The Economic Cost of Corruption in Indonesia’s Infrastructure Projects

Abstract

Corruption poses significant economic challenges in Indonesia’s infrastructure sector, undermining project efficiency, increasing costs, and delaying development. This paper investigates the economic cost of corruption in infrastructure projects by analyzing case studies, budget overruns, and procurement irregularities. Using quantitative data from government reports and interviews with key stakeholders, the study estimates the direct and indirect financial losses attributable to corrupt practices such as bribery, kickbacks, and collusion among contractors and officials. Findings reveal that corruption inflates project costs by up to 20–30%, reduces quality, and discourages private investment. The paper highlights systemic weaknesses in oversight mechanisms and calls for enhanced transparency, stronger institutional controls, and community monitoring to mitigate corruption risks. This research contributes to international debates on corruption’s economic impacts and provides policy recommendations relevant to other emerging economies grappling with infrastructure development challenges under governance constraints.