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Economic Reform When The Constitution Matters: Indonesia'S Constitutional Court And Article 33

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  • Simon Butt
  • Tim Lindsey

Abstract

Article 33 of Indonesia's Constitution requires the state to 'control' important branches of production and natural resources. The meaning of 'control' has been a matter of significant debate since Indonesia's independence: does it require the state to manage directly, or is regulation enough? The government has recently sought to break down government monopolies and attract private investment in key sectors. To this end it has enacted a raft of new statutes, but they have been challenged in Indonesia's new Constitutional Court. The Court has opted for the 'direct manage ment' interpretation of article 33, striking down statutes that implicitly interpret it as requiring government regulation only. This paper discusses these decisions and, more broadly, problems arising from judicial intervention in economic policy formation. It also considers how the government has sought to circumvent the decisions, and the possible consequences of state non-compliance for the Court's future.

Suggested Citation

  • Simon Butt & Tim Lindsey, 2008. "Economic Reform When The Constitution Matters: Indonesia'S Constitutional Court And Article 33," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 44(2), pages 239-262.
    • Handle: RePEc:taf:bindes:v:44:y:2008:i:2:p:239-262
    DOI: 10.1080/00074910802169004
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    Cited by:

    1. B.F. Sihombing & Edy Lisdiyono, 2018. "Governance and the Role of Legal Aspects in the Fuel Pricing in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 8(3), pages 168-176.
    2. Jamie S. Davidson, 2010. "Driving growth: Regulatory reform and expressways in Indonesia," Regulation & Governance, John Wiley & Sons, vol. 4(4), pages 465-484, December.

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