Sunday, February 09, 2014

RIP: Thee Kian Wie, True Scholar

Pak Thee Kian Wie was my role model for a good economist.

First of all, he published articles in international journals. A lot of articles. His primary expertise is in economic history and his PhD dissertation is on plantation in East Sumatra in the 1863-1942. He also wrote books on the making of Indonesian economy - from the colonial period to independence. A rare breed of economic historian in the economic profession, even rarer in Indonesia.

I read a lot of his works on industrialization and industrial policy in Indonesia. Pak Thee's personal access to the technocrats and at the same time his distance to power circle and bureaucracy makes his works not only instructive but also credible. Pak Thee, from his writings, was very aware of all political economy constraints and contestation at the time. He witnessed and reported the making of Indonesia miracle between 1970-1998 -- in increasing alarm in later years.

I actually wish that Pak Thee wrote more on how then up-to-date "(economic) ideas" were introduced and translated into Indonesian economic policymaking. Nevertheless, anyone wants to know how industrialization was planned and worked/did not work as intended in Indonesia shall read his papers and books.

Yet, one of his important work after the 1998 crisis is his essays on development, freedom, and New Order miracle (Pembangunan, Kebebasan, dan Mukjizat Orde Baru).

Apparently influenced by Amartya Sen, Pak Thee re-evaluated Indonesian economic "miracle" and reflected that, if I don't misread his writing, while the economic progress was real, there should have been more attention and work (read: government policies) to deal with freedom, inequality, and injustice. Probably not a strong statement for those who want a clear-cut verdict on the regime, but Pak Thee clearly went through a deep thinking and contemplation, with a tingle of regrets, before coming to this conclusion.

But above all, Pak Thee was a wonderful person. Anyone who ever came across him can attest how humble he was, considering his high scholarly credential.

Pak Thee once told me that while he was visiting Sussex University, he often commuted to London to see art performances. "I bought kelas kambing (cheapest) ticket for the shows", he added. It turns out that living in a "relative poverty" -- late Professor Sadli's term to describe his choice for living as a researcher under government payroll -- did not prevent him to become a true cosmopolitan.

He also once let me know, without a slightest hint of irony, that his son (I did not know Marcel Thee and Sajama Cut at that time) is a musician and makes a lot more money than him.

We will sorely miss you, Pak Thee.

Saturday, February 08, 2014

Thing I don't really comprehend #675

What do you think of this statement:

"To prepare for a healthier lifestyle, we will start eating junk food"

Crazy, you may think.

Read this. And think again.

HT: @acopatunru

Wednesday, February 05, 2014

Maybe there's no such thing as a maximum winning coalition

Recently, political scientists and commentators on Indonesian politics seem to like to think that SBY administration, in his second period, is a something called "maximum winning coalition". Certainly not a compliment, his fat coalition is widely seen as a reason on why his government has been so ineffective in many ways.

I agree that the administration does not do their homework very well -- in some cases, such as defending freedom of religion or free trade, they failed miserably. But I am afraid that I can not really comprehend what a "maximum winning coalition" substantially means, as opposed to a more plausible, at least to me, and more established theory of "minimum winning coalition" (see Riker, 1962, for example). 

A "maximum winning coalition" assumes that the winner is somewhat irrational by not picking a low-hanging fruit of smaller coalition for better delivery -- and bigger rent to redistribute within the coalition.

In economic jargon, it is like that he left a 100 dollar bill he saw on the street when actually nobody can prevent him to pick it.

Now, when you see someone did it, you can think that either he's irrational (or maybe foolish); or, he is just rational but it costs him a lot, albeit not directly observable, to grab the money.

The proponent of "maximum winning coalition" argument seems to believe in the first possibility. I am, however, for the argument that the current administration, a large coalition, is still a "minimum winning coalition", given big transaction cost faced by the winner should he exclude the current elements of the administration.

Such cost is stemmed from the effective ability of the (election) losers to hijack the administration policy and rents redistribution -- especially in our existing murky business of political campaign finance transactions, where, it seems to me from series of KPK saga, everybody get the money from everybody.