Abstract
<jats:title>Abstract</jats:title> <jats:p>This chapter focuses on Indonesia’s educational system reform. During Suharto’s era (1965–1998), Indonesia’s main policy goal was to construct schools. Two decades after Suharto’s fall, the focus remained on improving school attendance. Yet, poor educational outcome—coupled with the country’s decentralization project in this period—led to a shift in educational policy that emphasized the need for increased spending. But despite increases in the educational budget amounting to as much as 20% of the state budget annually, Indonesia’s educational performance remained poor, raising the question of what else Indonesia needed to do beyond increasing spending. While in the past, policies to increase enrollment had worked to increase the country’s average years of schooling, Indonesia’s poor educational attainment signaled more fundamental learning challenges. With evidence highlighting the importance of teachers in learning, scholars have found that merely increasing teacher pay doesn’t do much to improve school outcomes. Increasing spending on education is a good thing, but it needs to be spent wisely on the right thing.</jats:p>