The evolving role of the central government in economic planning and policy making in Indonesia

Abstract

This paper examines the changing role of the central government in the final years of the Soeharto era and since 1998. It argues that although economic policy making is now conducted in a very different political climate from that of the Soeharto period, there remains a powerful institutional legacy. In addition many old problems persist. The paper examines the evolving role of the national planning process and looks at the implications of the new law on national planning, especially for the division of labour between the national planning agency (Bappenas) and the Ministry of Finance. It also looks at some ongoing problems that are central to the economic policy process: the need for civil service reform and for a stronger audit process at all levels of government, and the issue of relations between the centre and the regions.