FOUNDATION FOR LOCAL GOVERNMENT INNOVATION 
(CLGI/YIPD) PROJECT 
FINAL EVALUATION 
Submitted to: 
The U.S. Agency for International Development 
Indonesia 
Under USAID Contract No. DFD-I-00-04-00229-00 
Democracy and Governance Analytical Services 
Prepared by: 
Democracy International, Inc. 
4802 Montgomery Lane, Suite 200 
Bethesda, Maryland 20814 
March 30, 2006 
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EXECUTIVE SUMMARY 
The U.S. Agency for International Development in Indonesia initiated a project in 2001 to de￾velop a sustainable Indonesian Center for Local Government Innovation (CLGI) that would 
contribute to the ongoing decentralization process in the country by assisting local governments 
and encouraging best practices in local government management. The CLGI/YIPD project led 
to the creation of a wholly Indonesian organization, the Yayasan Inovasi Pemerintahan Daerah 
(YIPD). The project had an initial three-year budget of $5.5 million; no-cost extensions subse￾quently added a fourth year. USAID conceived the CLGI/YIPD project as different from other 
programs, particularly with respect to its focus on customer demand and cost-sharing and its 
objective of establishing a new, independent organization. 
Since 2002, the CLGI/YIPD program and YIPD as an organization have conducted effective, 
technically valuable assistance programs in 26 local governments, spread throughout Indonesia. 
CLGI/YIPD has four years of experience and a track record of providing effective technical 
assistance to local governments in diverse locations throughout the country. It has notable ex￾perience and technical competence in several areas of local government and has developed 
strong capabilities valued by many local governments. It has a strong technical staff and a 
committed board, led by and including several well-known and highly regarded public figures 
and public officials. CLGI/YIPD has built a strong foundation on which to continue to build its 
credibility, to conduct programs, and to attract new funding. 
At the same time, there are a number of lessons that can be drawn from CLGI/YIPD’s experi￾ence. While there were excellent reasons to create a new organization rather than to work with 
an existing one, the costs ultimately may have outweighed the benefits. Likewise, the idea of 
obtaining some form of cost-sharing from local government partners was important, but more 
as an indication of commitment from local government counterparts than as a vehicle to finan￾cial sustainability, which was not realistic. While not entirely or necessarily at fault, 
CLGI/YIPD was unable to effectively define or manage the relationship with local government 
associations, which made it more difficult for CLGI/YIPD to achieve its mission of delivering 
and spreading innovative practices. CLGI/YIPD could have provided greater support in terms 
technical leadership and policy analysis, which the associations did not have the technical ca￾pacity to carry out themselves. Difficulties in launching the new organization and defining its 
internal governance structures complicated the mission in some respects, although they did not 
appear to compromise the technical quality of programs. CLGI/YIPD established an informa￾tion center or clearinghouse, including databases of materials and an impressive, comprehen￾sive website, but achieving greater impact for clearinghouse and information sharing activities 
would seem to require more active marketing, affirmative networking and national-level pro￾grams. 
CLGI/YIPD was a remarkable, creative program that sought to work in innovative ways. 
Those who conceived and implemented the program and led the new organization took some 
chances and tested some hypotheses about sustainable institutional development. That it did 
not always go as planned does not call into question the value of the effort. While the road has 
not been entirely smooth, YIPD is now a functioning, well-respected, wholly Indonesian or￾ganization that, by all accounts, has carried out many effective, valuable programs. Although 
its mission and means of working will certainly continue to evolve, YIPD should continue to 
contribute, with or without USAID funding, to successful decentralization and effective local 
government in Indonesia in the years to come. 
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BACKGROUND 
In 2001, USAID initiated a project to develop a sustainable Indonesian Center for Local Gov￾ernment Innovation (CLGI). The project was implemented through a task order to the Urban 
Institute under the Sustainable Urban Management (SUM) IQC. It was initially called the De￾velopment of the Foundation for Local Government Innovation Program (DFLGIP). The pro￾ject began on October 10, 2001, and, with a no-cost extension, continued until October 29, 
2005. The USAID project, however, established a new Indonesian foundation, the Yayasan 
Inovasi Pemerintahan Daerah (YIPD), which continues in operation.1
 
USAID undertook the CLGI/YIPD project to support the critically important process of decen￾tralization in Indonesia. New laws enacted in 1999, which went into effect on January 1, 2001, 
substantially decentralized the system of government in Indonesia and devolved broad areas of 
governmental authority from the center to the regions, principally to the kota and kabupaten or 
district-level governments. The project furthered the USAID Strategic Objective 10, Decen￾tralized and Participatory Local Government Strengthened, established in 2000. The 2004-
2008 USAID Strategic Plan for Indonesia continues to place a high priority on decentralization 
under the current Strategic Objective for Effective Democratic and Decentralized Governance, 
which includes two Intermediate Results relevant to this project, (1) Consolidating the Reform 
Agenda and (2) Expanding Participatory, Effective and Accountable Local Governance. 
The CLGI/YIPD project had several important objectives. First, the project would spawn a 
new organization that would engage and support the new local governments associations estab￾lished under the new local government law. As a “virtual branch” of the associations, it would 
be able to serve all the members of the associations with technical governance skills the asso￾ciations themselves lacked. Second, the new organization would be sustainable and financially 
self-sufficient. Third, CLGI/YIPD would become a source of professional skills valued by lo￾cal governments, and local governments would drive the agenda of the new organization. The 
idea was to reduce reliance on technical assistance from donors and build up local technical 
assistance capacity, with the goal of creating something that was self-sustaining. 
Scope of Work for Evaluation 
USAID issued a task order on February 8, 2006, under the Democracy and Governance Ana￾lytical Services IQC to Democracy International, Inc. (Democracy International or DI) to con￾duct an evaluation of the CLGI/YIPD project and an assessment of YIPD. Democracy Interna￾tional fielded a four-person team in Indonesia for about three weeks beginning on February 21 
to undertake this evaluation. 
The team conducted its evaluation in accordance with three objectives provided in the Scope of 
Work: 
 
1
 The appropriate term or name for the project or organization depends on the applicable time period, as the name 
of both the project and the organization has changed over time. Unless a more precise meaning is intended or 
necessary, this report generally uses the broad term CLGI/YIPD, which, depending on context, can refer to either 
or both of the past activities of the project/organization and the current activities of the yayasan. 
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1. Evaluation of implementation of CLGI/YIPD. The team conducted an evaluation of 
the implementation of CLGI/YIPD, including an assessment of the strengths and weak￾nesses of the project, its achievement of goals, and lessons learned. 
2. Assessment of YIPD’s strengths and weaknesses. The team also conducted an assess￾ment of YIPD’s strengths and weaknesses, with a focus on the institutional capacities 
needed for YIPD to become sustainable and recommendations regarding actions and 
strategies YIPD should pursue regarding its relationships with local governments and lo￾cal-government associations. This includes recommendations intended to provide advice 
useful to YIPD’s future development. 
3. Recommendations for USAID regarding possible future interaction with or support 
for YIPD. The team considered how USAID might support YIPD or its programs in the 
future. 
Evaluation Team 
Democracy International’s team for this evaluation included: 
• Eric Bjornlund, President of Democracy International, as senior institutional develop￾ment specialist and team leader; 
• Dwight King, Professor of Political Science and Director of the Center for Southeast 
Asian Studies at Northern Illinois University, as senior local government management 
and Indonesian specialist; 
• Muhammad Husain, deputy director of the Institute for Social & Economic Research 
Education and Information (Lembaga Penelitian, Pendidikan dan Penerangan Ekonomi 
dan Sosial, or LP3ES) in Jakarta, as Indonesian decentralization and research methods 
expert; and 
• H. Darwis, Executive Director of the Institute of Democracy and Local Autonomy at 
Hasanuddin University in Makassar, as Indonesian local government and decentraliza￾tion expert. 
Brief biographical sketches are attached as Appendix I. 
Approach and Methodology of Evaluation 
Democracy International conducted this evaluation and assessment principally through in￾depth interviews in Jakarta and other locations in Indonesia and review of relevant documents. 
Before the U.S.-based team members arrived in Indonesia and subsequently, DI’s team has re￾viewed a number of documents relevant to CLGI/YIPD. These include reports on the 
CLGI/YIPD project, performance monitoring plans, reports from YIPD, and other documents. 
A list of documents consulted is included as Appendix II. 
From February 21 to March 9, the team conducted meetings and interviews in Jakarta and in 
various locations around Indonesia with organizations and individuals directly involved in or 
knowledgeable about CLGI/YIPD, as well as with USAID and with donors involved in decen￾tralization and local government assistance in Indonesia more generally. The team met with 
USAID staff members, members of the YIPD board of trustees (Badan Pembina), members of 
the board of supervisors or auditors (Badan Pengawas), members of the board of directors 
(Badan Pengurus); YIPD staff members; CLGI/YIPD implementers, representatives of the 
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Ministry of Home Affairs, local government associations (including the Association of Indone￾sia City Governments or APEKSI, Association of Indonesian District Governments or BKKSI, 
and Association of Indonesian Provincial Governments or APPSI), other donors, and other 
relevant stakeholders in Jakarta. The team also consulted by email with selected former 
USAID/Indonesia officials who are familiar with the CLGI/YIPD project but are no longer in 
Indonesia. 
During the second week of the evaluation, the team divided in half in order to travel to loca￾tions where CLGI/YIPD has conducted programs. The team conducted in-depth interviews 
with local government officials, YIPD partners and staff members, and others in the field. 
One team visited Sleman (DI Yogyakarta) and a number of locations in Banda Aceh and Aceh 
Besar, in Aceh Province (N.A.D.). In Kabupaten Sleman, YIPD conducted a performance 
management pilot project to develop improved local government service delivery in public 
works, sanitation, health and water supply and a technical assistance initiative in financial 
management, including property asset management, performance budgeting and financial 
statements. Aceh represents a large percentage of YIPD’s more recent work and thus was a 
crucial component of the evaluation. 
The other team visited Pontianak (West Kalimanatan), Makassar (South Sulawesi) and Goron￾talo (Gorontalo province). Visiting Pontianak in Kalimantan allowed the team to assess the 
provision of similar services to those provided in Aceh on a smaller scale. YIPD’s work in the 
other districts has included a number of services, including performance management, financial 
management, strategic management and organizational development. 
The team used a semi-structured approach to interviews in the field. To guide interviews and 
attempt to collect comparable information, the team developed and used two separate interview 
guides, one for its in-depth interviews with local government officials and one for its in-depth 
interviews with local partners. (The interview guides are attached as Appendix III. Some in￾terviews were taped and transcribed. After the site visits, the team returned to Jakarta to con￾duct additional meetings, to meet and compare findings, to analyze the data and information 
collected, and to begin preparation of the draft evaluation report. 
Upon the return of team members to the U.S., the team interviewed representatives in the U.S. 
of the Friends of Indonesian Government Innovations (FIGI), the US-based organization that 
provides support to YIPD. The team also conducted follow-up discussions with former offi￾cials from USAID/Indonesia. 
A list of individuals and organizations with whom the team met or consulted is attached as Ap￾pendix IV. 
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Organization of the Report 
This body of this report is organized in three sections: (1) an evaluation of the implementation 
of the CLGI/YIPD program; (2) an assessment of YIPD; and (3) lessons learned and recom￾mendations. The discussion of a number of issues applies both to the evaluation of the 
CLGI/YIPD program and to the assessment of YIPD. Thus, the two sections should be read 
together and be seen as closely related. Similarly, lessons learned are derived from both the 
evaluation of the CLGI/YIPD program and the closely related assessment of YIPD, and thus 
lessons learned, while discussed throughout the report, are summarized in the third section. 
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I. EVALUATION OF IMPLEMENTATION OF CLGI/YIPD PROGRAM 
The team conducted a comprehensive evaluation of the implementation of CLGI/YIPD, includ￾ing an assessment of the strengths and weaknesses of the project, its achievement of goals, and 
lessons learned. The team attempted to assess the extent to which CLGI/YIPD contributed to 
achievement of USAID’s strategic objective and intermediate results. 
This section of the report addresses the evaluation of the implementation of the CLGI/YIPD 
program. In an effort to identify lessons learned, the evaluation considers in some detail a 
number of specific issues related to the CLGI/YIPD project design. These issues include (1) 
the rationale for the establishment of a new, independent organization and the focus on cost￾sharing; (2) the relationship of CLGI/YIPD to existing associations of local governments; and 
(3) the process of establishing the new yayasan. Next, it reviews and assesses the nature of 
CLGI/YIPD programs and the locations in which CLGI/YIPD has worked. Finally, this sec￾tion addresses program performance in the context of evaluation criteria specified in the Work￾plan. 
Rationale for CLGI/YIPD Project 
USAID conceived the CLGI/YIPD project as different from its usual project-based approach, 
particularly with respect to (a) its focus on customer demand and cost-sharing, and (b) its ob￾jective of establishing a new, independent organization. 
One objective of the project, as noted above, was to establish an organization that would be 
sustainable and financially self-sufficient. The strategy to achieve this goal, according to the 
Scope of Work, was to transition toward financial sustainability over a few years. In the first 
year, the project would develop and provide services to local governments at no cost. In the 
second year, it would begin seeking cost-sharing from clients. In the third and fourth years, it 
would seek to transfer an even greater proportion of costs to its local government clients. This 
commitment to the concept of cost-sharing was an important principle of the project and the 
new organization. 
USAID decided that local governments should share the costs of CLGI/YIPD programs for two 
reasons. First, the program’s designers wanted the institution to become viable and financially 
sustainable. Cost-sharing, they believed, would help the organization’s bottom-line, by com￾plementing other funds for programs. Perhaps more important, however, cost-sharing would 
demonstrate that local governments were truly interested in the services and programs that 
YIPD could provide. If a local government were willing to pay for at least part of the costs, 
this demonstrated commitment would demonstrate that it believed the service was worthwhile 
and useful. As the Scope of Work explains, “the assumption underlying the strategy was that 
services should be on a demand basis, and . . . the true measure of demand was that clients val￾ued the services sufficiently that they would pay for them.” Such “buy-in” also increased the 
chances the programs would be relevant and successful. 
Conversely, USAID believed that YIPD should only exist as long as there was a demand for its 
services from its clients and willingness on the part of their clients to pay for those services. 
USAID did not want simply to create another local service provider that operated solely by ob￾taining resources from donors or the private sector. 
Truly significant cost-sharing is difficult as long as the main clients are local governments, 
since more than 80 percent of local government revenue in Indonesia is merely transfers from 
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the national government. At least outside of the resource-rich regions, local governments sim￾ply do not have the capacity to pay for services at cost. It has proved more realistic for 
CLGI/YIPD to sell its services through the donor community. 
USAID decided to establish a new institution because it could not identify an existing institu￾tion operating on a demand-driven, customer-oriented basis or with a genuine goal of becoming 
financially sustainable. Despite the risks of creating another USAID-funded organization, 
USAID decided that designing it from the beginning with an explicit objective of financial sus￾tainability would create a different kind of attitude for the organization. 
While there were strong reasons to believe that the establishment of new institution was prefer￾able to working with an organization with established interests, it ultimately proved to be too 
idealistic. Turmoil plagued the governance and management of the organization; much of that 
turmoil can be attributed to the struggle over who would define and control the organization’s 
mission. Some of this might have been avoided had USAID and the program been working 
instead to help an existing organization with existing capabilities and an established governing 
structure to develop new approaches and more innovative programs. 
Relationship to Local Government Associations 
In the process of designing the CLGI program, USAID initially considered direct funding assis￾tance to the three primary local government associations (APEKSI, APKASI and APPSI) but 
determined that the institutions were too new and weak. USAID was engaging with these or￾ganizations through its Building Institutions for Good Governance (BIGG) and Performance￾Oriented Regional Management (PERFORM) projects but did not have the resources necessary 
to support all three to the extent that they could provide real technical leadership and technical 
assistance support to local governments. Thus, the original idea for the DFLGIP was that one 
organization could provide value to all three associations and to local governments. During the 
course of the project and the establishment of YIPD, however, the relationship between YIPD 
and the local government associations became an issue of contention. USAID, YIPD and the 
associations never fully agreed on the role and relationship of YIPD vis-à-vis the associations. 
Some involved in the project, including the former chief of party, suggest that CLGI/YIPD was 
intended to help local government associations by cooperating with them in offering services to 
the ultimate customers: local governments themselves. They fault conversations between 
USAID officials and local government associations, which took place before the project actu￾ally got underway, for leaving an unfortunate misimpression that the local government associa￾tions would “own” the new organization. In this view, while CLGI/YIPD was intended to co￾operate and engage with local government associations, it also had other important stake￾holders, whose interests were not necessarily entirely consonant with those of the local gov￾ernment associations. The former chief of party argues that CLGI/YIPD was set up to be a re￾source for local government associations rather than to drive revenues for them. 
The April 2001 concept paper for CLGI/YIPD, however, suggested that the local government 
associations would indeed own CLGI/YIPD. “In concept, [CLGI/YIPD] would be ‘owned’ by 
the associations, which together with their members, would play guiding roles on the 
[CLGI/YIPD] board of directors.”2
 Likewise, the Scope of Work for the Evaluation states, 
 
2
 Yayasan OtDa: Developing the Institutional Capacity of Indonesian Associations of Local Government to pro￾vide Innovative Services and Expertise to their Members (USAID DLG Paper, April 2001), p. 2. 
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“CLGI/YIPD was expected to work in close coordination with the associations, and to be seen 
as being ‘owned’ by the associations rather than being a competitor.”3
In fact, there appears to be some disagreement among those involved in the design and initial 
implementation of the program, including officials at USAID, about whether local government 
associations, in addition to local governments, were or should be clients of CLGI/YIPD. Some 
believed YIPD should provide value and support to the associations, and thus to local govern￾ments through and in cooperation with the local government associations. Others argued that 
CLGI/YIPD’s clients were the members of the local government associations, the local gov￾ernments themselves. Indeed, some at USAID had or developed a negative view of the capac￾ity, commitment and interests of the local government associations. As discussed below, there 
were serious differences of opinion about the organization’s proper relationship with the local 
government associations even within YIPD and its structures of governance. Local govern￾ment associations had their own interests and objectives. Representatives of the associations 
came to the board with expectations about funding, programs, etc. that were generally not met. 
This became a serious problem for internal governance of the organization. 
The question of the relationship between YIPD and the local government associations became 
important in the context of determining the composition of the organization’s governing boards 
and setting its priorities and direction. The boards would control the resources of CLGI/YIPD, 
including the expectation of $5.5 million in USAID funding, or at least that part of those re￾sources that was not fully committed to management of the USAID project itself. 
CLGI/YIPD attempted to engage a broad range of stakeholders and to include representatives 
of a wide range of organizations in the foundation’s governing boards. CLGI/YIPD conducted 
a dialogue with stakeholders, including regular meetings, workshops, focus groups, working 
groups, and the like. CLGI/YIPD engaged with five of the six local government associations. 
The inclusion from the beginning of the associations of district legislatures (ADKASI and 
ADEKSI) was intended to stress that clients were not just local governments but also other lo￾cal players, including legislators, civil society organizations and the private sector. CLGI/YIPD 
also engaged with, among others, the national government, principally the Ministry of Home 
Affairs and the Ministry of Finance, although many observers have suggested that the central 
government did not believe CLGI/YIPD or, for that matter, USAID consulted enough about 
their local-government-support programs with the ministries. The attempt to reach out broadly 
was well-intentioned and important, but it ultimately failed to build the necessary consensus 
about the purpose and control of the organization itself. 
CLGI/YIPD did not develop a good relationship with APKASI, the Association of District 
Governments, now known as BKKSI. APEKSI, the Association of City Governments, also no 
longer has any active collaboration with YIPD, and the local government associations are no 
longer represented on the current YIPD board. 
It is understandable that it was difficult for CLGI/YIPD to develop effective partnerships with 
the local government associations. Even today, the local government associations are them￾selves generally perceived as weak and more focused on Jakarta and on the interests of their 
own secretariats than on the needs of their members. They typically lack resources, enough 
trained staff and good ownership from their member governments. Poorer local governments 
 
3
 USAID-Indonesia, Task Order Scope of Work, (February 8, 2006) Art. 3, p. 7. 
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tend not to pay dues or to be involved with local government associations. To a considerable 
extent, local government associations are more a group of relatively well off local governments 
representing their own interests in Jakarta than a broad coalition of local governments or a pro￾vider of services to local governments. 
In any event, several local government associations ended up unhappy with CLGI/YIPD. The 
association of kabupaten governments, BKKSI (formerly, APKASI), ended up withdrawing 
entirely from any cooperation or engagement with CLGI/YIPD. 
Establishment of the Yayasan 
The CLGI/YIPD project focused during its first year or so on establishing a new legal entity. 
The project’s leadership consulted extensively with stakeholders and carefully considered vari￾ous alternatives, including a for-profit corporation (PT) or a nonprofit foundation (yayasan). A 
decision to establish a yayasan, which would avoid tax, was made in early 2002, and in April 
2002 the organization began to use the name CLGI/YIPD. Thus, the project made the transi￾tion from being the Development of a Foundation for Local Government Innovation (DFLGIP) 
to being the Center for Local Government Innovation (CLGI). 
Indonesia’s new yayasan law required a complex governing structure, including a board of 
trustees (Badan Pembina), a board of supervisors (Badan Pengawas), and a board of directors 
(Badan Pengurus). CLGI/YIPD recruited Erna Witoelar and M. Sadli as founders, and both 
became members of the board of trustees. Others on this board included representatives of lo￾cal governments, the central government and the private sector. 
In an effort to involve all stakeholders, 16 members were recruited for the board of directors 
(Badan Pengurus). Because the local government associations were supposed to have a close 
relationship to the organization, each local government association had a representative on the 
board. This included not only the original three associations, APEKSI, APKASI and APPSI, 
but also two new associations of local legislatures that also wanted to be involved. But the size 
of the board kept the association representatives in the minority. The rest of board was diverse. 
It included representatives from the private sector, from universities and from local govern￾ments. The board of supervisors (Badan Pengawas) included a representative from the DPRD 
of Banten and the Mayor of Aceh Barat. 
There were 29 people on the combined board. The size of the initial board proved cumber￾some, and the group never achieved a common approach. According to many people involved, 
the interests, including self-interests, of board members were not always in line with the or￾ganization’s best interests. The Badan Pengurus and the Executive Director remained funda￾mentally apart on important issues. 
The yayasan held its first combined board meeting in December 2002. In the next board meet￾ing, in February 2003, three quarters of the board participated, but the organization was not 
able to achieve a quorum thereafter. Some members criticized the lack of honoraria and, de￾pending on who tells the story, were either disappointed by lack of funding for pet projects or 
disappointed by organization’s failure to take account of their organization’s interests. Turmoil 
plagued the relationships between the board and staff, among and within the different boards, 
and between the CLGI project and YIPD as an organization. One person involved said that the 
Badan Pengurus was “managed by a few people only and so somehow was taking YIPD in 
wrong direction, creating conflict and polarizing CLGI and YIPD.” In hindsight, as discussed 
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below, it is clear that YIPD made mistakes in its choices of executive director and chair of the 
board of directors (Badan Pengurus). In 2005, YIPD substantially streamlined and reconsti￾tuted its board, appointed a new acting executive director, and began to search for a new per￾manent executive director. 
Technical Assistance 
 1. Areas of Work 
CLGI/YIPD has conducted programs of training and technical assistance principally in (1) lo￾cal government management, and (2) local government financial management. 
Local Government Management includes performance management, change management, de￾velopment of strategic plans, and restructuring and organizational development: 
• Performance Management. Technical assistance to increase the effectiveness of local 
government services to communities through identification of objectives and clear per￾formance indicators that are developed based on inputs from various concerned parties 
including consumers of the services. 
• Change Management. Training local officials to encourage entrepreneurial thinking 
that is creative and proactive, as well as fostering integral thinking that is not based on 
narrow interests. 
• Development of Strategic Plans. Increasing local government capacity for making 
comprehensive strategic plans through participatory means by involving various stake￾holders. 
• Restructuring and Organizational Development. Facilitating the restructuring of local 
governments to improve efficiency and effectiveness. 
Local Government Financial Management includes property asset management and perform￾ance budgeting. 
• Property Asset Management. Training on methods to improve the management of 
public property, with the objective of (a) increasing local income; (b) attracting outside 
investors to the community; and (c) increasing public trust in local government credibil￾ity. 
• Performance Budgeting. Technical assistance intended to increase the capabilities of 
local governments to meet the requirements of Government Regulation No. 105 of 2000 
that requires local governments to establish their own budgetary formula by creating 
links among input, output and outcome variables. 
• Developing Financial Statements. Helping local governments to prepare accurate, 
standardized financial reports (balance sheet, income statement, and cash flow state￾ment) that can be used in policy formulation and policy review. 
In addition to these areas of technical support, CLGI/YIPD has conducted policy analysis, 
identifying and studying critical public policy problems, including studies of local autonomy 
policy regarding Law No. 22 of 1999. YIPD undertakes research and evaluation for a variety 
of purposes, including the mapping of local governments to document characteristics and ini￾tiatives to improve local governance. CLGI/YIPD also serves as an information center (clear￾inghouse) for best practices in local government, which is discussed below. 
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As far as could be determined, CLGI/YIPD’s programs were well received. Local government 
officials with whom the team met invariably expressed satisfaction with and appreciation for 
the assistance. The core staff of CLGI/YIPD in Jakarta is, by all accounts, technically compe￾tent, educated and experienced. Stakeholders and knowledgeable observers generally com￾mended YIPD’s programs on local government financial management. Many singled out asset 
management as especially valuable. 
A review of materials used in training, however, raises some questions about the programs 
when they are placed in a broader context. CLGI/YIPD has offered little help with one of—if 
not the—thorniest of the problems facing regional executives: how to manage in the uncertain 
and often inconsistent policy environment created by the central government in connection 
with decentralization. When CLGI/YIPD has trained local government personnel in how to 
achieve greater efficiencies, it has largely assumed that the rules and regulations governing 
their positions and responsibilities are fixed or stable. In reality, the rules have been constantly 
changing and unstable. CLGI/YIPD’s lack of locations for the Restrukturisasi Perangkat Pe￾merintaha Daerah program may reflect its inability to actually offer a training module on this 
problem. 
2. Local Partners 
CLGI/YIPD has provided technical assistance through its own technical staff, expert consult￾ants and/or local partners, be they NGOs or universities. Consultants have often been from the 
local community. Experts from Jakarta have tended to visit periodically, which has left it up to 
local governments and local partners to ensure follow-through and program impact. 
It seems that the local government often has been responsible for selection of a local partner 
rather than CLGI/YIPD itself. Most local partners have been appointed directly by a local gov￾ernment officer or local government institution (usually the local government planning office, 
Bappeda, or the local government secretariat, Sekda). But the selection of local implementing 
partners does not appear to have involved any kind of objective or competitive process. In 
places the team visited, there was no obligation to conduct an open bid or any structured means 
for selecting such partners. 
Local implementing partners with whom the team spoke expressed satisfaction about working 
with CLGI/YIPD. They did not find reporting, financial or other requirements to be onerous. 
Programs in Regions 
 1. Selection of Local Governments and Locations 
CLGI/YIPD has provided training and technical assistance to interested local governments in 
accordance with the stated or perceived needs of those governments. CLGI/YIPD did not ap￾pear to have a particularly rigorous process for initially choosing locations in which to work. 
Criteria included the eagerness of local governments to adopt new practices and the interests of 
local governments in particular subject areas. Because of CLGI/YIPD’s requirements and pro￾posal process, local governments receiving CLGI/YIPD assistance were, to a considerable ex￾tent, self-selected. 
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The earliest locations included Pontianak (West Kalimantan), Sleman (Yogyakarta), Manado 
(North Sulawesi) and Gorontalo (Gorontalo province in Sulawesi). The government of Indone￾sia had chosen Sleman and Gorontalo for a pilot local autonomy program in 1997, before the 
end of the New Order. CLGI began to work on property asset management in Sleman, for ex￾ample, because the bupati in Sleman is an accountant and thus understood and welcomed the 
program. 
CLGI/YIPD determined what kinds of programs or services to offer in given locations by at￾tempting to connect local needs with the main objectives and capabilities of CLGI/YIPD. 
Generally, the staff made an initial approach to a particular local government concerning a spe￾cific issue. Often, this would build on indications of good performance. Because of Kabupaten 
Pontianak’s good performance in financial management, for example, CLGI/YIPD saw the op￾portunity to improve budget performance. Because the government of Gorontalo City was 
willing to try to improve its public service, CLGI/YIPD offered a program to improve public 
service management there. 
Staff members then made site visits to meet with local government officials to discuss specific 
needs. They discussed terms of reference, the scope of service, financial aspects, the role of 
local implementing partners and other technical issues. CLGI/YIPD put the burden on local 
governments to identify the type of assistance they wanted and to prepare a written request to 
YIPD signed by the three key local government officials: the bupati or mayor, the head of the 
district DPRD and the head of the local planning office (Bappeda). In addition, as discussed 
elsewhere in this report, CLGI/YIPD required a commitment from a local government to some 
form of cost-sharing (in cash or in-kind). If agreement was reached, a memorandum of under￾standing (MOU) would be prepared and signed by both sides. The MOU addressed the type of 
service, main issues, activities, role of each party, and so on. 
The availability of funding, of course, beyond USAID’s initial program funding, has also 
driven the choice of locations. Thus, the availability of support from the Canadian Interna￾tional Development Agency (CIDA) prompted CLGI/YIPD to work in Sulawesi (as well as in a 
new technical area, Geographical Informational Services), funding from Freeport has enabled 
work in Kabupaten Timika and Kabupaten Bituni in Papua, and the tsunami disaster in Aceh 
provided an opportunity in that province and led to funding from USAID and from private 
philanthropic sources, the Bessemer Trust and the Bush-Clinton Tsunami Fund. This is consis￾tent, of course, with the idea of responding to demand. 
 2. Summary of Places and Approaches 
Between 2001 and 2005, CLGI/YIPD worked with 26 of the current 440 kabupaten and kota
local governments. All projects were designed to support local governments addressing a 
complex set of administrative, financial and human resource issues and contribute to smoother 
implementation of decentralization in Indonesia. 
CLGI/YIPD has conducted programs in the following areas: 
• Local Government Performance Management (Kota Pontianak; Kabupaten Sleman, 
Yogyakarta) 
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• Local Government Financial Management (Kabupaten Sleman; Kabupaten Mimika, 
Papua; Kabupaten Morowali, Central Sulawesi; Kabupaten Manokwari, Iran Jaya 
Barat; and Kota Gorontalo) 
• Local Government Change Management (Palangka Raya, Central Kalimantan and 
Papua) 
• Local Government Strategic Management/Planning (Kabupaten Mimika; Kabu￾paten Monokwari; Kabupaten Teluk Bituni; Kabupaten Sidenreng Rappang, South 
Sulawesi; and Kabupaten Kutai Timur) 
• Structural, Institutional and Organization Development for Local Government (Ka￾bupaten Lombok Timur, NTB; Kabupaten Monokwari, Kabupaten Mimika, Teluk 
Bituni; and Kabupaten Sidrap, South Sulawesi). 
A list of CLGI/YIPD projects is included as Appendix V. 
Program Performance 
The team evaluated the project against the following criteria suggested by the Workplan: 
• Efficiency of project startup. The CLGI project did not experience any significant dif￾ficulties during its startup, which was fully financed by USAID, assisted by the Urban 
Institute and Chemonics, and managed by a chief of party with years of experience in 
Indonesia. But in the course of starting the new Indonesian organization, problems did 
begin to appear, especially ones pertaining to organizational structure. At the present 
time, YIPD is in the process of recruiting a new executive director. 
• Quality of the personnel recruitment process. The process of recruitment of 
CLGI/YIPD personnel has been serious and professional, albeit overly structured and 
ultimately unsuccessful in some important respects. CLGI/YIPD has used a human re￾sources consulting firm and has attempted to adopt a careful rigorous process in select￾ing an executive director, but, as discussed elsewhere in this report, members of the 
boards were ultimately not of a common view about how to proceed. Mistakes in re￾cruiting personnel severely hampered the transfer of responsibility from the 
CLGI/YIPD project to YIPD and contributed to the turmoil in governance that the or￾ganization has experienced. They do not appear, however, to have affected the quality 
of services provided. 
• Ability to respond to new challenges. CLGI/YIPD has responded quickly and effec￾tively to new challenges, such as the one posed by the tsunami disaster in Aceh or the 
opportunity provided by CIDA’s interest in Geographical Information Services in Su￾lawesi, which are discussed below. 
• Financial performance. The team is not in a position to evaluate financial perform￾ance, financial systems or budget discipline. As discussed below, CLGI/YIPD has at￾tracted funding from a variety of sources, which has undoubtedly complicated financial 
reporting. Fundraising has necessarily occupied considerable attention from senior staff 
members. CLGI/YIPD did not spend its initial USAID funds at the projected rate. The 
reason for the project’s relatively slow rate of spending is unclear. Because 
CLGI/YIPD still had so much funding available at the end of the initial three-year pe-
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riod of the project, USAID only committed the last $950,000 when the needs in Aceh 
became apparent after the tsunami disaster. 
• Relationship with and responsiveness to USAID. CLGI/YIPD appears to have re￾mained in close and regular contact with USAID and to have sought generally to be re￾sponsive to USAID, but this effort was complicated by apparently varying views about 
a number of important issues within USAID. The program did not respond quickly to 
suggestions from some at USAID that it get the clearinghouse and website up and run￾ning nor that it should increase expenditures and staff time spent on sharing best prac￾tices. 
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II. ASSESSMENT OF YIPD’S STRENGTHS AND WEAKNESSES 
Evaluation Criteria 
This section of the report considers the strengths and weaknesses of YIPD as an institution. In 
the following sub-sections, the report both describes and analyzes the YIPD in the context of 
the following criteria: relationship with local governments, relationship with local government 
associations, geographical distribution fundraising strategy, management abilities and organiza￾tional structure. Programmatic issues and technical range of services provided were discussed 
primarily in the preceding section. 
This section of the report addresses the following specific issues: (1) corporate governance, (2) 
current programs, including in Aceh, (3) sharing of local government best practices and YIPD 
expertise, (4) YIPD’s relationship to other programs and coordination with other donors, (5) 
sources of funding and financial sustainability, (6) views of the current board, (7) the Friends 
of Indonesian Government Innovation, and (8) other strengths and weaknesses of YIPD. 
Corporate Governance 
 1. Executive Director/Relationship between Staff and Board 
After an extensive search, YIPD hired a new national executive director in 2004 to replace the 
CLGI/YIPD chief of party who had been acting as executive director. The search committee, 
which was made up of the chief of party and selected members of the board, failed to agree 
fully on the selection process—which led to considerable misunderstanding—and initially 
found it difficult to achieve consensus on which candidate should be offered the position. 
Moreover, the new executive director did not succeed in resolving tensions between the Badan 
Pengurus and the staff or in taking control of the day-to-day direction and management of the 
organization. According to several individuals still involved with YIPD, the executive director 
failed to effectively manage the organization. He also failed to perform on one important pro￾ject, an analysis of regulations regarding planning and budgeting commissioned by GTZ. The 
new executive director and the chief of party did not develop an effective relationship or mu￾tual trust. According to the former chief of party, the new executive director sought to bring 
the local government associations back into the organization, which the chief of party opposed. 
The then-chair of the board of directors initially supported the executive director and tried to 
ensure that he had appropriate independence from the chief of party/former executive director. 
Ultimately, however, the executive director resigned. 
 2. Current Status of YIPD Leadership: Reconstitution of Board and Selection of New Na￾tional Executive Director 
In 2005, YIPD substantially streamlined and reconstituted its board. The new board is much 
smaller and includes individuals personally committed to the mission and success of the or￾ganization. The Badan Pengurus includes just five individuals. Local government associations 
no longer have ex officio representatives on the board. 
Since mid-2005, an acting executive director, who came from the board, has managed YIPD. 
The turmoil in board-staff relations appears to have ended. As of the preparation of this report, 
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the board is nearing completion of a careful process to identify and hire a new national execu￾tive director. Much will be riding on this individual. 
Current Programs of YIPD 
It is a bit unclear how many jurisdictions YIPD remains active in. From its field visits, the 
team did not get the impression that there are many truly active programs, except in Aceh and, 
to a lesser extent, in Sulawesi. The team understands that there are active programs in Papua as 
well, but because of logistical and time constraints the team was not able to travel to Papua or 
talk to anyone involved in programs there. 
 1. Sulawesi GIS 
The Canadian International Development Agency has focused its local development efforts in 
Indonesia in Sulawesi. With support from CIDA, CLGI/YIPD developed a web-based Geo￾graphical Information System (GIS) in Sulawesi. The GIS aims to provide real-time informa￾tion for local governments and other interested parties. It manages information about Sulawesi 
and displays it in interactive maps. This bilingual system includes information on bio-physical 
data, socio-economic and demographic data, infrastructure maps, village boundaries, general 
information about each district, cities and provinces, information about donor programs, and 
news regarding Sulawesi. The system can be accessed at http://www.sulawesigis.org
YIPD’s GIS programs demonstrate its technical competence and flexibility. CIDA representa￾tives expressed satisfaction with the efforts to date and have indicated an intention to do further 
work with YIPD in Sulawesi. Team members did not have the opportunity to see whether local 
governments in Sulawesi are actually using this tool. 
 2. Aceh 
Post-Tsunami Opportunities 
After the December 26, 2004, earthquake and tsunami disaster, YIPD quickly became involved 
in Aceh. The earthquake and tsunami destroyed much of the coastal areas of Aceh Province 
and affected some inland areas. The tsunami killed more than 180,000 people and displaced 
tens of thousands. It also damaged innumerable public structures and private dwellings and 
devastated much of the public infrastructure. Local government in many places ceased to func￾tion. 
The tsunami left Aceh in desperate need of assistance. Even while people in Aceh remained 
traumatized, local government had to be restored, houses and infrastructure needed to be re￾built, communities needed to be rearranged, and the local economy needed to be revived. The 
international community expressed its shock and sympathy and offered first substantial hu￾manitarian assistance and subsequently considerable assistance to help rehabilitate and rebuild 
Aceh. 
In the days immediately following the tsunami, a YIPD program officer, Azwar, who was 
Achenese returned home to find his family members. After finding them, he immediately 
turned his attention to identifying ways in which YIPD could be of assistance. Soon after the 
tsunami, USAID identified the CLGI/YIPD project as a means to quickly provide funding for 
assistance and reconstruction in Aceh. 
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Since the beginning of 2005, YIPD has successfully implemented a number of projects in 
Aceh. Some of them are similar to those implemented in other regions, such as offering train￾ing to improve capacity of local government officials, while others have been unique to Aceh, 
such as community empowerment and community mapping. Officials of the provincial gov￾ernment, kecamatan (subdistrict) governments, and the Aceh and Nias Rehabilitation and Re￾construction Agency (BRR) often expressed heartfelt appreciation to YIPD for its early and 
important assistance. 
YIPD’s programs in Aceh have differed from its efforts in other parts of the country in at least 
four significant ways. 
1. Physical infrastructure. In Aceh YIPD has provided support for physical infrastruc￾ture, including renting or helping to rehabilitate a structure for an office and providing 
office equipment and office furniture. 
2. Beneficiaries. CLGI/YIPD programs in other regions have not directly targeted mem￾bers of the community and are usually focused on district-level (kabupaten/kota) gov￾ernments. In Aceh, YIPD has worked with kecamatan governments and directly with 
members of the community. YIPD provided cash for work, for example, to clean irri￾gation canals and paddy fields and has pioneered efforts in community-based mapping. 
3. Absence of cost-sharing. Even though cost-sharing has been a fundamental principle 
of YIPD support for local government, there has been no discussion of any kind of cost￾sharing or in-kind contributions in Aceh. Cost-sharing seemed obviously inappropriate 
in the context of emergency assistance and in the wake of an overwhelming natural ca￾tastrophe. Moreover, there are a large number of other donors and organizations offer￾ing assistance of various kinds in Aceh. But now that more than a year has passed and 
very significant resources have been made available, the possibility of cost-sharing in 
some form can no longer be summarily dismissed. 
4. Local office. YIPD has an office and small professional staff in Aceh, which is some￾thing it has not had in any other locations in which it has worked. This allows for the 
development of relationships and follow-up that is simply not possible elsewhere. 
To date, YIPD has focused its activities in selected kecamatan in Banda Aceh and Aceh Besar. 
Community Mapping 
One of the priorities of local governments in Aceh is to provide permanent houses to survivors 
whose houses were destroyed. The government has promised to build a new house for each 
affected surviving family within two years of the tsunami. 
Before new houses can be built, it is critically important to determine property rights, as the 
tsunami has often obliterated indications of property boundaries. To address this problem, 
YIPD has assisted local governments in producing maps for land ownership based largely on 
consultation with the community. This so-called community-based mapping has proved ex￾tremely useful, and other organizations have followed YIPD’s model. 
In implementing community-based mapping, YIPD cooperated with local and university￾affiliated organizations that have technical know-how in land measurement. YIPD has con￾ducted community mapping projects so far in seven subdistricts of Banda Aceh and Aceh Be￾sar. YIPD has completed community-based maps in 32 villages and reported that community 
CLGI/YIPD Evaluation 
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mapping in 10 other villages remains incomplete, apparently because of insufficient commu￾nity participation. 
The provincial and local governments and BRR all expressed appreciation for YIPD’s work in 
initiating and producing community-based mapping. Government officials and NGOs have 
used the maps in village planning. Government representatives at all levels expect YIPD to 
continue its community-based mapping work in other villages and to help provide engineering 
village maps with land coordinates and contours. BRR has adopted guidelines for community￾based mapping developed by YIPD, and other agencies have followed these guidelines to con￾duct similar work in other villages. 
Support to Kecamatan Government 
Early involvement of YIPD in Aceh contributed substantially to the restoration of local gov￾ernment functions, especially at sub-district level, in a number of locations. YIPD supported 
sub-district government by providing temporary offices, office furniture and office equipment. 
YIPD also provided training to improve capacity of the officials in planning, budgeting and 
land-use. YIPD, however, was able to assist only a limited number of kecamatan governments. 
YIPD was the first organization to help restore sub-district government in Banda Aceh and 
Aceh Besar. Local officials expressed their sincere appreciation. “YIPD has opened our 
closed doors,” said one sub-district head in Banda Aceh. Several singled out Azwar for special 
praise for his valuable moral and other support at a very early stage. YIPD was seen to be very 
responsive to local government needs. 
Sub-district officials did complain, however, about the frequent and often unannounced turn￾over of YIPD’s staff in Aceh. As a result, they sometimes were surprised to find particular 
YIPD staff members no longer working at the organization. Sub-district officials urged better 
communication to prevent or mitigate such disappointments in the future. 
Several sub-district officials also expressed their hope that YIPD could also help restore village 
government. They pointed out that the majority of village offices are still located in private 
homes. 
Coordination with/Support to Provincial Government and BRR 
YIPD has established good relationships and has coordinated effectively with district and pro￾vincial government as well as with BRR. In fact, YIPD provided training on GIS for provincial 
officials, as spatial planning becomes a very important part of the redevelopment of the prov￾ince. Building on the YIPD program and using the provincial budget, the provincial planning 
agency plans to train additional officials on the use of GIS. 
BRR also appreciated the work of YIPD. As noted above, YIPD has assisted in the develop￾ment of guidelines for community-based mapping, which has helped protect property rights 
and mitigate the chances for serious disputes. YIPD also supported BRR with computers and 
software. In addition, YIPD developed a clearinghouse at the Banda Aceh development plan￾ning agency that houses extensive information about the situation in the field, such as extent 
and nature of damage. The clearinghouse, however, does not appear to be actively used or 
maintained, and the data are not up to date. 
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Other Programs 
Australian assistance to Aceh under the Australia-Indonesia Partnership for Reconstruction and 
Rehabilitation has implement programs based largely on those of YIPD. YIPD also was part of 
Chemonics’s team that won a competitive bid for continued work in Aceh. 
From interviews in Aceh, it seems that local government officials typically want YIPD to con￾tinue or expand its activities in Aceh. Various local government officials urged YIPD to: 
• Produce community-based maps for other villages 
• Provide technical mapping that can be used for engineering work 
• Provide training for village heads to give them better understanding in planning 
• Facilitate local government efforts in developing local regulations (perda) on village 
planning, outlining where and what to build. So-called development “blue prints” only 
provide general guidance. There are building codes in most places, but similar codes 
for infrastructure, water and drainage generally do not exist. 
Sharing of Local Government Best Practices and YIPD Expertise 
Nationwide, CLGI/YIPD has worked directly in only 26 of some 440 districts (kabupaten and 
kota) in Indonesia. Thus, the direct, macro-level impact of CLGI/YIPD programs, however 
effective or innovative, is necessarily limited. The question of how to replicate or build on in￾novations and successes in directly assisted local jurisdictions is a challenging one. 
In an effort to collect and share information about best practices in local government, 
CLGI/YIPD established an information center to serve as a clearinghouse for documents, in￾formation about best practices and other materials about local government and decentralization 
in Indonesia. This information center includes a library at YIPD’s Jakarta office, a computer 
database and a Website (www.clgi.or.id). The information center also includes daily news in￾dices, electronic press clippings, and a directory of local government offices and officials. 
CLGI/YIPD derived best practices, among other places, from other USAID programs, includ￾ing BIGG and PERFORM. 
As far as the team can determine, CLGI/YIPD appears to have collected a great deal of impor￾tant documents and information about local government, best practices, and the like. And the 
CLGI/YIPD website seems comprehensive and well maintained and offers a great deal of use￾ful information and links. Yet, there was also some suggestion that CLGI/YIPD was slow to 
set up the clearinghouse and website and did not take full advantage of the project resources 
available for sharing best practices. Moreover, whether because of a lack of resources or the 
failure to make it a priority, CLGI/YIPD has not been able to take significant affirmative steps 
to publicize the existence of this database and clearinghouse or to share this information with 
local governments not currently involved with YIPD. The focus on the collection of informa￾tion and the maintenance of a library and Website relies on potential beneficiaries to find out 
about the clearinghouse and take affirmative steps to access the information. This strategy 
would be insufficient under the best of circumstances; it is wholly unrealistic to expect it to 
have any impact in the considerable number of local districts that are largely lacking in human 
and financial resources or in the absence of reliable, reasonably fast access to the internet or 
even of computers and electricity. That is not to say that CLGI/YIPD has failed to do its job, 
only that a truly effective clearinghouse requires resources, sustained commitment, and market￾ing or other affirmative means of calling attention to its existence. 
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For YIPD’s programs and clearinghouse to have greater impact, the organization must find 
new, possibly more creative ways to share information about best practices. These might in￾clude more press and journal articles, monographs, policy briefs and newsletters by YIPD staff 
members, board members and partners. They might also include collection or preparation of 
manuals on local government, forms, training manuals for supervisors, curricula for training of 
trainers and syntheses of best practices from different local governments. Or they might in￾clude more attention to national or regional conferences on best practices for local government 
officials and stakeholders from multiple jurisdictions, something YIPD is considering. Yet a 
greater emphasis on affirmative means of sharing best practices and lessons learned brings its 
own disadvantages, not least of which is the necessary commitment of scarce resources and 
professional staff time. 
To the extent that YIPD could build active, mutually beneficial and mutually reinforcing rela￾tionships with the local government associations, the associations could be a way to market 
YIPD’s services and information resources. Once again, the relationship between YIPD and 
the local government associations seems to be a critically important one. But, of course, the 
weaknesses of the associations, including their often limited relationships with their own mem￾bers, means that this too is not likely to be a panacea. 
In short, CLGI/YIPD’s investment in building and maintaining an information center/clearing￾house represents a considerable organizational strength. At the same time, the organization’s 
lack of means to market the existence of that clearinghouse or to affirmatively share informa￾tion about best practices is a notable organizational weakness. The necessary response would 
seem to be some combination of efforts to (a) strengthen the local government associations, (b) 
improve the relationship between YIPD and the associations, and (c) undertake marketing or 
other efforts to increase awareness of YIPD. 
Relationship to Other Programs and Coordination with Other Donors 
There are a plethora of donors, NGOs, university-affiliated centers and other organizations that 
are providing services to local governments in Indonesia. By many accounts, these efforts are 
not well coordinated. The existence of other service providers in effect means that YIPD has a 
number of competitors. This makes it important for YIPD to think about and emphasize its 
comparative advantage, both for organizational sustainability and for program effectiveness. 
Even other USAID programs are effectively competitors to YIPD, especially the relatively new 
Local Government Support Program (LGSP). Several people involved with YIPD argued that 
the availability of technical assistance from other donor programs, generally without cost￾sharing or counterpart contributions, tends to dampen enthusiasm for YIPD programs and 
hamper the attempt to use counterpart contributions as an indicator of local buy-in. In any 
event, YIPD should be a resource to LGSP, by collecting and helping to share best practices. 
Ideally, YIPD would find a way to coordinate with all donors and projects in the decentraliza￾tion arena, including the new Decentralization Support Facility, which involves the key central 
government ministries and agencies as well as the leading donors. The Decentralization Sup￾port Facility is interested in mapping donor activities and maintaining a database on decentrali￾zation activities. YIPD or its clearinghouse might be a resource to this effort; perhaps YIDP 
could play a role in maintaining it. 
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Sources of Funding, Financial Sustainability 
While cost-sharing provides a strong indication of local government commitment, it has not, as 
noted above, provided a significant source of actual program funding, and cost-sharing does 
not offer a meaningful prospect of sustaining YIPD. Building on its initial funding from 
USAID, however, CLGI/YIPD has had notable success in attracting funding from (a) other in￾ternational donors, (b) multinational companies, and (c) private donors. 
Several bilateral and multilateral donors have provided grants and contracts to CLGI/YIPD for 
particular projects. These include CIDA, AusAID, the World Bank (through the Indonesian 
Development Marketplace, the World Bank Institute and IFC PENSA), GTZ, DFID and others. 
YIPD has also received additional USAID funds for the foundation’s work in Aceh. The inter￾national donors with whom the team met were pleased with the organization’s efforts. Al￾though this does not seem to be financial sustainability in the same way that receiving fees for 
services would be, it suggests that, even in the absence of USAID infrastructure support, donor 
funds are likely to sustain YIPD. 
CLGI/YIPD has attracted considerable involvement of and support from the private sector. 
Several multinational companies operating in Indonesia have funded activities in support for 
local governments in areas in which they are operating. Notable among these companies are 
Freeport and British Petroleum. These efforts, of course, are limited to locations in which the 
companies have operations, but they would seem to provide an opportunity for YIPD to make a 
contribution in those locations and to strengthen its portfolio of experience and its finances. At 
the same time, YIPD must take care not to become merely an agent of public relations for such 
companies. The team was not able to evaluate any of these programs directly. 
YIPD has also received two large private donations from the United States for post-tsunami 
Activities in Aceh. FIGI secured approximately $1.25 million in grants from the Bessemer 
Trust and the Bush-Clinton Tsunami Fund for YIPD activities in Aceh. Although the circum￾stances of Aceh are unique, FIGI’s success in this regard is encouraging. 
The team was surprised that some individuals associated with CLGI/YIPD ever considered an 
endowment from USAID to be a realistic possibility. During the team’s interviews, several 
individuals associated with YIPD mentioned this issue. Leaving aside the question of whether 
an endowment from USAID would ever be possible, the team might question whether it would 
even be desirable. While an endowment enables an organization to avoid worrying about its 
future existence, it does little as a market signal about the value of an organization’s services or 
as a way to ensure the client commitment or ownership necessary for project success. In this 
respect, an endowment would depart from the idea of YIPD as market-driven and responsive to 
customer needs. 
YIPD currently seeks a source of funding for its office and core operations. YIPD’s leaders 
and supporters argue this is necessary for a transition period to ensure the continued existence 
of the organization and free up professional staff time and attention from fundraising. To date, 
YIPD evidently has not negotiated for new funders of specific projects to cover their share of 
overhead expenses, as a truly sustainable organization would have to do. It is conceivable, 
however, that the organization may now have achieved enough of a track record and have 
enough negotiating leverage to make sure that future grants and contracts pay their share of 
overhead (general and administrative) costs. The substantial volume of activity, particularly in 
Aceh, would also suggest that this is a possibility, although it is by no means certain. The risk 
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is that, without additional support for core operations, the organization would not be able to 
survive. 
View of Current YIPD Board 
The evaluation team met with a number of members of the reconstituted board of YIPD, in￾cluding, among others, the chair of the board of trustees and the chair and vice chair of the 
board of directors. The reconstituted board of YIPD argues the organization effectively is still 
young, just getting its feet under it. The board measures the real start of YIPD from only mid￾2005, when the new board was constituted and the former chief of party left the organization 
entirely, rather than from its official start in 2002. Accordingly, board members argue that 
YIPD is still in its early stages, still establishing its capabilities and still a relatively small or￾ganization. YIPD, they argue, is not yet able to sustain itself without some institutional sup￾port. 
Board of Trustees Chair Erna Witoelar also emphasized the importance of secure funding, but 
she is clearly looking beyond USAID: 
One of the main obstacles to the development of YIPD is funding that is certain 
and secure. . . . We need to cultivate the opportunities presented us by JGZ, 
AUSAID, CIDA. Secure long term funding that enables us to carry out the pro￾jects we desire to carry out: this is our concern. 
Board members view YIPD as taking over a USAID program. While some activities of the 
USAID program have been continued, board members admit the volume and scope of pro￾grams has been reduced. 
Board of Directors Vice Chair Himasari Hanan argues YIPD’s mission has been “too ambi￾tious” and its approach “too idealistic.” She suggests that YIPD should probably be more fo￾cused, perhaps concentrating on asset management, the clearinghouse and “enhancement of 
local government.” She argues they need to prioritize their areas of work and be more realistic. 
YIPD’s uniqueness is “innovation in local government,” and its motivation is to “empower lo￾cal government,” as opposed to the project-based focus of other programs. 
Board members acknowledge the organization’s focus on projects and lack of a long-term plan, 
but they say they do not have much choice. They believe YIPD has the human capital and ex￾perience to go forward but say the organization must figure out how to manage the financial 
and programmatic challenges and have a real impact. They do not expect the organization to 
be any bigger in the future. They recognize it will have to be project-based, that projects rather 
than direct support will have to sustain the organization. Although they see advantages to at￾taching the organization to more established institutions, they are concerned about preserving 
the organization’s mission. They might increase cooperation with universities or thinktanks 
regarding research on improving local government. 
Dr. B. Raksaka Mahi, the chair of the board of directors, said that the board had decided to con￾tinue YIPD to share ideas with others. But they need to consider what makes them different 
from other organizations and programs, to go back to basics and think about their mission, their 
strengths and competitive advantage. They have determined that YIPD’s mission was to build 
on best practices by sharing experiences. He cited as examples lessons from Aceh on best 
practices for governments dealing with natural disasters, how to create an attractive investment 
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climate (such as by licensing for new businesses under one roof), and best practices on asset 
valuation. Board members agree on the need for YIPD to do more policy research. They want 
to extract best practices from what YIPD and others have done. They do not envision YIPD as 
a research institute as such, but they do believe the organization can use policy research to im￾prove the delivery of services to regions. 
Board members feel it is important to improve the organization’s relationship to the local gov￾ernment associations, and they believe the organization should try to mediate between the asso￾ciations and local governments. In a meeting with the team, Ibu Erna underlined the challenge 
of building an effective relationship with the local government associations: 
The challenge in the future, for both the Board and the Executive Director and 
staff, is how to make YIPD relevant to the associations because this has not yet 
been managed. I worry that YIPD is too busy with projects so that they forget 
their reason for existence, namely to empower the associations... There has not 
yet been a cooperative program that is truly beneficial for associations. 
Other board members still maintain that because local government associations are fo￾cused on Jakarta and have more “centralized interests,” representatives of local gov￾ernment associations should not dominate the board. 
Friends of Indonesian Government Innovation (FIGI) 
To facilitate fund-raising for YIPD in the United States, several American supporters of the 
organization formed the Friends of Indonesian Government Innovation (FIGI), a U.S. 501(c)(3) 
charitable organization. YIPD and the individuals involved with FIGI saw this as a way to take 
seriously the goal of creating a sustainable organization. The idea was to appeal to the sense of 
corporate social responsibility of U.S.-based multinationals with business interests in Indone￾sia. The 501(c)(3) organization made it possible to solicit tax-deductible contributions. 
The IRS approved 501(c)(3) status for FIGI in late 2003 and FIGI began activities during 2004. 
But it was the tsunami disaster of December 26, 2004 that provided FIGI and YIPD with the 
real opportunity to raise funds in the United States. As noted above, FIGI has raised substantial 
funds for YIPD activities in Aceh from the Bessemer Trust and the Bush-Clinton Tsunami 
Fund. 
The current board of FIGI now includes five individuals: two former U.S. ambassadors to In￾donesia, Robert Gelbard (chairman) and Ed Masters; Leroy Hollenbeck, the former chief of 
party for CLGI/YIPD; Jeff Telgarsky, the former director of international programs at the Ur￾ban Institute; and Iwan Azis, an Indonesian national who is a Professor of Economics and Re￾gional Science at Cornell University. This board has fiduciary responsibility and ultimate deci￾sion-making authority for funds raised by FIGI and thus must approve and oversee projects 
funded. 
The board members of FIGI are volunteers, and FIGI does not have any secretariat or paid 
staff. For YIPD’s work in Aceh, board members themselves reviewed and acted on proposals 
and budgets. Board members continue to review monthly reports on project activities and pro￾gress, and they review and assist with quarterly reports to their funders. The evaluation team 
was not able to review any of those reports. 
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FIGI’s board members remain strong supporters of YIPD and its work. They are not actively 
fundraising at present, however, at least in part because they do not believe YIPD has the ca￾pacity to use additional funding effectively at this time. They do hope YIPD will be able con￾tinue in existence in the future. 
Other Strengths and Weaknesses 
Beyond those mentioned above, YIPD has considerable strengths. CLGI/YIPD has four years 
of experience and a track record of providing effective technical assistance to local govern￾ments in diverse locations throughout Indonesia. It has notable experience and technical com￾petence in several areas of local government. It has a strong technical staff and a committed 
board, led by and including several well-known and highly regarded public figures and public 
officials. It has a strong foundation on which to continue to build its reputation and credibility. 
These strengths give YIPD greater leverage for negotiating with clients and donors for future 
programs. 
Regarding types of technical assistance, the team was not in a position to evaluate YIPD’s tech￾nical assistance services as such or to determine which are the organization’s prime areas of 
technical strength. YIPD sees its own strengths in financial and performance management. 
USAID’s support has brought CLGI/YIPD into existence and has been essential to the founda￾tion’s successes. At the same time, some central government ministries may be concerned 
about USAID-funded decentralization activities bypassing the national government. YIPD’s 
close association with USAID and relative lack of contact or relationships with the Ministry of 
Home Affairs, the National Planning Agency (Bappenas) and other central government agen￾cies is a weakness in this regard. Accordingly, it is important for YIPD to build its Indonesian 
ownership, including strengthening links to the national government. 
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III. LESSONS LEARNED AND RECOMMENDATIONS FOR USAID REGARDING 
YIPD 
This report includes throughout a number of explicit and implicit lessons learned. This section 
summarizes some of the most salient. Some tentative lessons from the implementation of the 
CLGI/YIPD project and the experience of YIPD to date include the following: 
• Creation of new institution. As discussed above, there were good reasons to create 
a new organization rather than to work with an existing one. Ultimately, though, 
the costs may have outweighed the benefits, and this decision contributed to other 
dysfunctions in the program and the organization. While there were strong reasons 
to believe that the establishment of a new institution was preferable to working with 
an organization with established interests, those involved in designing and imple￾menting the project underestimated the difficulties and disadvantages of starting an 
new organization. Much of the turmoil in the governance and management of YIPD 
can be attributed to the struggle over who would define and control the organiza￾tion’s mission. Some of this might have been avoided had USAID and the program 
been working to help an existing organization with existing capabilities and an es￾tablished governing structure to develop new approaches and more innovative pro￾grams. 
• Corporate governance. Future efforts to establish a new organization should care￾fully consider and plan for issues of organizational governance. To be fully suc￾cessful, a new organization needs a focused, committed board, all of whose mem￾bers share a common purpose and a mutual understanding of the organization’s mis￾sion. Such a board cannot be too large. When problems emerge, the board and ex￾ecutive staff must deal with them right away. Lines of authority and responsibilities 
with the board and between the board and senior staff should be clear. The process 
of selecting key personnel, such as the executive director of YIPD, need not be 
cumbersome but should be agreed to in advance. 
• Cost-sharing. The idea of obtaining some form of cost-sharing from local govern￾ment partners was an important one. It did not work, however, as a vehicle to fi￾nancial sustainability. The amount of cost-sharing was not sufficient to substan￾tially affect the bottom line or complement other funds for programs. Local gov￾ernments generally did not have enough revenues to pay for services. It has proved 
more realistic for CLGI/YIPD to sell its services through the donor community. 
Cost-sharing was more meaningful, however, as a signal of commitment from local 
government counterparts. Cost-sharing, even in the form of provision of local gov￾ernment facilities or staff time, demonstrated a genuine interest in YIPD assistance. 
Such “buy-in” also increased the chances the programs would be relevant and suc￾cessful. The requirement that local governments actually propose projects ensures 
the local government has demonstrated some will and capacity. Similarly, cost￾sharing is evidence of responsibility and commitment. For these reasons some type 
of cost-sharing should be part of future programs. 
• Selection of local governments and areas of technical assistance. CLGI/YIPD 
could have developed a more strategic manner of selecting local governments with 
which to work and choosing areas of technical assistance. As discussed in Section 
I, CLGI/YIPD did not have an especially rigorous process for initially choosing lo￾cations in which to work, and it apparently did not focus on certain areas of techni-
CLGI/YIPD Evaluation 
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cal assistance that might be particularly valuable for local governments dealing with 
the uncertain policy environment associated with decentralization in Indonesia. Re￾garding choice of local governments, CLGI/YIPD might have developed a set of 
criteria by which to determine which local governments would have the most im￾pact as models or demonstration projects or, alternatively, to consider the relative 
needs of local governments that could be candidates for assistance. Regarding areas 
of technical assistance, it might have made sense for CLGI/YIPD to focus more at￾tention on problems encountered under decentralization in addition to financial and 
performance management. A more strategic approach might better contribute to the 
goal of sharing and replicating best practices. 
• Assisting smaller or less affluent local governments. Because of its approach, in￾cluding its focus on political and financial buy-in from client local governments, 
YIPD has not focused on or worked with local governments that are smaller or rela￾tively lacking in capacity. In the future, it might make greater, more proactive ef￾forts to identify local governments that are less affluent and in greater need of assis￾tance. But it should not depart from the requirement of genuine commitment by the 
local government seeking assistance. YIPD could also help smaller or poorer local 
governments or local governments that have not been directly assisted by working 
with LGSP on national workshops on best practices, publication of materials and 
other means of sharing lessons. 
• Relationship to local government associations. CLGI/YIPD’s relationship with the 
local government associations was fundamentally important to its mission. While 
not entirely or necessarily the fault of CLGI/YIPD, the failure to effectively define 
or manage the relationship with local government associations, as discussed above, 
made it more difficult for CLGI/YIPD to achieve its mission of delivering and 
spreading innovative practices. The effects of this failure linger to this day. The 
two associations of district (kabupaten/kota) governments, BKKSI and APEKSI 
have no collaboration with and interest in YIPD, and none of the local government 
associations is represented on the current YIPD board. To the extent that YIPD 
could build active, mutually beneficial and mutually reinforcing relationships with 
the local government associations in the future , the associations could be a way to 
market YIPD’s services and information resources. 
• Technical leadership and policy analysis. CLGI/YIPD could have provided 
greater support in terms technical leadership and policy analysis, which the associa￾tions did not have the technical capacity to carry out themselves. YIPD has a strong 
technical staff and capabilities. The YIPD staff could have put greater emphasis on 
developing innovations and then working with and through the associations to share 
lessons learned with local governments and to encourage other kota/kabupaten to 
adopt these new practices. Although the local government associations themselves 
were weak partners, YIPD might still have provided technical content for the asso￾ciations to incorporate into training programs and workshops for all their members. 
• Impact of clearinghouse. Achieving greater impact for clearinghouse and informa￾tion sharing activities requires more active marketing, affirmative networking and 
national-level programs. Maintaining a library and Website does little, by itself, to 
help local governments lacking resources and basic infrastructure. To make the 
clearinghouse function more meaningful and effective, YIPD would have to take a 
number of steps to let potential users or consumers know about the existence of the 
information. Such users could include local governments, local government asso-
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ciations, central government offices, donor agencies and other internationally sup￾ported decentralization programs. YIPD might “market” the existence of its li￾brary, Website and clearinghouse by contacting potential users, for example by 
email or through materials sent in the mail. It might also undertake efforts to mar￾ket these services by more proactive networking efforts with potential users and 
stakeholders, including seeking meetings with appropriate central government offi￾cials and local government association representatives. Furthermore, YIPD could 
market its services and share best practices by organizing national or regional semi￾nars for such stakeholders on best practices and lessons learned and/or participating 
in national or regional seminars organized by local government associations. 
• Replication of Best Practices. As discussed above, a clearinghouse can be one 
means of sharing best practices and helping local governments other than the ones 
receiving direct technical assistance, but a truly effective clearinghouse requires re￾sources, sustained commitment, and marketing or other affirmative means of calling 
attention to its existence. To better share best practices, YIPD will have to find 
new, possibly more creative ways to share information about best practices. These 
might include newsletters, press and journal articles, monographs, and policy briefs 
by YIPD staff members, board members and partners. YIPD also should focus on 
collection or preparation of manuals on local government, forms, training manuals 
for supervisors, curricula for training of trainers and syntheses of best practices 
from different local governments. YIPD also might involve itself in distance￾learning activities. And it might participate in national or regional conferences on 
best practices for local government officials and stakeholders from multiple juris￾dictions. Improved cooperation with the local government associations, among 
other benefits, would help to share best practices. These activities will require a 
commitment of scarce resources and professional staff time. 
• Transition from founder. It is difficult for a charismatic, dedicated, successful 
founder to pass on his vision and step aside, especially when the founder is an out￾sider (in this case, an American). The chief of party was not only the head of a 
USAID program but also the person with the vision needed to start the new organi￾zation and legitimize its activities. In future programs that seek to spawn new, lo￾cally owned organizations, more thought needs to be given to this important chal￾lenge. 
• Future technical directions. As discussed earlier, the team believes that YIPD 
could benefit from renewed attention to the nature and types of its technical assis￾tance. The organization is likely to continue to respond to opportunities that present 
themselves, as with GIS in Sulawesi and community-based mapping in Aceh. 
YIPD is likely to continue to work in both of those technical areas in the future. In 
Aceh, as discussed above, YIPD may also become involved with village planning 
and engineering/infrastructure mapping. It should continue to work in its areas of 
technical strength, including asset and performance management. It also should 
seek to make its programs as responsive as possible to the changing decentralization 
policy environment in Indonesia, both by adapting its technical assistance where 
necessary and by conducting further research about the needs of local governments 
in the evolving context of decentralization. Most important, it should seek means to 
build upon its past efforts to develop a clearinghouse to share innovations and best 
practices. 
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• Financial sustainability. As discussed above, CLGI/YIPD’s objective of cost￾sharing and fee-for-services, although having other benefits, has not proved to be an 
effective strategy for financial sustainability. YIPD has proved itself notably suc￾cessful in attracting grants from other donors—international, corporate and pri￾vate—including through competitive bids. Although it might continue to seek con￾tributions from donors, YIPD’s best strategy would seem to be to emphasize its 
comparative advantage in sharing innovations and best practices as it obtains fund￾ing for specific programs. As it goes forward, it would seem it can only achieve fi￾nancial sustainability by including an appropriate share of general and administra￾tive or indirect costs in its budgets for programs funded by all donors. 
• Strengthening relationships. To achieve its objectives of being an innovative pro￾vider of local government assistance, an effective clearinghouse, and a positive in￾fluence on Indonesian decentralization, as discussed earlier, YIPD will have to 
strengthen its relationships with local government associations and with national 
government ministries and agencies, especially the ministry of home affairs and the 
national planning agency (Bappenas). To do so, YIPD should take proactive steps, 
including arranging meetings and networking with appropriate officials and jointly 
planning or participating in national workshops and seminars. Moreover, there 
would seem to be opportunities for greater collaboration with other programs, nota￾bly USAID’s Local Government Support Program. YIPD could seek, for example, 
to collect lessons learned from LGSP and share them with local governments not 
involved in YIPD or LGSP projects. 
USAID has told the team to assume that USAID will likely collaborate with and provide assis￾tance to YIPD in the future. Given that assumption, the team recommends that USAID con￾sider the possibility of technical assistance that will help the organization become financially 
sustainable, such as advice on accounting, recovery of overhead costs on projects, and fundrais￾ing. USAID might also consider supporting additional attention to the clearinghouse/sharing of 
best practices function. Although the team does not necessarily recommend additional institu￾tional support, ways to encourage sharing of best practices could include support for policy re￾search, continued collection of best practices or participation in national workshops on innova￾tive local government practices. 
CLGI/YIPD was a remarkable, creative program that sought to work in innovative ways. 
Those who conceived and implemented the program and led the new organization took some 
chances and tested some hypotheses about sustainable institutional development. That it did 
not always go as planned does not call into question the value of the effort. While the road has 
not been entirely smooth, YIPD is now a functioning, well-respected, wholly Indonesian or￾ganization that, by all accounts, has carried out many effective, valuable programs. Although 
its mission and means of working will certainly continue to evolve, YIPD should continue to 
contribute to successful decentralization and effective local government in Indonesia in the 
years to come. 
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APPENDICES 
1. Biographies of Evaluation Team Members 
2. List of Interviews 
3. Documents Reviewed 
4. YIPD Programs by Subject Area 
5. Interview Guide