chapter  1
12 Pages


The idea that economic reform is essentially a contest between economic rationality and political and social interest is also inherent in the work of new institutional economists and, in particular, that of Douglass North. Neo-Weberian scholars working under the heading 'The Politics of Economic Adjustment' have also explained the dynamics of economic liberalisation in these terms, or at least very similar terms. In explaining the initiation of reform, however, they stick with the old argument - that is, that reform is more likely where states are highly insulated from political and social pressures. The literature on economic liberalisation in Indonesia has reflected the view that reform is essentially a process in which economic rationality prevails over political and social interest. Since the mid-1980s, Indonesia has undergone a dramatic process of economic liberalisation. The chapter also presents an overview of the key concepts discussed in this book.