THE ROLE OF LAW IN INDONESIAN ECONOMIC DEVELOPMENT:
A STUDY FROM THREE ERAS OF GOVERNMENTS
The Faculty of Law, Brawijaya University
Jl. Mayjen Haryono 169 Malang
Study of the role of law in Indonesian economic development covers the three eras of governments: Old Order Government (Orde Lama) after Independence until 1965, New Order Government (Orde Baru) between 1966 until 1998, and Reformation Government (Reformasi) after 1998 until now. Although since the Independence, there had been gradual improvement in the role of law in Indonesian development, it must be said that law has never been functioned by the government as a tool of developing Indonesian economy. The study will bring us to understand why it is very difficult to develop Indonesian economy up to now without proper legal and effective judicial system as well as strong law enforcement. The lack of those factors has caused unpredictability, uncertainty and inefficiency for anybody doing business in Indonesia that finally weakens Indonesian economy. Indonesia’s experience confirms the long held principle that proper legal and judicial systems are prerequisite for long and sustainable economic growth. This study will be based on theories made by Max Weber, David Friedman, Richard Posner and Iwan Jaya Azis. Their theories will be compared with the economic development theory proposed by the World Bank.
Keywords: Economy, Law, Development, Economic Development, Indonesia.