<![CDATA[This paper analyses the KPR Sejahtera policy, a mortgage loan programme for low-income communities (masyarakat berpenghasilan rendah/MBR) initiated by the Ministry of Public Works and Housing (Kementerian Pekerjaan Umum dan Perumahan Rakyat/PUPR). Although the policy has good intentions, its implementation, particularly the funding scheme has hindered the effectiveness of housing provision in the Special Region of Yogyakarta. Using the pathology of public policy framework by Hogwood & Peters (1985) and the NATO scheme from Hood & Margetts (2007), this study explores why the KPR Sejahtera funding mechanism has proven ineffective and has instead created new issues. The Directorate of Infrastructure Financing (Direktorat Jenderal Pembiayaan Infrastruktur) delegates this programme to state-owned banks, but the implementation details are left to each bank. The core problem arises from the mismatch between the banks' profit-oriented nature and the social mission of the program. This leads to internal conflicts within the banks and results in the failure to reach the targeted MBR beneficiaries. This situation reflects the ‘earmarking’ pathology, in which a budget designed for a specific programme is allocated outside of its original purpose, leading to sub-optimal policy outcomes.]]>
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