local conditions without approval of the government.

3.4.3

Lessons transferable to other programs and contexts.

Considerations of applicability in other areas, regions, and the risks involved. Implications for Bank
lending instruments and program design.
The KDP principles of transparency, accountability, and participation; the projects set of basic rules
for disbursement; and its simple manual for operations are widely applicable in most regions and
countries where intensive facilitation is possible. In extremely remote locations without roads or a
communications infrastructure, the level of facilitation required for effective community-based
development probably would not be possible, unless the project provided, at the very least,
communication capabilities (cell phones, wireless email, satellite dishes radios, communication
centers), efficient transport arrangements, and security for facilitators. Authoritarian governments are
another barrier, since true CDD projects are simply too threatening to government officials. More
knowledge needs to be developed about the political, social, and physical conditions under which
CDD programs could be effective, and the findings of that research needs to be taken into account in
designing a Bank-wide CDD lending program.