Hostname: page-component-cd9895bd7-p9bg8 Total loading time: 0 Render date: 2024-12-26T02:04:03.657Z Has data issue: false hasContentIssue false
  • English
  • Français

Devaluation and Domestic Politics in Developing Countries: Indonesia in 1978*

Published online by Cambridge University Press:  08 April 2017

Wing Thye Woo
Wing Thye Woo
Affiliation:
Enconomice, University of California Davis
Get access Rights & Permissions [Opens in a new window]

Abstract

Devaluations are traumatic events. The historical record shows that a devaluation doubles the probability that a ruling group would be replaced and triples the likelihood that the Minister of Finance would be relieved. Yet in November 1978, Indonesia devalued its currency by 50 percent when observers were not predicting a balance of payments crisis in the near future. The devaluation was undertaken to effect an income transfer to the countryside and the Outer Islands, the centers of traditional agricultural export industries. Since this action contradicts the logic of the dominant models of the Indonesian state, we propose that authoritarian corporatism is a more accurate characterization of the state-society relationship. The economic conditions in the countryside and Outer Islands are important to policy makers because the former has a long history of agrarian radicalism and the latter a history of secessions.

Type
Articles
Information
Journal of Public Policy , Volume 8 , Issue 3-4 , July 1988 , pp. 335 - 352
Copyright
Copyright © Cambridge University Press 1988

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Anderson, Benedict, ‘The Idea of Power in Javanese Culture’ in Holt, C., Anderson, B. and Siegel, J. (ed.) Culture and Politics in Indonesia, Cornell, 1972.Google Scholar
Arief, Sritua and Sasono, Ado, Indonesia: Dependency and Under development, META, Kuala Lumpur, Malaysia, 1981.Google Scholar
Arndt, H. W., ‘Survey of Current Developments’, Bulletin of Indonesian Economic Studies, November, 1978.CrossRefGoogle Scholar
Cooper, Richard, ‘Currency Devaluation in Developing Countries’, Essays in International Finance, No. 86, Princeton University, June 1971.Google Scholar
Corden, W. Max, ‘Exchange Rate Protection’, in Cooper, Richard et al. (ed) The International Monetary System under Flexible Exchange Rates, Ballinger 1982.Google Scholar
Crouch, Harold, The Army and Politics in Indonesia, Cornell, 1978.Google Scholar
Dake, Antonie, In the Spirit of the Red Banteng: Indonesian Communists between Moscow and Peking, 1959–1965, Mouton, Netherlands, 1973.Google Scholar
Frank, Andre Gunder, Capitalism and Underdevelopment in Latin America, Monthly Review Press, 1967.Google Scholar
Jackson, Karl, ‘Bureaucratic Polity: A Theoretical Framework for the Analysis of Power and Communications in Indonesia’ in Jackson, K. and Pye, L. (ed.), Political Power and Communications in Indonesia, University of California, 1978a.Google Scholar
Jackson, Karl, ‘The Prospects for Bureaucratic Polity in Indonesia’ in K.Jackson and L. Pyc, op. cit., 1978b.Google Scholar
Jenkins, David, Suharto and His Generals: Indonesian Military Politics, 1975–1983, Cornell, 1984.Google Scholar
Kartodirdjo, Sartono, ‘Agrarian Radicalism in Java: Its Setting and Development’ in Holt, Claire, Anderson, Benedict and Siegel, James, editors, Culture and Politics in Indonesia, Cornell, 1972.Google Scholar
Kincaid, Russell, ‘A Test of the Efficacy of Exchange Rate Adjustments’, IMF Staff Papers, March 1984.Google Scholar
Liddle, R. William, ‘Soeharto's Indonesia: Personal Rule and Political Institutions’ in Pacific Affairs, 1985.CrossRefGoogle Scholar
May, Brian, The Indonesian Tragedy, Routledge and Kegan Paul, London 1978.Google Scholar
McDonald, Hamish, Suharto's Indonesia, Fontana, 1980.Google Scholar
Mortimer, Rex (ed.), Showcase State: The Illusion of Indonesia's Accelerated Modernization, Angus and Robertson, Sydney, 1973.Google Scholar
Ransom, David, ‘Ford Country: Building an Elite for Indonesia’ in Weissman, Steve (ed.), The Trojan Horse: A Radical Look at Foreign Aid. Ramparts Press, 1975.Google Scholar
Reeve, David, GOLKAR of Indonesia: An alternative to the Party System, Oxford University Press, Singapore, 1985.Google Scholar
Robison, Richard, Indonesia: The Rise of Capital, Allen & Unwin, Australia, 1986.Google Scholar
Roeder, O. G., The Smiling General: President Soeharto of Indonesia, Gunung Agung, Djakarta, 1970.Google Scholar
Sachs, Jeffrey, ‘External Debt and Macroeconomic Performance in Latin America and East Asia’, Brookings Papers on Economic Activity, 1985: 2Google Scholar
Sievers, Allen, The Mystical World of Indonesia: Culture and Economic Development in Conflict, Johns Hopkins Press, 1974.Google Scholar
Siregar, Aritin, ‘Indonesian Entrepreneurs’, undated manuscript (1968?).Google Scholar
Sundhaussen, Ulf, ‘The Military: Structure, Procedure and Effects on Indonesian Society’ in Jackson, and Pye, , eds, Political Power and Communications in Indonesia, University of California Press, 1978Google Scholar
Warr, Peter, ‘Indonesia's Other Dutch Disease: Economic Effects of the Petroleum Boom’, Working Papers in Trade and Development, No. 86/2, Research School of Pacific Studies, Australian National University, 1986.Google Scholar
Woo, Wing Thye, The Economic Policymaking Equation in Indonesia’, Pacific Rim Studies Program Working Paper No. 6, 1988a.Google Scholar
Woo, Wing Thye, The Management of Three Crisis Episodes in Indonesia: Maintaining Balance on an Oil Slick’, Pacific Rim Studies Program Working Paper No. 9, 1988b.Google Scholar
Woo, Wing Thye and Nasution, Anwar, ‘Indonesian Economic Policies and Their Relation to External Debt Management’, in Sachs, Jeffrey (ed.) Developing Country Debt and Performance, vol. 2, University of Chicago, forthcoming.Google Scholar