Using Identification Cards to Improve National Social Assistance in Indonesia

Government scale-up improves access to targeted social programs for 65.67 million people.

TNP2K commercial about the social protection identification card

Identification cards printed with information about program eligibility and entitlements are a simple, low-cost way to improve access to targeted social assistance programs. Research by J-PAL affiliates Abhijit Banerjee, Rema Hanna, and Benjamin Olken, along with Jordan Kyle and Sudarno Sumarto, has shown that providing identification cards to beneficiary households, in combination with community outreach and advertisements, improved access to Raskin, Indonesia’s national rice subsidy program.

The Scale-Up: Evidence from randomized evaluations by J-PAL affiliates informed the Government of Indonesia’s decision to scale up social assistance identification cards to the poorest households across the country.

In June 2013, the Government of Indonesia National Team for Accelerating Poverty Reduction (TNP2K) began distributing ID cards to 15.5 million of the poorest households, reaching 65.67 million people. Though originally intended to be used for the Raskin program, these cards now enable beneficiaries to access a wide array of government social services, including conditional and unconditional cash transfers.

The Problem: Corruption prevents social assistance programs from reaching intended beneficiaries.

The Indonesian government spends US $2.15 billion each year on Raskin, a program that provides subsidized rice to households in the bottom 25 percent of the income distribution. In practice, however, eligible households receive only one-third of the amount of rice and at a cost that is 25 percent higher than their entitled subsidy. While poor households should receive 15 kilograms of rice per month at Rp. 1,600 per kilogram, the average beneficiary generally receives 5 kilograms per month at Rp. 2,000 per kilogram. Leakages are also high: nearly 70 percent of households that purchase subsidized rice are non-poor. Village leaders responsible for distributing the subsidized rice to eligible households frequently distribute rice evenly to all households in their communities regardless of eligibility in order to maintain social cohesion.

In 2012, the Government of Indonesia began to explore reforms to Raskin for the first time since the program’s inception in 1998. TNP2K, an organization under the Vice-President, proposed an identification card system for the targeted social assistance program. ID cards could empower poor households to demand the full subsidy to which they are entitled under the program. They could also give distributors an easy way to verify if households are eligible. Yet, a rigid ID card system could also lead to conflict within communities if the eligibility process is perceived to be unfair or inequitable. The Vice President voiced concerns and requested that the team put together real evidence about the effectiveness and social implications of distributing cards.

The Research: Identification cards coupled with enhanced community engagement increased the share of eligible households purchasing Raskin rice at the correct price.

J-PAL affiliates and colleagues worked closely with TNP2K to design a randomized evaluation that could generate evidence on the proposed identification cards system in time for the government to incorporate the program into the national budget for 2013 if found effective. Specifically, they measured how the information printed on the cards and the channels through which the cards were distributed affected program outcomes. Trained program facilitators also conducted enhanced community engagement in randomly selected villages to address the potential for social conflict within communities. They met with village leaders, hung informative posters throughout the village, and read scripted messages about the program on local village announcement systems.

Within six months, researchers collected and analyzed data and found that the ID cards increased monthly purchases of Raskin rice by 1.25 kg (or 24 percent), and decreased price mark-ups by Rp. 57/kg (2.5 percent), therefore increasing the monthly subsidy eligible beneficiaries received by Rp. 7,455 (26 percent). The community socialization component increased beneficiary take-up by an additional 0.81 kg of rice per eligible household and improved overall beneficiary satisfaction with the Raskin program.

These impacts were achieved at a cost of $1 per household for the ID cards, and $1.40 per household for the community engagement. The ID card and community engagement interventions led to an effective subsidy increase per household per year of $7.71 and $4.58, respectively.

This research was made possible with funding from the Australian government.

“We need to and are committed to showing that our policies actually benefit the poor…The critical ingredient was a partnership with researchers from the start.” Sudarno Sumarto, Policy Adviser, TNP2K, Office of the Vice President of the Republic of Indonesia

From Research to Action: Rapid research in response to policymaker demand created buy-in for evidence from the beginning.

According to Bambang Widianto, Executive Secretary of TNP2K, the J-PAL evaluation provided key insights into the design of Raskin cards and its socialization strategy. Not only did the evaluation show that the cards were effective, but it also showed that the cards did not generate social conflict between beneficiaries and non-beneficiaries in the villages where they were sent. In June 2013, the Government of Indonesia decided to scale up the identification card program to 15.5 million poor households. By August, 14.38 million cards had already been distributed as Social Protection Cards (KPS).

Watch Bambang Widianto and Rema Hanna discuss the evaluation and scale up:

Though the cards in the evaluation were intended for the Raskin program, the government distributed Social Protection Cards as a means for beneficiaries to access three different programs: (1) BSLM, a temporary unconditional cash transfer program to compensate for cuts in Indonesia’s fuel subsidy, (2) BSM, a cash transfer for poor students, and (3) Raskin.

In total, these three programs cost around US$4.3 billion. Importantly, as part of the scale-up, the government implemented a community engagement process to allow households to reallocate cards for individuals who moved or whom the community deemed as too rich to receive the program; this community process was designed based on a previous evaluation that J-PAL affiliates had conducted with the Government of Indonesia.