How to harness the positive potential of KKN: Explaining variation in the private sector provision of public goods in Indonesia

Abstract

This article argues that the two prevailing perspectives that explain private sector participation in infrastructure in developing countries - new institutional economics and the rent-seeking approach - cannot account for the evident variations within and across sectors in a given country. This study uses two cases from Indonesia's attempt to promote private investment in toll road construction to demonstrate that a firm-level analysis is adequate to the task. In particular, the specific incentive structure that a rent-seeker faces may explain whether positive or negative rent will be facilitated. © 2010 Taylor and Francis Group, LLC.