Soeharto’s Indonesia: A Better Class of Corruption

Abstract

TTndonesia has a reputation as one of the most corrupt countries in the world I (Transparency International, 1999). Unlike many others that are regarded as highly corrupt, however, this was not incompatible with rapid economic progress over three decades, and Soeharto's New Order regime clearly brought considerable material benefits to the majority of the population. Some argue that endemic corruption was unsustainable and that it was responsible for the unravelling that has been seen since mid 1997, but while the nature of government-business relationships undoubtedly contributed in important ways to the crisis, the mechanisms by which this occurred have yet to be adequately described. The present paper attempts to fill this gap.

Legal Mobilisation and Justice: Insights from the Constitutional Court Case on International Standard Schools in Indonesia

“…Under the New Order, Indonesian public schools became part of the New Order's larger 'franchise' structure, the key feature of which was the purchase of government positions in exchange for access to the rents they generated (McLeod 2000). Local community members such as parents, who had previously played a central role in the management of schools, were pushed aside in favour of politico-bureaucrats who bought school positions and used them to make money through corruption and fees (Irawan et al 2004, 50).…”

From User Fees to Fee Free: The Politics of Realising Universal Free Basic Education in Indonesia

“…Within this context, Indonesia's basic education system became part of the larger 'franchise' structure that characterised the New Order, the key feature of which was the purchase of government positions in exchange for access to the rents they generated (McLeod, 2000). Local community members such as parents, who had previously played a central role in the management of Indonesian schools, were pushed aside in favour of politico-bureaucrats who bought their positions at schools in exchange for the opportunity to make money through corruption and fees (Irawan et al, 2004: 50).…”

Dealing with bank system failure: Indonesia, 1997–2003

“…For a discussion of the politico-economic system under Soeharto, focusing on how economic policy was used to enrich the first family and its business associates and to entrench Soeharto's hold on power, see McLeod (2000aMcLeod ( , 2000b Calomiris and Kahn (1991) note that studies in the US 'indicate that fraud and conflicts of interest characterize the vast majority of bank failures' (p. 499). They go on to present a model of banking in which the possibility of a bank run, given the existence of deposits able to be withdrawn on demand, helps 'to prevent absconding [by bankers] from taking place' (p. 510).…”