Opposition to privatized infrastructure in Indonesia

Abstract

For decades multilateral organizations have led efforts to privatize infrastructure in developing economies, where the policy has generated considerable controversy. A prominent line of thinking suggests that local officials oppose privatization in order defend their material interests, and thus vested interests are what ultimately hinders institutional change. This article argues, however, that the private interests of local officials should not be assumed. Their objections need to be placed in the specific context of long struggles over the role of the private sector in development, exogenous-induced institutional change, sectoral governance, and moderately successful public sector performance. By adopting a constructivist vantage point that focuses on the role of ideas and the delinking of subjective interests from objective ones, we observe that public officials define what constitutes success differently than what a standard neoliberal analysis would yield. These insights are drawn from a longitudinal case study of the tollway sector in Indonesia.