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Making Trade Policy in a New Democracy after a Deep Crisis: Indonesia

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  • Kelly Bird
  • Hal Hill
  • Sandy Cuthbertson
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Abstract

This paper examines the recent political economy of trade policy in Indonesia against the backdrop of two major events: the deep economic crisis of 1997-98, and the transition from three decades of rapid growth under an authoritarian regime to a weaker but democratic state. We investigate both international and domestic trade policy. The international trade policy regime has remained largely open, perhaps surprisingly in view of the unpopularity of liberal economic policies in the wake of the crisis and the forces advocating more protectionist policies. However, this openness is precarious, and lacks both institutional and community opinion support. In contrast, while remaining largely open at the international border, domestic barriers to trade have increased. This conjunction of economic crisis and weak, democratic states is a common phenomenon in the developing world, and the lessons for trade policy from the Indonesian experience over this decade are therefore relevant to many other countries. Copyright 2008 The Authors. Journal compilation 2008 Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal World Economy.

Volume (Year): 31 (2008)
Issue (Month): 7 (07)
Pages: 947-968

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Handle: RePEc:bla:worlde:v:31:y:2008:i:7:p:947-968

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  1. Hadi Soesastro & M. Chatib Basri, 2005. "The Political Economy of Trade Policy in Indonesia," Trade Working Papers 22033, East Asian Bureau of Economic Research.
  2. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
  3. Tim Lindsey, 2004. "Legal Infrastructure and Governance Reform in Post-Crisis Asia: The case of Indonesia," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, Asia Pacific School of Economics and Government, The Australian National University, vol. 18(1), pages 12-40, 05.
  4. Hill,Hal, 2000. "The Indonesian Economy," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521663670.
  5. Fukunari KIMURA, 2006. "International Production and Distribution Networks in East Asia: Eighteen Facts, Mechanics, and Policy Implications," Asian Economic Policy Review, Japan Center for Economic Research, Japan Center for Economic Research, vol. 1(2), pages 326-344.
  6. Chris Manning & Kurnya Roesad, 2006. "Survey of recent developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 42(2), pages 143-170.
  7. M. Chatib Basri & Hal Hill, 2004. "Ideas, Interests and Oil Prices: The Political Economy of Trade Reform During Soeharto's Indonesia," The World Economy, Wiley Blackwell, Wiley Blackwell, vol. 27(5), pages 633-655, 05.
  8. Prema-Chandra Athukorala, 2006. "Post-crisis export performance: The Indonesian experience in regional perspective," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 42(2), pages 177-211.
  9. R. William Liddle, 2005. "Year one of the Yudhoyono-Kalla duumvirate," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 41(3), pages 325-340.
  10. Prema-chandra Athukorala, 2005. "Product Fragmentation and Trade Patterns in East Asia," Asian Economic Papers, MIT Press, MIT Press, vol. 4(3), pages 1-27, October.
  11. Charles E. McLure, Jr. & Jorge Martinez-Vazquez, 1998. "Intergovernmental Fiscal Relations in Vietnam," International Center for Public Policy Working Paper Series, at AYSPS, GSU, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University paper9802, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  12. Ross Mcleod, 2005. "The struggle to regain effective government under democracy in Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 41(3), pages 367-386.
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Cited by:
  1. Lee, Chien-Chiang & Chen, Mei-Ping & Chang, Chi-Hung, 2013. "Dynamic relationships between industry returns and stock market returns," The North American Journal of Economics and Finance, Elsevier, Elsevier, vol. 26(C), pages 119-144.
  2. Haryo Aswicahyono & Dionisius Narjoko & Hal Hill, 2008. "Industrialization after a Deep Economic Crisis: Indonesia," Departmental Working Papers, The Australian National University, Arndt-Corden Department of Economics 2008-18, The Australian National University, Arndt-Corden Department of Economics.
  3. Aswicahyono, Haryo & Bird, Kelly & Hill, Hal, 2009. "Making Economic Policy in Weak, Democratic, Post-crisis States: An Indonesian Case Study," World Development, Elsevier, Elsevier, vol. 37(2), pages 354-370, February.

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