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

Kelly Bird, Sandy Cuthbertson and Hal Hill

Departmental Working Papers from The Australian National University, Arndt-Corden Department of Economics

Abstract: This paper examines the recent political economy of trade policy in Indonesia against the backdrop of two key 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.

Keywords: Trade Reform; Political Economy; Domestic Trade; Indonesia (search for similar items in EconPapers)
Pages: 37 pages
Date: 2007
New Economics Papers: this item is included in nep-dev, nep-int, nep-pol and nep-sea
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Citations: View citations in EconPapers (1)

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