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The Politics of Development Policy and Development Policy Reform in New Order Indonesia

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  • Michael T. Rock
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    Abstract

    How can we account for Indonesia’s astonishing development performance between 1965 and 1997—rapid growth, massive reduction in the incidence of poverty, low income-inequality and substantial diversification of the economy—in the face of extremely dirigiste microeconomic policies, even by developing country standards, and massive, systemic and endemic rent-seeking and corruption? This question is answered by demonstrating that Suharto, the leader of Indonesia’s New Order government, was extremely successful in building and sustaining a procapitalist, pro-integration with the world economy, and pro-growth with equity political coalition in which corruption played a central role.

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    Bibliographic Info

    Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 2003-632.

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    Length: 60 pages
    Date of creation: 01 Nov 2003
    Date of revision:
    Handle: RePEc:wdi:papers:2003-632

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    Keywords: Suharto; New Order; corruption; Indonesia; development policy; economic reform;

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    1. Haryo Aswicahyono, 2000. "How Not to Industrialise? Indonesia's Automotive Industry," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 36(1), pages 209-241.
    2. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Governance matters," Policy Research Working Paper Series 2196, The World Bank.
    3. Jake Redway, 2002. "An Assessment Of The Asset Management Company Model In The Reform Of Indonesia'S Banking Sector," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 38(2), pages 241-250.
    4. Sato, Yuri, 1993. "The Salim Group in Indonesia: the development and behavior of the largest conglomerate in Southeast Asia," The Developing Economies, Institute of Developing Economies, Japan External Trade Organization(JETRO), Institute of Developing Economies, Japan External Trade Organization(JETRO), vol. 31(4), pages 408-441, December.
    5. Prema-Chandra Athukorala, 2002. "Survey Of Recent Developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 38(2), pages 141-162.
    6. Sato, Yuri, 1996. "The Astra Group : a pioneer of management modernization in Indonesia," The Developing Economies, Institute of Developing Economies, Japan External Trade Organization(JETRO), Institute of Developing Economies, Japan External Trade Organization(JETRO), vol. 34(3), pages 247-280, September.
    7. Michael T. Rock, 2002. "Exploring the impact of selective interventions in agriculture on the growth of manufactures in Indonesia, Malaysia, and Thailand," Journal of International Development, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 14(4), pages 485-510.
    8. Reza Siregar, 2001. "Survey Of Recent Developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 37(3), pages 277-303.
    9. Timmer, C. Peter, 1975. "The Political Economy of Rice in Asia: Indonesia," Food Research Institute Studies, Stanford University, Food Research Institute, Stanford University, Food Research Institute, issue 03.
    10. Rock, Michael T., 1999. "Reassessing the Effectiveness of Industrial Policy in Indonesia: Can the Neoliberals be Wrong?," World Development, Elsevier, Elsevier, vol. 27(4), pages 691-704, April.
    11. Nicole Mellington & Lisa Cameron, 1999. "Female Education and Child Mortality in Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 35(3), pages 115-144.
    12. Paul Deuster, 2002. "Survey Of Recent Developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 38(1), pages 5-37.
    13. Thee Kian Wie, 2002. "Competition Policy in Indonesia and the New Anti-Monopoly and Fair Competition Law," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 38(3), pages 331-342.
    14. Anne Booth, 2000. "Poverty and Inequality in The Soeharto Era: An Assessment," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 36(1), pages 73-104.
    15. Booth, Anne, 1999. "Initial Conditions and Miraculous Growth: Why is South East Asia Different From Taiwan and South Korea?," World Development, Elsevier, Elsevier, vol. 27(2), pages 301-321, February.
    16. Hill, Hal, 1996. "Indonesia's Industrial Policy and Performance: "Orthodoxy" Vindicated," Economic Development and Cultural Change, University of Chicago Press, University of Chicago Press, vol. 45(1), pages 147-74, October.
    17. Pincus, Jonathan & Ramli, Rizal, 1998. "Indonesia: From Showcase to Basket Case," Cambridge Journal of Economics, Oxford University Press, Oxford University Press, vol. 22(6), pages 723-34, November.
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