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CHART 1

2005
Indonesi
a

2006

2007

2008

2009

2010

2011

2012

2013

2014

2.2

2.4

2.3

2.6

2.8

2.8

3.0

3.2

3.2
3.4

TITLE
SOURCE OF CHART
Chart 1 shows that Indonesias score on the Corruption Perceptions
Index has been increasing constantly, from 2.0 over a decade ago in 2004
to 3.4 from the latest results in 2014. The result ranges from 10 (highly
clean) to 0 (highly corrupt) and there are several reasons for the
decrease in the perception of the degree of corruption in Indonesia; such
as increased press coverage and freedom, reform of regulation and
bureaucratic red-tape in government, and the dismantling of subsidies
that enable corruption schemes.
Increased exposure of information regarding corruption, in this case
through the freedom of speech and of the press, are both explanations
for decreased corruption. Brunetti and Weder (2003, pp.1820-1821)
concluded that higher press freedom is strongly related to lower
corruption in cross-study of countries. Further, Adsera, Boix, and Payne
(2004, p.479) stress that countries with citizens more informed and
engaged in public matters (measured through newspaper readership) are
more likely to hold politicians accountable for their actions. Therefore
increased press coverage and freedom in Indonesias transition to
democracy is one explanation of decreasing corruption.
Government reform of bureaucratic regulations and red-tape also affect
levels of corruption. According to Lopez-Claros (2013, p.28) old rules
and procedures that are no longer useful/appropriate in the present only
serve to provide economic rents for bureaucrats that support them.
Rose-Ackerman (1998, p.45) states that the most obvious approach is
simply to eliminate laws and programs that breed corruption. UNODC
states that Indonesia has made key steps in reforming business
regulation and public procurement and is likely to have contributed to
the steady decline in the perception of corruption.
Lastly, the reform/replacement of government subsidies on consumer
goods which can inadvertently create opportunities for corruption also

affects the level of corruption. In a study by the IMF (2013) global


subsidies for energy products amount to $1.9 trillion each year,
equivalent to 2.5% global GDP but are often misdirected, with the case of
gasoline where 60% of benefits from the subsidy reach the 20% richest
households. As Indonesia has recently scrapped its national gasoline
price subsidy, it has eliminated a source of corruption while also freeing
public funds to more productive policies.
Therefore, replacement of corruption-enabling subsidies, reform of
bureaucratic red-tape and increased freedom of the press are all valid
reasons explaining the drop in perception of the degree of corruption in
Indonesia.
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