Legal infrastructure and governance reform in post-crisis Asia: The case of Indonesia
It is well known that a loss of investor confidence led to dramatic falls in investment in Malaysia, Indonesia, South Korea and Thailand following the collapse of the Thai baht in 1997 (Terril, 1999). This loss of confidence is usually attributed to investor concerns about the effectiveness of law2 and legal infrastructure in these jurisdictions. There is now a consensus among major multilateral development assistance agencies (such as the World Bank, the International Monetary Fund and the Asian Development Bank), most bilateral aid agencies and among policy makers in the United States, including the Treasury and USAID, that the best response to East Asia’s economic crisis is therefore ‘Governance’ in the sense of massive legal infrastructure reform. Specifically, the aim is to reinvent legal institutions relevant to investors, to build their confidence. This consensus reflects a major shift in thinking about the significance of law for development (Jayarisuriya, 2002; Lindsey and Dick, 2002; Neilson, 2000; Goodpaster 1999; Stiglitz, 2002).