Pancasila as a Contract?
A Question about Ends and Means
Pancasila emerged as one of the most important philosophical foundations of Indonesia, comprising five interrelated principles that serve as the nation’s ideological basis and encompass aspects such as religious rights, human rights, national unity, democracy, and social justice. It was embedded in the 1945 Constitution of the Republic of Indonesia and positioned as the fundamental norm of legal and political guidance.
Drawing primarily from North (1990) and Hart (1988), Pancasila shapes informal constraints in Indonesia through cultural influence, shared values, and institutional norms. Its existence within the constitution implicates the structure of rights and institutional incentives.
Yet, it displays operational ambiguity. Historically, political actors have attempted to reinterpret and instrumentalize Pancasila, resulting in various interpretations of its principles throughout Indonesian history.
Under Soekarno, it was operationalized as a unifying framework to build compromise among different political factions, while Soeharto’s regime attempted to centralize the interpretation of Pancasila. The Reformasi period created a more open interpretation of Pancasila within a diverse institutional environment. I ask: why has Pancasila produced inconsistent operationalization across different regimes despite being embedded as a normative framework?
Despite being designed to consolidate significant heterogeneity, it imposes formal and informal constraints that fulfill the criteria of a social contract. I contend that it matches the definition of an incomplete contract as defined by Hart (1988), which asserts the impossibility of anticipating all future contractual contingencies.
Within Hart’s framework, I question the concept of government as a subject with higher authority within the contract, thus potentially benefiting from interpretive authority. Furthermore, I further question the conceptualization of government as a third-party enforcer that upholds contracts, while simultaneously being a subject within the contract itself.
The long-run stability of such a framework ultimately depends on alternative enforcement mechanisms. Referencing North (1990), exploration of the concept of self-reinforcing mechanisms and the degree to which they could be implemented for contractual arrangements within the Indonesian context is becoming increasingly timely.
References
North DC (1990) Institutions, Institutional Change and Economic Performance (p. 33). Cambridge: Cambridge University Press.
Hart O (1988) ‘Incomplete Contracts and the Theory of the Firm’, The Journal of Law, Economics, and Organization, 4(1), 119-139.