Growing into Trouble: Indonesia after 1966

39 Pages Posted: 30 Aug 2001

See all articles by Jonathan R.W. Temple

Jonathan R.W. Temple

Centre for Economic Policy Research (CEPR)

Date Written: August 2001


This paper analyses the remarkable growth experience of Indonesia since 1966. Over a thirty-year period, GDP per capita rose more than fourfold, despite unfavourable initial conditions, some weak institutions, and flawed microeconomic policies. The paper attributes this strong performance to a mutually reinforcing combination of political stability, competent macroeconomic policy, and some important instances of good fortune. It explores the origins of good policy and analyses three of the main external shocks. The paper also argues that rapid growth interacted with weak institutions in a way that contributed to the severity of the crisis of 1997-98.

Keywords: Indonesia, growth, structural change

JEL Classification: O11, O53

Suggested Citation

Temple, Jonathan R.W., Growing into Trouble: Indonesia after 1966 (August 2001). CEPR Discussion Paper No. 2932. Available at SSRN:

Jonathan R.W. Temple (Contact Author)

Centre for Economic Policy Research (CEPR)

United Kingdom

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