Institutionalized public sector corruption: A legacy of the Suharto franchise

Abstract

Policy analysts in Indonesia are familiar with the formal hierarchy of various kinds of state laws.¹ The Constitution is the highest law of the land, followed in turn by laws enacted by the Indonesian parliament (Dewan Perwakilan Rakyat, DPR), government regulations, presidential decrees, and regional government regulations (Law no. 10/2004 on the Formulation of Laws, Article 7). But in reality another law outranks all of these, despite lacking any means of enforcement: namely, the economic law of supply and demand, according to which the prices of goods and services and assets adjust so as to bring supply into balance with