Restoring Indonesia’s politic from oligarchs to people

Summary: From the original title: Counter-Oligarchy: Reducing the influence and domination of Oligarchs from Indonesia’s political parties through reform of Indonesia’s Party and Campaign Finance Systems, this paper propose to create equal ‘level of playing field’ by spending caps, reduce donation caps, promote a publicly financed, transparent system of campaign financing that amplifies small donations, along the lines of the complete disclosure, transparency of campaign funding. All of these necessary packages to kick big and dirty money out of Indonesia’s democracy.

I. Introduction

Indonesia’s institutional design of the electoral system has produced the most competitive electoral democracy in Southeast Asia,[1] but the regulation of campaign financing has been almost ignored.[2] Currently, Indonesian parties become vulnerable to and dependent on oligarchs[3] –a wealth individual or conglomerates who dominate Indonesia political parties — secure their operational survival. Accordingly, the operation of oligarchs Indonesia political life extends not only to supporting, backing and funding political parties and politicians but also to the taking over of top positions of party leadership.[4] A remarkable new development is that the majority of political party leadership is occupied by oligarchs.[5] As a consequence, many political party cadres and politicians are trapped in a conflict of interest and are typically driven by these wealthy donors. As a result, this deterioration led to more endemic political corruption and a reduced quality of democracy, policy-making and public service delivery.[6]

To deal with these problems, Indonesia introduced a stricter regime of transparency and a donation cap, complemented by stricter sanctions and punishments (ranging from fines, prisons and disqualifications). But, there is much criticism on the lack of enforcement and effectiveness of these regulations. Further, Indonesia also seems to doubt its own policy of providing state subsidy to political parties, which scholars believe only creates a structural environment to the establishment of oligarchs. Many scholars suggest Indonesia should reform its electoral system through the increase of public funds significantly.[7] They outline that it is necessary to swap to public funding as it logically can reduce a dependence of political parties on oligarchs.[8] Many other commentators, on the other hand, are skeptical about that suggestion and claim that the Indonesian political parties’ character tend to develop as a form of ‘cartel parties’.[9] As such, they believe that providing a public funding to political parties will only be the ultimate achievement of a predatory corrupt behaviour of politicians and political parties to rob public funds.[10] However, both supporters and sceptics of public funding do not provide a comprehensive solution to reduce the influence of oligarchs in Indonesian parties. They for instance pay little attention to the absence of expenditure caps, disadvantage of too high amounts of donation caps, and to the almost uncontrolled political advertising in Indonesia’s electoral system.

In this paper, therefore, I aim to argue that the current Indonesia’s electoral framework is inadequate because it is unable to mitigate and reduce the influence of oligarchs in political parties. Referring to and elaborating on the work of Mietzner on the importance and the necessity to increase public pundings, then critically contextualizing with most recent development, there are some measures that should be taken by Indonesia to reform its electoral system, particularly regarding the way Indonesian politicians have to raise and spend funds for their political campaigns and operations. More concretely, this paper may suggest that Indonesia should adopt expenditure caps, increase public funds, reduce the amount of the donation cap, and limits political advertisement to counter the influence and domination of oligarchs. All these — together with the redesigning the election monitoring institutional framework into a single agency- is required to ensure more effective monitoring and enforcement.

This paper traces and examines the evolution of Indonesia’s problem with political finance and proposes a number of possible solutions. It so develops in four analytical sections: first, it will illustrate the general problem of oligarchs and political party funding in an era of oligarchy. In particular, how they operate, take over and maintain their power; second, it describes Indonesia’s current electoral system and why it has created the structural environment for the tendency of oligarchies to develop and failed to reduce their influence and domination; third, it illustrates how the deficits of the political financing system have negatively impacted not only on the quality of policy-making but also to the enjoyment of rights; fourth, it analyses whether it is possible to construct an electoral system that will be able to mitigate the intensity of political corruption and reduce a dependence on oligarchs in Indonesia. It formulates recommendations on possible reforms of the party and campaign financing system.

II. Background: Oligarchs, Media and Political parties

“We are moving rapidly away from our democratic heritage into an oligarchic form of society where today we are experiencing a government of the billionaires, by the billionaires, and for the billionaires.” — Bernie Sanders[11]

Speaking of American political and electoral reform, where so far, very few wealthy donors have donated around half of the $318 million raised to back the 2016 presidential campaign,[12] Bernie Sanders’s quote highlights the points author wants to emphasis in this chapter; the era of oligarchs‘ domination and its threat to the democratic system. Although for a long time, wealth has influenced American politics in a powerful way, recently its role in democracy has been consolidated and even more powerful, particularly after the elimination of campaign expenditure limits, which resulted in a very significant increase of private investment during elections.[13] Relatively similar to some extent to what has happened in America, after the fall of Soeharto, scholars argue that Indonesia’s political life has suffered from two major phenomenons: the domination of oligarchs[14] and the formation of cartel parties. While Winters (2011)[15] and Hadiz (2012)[16] argue that the majority of Indonesian parties fell to the hand of oligarchs, Slater (2004)[17] and Ambardi (2009)[18] believe that Indonesian parties have –in various periods — formed a cartel system to distribute power and resources among them.[19] Those different theses to analyse the Indonesian political parties, however, seem to be mixed. Both confirmed weaknesses of Indonesia’s party financing system and the dysfunctionality of political parties. But, when it turns to the solution, particularly in relation to the idea of public fundings for political parties, those conceptions come up with very different opinions. The author, however, will not elaborate concerned dispute in this chapter, and will get back to this issue in the chapter on solutions.

This chapter begins by identifying and analysing current political life in Indonesia, which is dominated by oligarchs. It also provides an extended discussion of how the emergence of oligarchs, their relations to political parties and media, including their particular interests.

The rise of oligarchs

For many observers, the rise and extension of the influence of oligarchs into Indonesian political parties can be traced since direct presidential elections in 2004 and subsequent 550 direct local executive elections from 2005 to 2010.[20] At that time, elections resulted in the significant increase in the cost of campaigns, consultants, opinion polls and media advertisements.

At the same time, globally, there has also been a decreased trend in the number of memberships of political parties. For a long time period, political party members played a significant role as the backbone and massive machine of the campaign process. But, when it reduced significantly, especially in the last decade, political parties turned to the power of money for political campaign and other operational activities.[21] As a result, it provided opportunity for the oligarchs to strengthen their role and make the political parties more dependent on them than before.

Another factor believed by scholars to enable oligarchs is the inadequacy of Indonesia’s campaign financing system and the dysfunctioning of political parties, which created the structural environment for the fall of political party leadership to the oligarchs.[22] However, it was probably a combination of those three factors that contributed to the fall of political party leadership to oligarchy. Oligarchs exploited a gap in inadequate election regulations and at the same time used political conditions, which supported their role and position.

How they operate?

It was the general understanding that oligarchs used political parties as a vehicle for their economic and political interests. However, there is no single conception of how oligarchs operate. Although Hadiz and Robison’s and Winters’s analyses both emphasize the central theory of wealth defence,[23] they disputed the operation of oligarchs. Whereas Hadiz and Robison describe a collective nature of oligarchy as key element of the concentration of wealth and power within the system of power relation, Winters, by contrast, argues that oligarchy does not require collective behaviour in the way to defend its rule.[24]

In the Indonesian context, these methods also differ in their principal element of analysis. With his definition of oligarchy as the politics of wealth defence by materially endowed actors, Winter’s analysis focusses on individual agents who sometimes act collectively, but often do not.[25] The emergence of different forms of oligarchy — warring, civil, sultanic and ruling –presented by Winters is primarily determined by the diverse threats oligarchs face and how wealth defense is accomplished. Politics of the electoral is a potential canal for the exercise of power in the pursuit of wealth defense, and oligarchs may choose to support, sponsor, or even become political elites.[26] But while ‘extreme material inequality necessarily produces extreme political inequality’, this linkage doesn’t require that all individual oligarchs engage in the political sphere or hold positions of direct rule, according to Winters. This contrast with Hadiz and Robison emphasis on the collective system of power relations in Indonesia and the evolving connection between the state and bourgeoisie, which –returning to their definition of oligarchy — entails the fusion of wealth accumulation and political power from the late New Order period. In my opinion, Hadiz and Robison’s analysis of Indonesian politics places relatively more emphasis on structure than does the agency analysis by Winters.

Oligarchs and Media

Since Soeharto’s regime fell, Indonesia’s media outlets are relatively free in the sense that they are not threatened by muscular intimidation or intervention from the state. But they are also thoroughly corporate and dominated by super-powerful oligarchs.[27] In order to exert much political power, oligarchs control and use Indonesian media, including online media news, newspapers, television and radio through their domination of ownership.[28] Currently, a small number of wealthy families who also have direct affiliations with and are led by political parties[29] dominate the media market and own the vast majority of Indonesia’s media. Major media groups own five out of six Indonesian newspaper with the highest circulation and all of the four biggest online news media sites. Further, ownership of TV stations is concentrated into five corporations that control 96,6% of all national stations.[30]

Benefiting from the weakness and inadequacy of political advertising regulation, media oligarchs played a significant role in the framing and outcome of the presidential election. For instance, Indonesia’s television station owners became key political players during Susilo Bambang Yudhoyono’s (SBY) presidency (2004–2014).[31] This continued during the 2014 presidential election campaign when mainstream media contributed to Joko Widodo’s overall success.[32]

The fusion of media control and political party leadership within the power of oligarchs also brings serious consequences to press freedom and to the quality of democracy in general. There is evidence that oligarchs sometime used coercion to offend press freedom, freedom of expression and freedom of association.[33]

III. Indonesia’s legal framework on political party financing. Early Initiatives for reform. What is wrong?

This chapter begins by reviewing the current regulations of party financing. It provides some evidence of early initiatives of electoral reform. Indonesia’s current electoral framework regulates political party financing, which includes mechanisms to raise a funds, provisions on disclosure, sanctions and enforcement. But, the focus of this chapter is to assess what might be wrong with those regulations? This chapter identifies and analyses some weaknesses of those regulations and identifies unregulated areas, which create damage to the fairness of elections and Indonesia’s quality of democracy. Further, it argues that a range of reforms are necessary to reduce or even erase the influence and domination of wealth.

A. How do parties raise their funds?

By law, Indonesia’s party financing system in 1998 and 1999 decided that parties might be funded through three different sources: member’s contributions,[34] private donations,[35] and public funding.[36] As many civil society organisations point out, membership fees model as a better solution to the problem of political financing. Ideally, a political party raises much of its income from membership contribution. Therefore, until now it has been upheld as one of the three pillars of Indonesia’s party financing system in the political party law until now. However, this idea has long showed to be unrealistic. Worldwide, as goes for Indonesia, parties have shown a tendency to lose their mass base. [37] Although some parties have links to or even roots within some of the largest mass organizations, [38] in terms of financing, there is evidence that members are unable to serve as a backbone for party funding.

Another form of membership contribution is that party cadres who have a seat in the House of Representatives, or are ministers or are posted in executive bodies must send about 15–25 percent of their wages to their party’s central office.[39] Many of them have to pay more for additional contribution for regular or incidental party events. This form of ‘taxation’ is far from ideal and contains many risks. For Instance, MPs have attempted to raise their allowances by up to 300 per cent to compensate for the loss of individual income. [40] This initiative, however, led to intense public criticism and was finally cancelled. [41] As a result, many of the MPs have shifted to corrupt practices to compensate for their losses.[42]

The second sources of party financing are donations. Based on the 2011 party law, there are specific caps to the contributions of individuals or companies Currently, annually, parties are allowed to collect 1 billion rupiahs from individuals and up to 7.5 billion rupiahs from corporations.[43] Additional contributions are allowed to the accounts of legislative, presidential and local executive campaigns, with different thresholds in place. However, the very high donation limit contains some dilemmas. According to International IDEA’s political finance database, Indonesia has very high donation limits, which are among the highest in the world. [44] As a result, candidates and political parties often take a short cut in fundraising through donations by oligarchs. Accordingly, the majority of funding for the 2014 presidential election came from corporations and the wealthiest Indonesians. In the official report of the then candidate couple Jokowi-Kalla campaign income, Kalla groups and other companies affiliated to him contributed around Rp. 20 billion rupiahs or almost a half from the total income.[45] A similar pattern also can be found in opponent’s Prabowo-Hatta campaign income report. Therefore, IDEA suggested Indonesia to consider lowering its donation limits.[46]

Unlike in other more advanced democratic countries,[47] where the government offers tax deductions for officially registering campaign donors and membership fees, Indonesia does not have that kind of policy and does not that facility. In practice, particularly outside election periods, most contributors give directly and informally to political parties and individual candidates or politicians.[48] Further, because of inadequate regulations on this, both donors and recipient freely operates without a risk of legal consequence.

The third component of the party and campaign financing system consists of public funds or state subsidies. Unlike in many countries where the percentage of public funds has steadily increased, [49] Indonesia rather tends to eliminate the existing public funding system for elections and campaigning or political parties in general. Public funds to political parties have systematically been reduced by around 90 per cent since the implementation of Government Regulation №29 of 2005.[50] Prior to that, in 2001 each party obtained Rp 1,000 per vote. This introduced state fund as a substantial component of party funding and could cover significantly to more than half of a percentage of electoral expenses[51]: for instance, the Indonesian Democratic Party of Struggle (PDIP) collected Rp 35.7 billion each year at the national level and relatively similar payments at the local level.[52]

However, since 2005, a new presidential decree reduced the payments to Rp 21 million per seat, or around Rp 108 per vote.[53] This massive reduction, ironically, occurred at a time when parties and election campaign costs increased dramatically.[54] In contest with a series of local elections from 2005 to 2010, scholars explained that the professionalization of campaigns led to more costs, especially for consultants, opinion surveys and advertisements. An official reported that PDIP’s campaign expenses, for example, showed a dramatic increase to Rp 376.3 billion in 2009, while it only held around Rp 1.5 billion in public funds at the national level in that year.[55]

Despite party branches at the local level having received additional money from provincial, district and municipal governments, with the high cost of the hundreds of local elections, this system is likely to fail in building stable, coherent and institutionally healthy parties.

B. Disclosure, Transparency and Accountability

At the same time that public funds were reduced, ironically, Indonesia’s party and electoral laws tightened the allocation and accountability mechanisms for the use of that public funding. Regarding the allocation of money, under the 2011 Political Party Law, parties are required to spend portions of the state fund not only on their operational expenditure but also on political education. The purpose of this policy was idealistic and necessary, but with little state subsidy to spend, the policy is too demanding and contains a risk of being misused in its application.

Furthermore, under the 2011 Party Law, parties were periodically required to have a financial audit and to publish it. [56] Their financial reports are audited by the State Audit Agency (BPK).[57] Similarly, they have to submit their campaign accounts to the General Election Commission (KPU) , which will appoint a public accountant for an official audit. [58] However, there is evidence that these rules are not effectively monitored and purely administrative, non substantive and formalistic.[59] Scholars observed that these rules are only superficially enforced.[60] For instance, auditors only check whether the audit forms were filled in accurately. No investigative audit takes place. As a consequence, Indonesia is losing significant funds on unsubstantial audits, none of which has ever led to prosecutions. Moreover, there are no obligations that would require parties, candidates or the General Election Commission (Komisi Pemilihan Umum, the ‘KPU’) to publish account statements or audit reports, effectively excluding the population from efforts to enforce transparency.

However, transparency and accountability are obscured by institutional miss coordination and rivalries over who is responsible for monitoring party and campaign financing. By law, there are four agencies involved: the General Election Commission (KPU), the Election Supervisory Board (Panwaslu), the National Police and the State Audit Agency (BPK). However, none of these institutions has ultimate responsibility for investigations and imposing sanctions. This design is different from best practices in other advanced democracies, where a single agency receives complaints, conducts investigations and issues punishments.[61] Furthermore, these four oversight bodies have deep institutional rivalries; they withhold significant information from each other that prevents their counterparts from starting credible legal processes on their own.[62] These institutional weaknesses and loopholes have led to a situation in which even the most blatant violations are not investigated.[63] In both the 2004 and 2009 elections, civil society organizations such as Indonesia Corruption Watch (ICW) revealed detailed records on ‘fictitious donations’, vast differences between official and real expenditures and campaign accounts that included remarkably small amounts.[64]

The actual report of the campaign spending is also easy to manipulate without a fear to be punished. For example, PDIP officially published campaign costs of totally Rp 38.9 billion for the 2009 parliamentary and senatorial elections, but AC Nielsen’s report on television advertisements during the campaign period exposed that the political party had spent over Rp 100 billion on television advertisements alone.[65] A similar figure is also found for other parties. However, there is no enforcement by the responsible authorities. It seems there is a collective understanding among Indonesian parties, law enforcement agencies and the public on this behaviour of non-enforcement. Observers speculate that those existing transparency regulations are unlikely to be enforced because that would cause extreme turmoil in the political process and arguably place every single politician in jail. However, there should be no excuse for this.

Another instance can be seen at the distinction between the campaign costs claimed by the candidates and the actual expenses. Indonesia’s winning Jokowi-Kalla representatives and the losing ones for the Prabowo-Hatta team claim that they successfully collected a combined $37 million. [66] But the real campaign expense as estimated by the University of Indonesia’s Institute for Economic and Social Research was at a levelling $920 million[67] — or about 25 times what was reported. [68] A large piece of these enormous differences describes vote-buying and bribes, although some of the variance also derive from enormous advertisements costs beyond legal caps and the cost of nominations and primaries, which occur before the beginning of the formal reporting period. [69]

C. Tightening rules on sanctions and punishments.

Indonesia’s party and electoral legal frameworks contain a lengthy list of sanctions for political parties and candidates violating these laws, with punishments[70] ranging from fines to prison terms and disqualification[71] as an electoral contestant.

Disqualification of candidacy is possible on the breach of bribery. However, a candidate who is convicted of committing other election offences will not be removed from candidacy, even if he/she is found guilty of committing acts of “intentionally disturbing or obstructing the conduct of an election campaign,”[72] “giving or receiving campaign funding above the permitted limit,[73] “intentionally giving incorrect information in the report of the election campaign fund,”[74] “intentionally using violence or threat of violence and obstructing anyone from exercising his voting right,“[75] or other election offences.

In practice, the enforcement of campaign funding regulations is also uncertain. Despite the fact that there were a large number of prosecutions of election offences, the exact number of cases that related to the breach of campaign funding was not clear. For example, at the 2004 General Elections, from 2,413 election offence reports submitted by the Election Monitoring Committee (Panitia Pengawas Pemilu or ‘Panwaslu’) to the police, only 1,065 were sent to the court by the prosecutor, which also shows the lack of effectiveness of the enforcement process.

Scholars explain how law a violation of election law contains by a lack of effectiveness in term of coordination, procedures, technical and willingness to enforce. For instance, according to Topo Santoso from the University of Indonesia, there are several reasons why settlement of election offences, either by Panwaslu, police, or public prosecutor has not been effective.[76] Firstly, coordination between Panwaslu and the police has not yet been conducted smoothly. Secondly, there was insufficient evidence to prove a case. There are many causes for this lack of evidence like the main perpetrators often disappearing within 30 days. Third, different institutions often hold different perceptions concerning one or more elements of a particular offence, for instance, the perception of bribery or of campaigning beyond the campaign period. Fourth, the application of discretionary power not to follow up on certain cases for a number of reasons, e.g. possibility that a judicial process might bring about social chaos, removal of an offender from candidacy by Election Commission, which rendered prosecution futile.

B. Recent development: expenditure cap and limits of political advertisement

In an effort to control political campaigns high costs, the General Elections Commission (Komisi Pemilihan Umum, the KPU) has introduced a cap on campaign spending for candidates and political parties contesting in regional elections. On 2015, Indonesia enacted Law №8 of 2015 on Governor and local leader election and for the first time introduced an expenditure cap. [77] It was followed by the regulation of PKPU №8 of 2015 article 12 (expenditure cap) and article 53 (disqualification). [78] However, as publicly stated by the head of KPU Legal Bureau, the motivation of this regulation determined more by the concern of high cost of the campaign and the misuse of the local state budget (APBD) by the incumbents[79] rather then by the awareness of the threat of oligarchs. The KPU claimed that the cap would not cause a problem as some funding would be received from local government state budget (APBD). The local governments are expected to fund public debates to be broadcasted on local TV and radio stations, election paraphernalia and print media advertisements. For example, KPU commissioner Ferry Kurnia Rizkiyansyah explained that for daily television commercials, the KPU will accommodate ten spots, which each will last 30 seconds while advertisements on the radio can last up to 60 seconds. [80]

On the other hand, reformers criticise this new regulation as they argue that the government’s arrangement to limit campaign expenditure for candidates and parties contesting regional elections is too high. For instance, the Association for Elections and Democracy (Perludem), reported on the application of a model designed by the General Elections Commission (KPU) to set region-specific budget plafonds. These figures were calculated by distributing the number of eligible voters in one province by the number of regencies or municipalities within that province. The amount is calculated by the average cost of paying a civil servant to attend a full-day meeting in the region. [81] For instance, West Java’s local campaign budget-ceiling was Rp 490 billion (US$37.5 million) based on the average cost of organizing a full-day gathering with Echelon I and II officials in the province, or Rp 345.6 billion if based on Echelon III standards. [82] Therefore, it will likely have no effect as the proposed formula establishes no actual spending limits.

As this regulation was enacted at a time close to the local leader election event itself, it is difficult to see its impact so far. However, it can be considered as good progress in Indonesia’s electoral system. Certainly, the success of the implementation of this regulation will push parliament and government to adopt campaign expenditure limits and political advertisements limits in the revision of the 2008 Presidential election as well as the 2004 National, Local Parliament and Senator Member Election Law.

IV. Impact of the failure of the party financing system

The systemic failure of Indonesia’s party financing system that was dominated by oligarchs has had a number of serious consequences for the endemic political corruption[83] and the reduction of the country’s democratic quality.[84] People might say that the shifted position of wealthy individuals and oligarchs from exercising clandestine influence to becoming front men of parties will turn them into subjects of public scrutiny and accountability, and therefore more transparent.[85] But, For the oligarchs, it would seems difficult to avoid conflict of interest between the demands of public office and their private interests. Conflicts and biases arising from the unique positioning of these individuals thus can undermine the actual or, at least, the perceived integrity of democratic government — a form of government wherein holders of public office are assumed to leave their private interests behind when they take their oath. This is a tall order for business tycoons whose investments tend to be so widely diversified that almost all political decisions impinge on their private interest in one way or another, directly or indirectly.

Furthermore, we also have to consider the types of political corruption. According to a Transparency International Annual Report (2004a, 10) ‘Political corruption is the abuse of entrusted power by political leaders for private gain, with the objective of increasing power or wealth. Political corruption need not involve money changing hands; it may take the form of ‘trading in influence’ or granting favours that poison politics and threaten democracy.’[86] Others scholar have further defined several different types of corrupt behaviours, including state capture, patronage, nepotism, influence padding, and bureaucratic corruption.[87] Obviously, these different forms of political corruption can be found in Indonesia, where oligarchs and political parties play a central role and position in the endemic political corruption.

During election periods, political parties tend to get trapped in corrupt behavior. For example, parties tendering and selling ‘ticket’s for candidacy to the highest bidder whom might come from their cadres, from non-party figures or wealthy individuals for positions in legislative and executive bodies. For instance, in 2004, in order to secure their seat and candidacy, the Gerindra party –led by Prabowo Subianto- asked its legislative candidates to pay Rp. 300 million (US $30.000) to secure their seat.[88] This modus was common and happening to almost all parties. If they reject this ‘contribution’, they will face serious consequence, from a cancelation or removal from the list of candidates to the dismissal from their position in legislative or ministries and other political position.[89] Under the influence of and significant ‘debt’ to oligarchs, the successful candidates who paid political parties for their candidacy and subsequently had to self-fund their campaign then have to pay back by serving the interests of their wealthy donors.[90]

The way on how they pay back their private debt can be illustrated in several ways. For instance, from the national to the local level, governors, majors and district heads use many items of the state budget to fund their allies, constituency and mass-organisation (religious, youth, students). The most common item is the misuse and misallocation of ‘grant funding’ (dana hibah).[91] However, other items are also used, for example, a direct appointment of contractors to build a specific infrastructure project. Another example shows itself through pro-poor policy as legalized through law. For instance, to win the 2009 election, SBY launched a popular cash-hand out fund –like a Taksin’s policy model- of around US$ 2 billion.[92] Despite the fact that it can be considered as a form of bribery of the voter, it secured them from being charged with corruption or another violation of the election law.

As a consequence, there is a large number of politicians, lawmakers, heads of local governments who are involved in corruption. Among them are three chairmen of political parties: Anas Urbaningrum, a former chairman of the Democrat Party ‘PD’ who was charged with 14 years of imprisonment for graft,[93] Luthfi Hasan Ishaaq, a former chairman of the Prosperous Justice Party or Partai Keadilan Sejahtera ‘PKS’ who charged with 16 years imprisonment also for graft, [94] and Suryadharma Ali, the former minister of religious affairs and the chairman of the United Development Party (PPP) charged with 6 years imprisonment for a Haj scam.[95] From 2004 to 2013, The Corruption Eradication Commission (Komisi Pemberantasan Korupsi, ‘KPK’) arrested 65 members of parliament, seven ministers, eight governors, and 32 district head and majors.[96] Many of them charged with graft, misuse of grant funding and other forms of corruption.

To sum it up, the early reform of Indonesia’s party and campaign finance system has contributed to endemic political corruption. Therefore, it is deemed essential to raise awareness on the need of state subsidies and the next reform of party and campaign finance.

V. Solutions: reducing the influence and domination of oligarchs from Indonesia’s political parties

Searching for solutions by focusing on the next step of electoral reform could be critical given the many disappointments due to the lack of enforcement. Research suggests that adopting international standards directly into Indonesian electoral system without understanding the context and its structural problem is unrealistic and will only lead to a lack of implementation and result in distrust of the system.[97] It is evidence that Indonesia’s party financing system was far from adequate. Further, the weaknesses of the electoral system created a structural environment for the domination of oligarchs and an endemic of political corruption. Therefore, to formulation of some solutions should be based on the critical analyses of that particular context.

In order to resolve the problems, scholars and organisations have suggested Indonesia to lower donation caps,[98] and to increase the state subsidies.[99] Other suggest to tighten regulations and apply stricter sanctions.[100] However, none of these recommendations suggest the necessity to adopt expenditure caps and political advertisement limits. Further alternatives must be taken into account and considered.

Therefore, although the author still acknowledges and accepts some of their recommendations, such as limiting donations and increasing state funds, as part of an integral solution, this paper also carefully re-examines them and goes beyond them. This work presents the following recommendations:

A. Increased of Public Funds

The first solution that has already often been suggested by political scholars is the necessity to increase the amount of state subsidies for political parties significantly.[101] Citing Mietzner, who is considered as the most popular reference to this proposal, Indonesia needs to increase at least 30% of their public fund allocation to political parties or an increase per vote amount from Rp.108 to — eventually — around Rp. 5,000 in order to reduce their dependence on wealthy sponsors.[102]

According to Mietzner, the main source of the partial oligarchization of party politics is Indonesia’s dysfunctional party system.[103] He argues that, in the vast majority of cases, polities that fail to provide significant state subsidies for central party boards tend to create conditions in which conventional politicians can’t mobilise the funds necessary to compete for public office and thus have to surrender the political arena to oligarchs. For Marcuse, it seems only logical, then, that the introduction of substantial state subsidies for parties could help in mitigating the oligarchic problem.[104] Similarly, his conclusion seems to get confirmation by Winters, who stated that ‘except for countries where public funds are a major source of finance for political campaigns, finding the money to be a political contender is always a challenge.’[105]

Providing more state subsidies to parties appears like a convenient solution to this dilemma, but the critics of such an approach are numerous. In the neo-classical literature on party financing, scholars have warned that public subsidies make the parties dependent on the state, discourage them from deepening their roots in society, and create “cartelistic” tendencies, in which the parties no longer compete for power, but are occupied with distributing state resources among themselves.[106] Furthermore, state subsidies are no guarantee against party corruption, with public funding having “a supplementary rather than substitutory effect on clientelistic forms of financing”. [107]

The opponents of public funding, on the other hand, contend that state subsidies will reduce political corruption and the influence of oligarchs. They do this based on understanding that public funding for political parties also carries a significant risk of the misuse of public resources. It occurs when public funds are used for personal party rank benefits rather than a purpose according to the law, for example for political education or training of party members. Another risk is that it could be considered as unfair as the funding is provided only for the political parties with seats at parliaments or the existing political parties but not to the newcomer parties.

The main argument for this rejection is based on the theory of cartel parties.[108] While for supporters of the oligarchy theory, the availability of significant public funding is extremely crucial to mitigate or reduce the influence of oligarchs, cartel theory supporters argue that public funding for political parties will not prevent politicians from corrupt behaviour because the function of political parties was changed from playing political competition to reaching the power to establish a single collaboration to control and share power and wealth.[109] Under this system, parties decides among themselves how much to grab state pundings.

Although the argument of the advocates for public funding looks convincing, many civil society organisations and NGO’s activists are still doubtful and sceptic. Most of them argue that many politicians will just pocket public funds for their own interests and continue their corrupt behaviours on state resources. For example, the prominent anti-corruption organisation Indonesia Corruption Watch (ICW) has challenged almost all of political parties to ensure financial transparency as well as accountability before receiving a substantial addition in annual subsidies from the state budget.[110] The ICW encouraged parties to first prove that they were worthy of more financial assistance from the state by taking measures to not tolerate corrupt practices among their cadres. This was in the understanding that there was an increase of public distrust towards political parties and that a large number of the corruption case involved politicians. Then, after the KPK charged some party leaders, the awareness of a dire need for a solution to increase accountability of party financing started to rise. Some people shifted their mind to acknowledge the importance of public funding, others however, remained uncertain about what to do, without offering realistic solutions.

Opponents of state subsidies for parties in Indonesia echo this general skepticism. They point to the fact that parties already did not respect existing party financing regulations, with only 13 out of 24 parties of the 2004 elections submitting their auditing reports to the KPU. Out of these, only four parties handed in their reports on time, and only one was in line with the required standards.[111] Furthermore, Transparency International Indonesia (2004) has provided evidence that parties regularly under-report their contributions and expenses, making it unlikely that they would submit to the tight control regime typically required for effective public party financing. The authorities, for their part, have not imposed significant sanctions for violations, adding to the doubts that any further state subsidies would be spent for organizational needs of the party rather than personal interests of individual politicians.[112]

Recently, strong opposition and high level of distrust to political parties led to the rejection of the new proposal for increased state subsidies to political parties. On March 2015, Indonesia’s Home Minister Tjahjo Kumolo revealed a plan to increase annual subsidies to a maximum of Rp 1 trillion or (US$76.75 million) for every party, a program that could be reasonable within five years, after the 2019 elections. [113] He argued that increasing state funding for political parties would support a pillar of democracy and repair the bad perception of politicians and their parties, which had been tainted by graft and corruption cases in the past decade since they would be forced to exercise accountability for such huge amounts of state support. [114] This plan was followed by intense criticism from the public and as predicted, also from Vice President Jusuf Kalla (an oligarch himself and, therefore, opposing this proposal), who claimed that it would trigger everyone to create political parties.[115]

Despite it having been approved by the Presidential Office, in less than four months since he announced a plan to increase annual state funding to a maximum of Rp 1 trillion (US$76.75 million) for each political party, the Jokowi’s administration had decided to stop the deliberation process for the plan. The government explained that a number of lawmakers and the anti-corruption commission were against the proposal.[116] However, the decision to drop this proposal shows that Jokowi’s administration would not take a risk of being exposed to unpopular public perception. It is clear that the Indonesian public still seems reluctant to give more funding to political parties.

However, if Indonesia wants to reform its party financing system, Indonesia will have to begin with a raise in public funds for political parties. Without it, there is no incentive for politicians to change their illegal fundraising methods and corrupt behaviour. While not the only one solution, state subsidies can effectively reduce the undue influence of oligarchs and other donors, and they can erode the justification that politicians often use for political corruption.

B. Expenditure caps

The second alternative for electoral reform is the need to adopt the expenditure cap. The idea of expenditure caps comes from the argument that limiting the amount of money that can be spent may help to reduce the advantages of those political parties and candidates with more access to resources.[117]

Like in the US, a remarkable impact of the absence of expenditure cap is a significant increase in campaign cost. [118] From 2001 to 2014, the electoral expenses of PDIP, for instance, have rocketed from Rp. 69,1 billion (US$ 6,9 million) to Rp. 720,4 billion (US$72 million) or about an increase of ten times.[119] Furthermore, in Indonesia, the campaign costs are very high. The comparative studies on the numbers of party expenditure in some countries showed that Indonesian real campaign cost are higher than those of richer countries such as the United Kingdom ($91 million), [120] Germany ($93 million) [121] or Australia ($145 million). [122] Such high expenditure, both legal and illegal, is a real threat to public trust in democracy. It indicates that politics is only accessible to the wealthy or well-connected, which often disadvantages women and poor candidates. The non-reported amounts indicate at massive vote buying and bribery.

Although money cannot always buy the election,[123] unlimited campaign expenditure creates damage beyond the result of elections. For the contestants and political parties, this paper has demonstrated that excessive and unlimited expenditure breeds corruption, hinders grassroots candidates and keeps oligarchs and other wealthy special interest groups in the pocket of the candidate.[124] Further, for the voter, it increases their vulnerability to money politics, vote-buying, and other undemocratic behaviours.

The advocates of campaign spending limits emphasize, at least, three benefits of an expenditure cap policy. Firstly, the spending limits can effectively eliminate the advantage of the oligarchs and wealthy candidates that have unlimited and easy access to resources and subsequently better ensure equality and fair competition. Under the expenditure cap scheme, all contestants in the election have a same size of the field to play.[125] The second benefit of an expenditure cap is that party’s spending can be more easily monitored than donations and making it easier to detect violations. It is also relevant to Indonesia, which is generally considered as having a lack of oversight and performing poorly in enforcement. The third advantage of spending limits is that they will reduce corruption and undue influence.[126] The anti-corruption rationale for spending limits[127] argues that they can act as a preventive measure by containing grows in campaign spending and, therefore, containing the need for parties and candidates to seek larger donations.[128] This pressure to search for donations increases the risk of corruption. Lastly, if applied effectively, the limits would also reduce the time spent by the parties on fundraising and allow them to devote more time to their other functions.[129]

The opponents, on the other hand, claim that applying an expenditure cap is a breach of freedom of speech. Like in the US, the major argument for the rejection of limiting political expenses is based on the new interpretation by Supreme Court judges of the First Amendment of American Constitution.[130]

The opponents also doubt that expenditure limits will solve the problem of the high number of electoral expenses. Pointing at the political advertisements as the root cause of the increase of campaign expenses, the opponents of expenditure limits argue that rather than having spending limits, there should be limitations of political advertisement.[131] However, that would fail to capture others key items of election spending such as direct mail, opinion polling and consultancies. Principally, a ban, by its nature, involves a much more severe limitation of freedom of political communication that outweighs its purpose of fairness and anti-corruption.[132]

Advanced democratic countries provided a different position on the campaign expenditure limits. But, the proponent of expenditure caps show that the countries that adopt expenditure caps tend to be successful in reducing the domination of oligarchs. For example, Canada’s experience with expenditure caps and limits to political advertisement provides empirical evidence of success in reducing the domination of wealth and ensure equality in the election.[133]

The Supreme Court of Canada, in line with the egalitarian model of elections, endorsed several principles applicable to the spending limits regulations. Two major principles say that spending limits are necessary to preserve the principle of political fairness[134] and to guarantee the rights of free and well-informed vote.[135]

‘to ensure a right of equal participation in democratic government, laws limiting spending are needed to preserve the equality of democratic rights and ensure that one person’s exercise of the freedom to spend does not hinder the communication opportunities of others.’[136]

The Court added:

‘Owing to the competitive nature of elections, such as spending limits are necessary to prevent the most affluent from monopolizing election discourse and consequently depriving their opponents of a reasonable opportunity to speak and be heard’.[137]

In contrast, more restrictions to the electoral process were rejected in the USA. Upholding the libertarian model, in the US applying spending limits is considered as a violation of First Amendment Right to free speech and that ‘if a candidate can raise the money, he or she should be able to spend it’. Expenditure limits law is not implemented anymore due to a series of court decisions including Citizens United v. FEC (2010) and McCutcheon v. FEC 2014[138] that overruled Austin[139] and McConnell[140] precedents. While in Austin and McConnell, the Court accepted the principle that corporations do not have the same rights on political activity as a person, in the Citizens United, by contrast, US Supreme Court has expanded the ability of wealthy individuals, corporations and groups to spend as much as they like to influence elections.[141] However, many American civil society organizations and scholars condemned those decisions.[142] For example, according to Dworkin, the decision in Citizens United creates damage to American democracy. He outlined that the decision ‘…threatens an avalanche of negative commercials financed by huge corporate wealth.’ Further, Dworkin believed that the decision provides more opportunity for corporate lobbyists to be more powerful and influential.[143] In order to save America from the hand of oligarchs, reformers have an apparent demand: to return to campaign finance limits that were in place for decades before the court unveiled its new reading of the Constitution. It means the previous precedent in Austin and McConnell should be restored. Therefore, it seems that the recent developments in US campaign funding have put America in the hand of oligarchs.

To be effective, the International institute for Democracy and Electoral Assistance (IDEA) suggests spending limits should be realistic. Which means that they should not be too low, nor too high. Spending limits that are too low and regulations that are too strict may stifle campaigning, as has happened during assembly elections in India. Limits that are too high –as happened in Maldives — are also counterproductive.[144]

However, spending limits for political parties or candidates will not work effectively in absence of similar restrictions to the third party. Although third party expenditure might be less than political parties and candidates, their spending can be directed toward supporting or attacking other competitors.[145] Therefore, in Harper, the Court endorsed the necessary to impose spending limits to the third party as well.[146]

Complementary to public funding, in order to counter the influence and domination of oligarchs, Indonesia should also adopt expenditure caps. Without this change, oligarchs for private interests will continue to use their resources to dominate and influence political parties. Giant companies can make an unlimited amount of propaganda in support of one candidate, or equally, attacking his or her competitors, as long as these actions are not coordinated with or ordered by the official campaign itself. This includes producing advertisements, organizing assemblies, and producing and distributing campaign materials. Further, multiple companies can pool these independent expenditures together to provide a huge amount of independent support to one particular contestant.

C. Limits of political advertisements

In line with the need of expenditure caps, limiting political advertisement is extremely important to prevent the domination of oligarchs. Although the very recent local executive election law regulates limits of political advertisement, at the national level, Indonesia still maintains two main national election law: the 2008 Presidential election as well as the 2004 National, Local Parliament and Senator Member Election Law — without clear arrangements on political advertisement. These laws, although setting requirements for both electronic and printed media to provide equal access to each candidates pair to the theme, content and place of the campaign,[147] in the absence of advertisements limits, only the wealthy candidate or those who are supported by wealthy donors can afford it. Therefore, setting limits to political advertisement can be used as a means of providing opportunities to poorer parties or candidates in an environment of equal advertisement.

Oligarchs also enjoy double benefits from the absence of political advertisements limits. It can be a vehicle for their political interest on the one hand and a tool to accumulate their profits on the other. It happened not only during the election period but also post-election. For example, in 2015 or a year after 2014 elections, AC Nielsen’s survey recorded that advertisement agencies have continued to enjoy plentiful benefits from political advertisement with about 36% of incomes in the third quarter of 2015 coming from the government and political organisations, or about 15% a slightly lowered from the same period last year ,which is worth RP 4,6 trillion (US$335 million). [148] The content of advertisement is commonly dominated by congratulatory or support messages in case of loss, which only showed the existence of the political figure or political party, none of it related to content of party’s program or activities.

As explained earlier by Robison and Hadiz and by Winters, media oligarchs may generally form news and information according to their interests.[149] Empirical studies have suggested that broadcasting, particularly television has at best a limited role in influencing voting behaviour, but that it provides voters with pieces of information.[150] For instance, the political journey of Jokowi to become the Jakarta governor and subsequently to the presidential office cannot be separated from the role of an oligarchy, and it’s media ownership. Some observers emphasize that Jokowi was only allowed to run as the candidate for the governor of Jakarta in the first place due to the plots of oligarchs Megawati Sukarnoputri and Prabowo Subianto. Jokowi and his running mate, Ahok, were supported by a well-funded Gerindra media team that, among other suporters, spent significant amounts on political advertising, especially television.[151] Once in power, it was the oligarchic media (largely TV One and Metro TV) that, through constant coverage of Jokowi’s popular communication outreach, the ‘blusukans’, created him into a national most popular figure.[152] This consistent, continuous coverage must have had support from the two major news stations’ owners, such as Aburizal Bakrie (TV One) and Surya Paloh (Metro TV), even if their reasons for such support were profit-driven. Once the election year began, the oligarchs controlled the coverage of the election, and, as they have done in the past, took sides. To win, Jokowi was forced to ally himself with various New Order oligarchs, such as his vice-presidential running mate, Jusuf Kalla, and media moguls Surya Paloh (Media Indonesia and Metro TV), Dahlan Iskan (Jawa Pos group), and James Riady (Lippo Group). Rather than a victory of the individual citizen over the oligarchs allied to Prabowo, this was, in fact, a triumph of one set of oligarchs over another.[153]

Research also shows that political advertisements become more persuasive and if not countered with broadcasts on the opposing point of view. [154] Furthermore, it could be used to buy influence and is not only directly through persuading the voter, but also by agenda setting.[155] These reasons strongly show the need to impose limits to political advertisement.

The opponent of limits to political advertisement may argue that in the digital era, which provide more open access for everyone, political advertisement limitation is no more relevant. They may claim that candidates and political parties have a similar opportunity to use the internet as a tool for political campaigning and reaching more audiences. However, in developing countries like Indonesia where access to the internet is still dominated by the urban areas, whereas the majority of people stays in the rural area without access to the web, political advertisement limits are still relevant. Although, by June 2013 Indonesia had almost 64 million active Facebook users or the fourth largest after the US, India and Brazil and about 30 million Twitter users with Jakarta as the world’s most ‘noisy’ Twitter city, ahead of London, New York and Tokyo,[156] yet social media cannot replace television. TV and radio are still the primary media that can reach a broader population. However, the author acknowledges the potential of social media to provide an affordable alternative for political parties and civil society to counter the oligarch’s media domination.

Limiting political advertisement in the media may contain dilemmas related to human rights principles, particularly freedom of expression. Great tension has been recorded through court battles in many countries. In the EU, for example, although in the dispute of banning political advertisement, which goes beyond just limiting, European Human Rights Court ruled that the UK’s prohibition on a political advertisement on TV, as applied to an animal rights group, did not breach Article 10 on freedom of expression.[157] Previously, in 2001, the EHRC first acknowledged a political advertising prohibition on TV in Switzerland where a unanimous Court ruled that such a prohibition, as applied to an animal rights organization wishing to air a political advertisement, violated freedom of expression. Similarly in 2008, the Court was again challenged concerning Norway’s law on prohibition of political advertisement on television, and again, a unanimous Court ruled that the ban was an impermissible restriction on ‘political speech’.[158] However, international human rights law provided adequate guidance to face this dilemma through the test of permissible restriction.[159] Therefore, limiting political advertisements in a particular time, number and space for the justifiable reasons and the purpose of public interest and more democratic society is legitimate.

More instances of opposition to the limits of political advertisements come from the libertarian, free market values which require the minimum regulation or restriction, as less as possible: the breach of freedom of communication. It was applied in the US, where the equal-time rule model prefers to secure equal opportunity for political candidates who request it. [160] However, a recent development shows an Federal Communications Commission (FCC) proposed some requirements on the disclosure of political advertisement. [161] Indonesia’s current presidential election law is close to this model. However, it is a fact that this model failed to create fairness and equal principle in the election due to a gap of contestants’ financial means for the campaign.

To sum it up, from the explanation as above, it seems that the benefits of limiting political advertisement outweigh its negative impact. Therefore, if Indonesia commits to creating healthy political parties and to freeing voter from the negative influence of media oligarchs, political advertisements should be limited.

D. Single political financing monitoring institution

Indonesia’s monitoring institution for political financing shows a lack of effectiveness in terms of coordination, procedures, technical expertise and willingness to enforce. Currently, at least, four agencies are responsible for this monitoring task:[162] they are the General Election Commission (Komisi Pemilihan Umum, the ‘KPU’) which oversees campaign accounts with the help of public accountants; Bawaslu scrutinizes electoral finances in the field; the State Audit Board (Badan Pemeriksa Keuangan, ‘BPK’) is in charge of auditing the parties’ reports on their use of the tiny state subsidies; and the police are supposed to follow up if criminal violations occur.

Indonesia seems similar to Italy. In Italy, three different agencies are in charge and have to deal with various types of financial reports. Italian parties are required to file annual reports of their financial routine operations to the speaker of parliament. The election campaign donations and expenditures of all parties have to declare their expenses to the Collegio Regionale di Garanzia Elettorale, the regional administration agency in charge of elections.[163] By contrast, many more advanced democracies have handed the power to monitor, examine, and issue sanctions on political financing violations to just one institution — or example, the US Federal Election Commission (FEC), Germany’s Office of the Chairman of the House of Representatives, or Turkey’s Constitutional Court.[164]

Scholars analysed that this fragmented design of monitoring institutions led to dysfunctioning and rivalries. Therefore, reformers have suggested that the responsibility for monitoring political financing flows should be concentrated in a single institution.

E. Beyond regulations: further alternatives

Above suggestions are developed based on the proposition that the reformation of Indonesia electoral and party’s financing system will show its significance. The author believes that creating a more fair political competition is the best formula to handle the domination of wealthy individuals and groups of political life. However, the author also realizes that the power of oligarchs cannot be contained by only reforming the legal and institutional framework of party financing. Their power is rooted in an unjust politico-economic structure. As Winters suggest, without a fairer distribution of wealth, the election process by it self cannot overcome the domination and influence of the oligarchy in the political sphere.[165]

As with all examinations, there are limitations for further consideration, of which four are identified here. First, extending this work beyond electoral regulation would add valuable perspective and whether small donators as alternative methods can be generated or empowered to counter-oligarchy power.[166] Second, although with very limited influence and role, there is a dynamic involvement of CSOs, Trade Union, and human rights activists in the political structure and play from within. Therefore, Mietzner emphasizes it is significant to count them in the discourse.[167] Third, as briefly mentioned in the previous sub-section, the role of social media is growing. Low-cost advocacy organisations are transforming contemporary political landscapes, by drawing market failures and governance failures to public attention.[168] Lastly, there needs to be a combined effort by parties to re-establish a mass base in civil society. Further, to designing internal procedures to ensure election of candidates based on their capacity, passion, vision, and dedication.

VI. Conclusion

This paper has demonstrated that the systematic failure of Indonesia’s party financing system has created a structural environment for oligarchs to expand their influence and defend their wealth and power. Further, its key finding showed that the post-Soeharto Indonesia’s electoral reform, so far, has been far from adequate and failed to mitigate or prevent the domination of oligarchs. A massive reduction of public funds, too high limits of donation, unwillingness of law enforcement, and miss-coordination within a complex design of oversight bodies all have contributed to the deterioration of Indonesia’s party financing system as well as Indonesia’s democratic society.

To find a way out from these acute problems, this paper suggests that Indonesia should adopt expenditure caps, increase public funds for parties, reduce the amount of donation caps, and set limits to political advertisement to counter the influence and domination of oligarchs. These all — together with the redesign of the election oversight institutional framework into a single body- are required to ensure more effective monitoring and enforcement. However, to overcome the power the oligarchs, these suggestions may not be enough, other efforts like empowering small donors, encouraging counter-oligarch alliances, and strengthening the mass base of parties should also be taken as measures.


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[1] Marcus Mietzner, Money, Power, and Ideology: Political Parties in Post-Authoritarian Indonesia (Asian Studies Association of Australia in association with University of Hawai’i Press, 2013), 2.

[2] Marcus Mietzner, ‘Political Party Financing in Indonesia Is a Recipe for Corruption’ (2013) 360 Strategic Review The Indonesian Journal of Leadership, Policy and World Affairs, 1–14.

[3] The term ‘oligarchy’ is used in diverse ways in the reference. See Richard Robison and Vedi R. Hadiz, Reorganizing Power in Indonesia: The Politics of Oligarchy in an Age of Markets (RoutledgeCurzon), 2004. ; Vedi R. Hadiz, and Richard Robison, ‘The Political Economy of Oligarchy and the Reorganization of Power in Indonesia’ in Michele Ford and Thomas B. Pepinsky (eds), Beyond Oligarchy: Wealth, Power, and Contemporary Indonesian Politics (Southeast Asia Program Publications (SEAP) Cornel University, 2014), 35–57. ; see also Jeffrey A. Winters, ‘Oligarchy and Democracy in Indonesia’ in Michele Ford and Thomas B. Pepinsky (eds), Beyond Oligarchy: Wealth, Power, and Contemporary Indonesian Politics (Southeast Asia Program Publications (SEAP) Cornel University, 2014), 11–33.

[4] Jeffrey A. Winters, Ibid. 27–28.

[5] Ibid. 28.

[6] Mietzner, above n 2. 1.

[7] Ibid.

[8] Ibid.

[9] Kuskridho Ambardi, The Making of the Indonesian Multiparty System: A Cartelized Party System and Its Origin (PHD Dissertation Thesis, Ohio State University, 2008): Dan Slater, ‘Indonesia’s Accountability Trap: Party Cartels and Presidential Power after Democratic Tranistion’ (2004) 78 Indonesia 61.

[10] Ibid.

[11] See

[12] See

[13] Timothy K. Kuhner, ‘American Plutocracy’ (2015) 26(1) King’s Law Journal 44.

[14] The Oxford Dictionary defines it as ‘a small group of people having control of a country, organisation and institution’. According to Jeffrey Winters, ‘oligarchs are people (never corporations or other organizations) who command massive concentrations of material resources (that is, wealth) that can be deployed to defend or enhance their own property and interests, even if they don’t own those resources personally. Without this massive concentration of wealth, there are no oligarchs’. Winters, above n 3. See also's_oligarchs_can_squeeze_the_rest_of_us

[15] See Jeffrey A. Winters, above n 3. 11–33.

[16] See Richard Robison and Vedi R. Hadiz, above n 3.

[17] Dan Slater, ‘Indonesia’s Accountability Trap: Party Cartels and Presidential Power after Democratic Tranistion’ (2004) 78 Indonesia 61.

[18] See Ambardi, above n 9.

[19] In a nutshell, Katz and Mair theorize that this has been a common occurance in Western European democracies, with their traditional mass parties gradually morphing into cartel parties. See Richard S. Katz and Peter Mair, ‘The Cartel Party Thesis: A restatement’ (2009) 7 (4) Perspective on Politics 753–766

[20] See Mietzner, above n 2. 4.

[21] Ibid.

[22] Ibid.

[23] Winters concerned with the role and locus of coercion in the wealth defense politics. see Jeffrey A. Winters, above n 3. 7.

[24] Michele Ford and Thomas B. Pepinsky, ‘Introduction: Beyond Oligarchy?’ ibid. 4

[25] See Winters, above n 3. 7.

[27] Ross Tapsell, ‘Indonesia’s Media Oligarchy and the ‘Jokowi Phenomenon’’ (April 2015) 99 Indonesia 29.

[28] Robison and Hadiz include “media control” in their definition of what determines an oligarchy, while Winters explicitly points to media oligarchs as central to his argument in the case of Indonesia. Robison and Hadiz include “media control” in their argument of oligarchy, in Robison and Hadiz, above n 3. 40. See also Winters, “Oligarchy and Democracy in Indonesia,” above n 3. 25–27.

[29] For instance, Metro TV is owned by Surya Paloh, founder and chief of the Nasdem Party (Partai Nasdem, National Democrat Party). TV One is owned by Aburizal Bakrie, chief of the Golkar party (Partai Golongan Karya, Party of Functional Groups).

[30] “Oligarchic” media includes Trans Corp (owned by Chairul Tanjung), Visi Media Asia (owned by Aburizal Bakrie), Media Indonesia Group (owned by Surya Paloh), MNC Group (owned by Hary Tanoesoedibyo), Jawa Pos Group (owned by Dahlan Iskan), and Emtek’s SCTV and Indosiar (owned by Eddy Kusnadi Sariaatmadja).

[31] See Tapsell, above n 27. 29

[32] Ibid. 29.

[33] see also Herlambang Perdana Wiratman, Press Freedom, Law and Politics in Indonesia: A Socio-Legal Study (Doctoral Thesis Thesis, Institute for the Interdisciplinary Study of the Law, Van Vollenhoven Institute, 2014)

[34] Undang-Undang Nomor 2 Tahun 2008 tentang Amandemen Undang-Undang Nomor 2 tahun 2008 tentang Partai Politik [Law №2 of 2011 on Amendment to Law №2 of 2008 on Political Party] (Indonesia) Article 34, Section 1 (A)

[35] Article 34, Section 1 (B) and Article 35 Law №2 of 2011 on Amendment to Law №2 of 2008 on Political Party; see also Article 96 Law №42 of 2008 on Presidential Election.

[36] Article 34, Section 1 © Law №2 of 2011 on Amendment to Law №2 of 2008 on Political Party.

[37] See Mietzner, above n 2.

[38] For Example, National Mandate Party (PAN) with Muhammadiyah and National Awakening Party (PKB) with Nahdlatul Ulama (NU)

[39] Marcus Mietzner, above n 2.

[40] IDEA, Extracted from Funding of Political Parties and Election Campaign: A Handbook on Political Finance (International Institute for Democracy and Electoral Assistance, 2014).; IDEA, Political Finance Regulations around the World (2012).

[41] IDEA, Political Finance Regulations around the World (2012). 98

[42] Schutte, 2012

[43] Art. 35 Law No 2 of 2011 on the amendment to Law №2008 on Political Party— Donations as referred to in Article 34 paragraph (1) letter b that a political party receives are from:

a. Individuals members of a political party of which the implementation shall be governed by the Statute and By-laws of the political party;

b. Non-member Individual, to the amount that shall not exceed Rp, 00 (one billion rupiahs) per person within the period of 1 (one) year.

c. Companies and/or corporations, to the amount that shall not exceed Rp 7.500.000.000, 00 (seven billion and five hundred million rupiahs) per company/corporation within the period of 1 (one) year.

[44] See

[45] KPU, Daftar Laporan Penerimaan Kampanye Pasangan Joko Widodo dan Jusuf Kalla, 4 Juni- 5 July 2014.


[47] The US or Australia, for example, Part XI of the Commonwealth Electoral Act 1918 or under corresponding state or territory legislation. see

[48] See Mietzner, above n 1.

[49] Marcus Mietzner, ‘The Illusion of Regulation: Political Finance in Post-Authoritarian Indonesia ‘ in Pippa Norris, Andrea Abel van Es and Lisa Fennis (eds), Checkbook Elections: Political Finance in Comparative Perspective (2016 Fourthcoming)

[50] See IFES 2004: 6; also IFES (2000; 2002).

[51] For example, from 2001 to 2004, the ruling PDI-P (Indonesian Democratic Party-Struggle) received an estimated USD 47 million in public money.

[52] Total expenses of PDIP were reported as being Rp 69.1 billion. See KPU (Komisi Pemilihan, ‘Hasil Audit Laporan Penerimaan Dan Pengeluaran Partai Politik Peserta Pemilu’ (KPU, 2014)

[53] This reduction of almost 90 percent was further institutionalized by presidential decrees in 2009 and 2012, and decrees by the Ministry of Home Affairs in 2009 and 2013. In some cases, these subsidies have been significantly higher than the Rp 108 per vote paid at the national level. But there is no systematically collected data on the amounts paid out to party branches in Indonesia’s 34 provinces and approximately 500 districts and municipalities, so it is difficult to know the total figure.

[54] Saiful Mujani, ‘Voters and the New Indonesian Democracy’ in Edward Aspinall and Marcus Mietzner (eds), Problem of Democratisation in Indonesia: Electios, Institutions, and Society (Institute of Southeast Asian Studies, 2010) 75.

[55] See Mietzner, above n 49.

[56] Undang-Undang RI №2 Tahun 2011 tentang Partai Politik [Law №2 of 2011 on Political Party] (Indonesia)– Article 34 (4), 34A and 39 Law №2 of 2011 on Political Party

[57] Article 34 A Law №2 of 2011 on Political Party

[58] Article 39 (2) Law №2 of 2011 on Political Party

[59] See IFES 2004: 6; see also IFES 2000; 2002.

[60] See Mietzner, above n 2. 4.

[61] For Example, The Federal Election Commission in the United States.

[62] See Mietzner, above n 2. 4–5.

[63] Ibid.

[64] See

[65] See

[66] See




[70] Article 47 Law №2 of 2011 on Political Party.

[71] Section 77 (1) states that what is meant by promising and/or giving is the initiative coming from the candidate who promises and gives to influence the voters. For the Presidential Election, in addition to bribery, receiving campaign fund from prohibited sources is also an election offence which can result in the cancellation of such candidate for the Presidency and Vice-Presidency.

In light of section 77, to be removed from candidacy on the ground of bribery, a candidate must be convicted with a final decision from the court. Therefore, it must be in accordance to the bribary offence as stipulated in Law №12 of 2003 section 139 (2) which states that:

Any candidate who is intentionally giving or promising money or other material compensation to other people in order to avoid them from fulfilling their voting rights, or to persuade them to choose certain elections participant, or to use their voting rights in a certain manner so as to render ballots invalid, is subject to imprisonment of at least 2 (two) months or at most 12 (twelve) months and/or a fine of at least Rp. 1,000,000.00 (one million rupiah) or at most Rp. 10,000,000.00 (ten million rupiah).

[72] Law Number 12 of 2003, section 138 (4)

[73] Law Number 12 of 2003, section 138 (5)

[74] Law Number 12 of 2003, section 138 (7)

[75] Law Number 12 of 2003, section 139 (1)

[76] Topo Santoso, Settelement of Election Offences in Four Southeast Asian Countries (with Special Reference to the Indonesian General Elections) (Doctoral Thesis, University of Malaya, 2009)

[77] Law №8 of 2015 on Governor and local leader election. Art 74 (9) Pembatasan dana Kampanye Pemilihan ditetapkan oleh KPU Provinsi dan KPU Kabupaten/Kota dengan mempertimbangkan jumlah penduduk, cakupan/luas wilayah, dan standar biaya daerah.[Spending limits for campaign is determined by KPU province and City/District by considering a number of People, covered area, and local standard cost] (translated nhidayat)

[78] See KPU Regulation №8 of 2015. Art. 12

[79] See

[80] See

[81] See

[82] ibid.

[83] Sofie Arjon Schutte, ‘Against the Odds: Anti-Corruption Reform in Indonesia’ (2012) 32 Public Administration and Development 38.

[84] See Mietzner, above n 1.

[85] Thomas Reuter, ‘Political Parties and the Power of Money in Indonesia and Beyond’ (July 2015) 3(02) Trans -Regional and -National Studies of Southeast Asia 267.

[86] Vineeta Yadav, Political Parties, Business Groups, and Corruption in Developing Countries (Oxford University Press, 2011). 5.

[87] Ibid. 5. State capture refers to ‘the action of individuals, groups, or firms both in the public and private sectors to influence the formation of laws, regulations, decrees, and other government policies to their own advantage’ (World Bank 2000, xv). Patronage and nepotism refer to ‘favoritism shown to narrowly targeted interests by those in power in return for political support’ (World Bank 2007, 3). Bureaucratic corruption is defined as ‘the intentional imposition of distortions in the prescribed implementation of existing laws, rules, and regulations to provide advantages to individuals in and/ or outside government through illicit, non-transparent means’ (World Bank 2000, xvii).

[88] See Mietzner, above n 49.

[89] Mietzner 2013, 77

[90] Jeffrey A. Winters, above n 3. 20.

[91] Sofie Arjon Schutte, ‘Against the Odds: Anti-Corruption Reform in Indonesia’ (2012) 32 Public Administration and Development 38.

[92] Marcus Mietzner, ‘Indonesia’s 2009 Elections: Populism, Dynasties, and the Consolidation of the Party System’ (2009) Syndey: Lowy Institute for International Policy




[96] Politicians are at the top of a list of actors in ICW’s latest study of corruption trends in Indonesia. — See more at:

[97] See Mietzner, above n 49.

[98] International Foundation for Electoral Systems (IFES), ‘Campaign Finance in Indonesia’ (International Foundation for Electoral Systems (IFES), 2010); IDEA, Political Finance Regulations around the World (2012).

[99] Marcus Mietzner, ‘Party Financing in Post-Soeharto Indonesia: Between State Subsidies and Political Corruption’ (2007) 29(2) Contemporary Southeast Asia: A Journal of International and Strategic Affairs 238.

[100] Thomas Reuter, ‘Political Parties and the Power of Money in Indonesia and Beyond’ (July 2015) 3(02) Trans -Regional and -National Studies of Southeast Asia 267.

[101] The Corruption Eradication Commission (KPK), the DPR’s ethics committee and NGOs like the Association for Elections and Democracy have all been suggesting reforms are needed to increase tax-payer funding for political parties, so as to reduce their dependence on billionaire sponsors (Devianti Faridz 2014; Marcus Mietzner 2013b);

[102] See Mietzner, above n 1. 231. Arguably, increasing the proportion of state subsidies via a vis party expenditure from currently less than 1 percent to around 30% (as in other new democracies) would go along way towards reducing the influence of oligarchs.

[103] See Mietzner, above n 1.155.

[104] Ibid. 155.

[105] See Winters, above n 3.

[106] Dan Slater, ‘Indonesia’s Accountability Trap: Party Cartels and Presidential Power after Democratic Transition’ (2004) 78 Indonesia 61.

[107] Ingrid van Biezen, ‘Party Financing in New Democracies: Spain and Portugal’ (2000) 6(3) Party Politics 329. 336.

[108] Mark Blyth and Richard Kartz, ‘From Catch-All Politics to Cartelization: The Political Economy of the Cartel Party’ (2005) 28(1) West European Politics 33.; Dan Slater, ‘Indonesia’s Accountability Trap: Party Cartels and Presidential Power after Democratic Tranistion’ (2004) 78 Indonesia 61.

[109] Slater 2004, above n 106.; See also Richard Katz and Peter Mair. (1995). ‘Changing Models of Party Organization and Party Democracy: The Emergence of the Cartel Party.’ Party Politics: 1:15).

[110] See more at:

[111] See IFES 2004, 11.

[112] See Mietzner above n 99. 258.


[114] See more at:

[115] ibid.

[116] For example, KPK commissioner Zulkarnaen believed that political parties should be able to cut their expenditure instead of requesting for additional and more funds from the state. “The public will choose people who are credible, so there’s no need to be afraid [of not spending more]. Just be confident. Why spend lots of money that could lead to problems in the future?” — See more at:

[117] IDEA, Political Finance Regulations around the World (2012).

[118] Timothy K. Kuhner, ‘American Plutocracy’ (2015) 26(1) King’s Law Journal 44–75.

[119] Ibid. 45.

[120] See

[121] See

[122] See

[123] Bradley A. Smith, ‘Faulty Assumptions and Undemocratic Consequences of Campaign Finance Reform’ (1996) 105 The Yale Law Journal 1049.


[125] Joo-Cheong Tham, Money and Politics: The Democracy We Can’t Afford (UNSW Press, 2010). 198.

[126] ibid. 198. Expenditure caps can also perform a remedial function. It should decrease the risk of graft and undue influence.

[127] Joo-Cheong Tham, above n 124, 198.

[128] Ibid, 198.

[129] Ibid, 198.

[130] See Dworkin criticism to Supreme Court’s decision in Citizens United v. FEC (2010) at Ronald Dworkin, ‘The Decision That Threatens Democracy’ (2010) (May 13) The New York Review of Books

[131] J Rowbottom, ‘Access to the Airwaves and Equality: The Case against Political Advertising on the Broadcast Media’ in K D Ewing and S Issacharoff (eds), Party Funding and Campaign Financing in International Perspective (Hart, 2006)

[132] Joo-Cheong Tham, above n 124, 199–200.

[133] See Libman v. Quebec (Attorney General) [1997] 3 S.C.R. 569. para 46, -50 at Harper c. Canada (P.G.) [2014] 1 R.C.S. 827. para 61. Herper v Canada (Attorney General) 2004 SCC 33

[134] ibid. 61.

[135] ibid. 61.

[136] ibid. 61.

[137] ibid. 61.

[138] The case was submitted by Shaun McCutcheon, an Alabama businessman who during the 2012 election cycle doled out $1,776 a piece to a group of 15 candidates who were challenging incumbents. McCutcheon claimed he hoped to donate to an additional 12 challengers, but doing so would have put him in violation of the limits. He was joined in his case by the Republican National Committee, and represented by James Bopp Jr., the intellectual architect behind Citizens United.

[139] Austin v. Michigan Chamber of Commerce, 494 US 652 (1990)

[140] McConnell v. Federal Election Commission (FEC) 540 U.S. 375 (2003)



[143] Ronald Dworkin, ‘The Decision That Threatens Democracy’ (2010) (May 13) The New York Review of Books

[144] Funding of Political Parties and Election Campaigns, IDEA 101–102IDEA, Political Finance Regulations around the World (2012).

[145] Joo-Cheong Tham, above n 124, 193

[146] Harper c. Canada (P.G.) [2014] 1 R.C.S. para 61. Herper v Canada (Attorney General) 2004 SCC 33

[147] Article 37 Law №23 of 2003 on the general election of the president and vice president.

[148] See more at:

[149] See Robison and Hadiz, above n 3, 40; Winters, above n 3, 26–27

[150] See W. Miller, Media and Voters (Oxford, Clarendon, 1991) at Rowbottom, above n 131. 87.

[151] See Tapsell, above n 27. 29.

[152] Ibid, 48.

[153] Ibid, 48.

[154] See Rowbottom, above n 131, 88.

[155] Ibid, 88.

[156] David Adam Stott, ‘Indonesia’s elections of 2014: democratic consolidation or reversal?’ (2014) 12 (10) The Asia-Pacific Journal №2.

[157] VgT Verein gegen Tierfabriken v Switzerland (App no 24699/94) 28 June 2001.

[158] TV Vest AS v Norway (App no 21132/05) 11 December 2008, para 66.

[159] Article 19(3) of the ICCPR –see see also According to the Human Rights Commission, “[r]estrictions [on freedom of expression] must be applied only for those purposes for which they were prescribed and must be directly related to the specific need on which they are predicated.” See Human Rights Committee, General Comment №34, 102nd session, Geneva, July 2011, para. 22.

[160] See US 1934 Communication Act (section 315), as amended (Title 47 US Code)

[161] See

[162] See Mietzner, above n 1.

[163] IDEA, Political Finance Regulations around the World (2012).

[164] See Mietzner, above n 2. 13.

[165] Jeffrey A. Winters, above n 3. 33.

[166] Ibid.12. Relatively similar, Robison and Hadiz conclude that genuine democratisation and political change will occur if economic change determines ‘new forms of production and property (that) give rise to new forces and interest’. See Robison and Hadiz, above n 3. 35–57.

[167] See Marcus Mietzner, ‘Reinventing Asian Populism; Jokowi’s Rise, Democracy, and Political Contestation in Indonesia’,(2015) 72 Policy Studies, East-West Center.1–69.

[168] Karpf, David. 2012. The Move On Effect: The Unexpected Transformation of American Political Advocacy. London: Oxford University Press.

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