It had long been the case that Indonesia was afflicted by corruption, which was “rampant, systemic, and affecting the lives of practically everyone in the country.”  The Indonesian economic crises of 1997, which subsequently also led to the downfall of the dictator President Suharto in 1998, suggested to citizens that this endemic corruption had contributed significantly to the country’s economic problems.
It took another five years before wide-ranging formal action was taken:
- In 1998, a new era called Reformasi began. Throughout Reformasi, Indonesia was dominated by international creditors as it struggled to restructure its debt and liberalise its economy.
- Foreign nations demanded that Indonesia clamp down on graft and money-laundering practices that hampered their free access to Indonesia's resources and markets.
- An IMF bailout package totalling US$43 billion was agreed, conditional upon new controls intended to stop the outflow of public funds. One of the IMF's conditions was that Indonesia establish a comprehensive anti-corruption commission.
- After Indonesia's first free elections in November 1999, Parliament enacted a hastily drafted, wide-ranging Anti-Corruption Law that gave the government two years to create a new anti-corruption commission.
- In 2000, based on that law, Romli Atmasasmita, director-general of law and legislation in the Ministry of Justice (MoJ), set up a corruption eradication team in the MoJ. It was initially declared invalid by the constitutional court because the team lacked formal statutory authority.
- An MoJ steering committee, led by Romli, drafted a new anti-corruption law (Law No. 30/2002) with technical support from the Asian Development Bank (ADB) and the approval of the Indonesian Parliament and the IMF, and it passed into law in December 2002
In 2003, the Indonesian corruption eradication commission, the Komisi Pemberantasan Korupsi (KPK), was finally established. Its goals were implicit in its name. The KPK's duties, authorities and obligations fell into four zones of activity:
- Coordinating with, and supervising, other institutions authorised to fight corruption.
- Conduct preliminary investigations, investigations and prosecutions of corruption.
- Seeking to prevent corrupt activity.
- Monitoring state governance.
The public impact
The KPK has established a worldwide reputation for investigating, researching, and trying high-level targets with great thoroughness and, in its first 13 years, achieving an astonishing 100 percent conviction rate.
Indonesia has improved its standing in Transparency International’s 2015 Corruption Perception Index, to 88th (up from 122nd in 2003),  which may be ascribed to improvements in the country’s bureaucracy and public services but also to a lesser degree to increasing corruption in other countries.
Transparency International praised KPK’s achievements in increasing the public awareness of corruption and successfully targeting corrupt individuals. However, it also noted that Indonesia risked endangering this improvement if the current moves to weaken the KPK were successful.
Public Confidence Strong
When the KPK was instigated, the public had little confidence in the five commissioners appointed, largely because of the country’s history of political corruption. However, by 2007, it had become very well respected and popular, and it is now “Indonesia’s most trusted public institution.”  Citizens have made demonstrations of support, urging it to continue its work. It may even have “influenced the public debate in a way that led to the 2014 election of the reformer Joko Widodo as president.” 
There is a risk, though, that the five recently selected commissioners may lose public respect, because they do not appear to have, with one exception, the right stature and credentials for their roles.
Stakeholder Engagement Strong
The internal stakeholders in the KPK were the MoJ, the Indonesian Parliament and its president; the external stakeholders were the IMF, the ADB, legal authorities, civil society activists and foreign experts.
The IMF was significantly engaged, applying pressure to Indonesia to form an anti-corruption agency. The provided technical assistance to the committee drafting the law, supported by legal experts such as Bertrand de Speville, a retired commissioner of Hong Kong's Independent Commission Against Corruption, who was hired as a consultant to help draft the law.
There was some concerns, though, among some internal stakeholders about the increased scrutiny the KPK would bring to elected officials, and this delayed the Anti-Corruption Act in its progress through Parliament.
Political Commitment Good
The creation of the KPK was partly a government initiative, although there was significant pressure brought to bear by the IMF. When the draft Anti-Corruption Law was presented to Parliament, some politicians were concerned about the immense powers granted to the agency and their potential misuse. Others resented the law as “a foreign imposition, part of the ‘shock therapy’ the Indonesian government had accepted under economic duress.” 
Clear Objectives Good
The KPK’s objective was clear and specific, i.e., the eradication of corruption, and the authorities and duties assigned to it for achieving this aim were also clear.
Those drafting the Anti-Corruption Law modelled the proposed agency on Hong Kong’s ICAC and, as stated above, one of its commissioners helped draft the legislation. This was after due deliberation and comparative study of other existing anti-corruption agencies: those of Singapore, Malaysia, the Philippines, South Korea, and the Australian state of New South Wales. The ICAC was one of the first and most successful anti-corruption authorities in Southeast Asia and had pioneered a tripartite approach to eradicating corruption: investigation, prevention and education.
The legislation also created a specialised anti-corruption court, the Tipikor, which was based in Djakarta, dedicated exclusively to KPK cases. The Tipikor was modelled on the anti-corruption court of the Philippines. The use of these models provided a sound evidential model for the legislation and the KPK itself.
When the KPK was formed in 2003 it had a strong legal mandate but there were no procedures, office, staff, equipment or policies. It appears, then, that feasibility was not evaluated during the planning phase.
Two of original KPK commissioners, Hardjapemekas and Sunaryadi, used their private sector experience to create policies for strategic planning, finance and human resource. By December 2007, when they left office, “they had built one of the world's most effective anti-corruption agencies.” 
The first appointed commissioners of the KPK built the capacity of the commission by deploying up-to-date technologies and sound HR policies as well as devising a solid management structure. They were able to deal decisively with problems, e.g. in one of their first cases, against Mulyana Kusumah, an Indonesian election commissioner, they responded quickly to the need for extra resources when acquiring evidence against him.
There are several quantitative indicators of the success of the KPK:
- The number of cases brought before the Tipikor and the success rate for prosecutions there.
- The country’s standing in international corruption surveys, such as Transparency International’s Corruption Perception Index.
- The amount of public money saved by its activities that would otherwise have gone on corrupt payments (though clearly difficult to estimate).
- The return of stolen state assets. 
There are also qualitative indicators, such as the Indonesian people’s opinion of the KPP’s work and the opinion of external stakeholders and specialist agencies.
Initially, all the internal stakeholders were active, but over time, the KPK developed political enemies: there have been attempts by government to reduce the KPK’s powers; and the new house of representatives is now pressing to weaken the KPK’s law enforcement capability. It has survived up till now due to public support.
Although the KPK has been successful since its inception, it does not have good relations with other anti-corruption agencies, such as the police and the Attorney-General’s Office: the KPK is seen as doing everything by itself. There are reasons for this, though: “the KPK has enormous resources and public support whereas the police has to deal with public distrust and dislike.”  The KPK may have some justification in keeping the police at arm’s length, because of widespread corruption in the police force and its opposition to the KPK itself, including arresting two KPK commissioners on dubious charges.
However, there is exceptionally strong alignment with external stakeholders, in view of its excellent reputation with the public (see Public Confidence above) and with the IMF and the international community generally.