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Jakarta Post

Economics of corruption: How dismal science can explain graft problem

  • Fajar Hidayat


Jakarta   /   Wed, November 6, 2019   /  01:38 pm
Economics of corruption: How dismal science can explain graft problem Economics can help explain the reasons behind this corruption, specifically game theory and behavioral economics. Game theory analyzes situations in which the strategic actions of one agent affect the payoff of another. Behavioral economics analyzes economic decisions using psychological insights about individual behavior. (JP/Budhi Button)

The controversial revision to Law No. 30/2002 on the Corruption Eradication Commission (KPK) has not had a visible effect on either the KPK or the criminals it pursues. The KPK continues to operate while some, in both the public and private sectors, keep conspiring in corruption. Three recent cases included the arrests of the regent of Indramayu, West Java, on Oct. 15, of the Medan mayor in North Sumatra and of the head of the regional road authority (BPJW) in Samarinda, East Kalimantan. The first and third were arrested in relation to alleged bribery in public road procurement, while the second has been implicated in a series of illegal cash gifts from the local government office. Since 2004, 122 regional heads have been detained by the KPK and have been named suspects in corruption cases. They make up only a fraction of graft cases in Indonesia. Economics can help explain the rea...

Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.