A Critical Evaluation of Indonesia's Special Economic Zones using New Institutional Economics Approach

  • Munthea Julastuti

Student thesis: Doctoral ThesisDoctor of Philosophy (PhD)


This thesis investigates how institutions influence political institutions and economic agents’ in making SEZ policy decision and why do these institutions affect the decision. The empirical case studies presented here show traces of policy interventions and are well-suited to highlight the role that institutions play in determining behaviour. This study found a causal logic whereby some institutional determinants constrain the state into making the market well-functioning thereby increasing the risk of SEZ policy change. The actors’ boundedness to their own rationalities has complicated the process of SEZ policy formulation which resulted in SEZ mixed performance. It promotes further questions on the policy appropriateness and the actors’ logic in their policy choice.
The study argues that institutions matter in the SEZ policy process and its relevant policies. It further argues that SEZ policymaking relevant constraints involve behavioural assumptions, formal and informal rules, human actors, and modes of interaction between various economic agents and political institutions. Findings indicate that policy and institutions have been mutually influencing each other, entailing change or continuity of the status quo and contributing to the institutional arrangement where the government’s current policy decisions affect what options become available in the future. Furthermore, the choice of policies and institutions and their implementation depend on the relevant political landscape and its importance is, in general, undisputed.
The thesis reveals that the SEZ policymaking process in the following regimes has been potentially affected by the bureaucratic legacy of previous authoritarian rulers. SEZ policy debates and controversies by different regime periods lead to the continual intra-elite rivalry and inter-jurisdictional competition which still seemed to colour the access to state power while inter-factional tension emerged with higher intensity in the RDO era, often reflected in elite polarisation and thus lead to higher uncertainty, higher transaction costs, and stagnant growth.
Date of Award23 Jan 2019
Original languageEnglish
Awarding Institution
  • The University of Bristol
SupervisorWinnie King (Supervisor) & Vernon Hewitt (Supervisor)

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