IDEAS home Printed from https://ideas.repec.org/p/adl/cieswp/2005-05.html
   My bibliography  Save this paper

How Significant and Effective has Foreign Aid to Indonesia been?

Author

Listed:
  • Anis Chowdhury

    () (University of Western Sydney, Australia)

  • Iman Sugema

    (Institut Pertanian Bogor, Indonesia)

Abstract

With the improvement of relationship with the western countries after the demise of the old order regime of President Soekarno, Indonesia received a large volume of foreign aid that played a crucial role in the recovery of the economy. Indonesia remained a significant recipient of foreign aid through out the 1970s and 1980s, especially during the balance of payments crises. In addition to smoothing out balance of payments problems and providing budgetary supports, aid played an important catalyst for policy reforms that are believed to have contributed to the spectacular success of the Indonesian economy. However, no systematic study has been done so far on the effectiveness of foreign aid in Indonesia. This issue has become critical in the wake of the financial crisis of the late 1990s which turned Indonesia a heavily aid-dependent country as well as the renewed world wide debate on aid effectiveness. This paper, thus, attempts to examine the historical significance and effectiveness of aid flows to Indonesia. It finds that aid did contribute positively to economic growth, but made the government lazy in terms of domestic resource mobilisation. As a result, despite significance progress, Indonesia remained aid-dependent.

Suggested Citation

  • Anis Chowdhury & Iman Sugema, 2005. "How Significant and Effective has Foreign Aid to Indonesia been?," Centre for International Economic Studies Working Papers 2005-05, University of Adelaide, Centre for International Economic Studies.
  • Handle: RePEc:adl:cieswp:2005-05
    as

    Download full text from publisher

    File URL: http://www.adelaide.edu.au/cies/papers/0505.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Gillis, Malcolm, 1985. "Micro and macroeconomics of tax reform : Indonesia," Journal of Development Economics, Elsevier, vol. 19(3), pages 221-254, December.
    2. John Hudson, 2004. "Introduction: Aid and Development," Economic Journal, Royal Economic Society, vol. 114(496), pages 185-190, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fuady, Ahmad Helmy, 2014. "Aid and policy preference in oil-rich countries: Comparing Indonesia and Nigeria," WIDER Working Paper Series 023, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    Keywords

    Foreign aid; economic growth; balance of payments; government fiscal behaviour.;

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:adl:cieswp:2005-05. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dmitriy Kvasov). General contact details of provider: http://edirc.repec.org/data/cieadau.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.