Overseas Development 
         Institute
                           The political economy of  
                           policy-making in Indonesia
                           Opportunities for improving the demand 
                           for and use of knowledge
                           Ajoy Datta, Harry Jones, Vita Febriany, Dan Harris, 
                           Rika Kumala Dewi, Leni Wild and John Young
                                                                       Working Paper 340
                                                          Results of ODI research presented 
                                                           in preliminary form for discussion 
                                                                       and critical comment
                                advancing knowledge, shaping policy, inspiring practice
            
          
          
          
          
          
          
          
          
                                Working Paper 340 
                                             
                                             
                                             
                                             
                                             
                                             
                                             
          The political economy of policy-making in Indonesia 
                                             
                          Opportunities for improving  
                    the demand for and use of knowledge  
                                             
                                             
                                             
                  Ajoy Datta, Harry Jones, Vita Febriany, Dan Harris,  
                    Rika Kumala Dewi, Leni Wild and John Young 
                                             
                                             
                                     December 2011 
                                             
                                             
                                             
                                             
                                             
                              Overseas Development Institute 
                               111 Westminster Bridge Road 
                                     London SE1 7JD 
                                     www.odi.org.uk 
                                             
                                             
                                             
                 * Disclaimer: The views presented in this paper are those of the authors and do 
                             not necessarily represent the views of ODI. 
                                             
            
                                                                           
               Acknowledgements 
                
               This report would not have been possible without the significant contributions of several individuals. 
               We would like to thank and convey our gratitude to the following: 
                
                   •   The Australian  Agency for International Development (AusAID) for generous financial 
                       assistance; 
                   •   Key informants/respondents for generously allocating their time to be interviewed and to share 
                       valuable information with us; 
                   •   Participants in the validation workshop held in Jakarta on 30 July 2011; 
                   •   Staff within AusAID’s Knowledge Sector Programme, including (but not limited to) Diastika 
                       Rahwidiati, Benjamin Davis, Idauli Tamarin, Jessica Mackenzie, Peter de Mej and Endang 
                       Dewayanti for their invaluable support and assistance (including peer review) throughout the 
                       project; 
                   •   Dyan Mardiani and Nuning Akhmadi of The SMERU Research Institute for facilitating 
                       discussions with key informants; and 
                   •   Syaikhu Usman, a senior researcher at The SMERU Research Institute for peer review support. 
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
               ISBN 978-1-907288-57-9 
               Working Paper (Print) ISSN 1759 2909 
               ODI Working Papers (Online) ISSN 1759 2917 
                
                
               © Overseas Development Institute 2011  
                
               Readers are encouraged to quote or reproduce material from ODI Working Papers  for their own 
               publications, as long as they are not being sold commercially. As copyright holder, ODI requests due 
               acknowledgement and a copy of the publication. 
                                                   
                                                                            
                                                                         ii
                 Contents 
                  
                 Acronyms                                                                                                                                    v 
                 Executive summary                                                                                                                          vii 
                 1.     Introduction                                                                                                                          1 
                         1.1  Background, objectives and definitions                                                                                          1 
                         1.2  Approach and analytical framework                                                                                              2 
                         1.3  Methodology                                                                                                                    2 
                         1.4  Structure                                                                                                                      4 
                 2.     Formal policy processes                                                                                                              6 
                         2.1  Regularised planning and budgeting                                                                                             6 
                         2.2  Laws and implementation guidelines                                                                                            10 
                         2.3  The effectiveness of formal bureaucratic rules                                                                                13 
                 3.     Reformasi and the legacy of the New Order                                                                                           14 
                         3.1  The accommodative nature of Reformasi                                                                                         14 
                         3.2  Policy-making under the New Order                                                                                             14 
                         3.3  Summary                                                                                                                       16 
                 4.     The executive branch of the government                                                                                              17 
                         4.1  Presidential and vice-presidential decision-making                                                                            17 
                         4.2  Cabinet-level decision-making                                                                                                 18 
                         4.3  Policy-making across the government                                                                                           21 
                         4.4  Decision-making within ministries                                                                                             25 
                         4.5  Summary                                                                                                                      28 
                 5.     Political parties and the parliament                                                                                               29 
                         5.1  Political parties                                                                                                            29 
                         5.2  Influence of the DPR                                                                                                          31 
                         5.3  Parliamentary commissions                                                                                                     34 
                         5.4  Political parties and their DPR members                                                                                      36 
                         5.5  Summary                                                                                                                      36 
                 6.     Knowledge production and procurement                                                                                               38 
                         6.1  Analytical capacity within the executive                                                                                     38 
                         6.2  Analytical capacity in the legislature                                                                                        43 
                         6.3  Civil service performance                                                                                                    44 
                         6.4  Informal and personalised networks                                                                                            47 
                         6.5  Sources of knowledge external to government                                                                                  48 
                         6.6  Summary                                                                                                                      50 
                 7.     Factors that shape policy-makers’ use of knowledge                                                                                  52 
                         7.1  Factors that might motivate policy-makers to use knowledge                                                                    52 
                         7.2  Factors that might discourage policy-makers from using knowledge                                                             62 
                         7.3  Summary                                                                                                                      63 
                 8.     Conclusions, recommendations and further work                                                                                      65 
                         8.1  Formal policy processes                                                                                                      65 
                         8.2  The ‘rules of the game’                                                                                                      65 
                         8.3  Factors that shape knowledge use                                                                                             67 
                         8.4  Recommendations                                                                                                              69 
                         8.5  Further work                                                                                                                  71 
                 References                                                                                                                                 73 
                 Appendix 1: Analytical framework                                                                                                          76 
                                                                                           
                                                                                       iii