Harvard and MIT Receive $1.4 Million to Research Reforms to Indonesian Social Support Programs

Harvard and MIT received $1.4 million from the United States Agency for International Development in December to study and evaluate reforms to the government of Indonesia’s social support programs.

Indonesia’s social protection programs have come under scrutiny in recent years for issues with fraud. In 2012, Raskin, Indonesia’s largest social assistance program, had a $1.5 billion budget to provide subsidized rice to the bottom 30 percent of income distribution in Indonesia, which has a population of over 250 million, according to the Jameel Poverty Action Lab. But for every 100 kilograms of rice leaving a government warehouse, only 50 kg were delivered, according to a press release from USAID spokesperson Tiara S. Barnes.

In 2016, the Indonesian government announced that it would reform the way Raskin and five other social service programs deliver aid by 2022, using monthly digital vouchers deposited directly into the bank accounts of eligible households.

Harvard and MIT will be working with USAID to evaluate these reforms, comparing delivery of social assistance via electronic and traditional methods in 105 districts, according to the USAID press release.

Rema N. Hanna, a Harvard Kennedy School professor who chairs the International Development Area, is one of the researchers who applied for and received the funding.

Hanna wrote in an email that the transition from an in-kind transfer system like Raskin to digital food stamps has many potential benefits. For instance, the current reforms could reduce leakage of rice and improve its quality because citizens could go to any shop to buy better rice or other nutritional foods, rather than relying on government-distributed rice.

“But there are also risks,” Hanna wrote. “There could be leakage if the cards do not get in the right hands. Or, if there are not enough shops nearby that accept the cards, there may be little choice where to buy. That could lead to hold-up problems, and higher prices.”

Hanna — who also serves as the scientific director of the Abdul Latif Jameel Poverty Action Lab Southeast Asia Office in Indonesia — wrote that the funding will help researchers travel into the field and analyze data.

“Right now, we have conducted the survey for government officials and are doing field visits. We are also deeply engaged in the data analysis of the impacts on citizens, and hope to have results soon,” Hanna wrote.

Harvard and MIT’s research will help build evidence for scaling these reforms nationwide in Indonesia, and the research could also help other governments interested in improving their social assistance programs, Barnes wrote.

The award was given through the USAID Development Innovation Ventures, a program that provides support to solve social problems in countries where USAID operates.

“We are excited about the partnership with the USAID DIV program,” Hanna wrote. “Research support to help generate evidence on large-scale policies and programs in developing countries is key if we want to know how to better design reform that can improve the lives of the poor.”

—Staff writer Matteo N. Wong can be reached at matteo.wong@thecrimson.com. Follow him on Twitter @matteo_wong.