Modification of the Regulatory Impact Assessment (RIA) on Indonesia's trade, investment, and industrial incentive policies

Verico, Kiki (2018): Modification of the Regulatory Impact Assessment (RIA) on Indonesia's trade, investment, and industrial incentive policies. Published in: Journal of Economics and Finance in Indonesia (EFI) , Vol. 64, No. 1 (1 August 2018): pp. 43-58.

Abstract

This paper modifies the Regulatory Impact Assessment (RIA) method and applies it on Indonesia's trade, investment, and industrial incentive policies. First, it analyses the Indonesian Bilateral Trade Agreements (BTAs) utilizing trade and investment agreement. Indonesia currently has two BTAs in force. One, Indonesia – Japan Economic Partnership Agreement (IJEPA) and two, Indonesia – Pakistan Preferential Trade Agreement (IP-PTA). This paper found that the outcome expectation for trading partner depends on its GNI per capita. If the trading partner has GNI per capita higher than Indonesia’s then the highest expected outcome would be on the increasing FDI inflows from the trading partner. If its GNI per capita is lower than Indonesia's, then the highest foreseeable result would be on the rising net trade balance of Indonesia. Second, industrial sector incentive analysis by comparing RIA scores on all possible incentive policies. In this paper, the modified RIA found that firms prefer supply-side incentives such as government support on the Research and Development, patent and copyright protection than fiscal incentives such as the import duty-free or tariff rate protection.

• Item Type: MPRA Paper
• Language: English
• Keywords: Regulatory Impact Assessment; Public economics; Bilateral Trade Agreements; trade & investment; industrial incentive; RND & Innovation, Legal Institution, Indonesia
• Subjects: F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; K - Law and Economics > K2 - Regulation and Business Law > K23 - Regulated Industries and Administrative Law; O - Economic Development, Innovation, Technological Change, and Growth > O2 - Development Planning and Policy > O24 - Trade Policy ; Factor Movement Policy ; Foreign Exchange Policy; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O30 - General; P - Economic Systems > P3 - Socialist Institutions and Their Transitions > P35 - Public Economics; P - Economic Systems > P4 - Other Economic Systems > P45 - International Trade, Finance, Investment, and Aid; P - Economic Systems > P4 - Other Economic Systems > P48 - Political Economy ; Legal Institutions ; Property Rights ; Natural Resources ; Energy ; Environment ; Regional Studies

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