Emerging from the Kecamatan Development Project, the Indonesian direct democracy experiment was developed in order to measure the benefits of direct democracy on citizen satisfaction and political legitimacy in a community, as compared to the traditional town meeting.
Problems and Purpose
The purpose of the Indonesia Direct Democracy Experiment was to discover and assess the virtues of direct democracy. Stemming from the Kecamatan Development Project, the experiment aimed to discover and explore the concept that direct participation in decision-making can lead to increased satisfaction and legitimacy in a community. The creator of the experiment, Benjamin Olken, a professor of economics at MIT, was driven by the notion that communities might be happier and invest more in their government if they felt involved in the political process. Based on Olken's findings, there is support for the conclusion that societies that feel more directly involved in political processes are ultimately more satisfied overall.
Background History and Context
Indonesia was seen as a prime candidate for this type of experiment because of its political past. The nation was just recovering from the effects of 31 years of rule by the authoritarian Suharto regime. In 1998, the country was looking for ways to successfully decentralize its government. The desire to search for alternatives led to the creation of the Kecamatan Development Project (KDP) in 1998, which was financed by the World Bank. Essentially, the KDP funded projects in thousands of Indonesian villages. The villages affected by this funding were selected on the basis that they appeared to represent the diverse conditions of rural Indonesia. In an effort to encourage independent decision-making, each village was given the opportunity to propose a small-scale infrastructure project. The previous regime that existed in the country was a consultative assembly making the KDP project vastly dissimilar from what the population was accustomed to.
In KDP, participating subdistricts, which typically contain between 10 and 20 villages, receive an annual block grant for three consecutive years. Every year, each village in the subdistrict makes two proposals for small-scale infrastructure activities. The village as a whole proposes one of the projects and women’s groups in the village propose the second. Once the village proposals have been made, an inter-village forum, consisting of six representatives from each village, ranks all of the proposals according to a number of criteria and projects are funded according to the rank list until all funds have been exhausted; typically, about 40% of villages have at least one project funded each year.
It is important to note that while the KDP village meetings in some ways resemble the regular village parliament, the BPD, they are formally separate from BPD, and the hamlet representatives who vote at KDP village meetings are selected directly for that purpose at the hamlet level KDP meetings. The reason for this separation is historical: the KDP program was designed between 1996 and 1998 in the context of the Soeharto regime, and the program designers sought to create a decision making institution that was more independent than the village-head appointed Village Consultative Assembly (LMD) that existed at the time.
Olken's direct democracy experiment sprang from the very existence of this KDP. The experiment was designed with the intention of examining the way in which the respective projects are selected within the participating villages.
Organizing, Supporting, and Funding Entities
The direct democracy experiment was created by Olken, emerging from the World Bank-financed KDP project.
Participant Recruitment and Selection
Villages were randomly selected from the three rural sub-districts of East Java, North Sumatra and Southeast Sulawesi, in order to represent the wide variety of conditions in the country. East Java is a heavily Muslim area that is one of the most densely populated areas rural areas in the world. North Sumatra is an area with much smaller villages and a large Christian population and Southeast Sulawesi, a poorer, more remote area with substantial ethnic heterogeneity, even within villages.
The experiment had two different phases. The first phase was carried out in 10 villages in East Java Province and 19 villages in North Sumatra Province. After receiving the results of the first phase, the protocol was changed and then applied to 20 other villages in Sulawesi Province for the second phase of the experiment. During the first phase, 25 percent of the villages decided by referendum. In the second phase it was 45 percent. Both phases comprised villages that were selected based on a variety of variables. These variables included, but were not limited to, population, ethnic fragmentation and characteristics of the village legislative and executive bodies.
Government officials (e.g., the village head, village secretary, and other members of the village executive), neighborhood heads, and those selected to represent village groups compose the majority of attendees. A typical meeting would have between 9-15 people representing the various hamlets, as well as various formal and informal village leaders, with on average about 48 people attending in total out of an average village population of 2,200. In the general meeting, the representatives are usually (but not always) men, whereas in the women’s meeting, all representatives are women. At each meeting, the representatives in attendance discuss the proposals, with substantial help from an external facilitator deciding ultimately on a single proposal from each meeting.
Methods and Tools Used
Between September 2005 and January 2006, Olken began an experiment in which the usual decision-making mechanism for selecting KDP projects was changed. The enshrined KDP protocol recommended that the projects proposed by each village be selected in an assembly-based process. Villages were randomly selected, to choose projects based on direct election-based plebiscites. The selected villages would then choose their projects through referendums based on direct elections. In a nutshell, Olken assumed that an increased participatory process would eliminate the possibility of an elitist bias that was supposed to work in village assemblies.
What Went On: Process, Interaction, and Participation
In order to understand the changes made by the experiment in the counseling and decision-making process, it is important to look at the KDP process as a whole. Relevant projects were selected as part of the KDP in a three-stage process:
1. Agenda setting
All Indonesian villages are comprised of between 2 and 7 dusun, or hamlets. For a period of several months, a village facilitator organizes small meetings at the hamlet level; for large hamlets multiple meetings might be held in different neighborhoods within each hamlet. These meetings aim to create a list of ideas for what projects the village should propose.
2. Proposal creation
These ideas are then divided into two groups – those that originated from women’s only meetings and those suggested by mixed meetings or men’s meetings. The village facilitator presents the women’s list to a women-only village meeting and the men’s and joint ideas to a village meeting open to both genders. While these meetings are open to the public, those that attend represent a highly selected sample.
3. Funding Decisions
Once the village proposals have been made, an inter-village forum, consisting of six representatives from each village, ranks all of the proposals according to a number of criteria, such as the number of beneficiaries and the project’s cost, and projects are funded according to the rank list until all funds have been exhausted; typically, about 40% of villages have at least one project funded each year.
The Olkens experiment changed only the second of the three steps, by replacing the gathering-based mechanism with a referendum-based mechanism. Using a meeting-based mechanism implies the existence of community leaders and elites guiding said meetings and shaping the proposals created. In contrast, a plebiscite-based mechanism would not allow any individuals to guide the proposal process as each villager had their own vote based on a list of priorities they were given. In essence, Olken changed the mechanism used in the second step to see how direct participation would affect the selection of projects by the whole village. This change in the second step was expected to affect both the priorities set in the first step and the decisions made in the third step.
The experiment took into account the possibility that the villagers taking part in the referendums strategically chose those proposals which they believe have the best chance of getting funding in the third step. Olken states that because elites will be pushing for funding in the third step, villagers could choose projects in line with elite beliefs to ensure that their proposals will be properly argued for. In both types of villages, identical agenda-setting processes were used therefore standardizing the list of potential projects that each type of village would consider and weigh. By maintaining a level of consistency in the first step, Olken eliminates the potential for skewed data; plebiscites and meeting-based villages would be given the same data to work off of.
Influence, Outcomes, and Effects
The Olkens experiment generally led to two results. First, and most importantly, the data collected showed that referendums did not affect the general types of projects selected by the participating villages. To be more specific, the projects selected that have an impact on women generally reflected the views of the village elites more than those of the general population. Plebiscites seemed to favor the preferences of the average voters when it came to general issues but less so when it came to women’s specific concerns.
Direct participation also influenced the location for which the respective project was intended: since voting was based more on numbers than on representatives, those projects which should take place in remote areas of the village were less likely to be selected; the most populated neighborhoods were preferred in the vote.
The second aspect to consider is the level of satisfaction and support that the referendum-based mechanism generated in the second step. The results of the experiment show that a referendum-based process led to far greater satisfaction among the villagers in general. Citizens in the plebiscite villages claimed that the projects chosen were in line with their needs and were necessary to their well being. Statistically, the evidence of a change is shown by a 13 percent increase in the satisfaction that people felt towards KDP overall.
The main point to take away from Olken’s findings is that the process by which political decisions are made really does matter. Results of the experiment showed that clearly plebiscites have little to no impact on the types of projects chosen by the villages. This piece of data proves that the general population is just as capable of reflecting the views of the community, as representatives would be. The real impact is shown in the level of satisfaction and participation that plebiscites instigate in villages.
Analysis and Lessons Learned
It is clear that direct democracy had positive effects on legitimacy and satisfaction among the villages included in Olken's experiment. With regard to the selected projects, referendums had no concrete influence on the selection of the respective villages in general matters. In addition, the projects selected that have a direct impact on women were more in line with elite virtues, although the referendum process did not favor elitist opinions. The result of increased satisfaction shows that direct democracy can successfully increase political legitimacy without changing a government's priorities. Although theoretically this is a positive effect, in practice it could also be an obstacle to the distribution of wealth in a developing country. Because, taking into account Olken's experiment, changing the process in no way changes the results. In addition, decisions based on referendums, precisely because they eliminate representative voting, may only reflect the will and perspectives of the larger villages and ultimately exclude isolated, smaller villages. As a result, the concept of plebiscitary voting does not necessarily have positive effects on all villages, even if it generally increases legitimacy and satisfaction. In other ways, the experiment showed that referendums led voters to to find out about the type and location of the projects available for their village. The results of the experiment showed that in the case of referendums, the likelihood that respondents were aware of the KDP proposals affecting them increased by 18 percent. This finding shows that increased political participation leads to a better informed and happier population.
Many common objections were raised to the experiment in Indonesia. In particular, attention was drawn to the fact that long-term effects of voting by referendum must also be taken into account. While in the short term, plebiscitary methods were able to show an increased feeling of satisfaction as an immediate result, the long-term effects of the decisions chosen by plebiscite remain unpredictable and accordingly it remains uncertain whether the increased level of satisfaction will persist in the future or will flatten again. In addition, it is important to realize that the issues available for selection change depending on the location. Context is therefore extremely crucial when it comes to assessing the suitability of direct democracy, because referendums can either help or damage subgroups in a particular area significantly. Ultimately, explains Olken, it is quite possible that the participants in the experiment, because it was a one-off study, made fairer decisions with the intention of presenting themselves sensibly. This sort of experiment would need to be put into practice in several different areas for an extended period of time in order to defend its findings.
 Olken, Benjamin A. "Direct Democracy and Local Public Goods: Evidence from a Field Experiment in Indonesia." American Political Science Review 104.2 (2010): 243-67. MIT and National Bureau of Economic Research, May 2010. Web. https://economics.mit.edu/files/5224
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The first submission of this case entry was summarized from the original study by Benjamin Olken.