The Politics of Budgeting in Indonesia

Abstract

This thesis explores the nature of public budget-making through a study of the interplay between formal political institutions and informal practices within Indonesia’s budgetary arena after the 2014 elections. It draws on a body of theory that deals with the role of political institutions in budget-making and engages with key theoretical debates in area studies about the role of politicians and parties within Indonesia’s political system since the advent of democracy. Based on data collected through participant observation, in-depth interviews and a study of primary source documents, the thesis examines the legislature’s behaviour in the budget-making process. Drawing on three case studies, it argues that the legislature’s relationship to political parties and the executive arm of government behaviour is influenced not only by the President’s constitutional budgetary powers, but also by electoral rules that encourage legislators to prioritise access to patronage resources over party affiliation. In other words, the budget-making process is driven by a combination of the executive’s need to advance its budgetary agenda in a multiparty presidential setting, the absence of party direction and discipline and legislators’ need to secure patronage resources. These findings offer new insights not only into the budgetary process but also into the workings of Indonesia’s legislature. First, the case studies show that the presence or absence of a governing coalition is not a key determining factor in providing stability in the budget decision-making process. Second, they demonstrate that—in the absence of effective coalitions—the use of constitutional budget-making powers to maintain the support of the legislature comes at a particularly high political cost. Third, they reveal a form of cartel-like behaviour among individuals, rather than parties, which challenges the applicability of cartel party theory in the Indonesian context.