Domestic Trade Deregulation in Indonesia

Poverty and Inequality Analysis
Monitoring, Evaluation and Learning
Policy Research

Few of the price-distorting mechanisms were recorded centrally and can only be identified on-site, within the locality, making monitoring difficult. Moreover, because local governments have had inadequate local revenue bases, they are easily tempted to restore tariffs and toll barriers, despite the damaging effects on growth and welfare.

The deregulation measures took their legal basis from the 1997 reform package and the January 1998 Letter of Intent agreed with the IMF. The 1997 reforms reduced local taxes, while the January 1998 Letter of Intent to the IMF deregulated local trade in an effort to do away with monopolies, monopsonies and other undesirable trade practices which contributed to the "high cost" economy. 

The remainder of this newsletter will describe our methods and initial findings, and explore ways to disseminate the message that deregulation at a local level is here to stay and is beneficial.


Research Area 
West Java
East Nusa Tenggara
South Sulawesi
domestic trade
regional trade
tax reform
Publication Type 
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