Politics of Inequality in Indonesia: Does Democracy Matter?

Abstract

This chapter tries to answer the question of persistent inequality under a democratic regime by looking at the Indonesian case. The author assumes that one of the reasons that the government has failed to allocate sufficient budgets to effective poverty eradication programs is the lack of mass-based political parties in Indonesia’s party system and representation of the lower class. The author analyzed parties’ indifference to poverty and inequality by looking at legislative deliberations on annual budgets in the parliament. In addition, the author noted that the popularly elected president has an incentive to reallocate state resources to the lower class because he/she seeks to acquire political support from the majority of the population to win elections. The introduction of the popularly elected presidential system has created an opportunity for Indonesia to establish a government more concerned with people’s welfare, especially the social and economic conditions of the lower class. Notwithstanding, the parliament is still occupied by political parties that lack the capabilities and incentives to organize a political support base at the lower strata of society, resulting in prevalence of clientelistic politics and corruption.