IESET.
Policies·id_jokowi_nusantara_capital_2022

Nusantara new national capital law 2022

IDN·2022 – present·enacted 2022-02-15·PDI-P-led KIM+ super-coalitioncandidate
movesspending level↑sectoral subsidy↑rule of law↓

What the policy did

UU No. 3/2022 on the Ibu Kota Negara (as amended by UU 21/2023) authorised relocation of Indonesia's capital from Jakarta to a greenfield site in North Penajam Paser, East Kalimantan, branded Nusantara. Budget envelope ~USD 35bn (~20% state, ~80% private/PPP) over 20+ years. Established IKN Authority as a special-autonomy body reporting directly to the president. First government-building phase inaugurated for Indonesian Independence Day 17 August 2024; full migration of central-government offices targeted 2028-2045. Sovereign- commitment device locking successor governments into continued build- out.

Policy-content fingerprint — what this policy moved, on which axes

Per invariant 3, reforms are scored by what they did on each channel-separated axis, not by the party that enacted them. This fingerprint is how the policy-match engine finds historical analogues.

intended
↑
spending level
fiscal.spending_level
General government spending as share of GDP, excluding transfers already captured under fiscal.transfer_expansion to avoid double-counting.
increased · moderate
higher spending share
Multi-decade capital-build-out commitment, ~USD 7bn direct state contribution envelope.
↑
sectoral subsidy
fiscal.sectoral_subsidy
Targeted industrial and sectoral subsidies (renewable energy, chip manufacturing, agriculture, green hydrogen, etc).
increased · moderate
expanded sectoral subsidies
Tax holidays up to 30 years and land-rights concessions for private investors in IKN.
unintended / side-effect
↓
rule of law
institutional.rule_of_law
Rule of law as institutional substrate — contract enforcement, judicial independence, equal treatment before the law. Upstream of most other axes.
decreased · weak · unintended
weaker rule of law
IKN Authority bypasses standard provincial/regional governance and land-acquisition procedures.

Enacted by

Empirical evidence — linked hypotheses

Explicit links are curated by the author. Inferred links are hypotheses in the library that test the same axes this policy moved — the framework's answer to "what does the data say about a policy like this?".

The v1 decomposition (three channels: WGI gov effectiveness, WGI rule of law, IMF debt/GDP) left 98% of the Nordic-vs-Southern-Europe log GDP/capita gap unexplained.
nordic_outcome_persistence_decomposition_v2inferred
viainstitutional.rule_of_lawfiscal.spending_level
PARTIAL — coef=-0.1578, p=0.211 (above α=0.1); direction inconclusive
partial
Industrial policy effectiveness depends on governance quality; in low-rule-of-law country samples, state allocation predicts higher corruption and lower long-run GDP growth than in high-rule-of-law samples, in a broad panel of economies during 1990-2020.
industrial_policy_corruption_interactioninferred
viainstitutional.rule_of_lawfiscal.sectoral_subsidy
INCONCLUSIVE_DATA_PENDING — interaction term requested but no loadable constructed interaction variable is defined. The generic panel_fe runner would otherwise …
run pending
Large welfare states sustain long-run real GDP per capita growth when paired with market flexibility (low product- and labour-market barriers), trade openness, and fiscal discipline (debt-to-GDP below 90%), but not when paired with rigid product and labour markets, in an OECD and rich- country panel 1980-2020.
welfare_state_market_flexibility_complementinferred
viafiscal.spending_level
PARTIAL — coef=+3.308e-18, p=0.653; effect magnitude effectively zero
partial
El Salvador's FDI inflow, real-GDP growth, tourism arrivals, and business-formation rate accelerated under the Bukele era (2019-2024) relative to a Central American peer-country donor pool (Honduras, Guatemala, Nicaragua, Costa Rica, Panama, Dominican Republic).
bukele_fdi_gdp_investment_climate_2019_2024inferred
viainstitutional.rule_of_law
PARTIAL — mean_gap=-0.697, |gap|/pre_sd=1.2, p_perm=1 (gap below 0.5×pre_sd or placebo p≥0.10)
partial
Truss 2022 mini-budget shows that unfunded fiscal expansion above the ZLB triggers sharp bond-market and currency responses through expected-inflation and risk-premium channels.
unfunded_fiscal_expansion_above_zlb_bond_market_responseinferred
viafiscal.spending_level
SUPPORTED — GBP/USD trough on 2022-09-26 (1.0703) was 5.02% below the 2022-09-22 pre-announcement close (1.1269); log-decline +0.0515 clears the 3.0% threshold …
supported
Following El Salvador's perceived success with the régimen de excepción (March 2022 onward) and the homicide-rate collapse, multiple Latin American jurisdictions enacted Bukele-style emergency measures: Honduras (Estado de Excepción in select municipalities, December 2022), Ecuador (Estado de Excepción + designation of gangs as terrorist organisations, January 2024), Peru (Estado de Emergencia in Lima/Callao, 2023-).
latam_bukele_imitation_effect_homicide_security_stateinferred
viainstitutional.rule_of_law
PARTIAL — ATT=+0.03571, p=0.598, N=99, treated_countries=1 (above α=0.10)
partial
Under Financial Secretary John Cowperthwaite (1961–1971) and successors, Hong Kong pursued near-laissez-faire economic policy — no capital controls, no industrial policy, minimal tariffs, low flat taxes, and light labour regulation; between 1960 and 1997 Hong Kong's GDP per capita rose from approximately $4,000 to $26,000 (2011 PPP), converging almost fully to UK levels and surpassing most continental European economies.
hong_kong_minimal_state_growth_miracle_1960_1997inferred
viainstitutional.rule_of_lawfiscal.sectoral_subsidy
SUPPORTED — HKG/USA per-capita ratio 1997 = 0.80 (>=0.80); HKG annualised growth 1960-1997 = +5.22%/yr (>=5.0).
supported
Across a pre-registered panel of OECD and major emerging-market economies from 1996 to 2023, stronger rule-of-law institutions predict faster real GDP per capita growth after country and year fixed effects and basic macro controls.
market_order_rule_of_law_gdp_pc_growth_panelinferred
viainstitutional.rule_of_law
PARTIAL — coef=-0.08348, p=0.913 (above α=0.1); direction inconclusive
partial

Similar historical policies

Ranked by axis-fingerprint overlap with this policy. Direction match bolded — those are the closest historical analogues. Shape of the match is what drives policy-outcome comparison, not the country or party label.

Sondervermögen Infrastruktur und Klimaneutralität EUR 500bn 2025
DEU·2025
match
1.9
spending levelsectoral subsidyrule of law
Italy PNRR (Piano Nazionale di Ripresa e Resilienza) 2021
ITA·2021
match
1.8
sectoral subsidyspending levelrule of law
II Plano Nacional de Desenvolvimento (Brazil, 1974-1979)
BRA·1974
match
1.7
sectoral subsidyspending level
Industrialising industries strategy
DZA·1967
match
1.7
spending levelsectoral subsidy
Grand Ethiopian Renaissance Dam launch
ETH·2011
match
1.7
sectoral subsidyspending level
Growth and Transformation Plan I (GTP I)
ETH·2010
match
1.7
sectoral subsidyspending level
Growth and Transformation Plan II (GTP II)
ETH·2015
match
1.7
sectoral subsidyspending level
Iraq oil-boom national development plan 1976-1980
IRQ·1976
match
1.7
spending levelsectoral subsidy

References