Collections of Views, Opinions, and Analysis on Indonesian Capital Market by Market Movers, Experts and Forecasters.

Thursday, April 23, 2009

Comments regarding Presidential system in Indonesia

I took Professor Omri Yadlin's class at UC Berkeley who taught Law and Economics II based on Robert Cooter's book " The Strategic Constitution". It was a very interesting subject going about explaining political processes with theory of economic incentives. It gives me at least a framework to predict political outcomes. Without one, it can be a very daunting task He begins with the assumption that all politicians are rational beings, who through bargains and organizations trying to maximize their collective and individual needs.

Anyway, several important points in the book I see can be applicable to politics in Indonesia:

Indonesia's political system is charaterized by "bargained democracy", direct presidential election, and proportional representation.


"Indirect election of the prime minister unifies legislative and
executive power, whereas direct election of the president fragments legislative
and executive power" (Robert Cooter, page 554)

"Fragmenting power requires government to proceed by bargains, which I
have called “bargained democracy.” By contrast, unifying power can enable the
executive to proceed by commands, which I call “command democracy.“ In the
purest form of bargain democracy, the legislature dominates, whereas the
executive dominates in command democracy" (Robert Cooter, page 555)

The strength for bargained democracy is effecient governing ; for command democracy, decisive governing.
The weakness for bargained democracy is potentially unstable; for command democracy,
unresponsive, possibly dictatorial.

It is difficult for our proportional representation's system to have a "condorcet" winner. A condorcet winner is an alternative that can defeat any other alternatives in pair voting.
A condorcet winner can lose in an election involving three parties. Unlike winner-takes-all plurality, proportional representation can produce election involving three parties. Whereas the smallest party among those parties will be very relevant for political outcome (Robert Cooter, page 79)

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