Indonesia today faces an enormous problem related to corruption. Almost every day we read in the newspapers about corruption cases implicating state officials.

Given Indonesia’s shift to democracy more than a decade ago, many have been tempted to question whether rampant corruption during this period is actually the fruit of democracy.

Evidence shows democracies create more dangerous corruption than authoritarian regimes. A study by Olson (2002) of the Eastern Europe post-communist era found that the number of corruption cases climbed in newly democratic countries.

Olson did not talk about the link between democracy and welfare directly. His research simply questioned why welfare did not follow the fall of a bad government (communist authoritarian).

The reason was that the political transformation from authoritarianism to democracy in these countries only ...

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