CORRUPTION IN

INDONESIA
Emir Rahman M(12030115170001)
Shafara Aulia Shita A(12030116140219)
 Definition of Corruption

According to Ades and Tella (1999) corruption which can

be interpreted as bribery is part of the side of economics
as rent seeking activities. Based on Law No. 20 of 2001
concerning Eradication of Corruption Crime, corruption is
divided into 2 :
(1) Corruption stipulated in the Criminal Code, such as
bribery, embezzlement, extortion and complaints
relating to contractor or partner.
(2) Corruption regulated outside Criminal Code.
Corruption regulated outside the Criminal Code for example is
regulated in Law No. 15 of 2002 concerning Money Laundering
Crimes. Based on Law No. 20 of 2001 concerning Eradication of
Corruption Crime, there are 30 (thirty) types of actions that can be
categorized as acts of corruption. But in summary these actions can
be grouped into:
1. Loss on state profits
2. Bribery (another term: bribe or lubricant)
3. Darkening in position
4. Extortion (blackmail)
5. Fraud fraud)
6. Conflict interests in procurement
7. Gratification (another term: gift giving)
Types and Determinants of Corruption

In the opinion of Kumorotomo (1992) there are 7 (seven) types of corruption, namely
transactive corruption, extortion corruption, defensive corruption, investment corruption,
kinship corruption, autogenic corruption, and support corruption:
1. Transactive corruption (transactive corruption) This type of corruption is caused by a
reciprocal agreement between the giver and the recipient for the benefit of both
parties and they actively seek these benefits.
2. Extortive corruption Extortion is corruption in which the giver is forced to give a
bribe to prevent losses that are threatening him, his interests or something of value
to him.
3. Defensive corruption, People who act deviant because if the abuse is not done, the
business will be hampered or stopped (the behavior of victims of corruption with
extortion, becoming corrupt in order to defend themselves)
Types and Determinants of Corruption

4. Investive corruption, Providing goods or services without

obtaining certain benefits, in addition to profits that are still
in wishful thinking or that are expected to be obtained in the
future.
5. Kinship corruption or nepotism (nepotistic corruption) This
type of corruption involves the illegal appointment of relatives
or close friends to occupy positions in the government.
6. Autogenic corruption (autogenic corruption) A form of
corruption that does not involve other people and the
perpetrators are only one person.
7. Corruption (supportive corruption) Corruption is carried out
to protect or strengthen existing or future corruption.
According to Rose and Auckerman (1997), corruption can be divided into 4
(four) types as follows:

1. Kleptokrasi ,
Occurs if there are many bribers and few recipients of bribes at the
central government level.
2. Competitive bribery,
occurs when there are many recipients of bribes at the lower government
level. Bribes and lots Competitive Bribery Bilateral monopoly occurs when
there are few bribers and few recipients of bribes at the top government
level.
3. Bilateral Monopoly
Bilateral monopoly occurs when there are few bribers and few recipients
of bribes at the top government level.
4. Corruption Mafia, corruption mafia occurs when there are few bribers
and many recipients of bribes at the lower government level.
The causes of corruption or bribery
include the following:
a. Market distorting public policy.
b. The low level of controversy among public
employees.
c. Bribers want to get lower costs than formal fees.
d. Want to "buy" (determine) political influence and
court decisions.
e. Weak law enforcement.
f. Low trade openness.
According to Tanzi (1998), corruption is caused by
complicated regulations, poor taxation systems,
inefficient government expenditures, low quality of
bureaucrats, low salaries of public employees, poor
legal systems, and the absence of leadership examples.

Meanwhile, Trisman (2000), identifies factors that cause

corruption, namely a weak legal system, religion
(moral), the level of democratization, the level of
decentralization, the level of economic growth, the
dominance of certain ethnicities, natural wealth, and
large state intervention.
Measuring Corruption
Ari Kuncoro (2002) in his research used the proxy "other costs" taken from published Industrial
Statistics from BPS. Wu (2003) uses several indices to measure corruption, including:
Corruption Perception Index, International Country Risk Guide, Business International Index,
World Business Environment Survey, The World Competitiveness Index. Meanwhile, Mudrajad
Kuncoro (2004) uses "pelican money" in the form of illegal fees (pugli), tribute, and extra costs
for measuring corruption.
Data from Transparency International shows that the
position of Indonesia as a corrupt country has not
changed significantly, not least after the
implementation of regional autonomy in 1999. In
2005, Transparency International Indonesia conducted
a survey of 21 districts / cities throughout Indonesia
and ranked 21st in the region from the most corrupt
to the cleanest. Central Java Province has the number
4 most corrupt city, Semarang City and the 21st
cleanest city, Wonosobo Regency.
in the corruption perception index (CPI) compiled by Transparency International, Indonesia is
still one of the countries with a high level of corruption. Although Indonesia's position is still
better than Vietnam, the Philippines, Kambojo, Laos and Myanmar, Indonesia's position is still
under Malaysia, Thailand, Brunei and Singapore.
THE IMPACT OF CORRUPTION AND
BRIBERY
The impact of corruption or bribery can be distinguished by level, namely at the
macro level, private investment, and micro level.
1. Macro Level
 Reduce economic growth
 Increasing economic inequality
 Socio-political instability
 Public policy is not effective
 Reducing government income
 Neglect of existing asset
 Investment in large-scale projects that are less necessary
 Excessive investment in military projects
THE IMPACT OF CORRUPTION AND
BRIBERY – Cont’d
2. Private Investment
 Making private investment unattractive
 Increase investment uncertainty
 Oppresing small and medium enterprises
 Reduce foreign investment
3. Micro Level
 Worsening company performance
 Hamper company productivity
 Increase costs outside of production
CORRUPTION PREVENTION EFFORTS IN
INDONESIA
 Corruption develops systemically in indonesia.
 According to the study, indonesia always occupies the lowest position that
commits corruption because the development of corruption in indonesia also
encourages the eradication of corruption.
 However, there are still many parties who commits corruption in indonesia.
Prevention of corruption in Indonesia is currently carried out by several
institutions:
1. Tim Pemberantasan Tindak Pidana Korupsi (Tastipikor)
2. Komisi Pemberantasan Korupsi (KPK)
3. Police
4. Attorney
5. Badan Pengawasan Keuangan dan Pembangunan (BPKP)
6. Lembaga Swadaya Masyarakat (LSM). Example : Indonesia Corruption Watch
(ICW)
Obstacles faced in eradicating
corruption in indonesia
1. Inconsistent law enforcement.
2. Upward-oriented bureaucratic structure, including remuneration without
fixing the structure and culture.
3. Less optimal function of the supervisor or controller components.
4. Many gaps for corruption in the political system and state administration
system.
5. Difficulties in formulating cases, so that the perpetrators of corruption are
so easy to evade the accusations put forward by the attorney.
6. Corruptors tactics to deceive investigators, the public and the state
apparatus.
7. Lack of solid moral foundation.
How to overcome corruption

Preventive and represive

 Preventive: build work ethics, strive to improve income, foster self respect
for every position and job, and the existence of social control and social
sanctions.
 Represive: enforce the law that applies to corruptors and the registration of
wealth of officials and employees.
Corruption Eradication Commission
(KPK)
 The legal basis for the formation of the KPK was Law No. 20 Of 2001 and Law No 30 Of 2002.
 KPK duties are:
 Coordination with the authorized agency.
 Supervision.
 Carry out investigations and prosecutions.
 Take precautionary actions against corruption.
 Monitoring.
 The authority of KPK:
 Coordination of investigation and prosecutions of corruption.
 Establish a reporting system in eradicating corruption.
 Request information about corruption eradication activities to the relevant agencies.
 Holding meetings with agencies authorized to eradicate corruption.
 Request reports from relevant agencies regarding prevention of corruption.
Corruption and Decentralization
(Regional Autonomy)
1. Decentralization will reduce corruption by:
a) Inter-regional competition to attract investment.
b) High investment will guarantee the salaries of public employees.
2. Decentralization will increase corruption by:
a) Greater regional authority will be followed by greater levies.
b) Bribers only deal with a few public employees where the authority of the
recipient is a large bribe.
c) Among local public employees acting mutually independent so that bribes paid
are greater.