Driving growth: Regulatory reform and expressways in Indonesia

Abstract

This article uses the case study of Indonesian governments' attempts to construct a 1,000 kilometer toll road through the densest parts of Java to shed light on how governments with a checkered past of enforcing contracts and protecting private property rights go about establishing the requisite regulatory framework to attract private investment for infrastructure. While regulatory reform has taken place in Indonesia, vested interests and power will keep the country's political economy from taking on World Bank-promoted best practice characteristics. Programs that promote private sector participation in infrastructure need to be reconsidered where the main ingredients for these programs' success exist in small measures. © 2010 Blackwell Publishing Asia Pty Ltd.