Monday, November 07, 2005

Cash Transfer

While co-host Sjamsu likes the idea of the current cash transfer program in Indonesia, I have some reservation. I agree with giving people money, not in-kind assistance. But I'm a little reluctant to call what the government is doing now as compensation (or, more precisely, "compensating variation"). Here's my take in Jakarta Post -- but, please read the uncut version, as the newspaper has left some important points in the editing so as to fit the space. Among other things got cut by the Editor is my position that cutting oil subsidy, pursuing efficiency, mobilizing other sources of fund, and combating rent-seeking activities are complements, not substitutes. Also, in the end of the original writing I skecth some examples of cash transfer programs that have been known as successful.

Addendum: Reading Sjamsu's comment (below), it appears, we're not in disagreement. We both agree with with the idea of cash-giving (as opposed to in-kinds). I am skeptical to the implementation. It seems, Sjamsu does, too.


  1. Your view on the absence of negotiation in deciding "how much" should the goverment give is indeed very subtle. So far I have not mentioned that Rp 100k should do the job. Instead, I express my approval for idea of cash transfer, but not necessarily how it is being implemented.

    Anyhow, your points in the Jak Post op-ed are well articulated.

  2. how much do such social-safety-net programs improved the situation? based on its cost and benefits, i would rather see the government stop implementing such programs. remember raskin, dana inpres, etc? the idea might be marvelous (even though at some point i oppose charity) however past experiences've shown us that no good come up from such things.