BENEFIT-COST ANALYSIS IN INDONESIAN LEGISLATION: PROMISE, PRACTICE, AND BARRIERS

Abstract

The use of benefit-cost analysis (BCA) has been widely promoted by Indonesian policymakers and is mandated by law. This study aims to assess the use of BCA in the Indonesian legislative process. Drawing on a review of over 70 academic papers between 2019-2025, and interviews with key stakeholders, the research finds that despite both verbal and written commitments, evidence and BCA are rarely integrated into the policymaking process. The findings highlight the gap between policy intentions and actual practice, revealing challenges such as a lack of institutional capacity, limited access to relevant data, and political considerations that undermine the use of evidence-based tools. This study makes a significant contribution by providing an empirical assessment of the effectiveness of guidance for utilizing a benefit-cost analysis in the Indonesian policymaking and legislation process. It offers insights into the barriers hindering the full implementation of BCA and evidence in the legislative process, providing valuable recommendations for policymakers, scholars, and practitioners aiming to strengthen evidence-based decision-making in emerging economies.