The Political Economy of Forest Sector Reform in Indonesia

Abstract

Indonesia's forests are critical to its economic development strategy and to the global environment. Yet evidence of unsustainable management and insufficient governmental supervision continues to mount. After identifying two alternative positions in the debate on institutional reform, this article demonstrates the utility of the political-economy perspective for understanding some of the problems and prospects for reform in the Department of Forestry's roles as government landlord and conservation institution. Reform in the landlord role is heavily constrained by the patrimonial characteristics of President Suharto's New Order regime. Exercise of the conservation role flounders against organizational and structural complexity. Hence major reforms seem unlikely without a regime change, a critical shortage in timber supply, or external threats to Indonesia's exports of forest products.