The role and influence of interest groups in policy-making: the case of economic and political reforms in Indonesia

Abstract

This research is about the role and influence of interest groups in the process of reforming Indonesia's economic policy and political system during economic and political crisis that has been occurring in Indonesia since June 1997. The thesis focuses on the role and influence of the Indonesian Chamber of Commerce and Industry (Kamar Dagang dan Industri Indonesia, KADIN) and the Islamic Students Association (Himpunan Mahasiswa Islam, HMI) in the process of developing the Anti-Monopoly Law 1999, the Electoral Act Number 3, 1999, the Structure and Status of the People's Consultative Assembly (MPR), the House of Representative (DPR) and the Regional Houses of Representatives (DPRD) Number 4, 1999 and PERPU (Act) Number 2, 1998 on Freedom of Expression. This research is limited in its period of coverage from June 1997 to February 1999. As a basis for comparison, the role and influence of interest groups before the crisis is examined. Models of policy-making process and interest group theory are discussed to provide a conceptual framework for the study. The aim of this study is to determine the extent to which KADIN and HMI have influenced the process of developing the selected legislation and the outcome of the reform process. To determine their role and influence and examine the role of interest groups in policy-making before and during the crisis, selected government officials, members of the Parliament, academics and interest groups including KADIN and HMI members were interviewed. The conclusions of this study are that KADIN had no significant role in the adoption of the Anti-Monopoly Law 1999 and that HMI had basically failed to influence the outcome of the process of developing the selected political legislation. The considerations that led to these conclusions are analyzed and discussed. The study then recommends that for the effective functioning of democracy in Indonesia the power of the government particularly the power of the executive in making policies, has to be counterbalanced and the proliferation of interest groups in the political arena and their participation in the policy-making process has to be encouraged.