The importance of institutional quality: Reviewing the relevance of Indonesia's Omnibus Law on national competitiveness

This paper critically reviews Indonesia's Job Creation Law (Omnibus Law) through the lens of institutional quality analysis to assess its relevance in improving national competitiveness. While intended to attract foreign investment, the Law is deemed a partial reform overlooking crucial aspects of institutional quality, such as inter-community relations, intellectual property rights, vocational education, and meritocratic political recruitment. Consequently, the Law may weaken national competitiveness, a view supported by its conditional unconstitutionality ruling. The paper highlights the need for multi-sectoral collaboration for future implementation and emphasizes the importance of considering non-economic factors in developing nations' policy reforms.

Muhamad Rosyid Jazuli, Maimanah Mohammed Idris, Penelope Yaguma