PUBLIC POLICY FORMULATION

A policy is typically described as a principle or rule to guide decisions and

achieve rational outcome(s). The term is not normally used to denote what is
actually done; this is normally referred to as either procedure or protocol.
Whereas a policy will contain the 'what' and the 'why', procedures or
protocols contain the 'what', the 'how', the 'where', and the 'when'. Policies
are generally adopted by the Board of or senior governance body within an
organization where as procedures or protocols would be developed and
adopted by senior executive officers.

This study analyzes the manner in which social science analysis is

developed and utilized by legislators and policy makers to formulate
social policy. The initial charge for this study was to determine whether
information about social and economic behavior was more likely to be used
in policy development if it was developed from a classical experimental
as distinct from a quasi-experimental method of analysis.

Based on the way policy makers behave, this charge proved to be too narrow
a focus. While it is certainly true that data on behavior derived from properly
designed social experiments are more believable and do allow unambiguous
assertions of cause and effect, it requires more than random assignment to a
treatment and control group to make experimental data usable and reliable.

In this paper, we will define the policy formulation on poverty alleviation in

Indonesia. As we know, the number of poor people in Indonesia is increasing
in the past few years, and this problem, in fact, is happened due to some
policy formulation which ignored the safety and prosperity of people in this
country.

1 Public Policy Analysis - Policy Formulation

 Table of Contents

PUBLIC POLICY FORMULATION................................................................1

Table of Contents...................................................................................2
CHAPTER I INTRODUCTION......................................................................4
Background.............................................................................................................4
CHAPTER II LITERATURE REVIEW.............................................................8
2.1. Policy................................................................................................................8
2.2. Policy Formulation..........................................................................................11
2.2.1 Actors in Policy Formulation......................................................................11
2.2.2. Model in Policy Formulation.....................................................................12
CHAPTER III PROGRAM DESCRIPTION.....................................................15
3.1. What are KDP and UPP?.................................................................................15
3.2. Implementation Form and Pattern.................................................................16
3.3.Learning Process and Capacity Improvement.................................................17
3.4.Support from Millennium Declaration..............................................................18
3.5. Vision, Mission and Object of The Program....................................................19
3.5.1. Vision of KDP and UPP..............................................................................19
3.5.2. Mission of KDP and UPP............................................................................19
3.6. Program’s Objective.......................................................................................20
3.7. Decision Formulation Process in KDP and UPP...............................................22
3.7.1. Inter-Village Socialization and Deliberation (MAD Socialition)..................22
3.7.2. Socialization Village Deliberation (Musdes Sosialisasi).............................23
3.7.3. Idea Probing Deliberation.........................................................................23
3.7.4. Female Special Deliberation (MKP)...........................................................23
3.7.5. Planning Village Deliberation...................................................................23
3.7.6. Proposal Verification................................................................................23
3.7.7. Priority Inter-Village Deliberation (MAD Prioritas Usulan).........................24
3.7.8. Funding Inter-Village Deliberation (MAD Penetapan Usulan)...................24
REFERENCES

2 Public Policy Analysis - Policy Formulation

 CHAPTER I
INTRODUCTION

Background

Indonesia was once known as one of the Asian Tiger1 in economic field before

financial crisis hurricane came in 1998. The Indonesia’s GNP reaches

approximately $ 1,000 and between 1965 and 1990 the economic growth

average was 5.5%. Unfortunately, because the planning in the new order was

based on the economic growth that was influenced by Trickle Down Effect

Theory without strengthening the economic foundation. As a result, when the

global financial crisis arose, Indonesia’s economic collapsed.

It can be analyzed that by apllying such model, government depended

on capital and loan from abroad that when the capital was withdrawn, we

cannot do anything. Many banks were liquidated whereas some factories

were closed down while the others were transferred abroad. These

conditions led to the increasing number of unemployed and poor people.

Base on World Bank report (2006), there are five factors that can be

considered as having relations with poverty. These factors include education,

job, gender, access to basic service and infrastructure, and geographic

situations.

1 Asian Tigers are called to the eight best performers -- Hong Kong, Singapore, Taiwan, Korea, China,
Malaysia, Thailand, and Indonesia -- grew at an average of over 5.5% per year in per capita terms
between 1965 and 1990. See Steven Radelet, Jeffrey Sachs, and Jong-Wha Lee.1997.”Paper :Economic
Growth in Asia”. http://www.cid.harvard.edu/hiid/609.pdf

3 Public Policy Analysis - Policy Formulation

 Education; Poverty has always been associated with the inability to

reach higher education. It relates with the high cost of education itself.

Athough efforts to free elementary school tuition have been conducted by

government, other components of education cost that must be spent for

buying things such as for books and uniforms still remain high. Another cost

that should be calculated when poor people let their children study at school

is opportunity cost if their children study in private school. The high cost of

education has made school only for particular people, regardless to the basic

right of all citizens.

Correlation between poverty and education level can be seen from the

number of students who extend their education from elementary to junior

high and later to senior high school relatively small in poorest group. 70.5

percent of them complete their study from junior high school and only 18.2

percent who can complete their education in senior high school. On the

contrary, among the richest group, 90.7 percent completed their education

in junior high school and 40 percent completed senior high school. From the

data shown it can be concluded that the better economic condition one lives

in, the better education one can get.

Types of Jobs; Poverty has also been connected with types of job. In

Indonesia, poverty is always attached with farming sector in rural area and

informal sector in urban area. In 2004, 68,7 percent of 36,10 millions of poor

people living in rural area and 60 percent of them worked in farming sector2.

2 Tahlim Sudaryanto and I Wayan Rusastra, “Strategies for Increasing Production and
Alleviating Poverty in Agriculture”, in Journal Litbang Pertanian,, 25(4),2006. P. 1

4 Public Policy Analysis - Policy Formulation

A study conducted by Suryahadi et.al (2006) indicated that during the period

of 1984 until 2002, farming sector, whether in rural or urban area, is the

main cause of poverty. Moreover, the study also pointed out that farming

sector has contributed more than 50 percent of the total poverty number

and this is very contradictive when compared with service and idustry

sectors. The high level of poverty in farming sector has consequently caused

poverty rate increase to those who work as farmers than to those who work

in other sectors.

Gender; In Indonesia, there is gender dimension of poverty in which

from some poverty indicators like illiteracy, number of unemploymnet, and

informal workers. Women acquire more unfavorable positions than men (ILO

2004). Furthermore, People Development Report 2004 showed that the

figure in Human Development Index was higher than Gender-related

Development Index (GDI) and Gender Empowerment Measurement (GEM)

(MDGs Report, 2005). The fact that HDI was higher than the two gender

measurements showed that in general there is gender gap followed by the

low level of participation and opportunity for women in politic, economy, and

decision making processes. This MDGs report also points out that in GDI

achievement, Indonesia remains in 90th and is still left behind compared

with some ASEAN countries.

Access to basic services and infrastructure; A good infrastructure

system will directly and indirectly improve the poor people’s income through

the better provisions of health services, education, transportation,

5 Public Policy Analysis - Policy Formulation

telecommunication, energy access, water and sanitation (Sida: 1996). A

study conducted by World Bank (2006) indicated that infrastructure

improvement in villages are not good. This study also stated that

infrastructure in villages needs more attention because only 48 percent of

poor people in villages can get access to clean water compared to 78

percent of poor people in city who can get the access.

Geographical location; Geographic position correlates with poverty

for two factors; Firstly, natural condition in which there is potency in soil

fertility and natural resources. Secondly, development equality, either to

thos which has relationship with rural and urban development, or inter-

provincial development. In some provinces especially in eastern area of

Indonesia, the development is still left behind compared to the development

in Java. According to a data in 2004, people who live in Papua tend to have

poor probability four times bigger than those who live in rich natural

resources region like Kalimantan (World Bank 2006). Furthermore, non-

income dimension like low achievement in education and provision of basic

service access in several areas especially in eastern Indonesia clarifies the

gap based on geographic location.

Regarding to the explanation above, the writers conclude that if

Indonesia government want to overcome the poverty, it should consider to

the factor of poverty. Today, government has the most popular program that

adopting the concept Community-Driven Development (CDD)3. They are

3 Ke Fang, “Designing and Implementing a Community-Driven Development Programe in

Indonesia” in Development in Practice, Vol. 16, Number 1, February 2006: Routledge
Publishing. P.1

6 Public Policy Analysis - Policy Formulation

Kecamatan Development Program (KDP) and Urban Poverty Program (UPP).

Through these programs, government and all of the stakeholders hope,

Indonesia can improve the quality life of majority people particularly in

poverty alleviation.

In this paper, the writers are interested to analyze the policy

formulation process of Kecamatan Development Program (KDP) and Urban

Poverty Program (UPP). The question that we propose: “what are the process

reflecting the people needs, problem, and involving the stake holder?

CHAPTER II
LITERATURE REVIEW

2.1. Policy

Anderson4 said that policy is a purposive course of action followed by an

actor or set of actors in dealing with a problem or matter of concern. This

concept of policy focuses attention on what is actually done as against what

is proposed or intended, and it differentiates a policy from decision, which is

a choice among competing alternatives. As a result public policies are

policies that are developed by governmental bodies and officials.

In public policy process, there are five steps and in each steps there

are some key question that must be answered to understand what the

activities in each steps are as follows:

4 James E. Anderson,1979, “Public-Policy Making, Second Edition”, Holt, Rinehart and

Winston.p.3

7 Public Policy Analysis - Policy Formulation

1. Problem identification, what is a policy problem? What makes it a public

problem? How does it get on the agenda of government?

2. Formulation: how is policy alternatives for dealing with the problem

develop? Who participates in policy formulation?

3. Adoption: How is policy alternative adopted or enacted? What

requirements must be met? Who adopts policy? What processes are

used? What is the content of the adopted policy?

4. Implementation: Who are involved? What is done, if anything, to carry a

policy into effect? What impact does this have on policy content?

5. Evaluation: How is the effectiveness or impact of a policy measured? Who

evaluates policy? What are the consequences of policy evaluation? Are

there demands for change or repeal?5

Meanwhile, Lester and Steward explained there are six stages of policy

process, as follows:

1. Agenda setting

Agenda setting is describe as a set of political concerns meriting the

attention pf the polity, and it included both systemic agendas and

institutional agendas.

2. Policy Formulation

Policy formulation or policy adoption usually defined as the passage of

legislation designed to remedy some past problem or prevent some future

public policy problem. Originally, policy formulation was explained in

5 Ibid, p.24

8 Public Policy Analysis - Policy Formulation

 terms of an elitist or pluralist model. More recently, however, policy

formulation is viewed as the result of multitude of forces that affect policy

outputs, such as historical/geographic condition, socioeconomic

conditions, mass political behavior (including public opinion, interest

groups, and political parties), governmental institutions (including

legislature, courts, and the bureaucracy), as well as elite perceptions and

behavior.

3. Policy Implementation

It has been described as what happens after a bill becomes law. Simply

enacting legislation is no guarantee that action will be taken to put the

law into effect or that the problem will be solved. Law must be translated

into specific guidelines therefore the federal, state, or local bureaucracy

can see to it that the intent of the legislation is achieved at the point

where the policy is to be delivered. The implementation process can be

defined as a series of governmental decisions and actions directed toward

putting an already decided mandate into effect.

4. Policy Evaluation

Policy evaluation is concerned with what happens as a result of the public

policy, that is, what happens after a policy is implemented. It is concerned

with the actual impacts of legislation or the extent to which with the

policy actually achieves its intended result.

5. Policy Change

9 Public Policy Analysis - Policy Formulation

 As an analytical concept, policy change refers to the point at which a

policy is evaluated and redesigned so that the entire policy process

begins anew.

6. Policy Termination

Policy termination is a means of ending outdated or inadequate policies.

Some programs are found to be unworkable and thus need to be

abolished, whereas other programs are often scales back due to a

shortage of resources or for purely non-rational or symbolic reasons.

Essentially, policy termination is the end point of the policy cycle. It can

mean many things, such as agency termination, policy redirection, project

elimination, or fiscal retrenchment6 (2000:5).

2.2. Policy Formulation

The expected result of policy formulation is some type of solution to public

problem. According to Deborah Stone, there are five types of policy solution:

(1). Inducement, which can be positive (ex, tax credits) or negative (ex,

penalties for pollution); (2). Rules, or other forms of mandated behavior such

as regulation governing pollution; (3). Facts, or the use of information to

persuade target groups to behave in certain way, such as community right-

to-know information; (4). Rights, which give certain people rights or duties,

such as civil rights legislation; and (5). Powers, whereby a decision-making

body is charged with specific powers to improve decision making, such as the

6 See James P. Lester and Joseph Stewart,JR…2000.”Public Policy: An Evolutionary

Approach, Second Edition”. Wadsworth, p.5

10 Public Policy Analysis - Policy Formulation

budgetary power of legislature to affect the state budget. These policy

solutions can be in the form of congressional legislation, executive orders,

judicial decisions, or others forms of policy outputs7.

2.2.1 Actors in Policy Formulation

In the policy formulation, many actors are involved. Lester and Stewart 8

explained that many actors are involved:

a. Governmental Agencies

Government agencies are the government institution (bureaucracy), the

duty of them is to provide information to congress and executive branch

that later becomes the basis for legislation.

b. The Presidency

The president and/or executive offices are often involved in the policy

formulation. Such involvement includes presidential commission, task

forces, interagency committees, and other arrangements.

c. Congress

Congress is the institution that is most commonly associated with policy

formulation, either through the development of new legislation or through

the oversight and legislative review.

d. Interest Groups

7 Ibid p. 87
8 Ibid. p. 88-90

11 Public Policy Analysis - Policy Formulation

 Interest groups are extremely important in the process of policy

formulation, essentially in the pluralism model. In this model public policy

is shaped by bargaining, negotiation, and compromise among interest

groups and other components.

2.2.2. Model in Policy Formulation

In USA, and followed by many countries, there are three models in analyzing

policy formulation process9.

a. Rational-Comprehensive Model

This model based on the assumption that individuals make decisions on

the basis of a rational calculation cost and benefits. It includes the

following component:

1). The decision maker is confronted with a given problem that can be

separated from other problems;

2). The goals, values, or objectives that guide decision maker are clarified

and ranked according to the their importance;

3). A complete set of alternative policies for dealing with the problem are

prepared;

4). The consequences (costs and benefits, advantages and disadvantages)

that would follow from selection of each alternative are investigated;

5). Each alternative and its consequences, can be calculated and

compared with the other alternative;

9 Ibid, p. 89-96.

12 Public Policy Analysis - Policy Formulation

 6). The decision maker chooses that alternative that maximizes the

attainment of his or her goals, values, or objective.

b. The Incremental Model

The key components of the incremental model are:

1). The selection of goals or objectives and the empirical analysis of the

action needed to attain them are closely intertwined with, rather than

distinct from, one another;

2). The decision maker considers only some of the for dealing with a

problem, which will differ only incrementally for existing policies;

3). For each alternative, only a limited number of important consequences

are evaluated;

4). The problem confronting the decision maker is continually redefined;

5). There is no single “best” solution for a problem;

6). Incremental decision making is essentially remedial and is geared

more to the amelioration of presents, concrete social imperfections

than the promotion of future social goals.

c. The System Model

The system model, originally developed by biologist and then applied to

the study of politics by David Easton, suggest that public policy

formulation is initially affected by demands for new policies or support for

the existing policy.

This model propose that inputs (demands and supports) are converted by

the process of the political system (legislatures, the courts, etc) into

13 Public Policy Analysis - Policy Formulation

outputs (policies or decision), and these in turn have consequences both

for the system and for environment in which the system exist. Demands

may be internal to the system (e.g., political parties or interest groups) or

external to the system (e.g., ecology, the economy, culture, and

demography). Support includes action that help the system operate and

help to sustain it. Support is derived from: the political community, the

regime or rules of the game, and the government itself.

14 Public Policy Analysis - Policy Formulation

 CHAPTER III
PROGRAM DESCRIPTION

3.1. What are KDP and UPP?

Kecamatan Development Program (KDP) and Urban Poverty Program (UPP)

are the programs which adopt the concept of Community Driven

Development (CDD). KDP and UPP are community empowerment based

national programs on poverty prevention. It is implemented through the

harmonization and development system, as well as mechanism and

procedure of program, provision of assistance and stimulant funds to support

the community’s initiatives and innovation in the sustainable poverty

prevention program. The community empowerment is intended to create and

increase the community capacity, both individually and in group, in solving

many problems relating to the effort to increase life quality, independency,

and welfare.

Community empowerment requires significant involvement of the

regional government’s instrument as well as many parties to provide

opportunity and secure the continuity of many results already attained. The

goals to attain in the program are: First, to increase the poor’s welfare and

job opportunity independently; Second, to increase participation of all

community, including the poor, female group, hinterland traditional

community and other susceptible and frequently marginalized community

15 Public Policy Analysis - Policy Formulation

groups into the decision making process and the development management;

Third, to increase the rooted, representative and accountable community

institution capacity; Fourth, to increase the government’s capacity in

providing service to the community, especially for the poor, through pro‐poor

policy, program and budgeting. Fifth, to increase the synergy of the

community, regional government, private, association, university, non‐

government organization, community organization and other care groups in

order to make effective the poverty prevention programs; Sixth, to increase

the existence and independence of the community as well as regional

government capacity and local care group in preventing poverty in their

region; Seventh, to increase the social capital of the community

development in accordance with the social and cultural potential as well as

to preserve the local wisdom; Eighth, to increase innovation and utilization of

effective technology, information and communication in the community

empowerment.

3.2. Implementation Form and Pattern

In the implementation of this community based program, the district

becomes the focus of program and harmonizes the program planning,

implementation and control, then providing position to the community as

policy determinant or maker as well as the main agent of the development in

local level. In this context, the program always gives priority to the universal

values and local culture in the participatory development process as well as

16 Public Policy Analysis - Policy Formulation

using community empowerment approach according to the local social,

culture and geographical characteristics.

The scope of KDP and UPP are basically open for all poverty prevention

programs proposed and agreed upon by the community, covering provision

and repair of dwelling area, social, and economic infrastructure/facilities on

labor intensive basis and provision of financing source through funding and

micro-credit to develop the poor economic activities. The greater attention is

paid to the female group to utilize the revolving funds as well as other

activities relating to the improvement in the human resources quality,

especially intending to accelerate the attainment of MDG’s target. The scope

of this activity covers the efforts to increase the community’s and local

government’s capacity through making critical awareness, training on

business skill, organization and finance management as well as application

of good governance.

3.3.Learning Process and Capacity Improvement

To support the series of activities currently conducted, the fund is made

available to support the community learning, volunteer development and

community assistance operational activities as well as for facilitator, capacity

development, mediation and advocacy. The role of Facilitator is especially

crucial in early stage of empowerment, while the community volunteer is

especially as the motor of community movement in their region. The

component of Direct Community Aid (BLM) is as the stimulant fund of self‐

support, provided for the community group to finance part of activities

17 Public Policy Analysis - Policy Formulation

planned by the community, and to increase the community’s welfare,

especially the poor.

The increase in capacity of local government and actors is the series of

activities carried out to increase the capacity of regional government and

local actors /other care group, in order to be able to create conducive

condition as well as positive synergy for the community (especially the poor

group) in undergoing their life prosperously. The activities relating to this

component are among others seminar, training, workshop, field visit

conducted selectively. Program management and development aid, cover

the activities to support government and many other care groups in the

activities management; that it include provision of management consultant,

quality control, program evaluation and development.

3.4.Support from Millennium Declaration

In international and global context, KDP and UPP are also directed to support

the target already formulated and determined in the Millennium declaration.

The Declaration signed in New York, on September 2000 in Millennium

Summit momentum, attended by 189 countries being the member of United

Nations; where 147 countries were represented directly by the State Head or

Government Head. The Millennium Declaration covered the problems

relating to the peace, security development, including therein environment

protection to the weak groups, human right and governance that was then

developed to become the objective of development correlated to each other

as global agenda that is known as Millennium Development Goals (MDGs).

18 Public Policy Analysis - Policy Formulation

 There are eight objectives/targets of development to attain during this

Third Millennium covering:

(1) Eradicate Extreme Poverty and Hunger,

(2) Achieve Universal Basic Education,

(3) Promote Gender Equality and Empower Women,

(4) Reduce Child Mortality,

(5) Improve Maternal Health,

(6) Combat HIV/AIDS, Malaria and Other Diseases,

(7) Ensure Environmental Sustainability,

(8) Develop Global Partnership for Development.

The seven of first range of MGDs above have been translated into

target with measurable attainment and the result can be used as

standarization as well as international comparison. The development target

outlined in MDG not only merely serve as goal that must be attained by the

central government of each country, but also must serve as the development

goals for all stakeholders including Regional Government, Parliament, civil

society, mass media and others stakeholders.

3.5. Vision, Mission and Object of The Program

3.5.1. Vision of KDP and UPP

The long-term vision developed in KDP and UPP, are to attain the poor

prosperity and independency in rural areas. Prosperity is defined as

fulfillment the community’s basic need and independency is defined as the

19 Public Policy Analysis - Policy Formulation

capability to organize themselves in mobilizing the resources in their

environment, the capability to access the resources available outside their

environment and finally manage all resources to settle the existing poverty

problems.

3.5.2. Mission of KDP and UPP

Mission of KDP and UPP, in time‐phase of 5 (five) to 6 (six) years to come, are

to assist and facilitate the programs as follow:

(a) Developing the community’s capacity/capability and community’s

institutions therein.

(b) Institutionalization of participatory development system.

(c) Strengthening the role and function of Regional Government.

(d) Increasing the community’s social‐economy made basic infrastructure.

(e) Expanding the work network for development partnership.

The Mission above constitute the translation of the vision already

outlined by KDP and UPP areas within certain time limit from period of 5 ‐ 6

years, until 2015, and expectedly able to be realized consistently and

gradually within such period. This Mission can be viewed and re‐evaluated

within period of maximum 2 to 3 years, as well as may be subjected to

change or revision if the environmental condition supports or desires the

same due to no longer relevant to the development and dynamic occurring.

3.6. Program’s Objective

The general objective of KDP and UPP are to increase the welfare and job

opportunity for the poor in the rural areas through the enforcement of

20 Public Policy Analysis - Policy Formulation

community independency in decision making and development

management. The specific goal of KDP and UPP covers:

 Increasing the community’s participation especially the pure group and

female in planning decision making process implementation,

monitoring and maintenance of development result.

 Institutionalizing participatory development of the management, by

utilizing available local resources.

 Encouraging regional government capacity in facilitating development

management.

 Dividing socio and economic basic infrastructures by constituting the

higher priority according to the community decision.

 Institutionalizing revolve fund management.

 Supporting/promoting inter‐villages cooperation.

 Developing cooperation among stakeholder, relating to prevention of

poverty in rural area.

21 Public Policy Analysis - Policy Formulation

 3.7. Decision Formulation Process in KDP and UPP

Socialization Inter-Village Deliberation

Socialization Village Deliberation

Idea Probing Village Deliberation

Female Special Village Deliberation

Planning Village Deliberation

Priority Inter-Village Deliberation

Designing and Budgeting Proposal

Funding Inter-Village Deliberation

Result Information Village Deliberation

Program/Project Implementation

3.7.1. Inter-Village Socialization and Deliberation (MAD Socialition)

Inter-Village Socialization and Deliberation is an inter-village meeting for

early socialization about the objectives, principles, policies, procedures and

other matters relating to the KDP and UPP as well as to determine the

agreements between villages in how to carry out the KDP and UPP.

22 Public Policy Analysis - Policy Formulation

3.7.2. Socialization Village Deliberation (Musdes Sosialisasi)

Socialization Village Deliberation is a village community meeting as a venue

for dissemination of information, the KDP and UPP in the village.

3.7.3. Idea Probing Deliberation

Idea Probing Deliberation is a meeting among groups in the village

(Dusun/RW) to find the ideas fit the needs of the community, especially Poor

Households. The ideas presented by the community not just the idea of the

proposed activities in order to obtain funds KDP and UPP, but such ideas in

terms of direct poverty reduction.

3.7.4. Female Special Deliberation (MKP)

Special Female Deliberation attended by women and carried out in order to

discuss the ideas of women's groups and set the proposed activities that are

needed by the village.

3.7.5. Planning Village Deliberation

Planning Village Deliberation is a community meeting in the village that aims

to discuss the whole idea of projects, results of the probing process ideas

among groups.

3.7.6. Proposal Verification

Proposal Verification is a step that aims to examine and assess the

feasibility of the project proposal of each village to be funded KDP and UPP.

Verification of project proposal carried out by the Verification Team

23 Public Policy Analysis - Policy Formulation

established in districts with a member of at least 5 people who have

appropriate expertise of project proposal.

3.7.7. Priority Inter-Village Deliberation (MAD Prioritas Usulan)

Inter-Village Deliberation priority is a meeting in the district that aims to

discuss and rank the project proposals. Ranking is based on eligibility criteria

as those used by the Verification Team in assessing the project proposals.

3.7.8. Funding Inter-Village Deliberation (MAD Penetapan Usulan)

Funding Inter-Village Deliberation is a meeting to make decisions on the

proposals to be funded through the KDP and UPP. Funding decisions should

be based on the ranking of proposals being made at the time of MAD Priority.

24 Public Policy Analysis - Policy Formulation

 CHAPTER IV
ANALYZING THE PROCESS OF POLICY FORMULATION

In the analyzing of the policy formulation, we should follow and analyze in

each step. The steps in the process, commonly, are: defining the problem,

agenda setting, alternative choice,

Defining The Problem

Considering the privious explanation, it can be drawn that the failure of

economic policy in New Order in facing global financial crisis in 1998 was

because the policy formulation only focused on economic growth without

regardless to the power and potency of local economy. If we trace back to the

past, the new order policy tend to use Elitist model in which public policy was

constituted based on the preferences and values of governing elite10. This

model emphasize on the role of the government to formulate the policy. In

other words, the formulation of public policy utilizing elitist model can be

called Top Down Planning.

In addition, the economic growth was highly affected by Trickle Down

Effect Theory without strengthening the economic foundation. The

government was favorably relied on foreign capital and loan that when the

global financial crisis came, Indonesia cannot do anything because the capital

was withdrawn. Consequently, Indonesia’s economic collapsed. In 1998, after

10 Ibid. p.54

25 Public Policy Analysis - Policy Formulation

financial crisis came to Indonesia the number of poverty increased

dramatically up to 80 million and income per capita slightly decrease

significantly beyond U.S. $ 1,000 until $ 250. It led Indonesia as poor country

under Bangladesh’position. If observed by location, the largest poor

population living in rural areas reaches 45.6% of all population11.

Referring to the explanation above, some problems that trapped

Indonesia into crises can be identified resembling from global financial crisis,

inappropriate development strategy, and development policy models.

Responding this situation, during reformation era, Indonesia government

tries to formulate and implementt development strategies and policies based

on the public/citizen’s interest. The government applies pluralist model12 in

public policies with bottom up approach in the development planning.

Agenda setting

According to Cobb and Elder, agenda setting is a set of political controversies

that will viewed by as falling within range of legitimate concerns meriting

attention by a decision making body13. During the post-financial crisis,

government in transition era sought out solutions to overcome problems of

the withdrawal of capital from abroad, liquidated banks, relocation of some

factories and the increasing number of unemployment and poverty.

11Tempo edition 19/03 11 July 1998 on http://www.tempo.co.id/ang/min/03/19/ekbis3.htm

12 To know more about pluralist model, see James P. Lester and Joseph Stewart, JR. op.cit,
p.55
13 Roger W. Cobb and Charles D. Elder.1992. “Participation in American Politics: The
Dynamic of Agenda-Building”. Baltimore: John Hopkins University Press.

26 Public Policy Analysis - Policy Formulation

 Among these issues liquidated banks and the increasing number of

unemployment and poverty became two big issues surround the elite level of

Indonesian government. Lester and Stewart said that an issue will receive

attention from public policy makers if (1) it has reached crisis proportions

and can no longer be ignored, (2) it has achieved particularity, in which the

issues exemplifies and dramatizes a larger issue, (3) it has an emotive

aspect, or attracts media attention because of a “human interest angle”,(4)

it has wide impact, (5) it raises questions about power and legitimacy, (6) it

is fashionable14.

By utilizing the criteria mentioned above, it can be concluded that the

poverty and unemployment can become the consideration in the policy

agenda and therefore shall be handled optimally. Otherwise, it will be a time

bomb that could topple the government which ends up like de javu (as new

order experience).

Alternative Choices

In this stage, government needs to consider many policies that can also

reduce the number of poverty rate. The alternative programs are:

1. Counter Gas Subsidies: Bantuan Langsung Tunai (BLT) – Direct

Cash Subsidy;

2. Counter Health: Jamkesmas (Jaminan Kesehatan Masyarakat) –

Community Health Assurance;

14 James P. Lester and Joseph Stewart, JR. op.cit, p.66

27 Public Policy Analysis - Policy Formulation

 3. Counter the capital lack: KUR (Kredit Usaha Rakyat) – still

improperly distributed-, helping infant industry and small business on

expand their business.

4. Counter weak empowerment: PNPM Mandiri – constructing

highway- lowering production cost;

5. Program Keluarga Harapan (PKH) – increasing student presence

rate in school and raising number of baby.

In the end, from many programs alternative, KDP and UPP are seen as the

appropriate ones. We know that KDP began in 1998 meanwhile UPP began in

1999 and those still carried out until now.

28 Public Policy Analysis - Policy Formulation

 CHAPTER V
CONCLUSION AND RECOMMENDATION

5.1. Conclusion

KDP and UPP as a policy of poverty alleviation has been trying to implement

democratic values. In the concept of policy formulation, the government uses

the pluralist models involves four main components in making policy, that is:

government agencies, president, legislative, and interest groups.

In the Rational-Comprehensive Model, those programs that adopt the

World Bank’s program, --Community-Driven Development (CDD)-- are the

best choice. We argue that those programs are the best among the other

alternatives, because in the process of formulation, government following the

steps in the Rational Comprehensive Model.

The steps are: search the subject problem; setting goals, values, or

objectives of the program; compare with others alternative programs;

calculating the cost and benefit.

In the context of balance of interest, those programs give benefit to all of the

components: government, interest groups (private sector), and society. The

implementation of the programs must be recognized, can increase the

income of the poor people, although the increasing does not significant.

This is good for political imagery of a president. Private sector or

interest groups also get a benefit from the projects particularly in the building

29 Public Policy Analysis - Policy Formulation

of infrastructures. And the last beneficiary group that is poor people gets also

benefit, though they can really leave the poverty trapped. In the condition of

poverty, poor people will very happy to receive any number of money and

assistance. They will not care on the motive behind the assistance.

5.2. Recommendation

As the program that needs a lot of money, the government should be careful

in the formulation of policy. So that, poverty alleviation programs actually

have a long-terms result and actually be able to alleviate poor people from

poverty mud.

Thus in the future, in the policy formulation particularly related to

poverty alleviation, the government (and also all of actors) needs to consider

the factors that cause poverty. Base on World Bank report (2006), there are

five factors that can be considered as having relations with poverty. These

factors include education, job, gender, access to basic service and

infrastructure, and geographic situations.

30 Public Policy Analysis - Policy Formulation

 REFERENCES

Anderson, James E., 1979, “Public-Policy Making, Second Edition”, Holt,

Rinehart and Winston

Cobb, Roger W. and Elder, Charles D.,1992, “Participation in American

Politics: The Dynamic of Agenda-Building”. Baltimore: John Hopkins
University Press.

Fang, Ke, “Designing and Implementing a Community-Driven Development

Programe in Indonesia” in Development in Practice, Vol. 16,
Number 1, February 2006: Routledge Publishing

Radelet, Steven et al,1997,”Paper :Economic Growth in Asia”. (online)

http://www.cid.harvard.edu/ hiid/609.pdf

Sudaryanto, Tahlim and Rusastra, I Wayan, “Strategies for Increasing

Production and Alleviating Poverty in Agriculture”, in Journal
Litbang Pertanian,, 25(4),2006.

Tempo edition 19/03 11 July 1998 (online) http://www.tempo.co.id/ang/min/

03/19/ekbis3.htm

31 Public Policy Analysis - Policy Formulation