Conflict of Interest (3)

The swift decision by President Prabowo to sign the decree granting rehabilitation for Ira Puspadewi deserves appreciation because it demonstrates responsiveness, empathy, and a commitment to restoring justice. In a political climate where many legal cases linger for years without resolution, his rapid action signals that the state is willing to correct perceived injustices and protect the dignity of its citizens. Rehabilitation is not merely a legal formality; it is a moral gesture that acknowledges the harm caused by misjudgement and seeks to restore the honour of those affected. By acting quickly, the President shows that he values fairness over delay, and that he is attentive to public sentiment as well as the principles of justice.

This decision also carries symbolic weight. It reassures professionals, intellectuals, and returnees from abroad that the government is prepared to defend them when their integrity is questioned unfairly. In doing so, it strengthens trust in institutions and encourages talented Indonesians to continue contributing to the nation without fear of being criminalised for decisions made in good faith. The speed of the response reflects leadership that is decisive and humane, qualities that are essential for building confidence in the rule of law.

The question of whether it is more beneficial or harmful to keep Ira Puspadewi imprisoned or to release her requires a careful balancing of justice, institutional credibility, and the wider social impact. Allowing her to remain in prison may satisfy a formalistic interpretation of the law and demonstrate that the state is uncompromising in its fight against corruption. Yet, this approach risks being perceived as unjust, since there is no evidence that she personally enriched herself, and her decision was arguably a business judgment taken in good faith. The harm of keeping her incarcerated lies in the chilling effect it creates: professionals in state-owned enterprises may become reluctant to innovate or take strategic risks, fearing that any miscalculation could be criminalised. This atmosphere of fear could weaken the very institutions that the state seeks to strengthen.

On the other hand, releasing her through rehabilitation or acquittal would send a powerful signal that the government distinguishes between genuine corruption and business risk. The benefit of such a decision lies in restoring public trust, encouraging talented professionals to continue serving the nation, and reaffirming the principle that integrity and good faith should be protected rather than punished. Of course, there is the risk that some may interpret her release as leniency or inconsistency in law enforcement, but this risk is outweighed by the broader gain of reinforcing fairness and rationality in the justice system.

In conclusion, the benefits of releasing Ira Puspadewi are greater than the harms of keeping her imprisoned. Her freedom would not only restore her dignity but also strengthen the confidence of professionals and citizens alike that the state values justice, innovation, and integrity.

Now, back to our main topic.

The central purpose of the concept of conflict of interest is to protect the integrity of decision-making in contexts where individuals hold power, authority, or responsibility over public or organisational resources. The idea exists to ensure that decisions are made based on objective criteria and the public good, rather than being influenced, consciously or unconsciously, by personal benefits, relationships, or affiliations. By identifying and managing conflicts of interest, institutions aim to preserve trust, fairness, and legitimacy, particularly in governance, law, business, and professional practice.

The concept is not merely concerned with preventing corruption or illegal behaviour. Instead, its primary function is to address the risk that personal interests might compromise judgment, even when no wrongdoing has yet occurred. This preventive orientation allows organisations and governments to create systems of transparency, disclosure, and accountability, so that decisions remain credible and those in power remain answerable to those they serve.

The conception of conflict of interest seeks to maintain an ethical boundary between private gain and public duty, ensuring that authority is exercised responsibly and that institutions retain the confidence of society.

The concept of conflict of interest was developed to ensure that decisions made in public office, professional roles, or organisational settings remain trustworthy, impartial, and aligned with the responsibilities entrusted to the decision-maker. Its primary purpose is not merely to identify wrongdoing, but to prevent situations in which personal, financial, or relational interests could reasonably be expected to influence judgement or behaviour. By defining and recognising conflicts of interest, institutions aim to create a barrier between private advantage and public duty, thereby protecting the integrity of decision-making processes.

The idea also seeks to preserve public trust, which is essential for the legitimacy of governments, professions, and organisations. When citizens or stakeholders believe that decisions are driven by personal gain rather than the public good, confidence in institutions erodes, leading to cynicism, disengagement, and even systemic corruption. The framework of conflict of interest therefore functions as a preventative mechanism that promotes accountability, transparency, and fairness, ensuring that power is exercised responsibly.

The purpose of the concept is to acknowledge that human beings naturally have multiple interests, and that these interests can overlap in ways that create ethical risks. Instead of assuming perfect morality, the doctrine of conflict of interest recognises human tendencies and designs institutional safeguards to manage them. It shifts the focus from individual virtue to structural protection, ensuring that institutions remain credible even when individuals may be vulnerable to bias or temptation.

The concept of conflict of interest originally emerged as a moral idea. In early political and philosophical thought, it was primarily concerned with questions of ethics and virtue: how should an individual act when personal interests might compromise fairness, impartiality, or the public good? Philosophers and early political theorists focused on character and duty, emphasising that leaders, officials, or citizens should place communal welfare above self-interest. At this stage, the concern was normative rather than codified; it was about what was right or wrong behaviour, guided by conscience, moral reasoning, or societal expectation.

Over time, as governments became more complex and the scope of public administration expanded, the notion of conflict of interest transitioned from a purely moral concern to a legal concept. In the twentieth century, legal scholars and public policy theorists began formalising rules to define, prevent, and sanction conflicts of interest. Laws, regulations, and codes of conduct were created to provide clarity about acceptable behaviour, disclosure requirements, recusal procedures, and penalties for violations. The legalisation of the concept made it possible to enforce accountability systematically, rather than relying solely on moral exhortation or social norms.

More recently, the focus has shifted toward governance and institutional frameworks. In contemporary governance discourse, conflicts of interest are not only about individual wrongdoing but about structural risks, incentive alignment, and transparency within networks of decision-making. Governance frameworks emphasise mechanisms for managing conflicts, such as independent oversight, monitoring, audit systems, and multi-stakeholder engagement. The idea is to embed accountability into the system so that personal or organisational interests are balanced against collective or public objectives. In this way, the concept has evolved from moral guidance to legal enforcement to governance-oriented institutional design.

In modern government, the concept of conflict of interest serves several practical functions that are essential for maintaining accountability, trust, and effective decision-making. First and foremost, it acts as a preventive mechanism: by identifying situations where personal, financial, or organisational interests might interfere with public duties, governments can implement rules, disclosure requirements, and recusal procedures to reduce the risk of biased or corrupt decisions.

Secondly, conflicts of interest function as a framework for transparency and ethical governance. When officials are required to declare potential conflicts, it allows both oversight bodies and the public to scrutinise decisions, ensuring that policies and resource allocations are guided by public, rather than private, interest. This transparency helps maintain public confidence in institutions and prevents the erosion of legitimacy.

Third, the concept provides a benchmark for accountability and legal enforcement. Conflicts of interest create clear criteria for evaluating behaviour and, if necessary, enforcing sanctions. This enables both internal and external institutions—such as audit agencies, ethics commissions, and courts—to monitor compliance and address breaches effectively.

Finally, conflicts of interest in modern governance help to align incentives and institutional design. By anticipating where personal or organisational interests may clash with public responsibilities, governments can establish structural mechanisms, such as independent oversight committees, multi-stakeholder boards, and performance audits, that integrate ethical and practical considerations into routine decision-making. In this way, conflict of interest is not merely a regulatory concept; it becomes a practical tool for institutional integrity, risk management, and sustainable governance.

Conflict of Interest and Public Life: Cross-National Perspectives, edited by Christine Trost and Alison L. Gash (2008, Cambridge University Press), seeks to demonstrate that conflicts of interest are not merely a matter of individual morality, but rather an institutional and cultural phenomenon that is deeply dependent on several factors. These include the political system, legal traditions, social norms, bureaucratic practices, and the broader culture of democracy. In other words, what is considered a “conflict of interest” in one country may be regarded as acceptable or even legitimate in another.

The book argues that the relationship between conflict of interest and public life is fundamentally reciprocal: public institutions shape the ways in which conflicts of interest are identified and regulated, while the existence of such conflicts simultaneously influences how public life operates and how citizens perceive the legitimacy of government. Conflict of interest emerges not merely as a personal ethical dilemma, but as an inherent feature of modern democratic systems where individuals hold overlapping roles as private citizens and public representatives. Because public life depends on trust, transparency, and the belief that officials prioritise the common good, any perception that private interests are intruding upon public decision-making can erode confidence in institutions and weaken democratic engagement. At the same time, the norms and structures of public life—such as legal frameworks, bureaucratic cultures, and political expectations—determine whether certain behaviours are regarded as improper conflicts or as acceptable exchanges of expertise and influence. Thus, conflicts of interest both shape and are shaped by the institutional and cultural context of public life, creating a dynamic in which maintaining legitimacy requires constant negotiation between private incentives and public responsibilities.

According to the book Conflict of Interest and Public Life: Cross-National Perspectives, the definition of conflict of interest is inherently contextual because it does not possess a universal or fixed meaning. Instead, it is shaped by the unique historical experiences, institutional arrangements, and political dynamics of each country. What one society recognises as an improper or unethical overlap between private and public roles may be viewed differently in another, depending on local norms, regulatory frameworks, and political culture. For example, the practice of the "revolving door" in the United States—where government officials move between public office and private sector positions—is widely regarded as a serious problem because it risks the exploitation of insider knowledge for personal gain. In contrast, in some European countries, similar movements are often seen as legitimate transfers of expertise, enabling public institutions to benefit from private-sector experience while facilitating knowledge exchange between sectors. This contrast illustrates how context, culture, and institutional design critically influence what is considered a conflict of interest.

The book argues that the mere existence of strict rules and regulations does not automatically prevent the abuse of power or the emergence of conflicts of interest. According to the editors, the effectiveness of governance depends far more on the surrounding political, social, and institutional culture. Political ethical norms are crucial because they establish shared understandings of what behaviour is acceptable or unacceptable, guiding public officials beyond what the law prescribes and shaping their sense of responsibility to the public. Transparency is equally important, as it exposes decision-making processes and private interests to public scrutiny, thereby deterring misconduct by making it more likely to be observed and criticised. Public pressure plays a vital role because citizen engagement, media oversight, and civil society activism create accountability that regulations alone cannot enforce; officials are less likely to exploit positions of power if they fear reputational consequences or social sanctions. Finally, bureaucratic culture influences how rules are interpreted and applied on a day-to-day basis; a culture that values integrity, professionalism, and service to the public can encourage ethical behaviour, whereas a permissive or hierarchical culture may allow conflicts of interest to persist despite formal regulations. In sum, the book emphasises that effective management of conflicts of interest requires a holistic approach that combines rules with ethical norms, transparency, public vigilance, and institutional culture.

According to the book, conflicts of interest are an inevitable part of democracy because public officials inherently hold dual identities that naturally create tensions. On one hand, they are private citizens with personal interests, family connections, and professional networks. These private roles shape their preferences, influence their decisions, and often bring them into contact with individuals or organisations that have stakes in public policies. The book emphasises that these private ties are neither inherently unethical nor avoidable; they are part of the social and economic reality in which officials live. On the other hand, public officials simultaneously serve as representatives of the public who are expected to act impartially and prioritise the common good over personal gain. This role demands neutrality, adherence to ethical norms, and accountability to citizens. The tension between these two roles—private citizen and public representative—means that potential conflicts of interest are always present in democratic governance. Democracy cannot eliminate these tensions, but it can manage them through institutional design, transparency, ethical norms, and public oversight.

Conflicts of interest cannot be entirely eliminated because they arise naturally from the dual roles that public officials occupy and the complex interactions between private and public spheres. The book explains that instead of attempting the impossible task of eradication, these conflicts must be managed, controlled, and made transparent.

Conflicts of interest can be managed by establishing clear procedures and guidelines that help public officials navigate situations where personal and public interests intersect. Management involves setting ethical standards, providing training, and creating institutional mechanisms such as recusal from certain decisions or oversight committees to handle sensitive cases. This approach recognises the inevitability of conflicts while reducing the risk that they will compromise public decision-making.

Conflicts can be controlled through formal regulations, monitoring systems, and accountability measures that limit the opportunity for private interests to unduly influence public actions. Control is achieved by enforcing rules on disclosure, restricting certain financial activities, and implementing sanctions for breaches. The book emphasises that control mechanisms do not eliminate conflicts themselves but reduce their potential to harm public trust and governance.

Finally, conflicts should be made transparent because visibility and disclosure increase public awareness and scrutiny, creating a social and political check on misconduct. Transparency ensures that officials’ private interests are open to evaluation by citizens, media, and civil society, thereby deterring unethical behaviour and reinforcing accountability. By combining management, control, and transparency, democratic systems can handle conflicts of interest effectively without pretending they can be fully eradicated.

Public trust is profoundly influenced by perceptions of conflict of interest, as citizens rely on the belief that public officials act in the collective interest rather than for personal gain. When people perceive that private interests are shaping public decisions, even in the absence of concrete evidence of wrongdoing, confidence in governmental institutions begins to erode. This erosion is rooted in the symbolic dimension of public office: legitimacy in democratic systems depends not only on legal authority but on the moral credibility of decision-makers. Once the perception emerges that officials are using their positions to benefit themselves, their families, or their networks, citizens start to question the fairness, impartiality, and integrity of the political process. As a result, policies may be viewed with suspicion, participation in democratic processes can decline, and cynicism toward government becomes more widespread. The book suggests that the perception of conflict of interest can be just as damaging as actual misconduct, because trust functions as a fragile social resource that is difficult to restore once compromised. Therefore, transparency, accountability, and ethical behaviour are essential not merely to prevent abuse, but to sustain the public’s belief that democratic institutions operate in their favour.

According to Conflict of Interest and Public Life: Cross-National Perspectives, conflicts of interest are not merely the result of individual misconduct, but rather reflections of institutional design and political culture. The book argues that public officials operate within structures that shape their behaviour, expectations, and opportunities. When institutions are designed in ways that allow overlapping roles, weak oversight, or close interaction between public and private sectors, they create systemic conditions in which conflicts of interest are likely to emerge. In such contexts, individual actions cannot be understood solely as moral failures; they are shaped by incentives, norms, and institutional arrangements that either encourage or tolerate blurred boundaries between private and public responsibilities. Political culture further reinforces this dynamic by defining what is socially acceptable, how loyalty is understood, and whether personal networks are seen as assets or liabilities in public life. In societies where patronage, informal networks, or mutual obligations are culturally embedded, behaviour that outsiders would label as unethical may instead be viewed as normal or even desirable. The book, therefore, concludes that conflicts of interest reveal the deeper interaction between institutional structures and cultural expectations, demonstrating that effective solutions must address systemic design and political norms rather than focusing solely on individual punishment.

Preventing conflicts of interest requires a combination of legal rules, political accountability, and social ethical norms because no single mechanism is sufficient on its own. Legal rules provide the formal framework that defines prohibited behaviours, establishes disclosure requirements, and outlines sanctions for violations. However, the book argues that laws are inherently limited: they cannot anticipate every possible scenario in which private and public interests intersect, and overly rigid regulation may even drive misconduct into less visible forms. Political accountability fills part of this gap by ensuring that elected officials remain answerable to citizens, opposition parties, and the media. Through electoral consequences, parliamentary scrutiny, and public debate, political accountability creates incentives for officials to avoid behaviour that could be perceived as self-serving. Yet accountability mechanisms depend on active participation and awareness, which cannot function effectively without broader cultural support. Therefore, the book emphasises that social ethical norms are essential because they shape expectations of appropriate conduct and internalise standards of integrity within public life. When ethical norms are strong, officials refrain from exploiting loopholes not because the law forbids it, but because they recognise a moral obligation to prioritise the public interest. The book concludes that only through the interaction of legal structure, political oversight, and shared ethical values can democratic systems meaningfully prevent conflicts of interest and maintain public trust.

[Part 4]
[Part 2]

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