Making Economic Policy in Weak, Democratic, Post-crisis States: An Indonesian Case Study

SummaryEconomic crises in developing countries differ in their causes, severity and recovery trajectories. The literature on the causes and immediate management of these crises is well developed. However, it is more difficult to develop an a priori framework which facilitates an analytical interpretation of how crises affect economic policy and hence recovery. This is especially so in the commonly occurring “twin crises,” in which an economic crisis interacts with regime collapse. Country studies are needed to contribute to the development of such a framework. This paper addresses these issues with reference to Indonesia’s deep economic and political crisis of 1997–98.