As with most postcolonial countries, Indonesia inherited a legal order that distinguished between formal laws of the state and customary norms of the people. The rationale for this distinction was largely economic: most colonial governments were concerned not with broadbased economic development but with export enclaves based on large-scale agricultural production and resource-extraction (Seidman and Seidman, 1994: 32). Accordingly, colonial constitutions recognised customary law in the hinterland, albeit subject to catch-all requirements such as" natural justice, equity and good conscience", but applied European, capitalist laws to export enclaves and the commercial elite (usually European) that governed them (id). Many developmental economists now see this policy of economic and legal dualism as having created a clash of systems-one village-based and pre-capitalist, the other urban and capitalist-with disastrous consequences for rural areas, including indebtedness, exploitation and over-population for rural areas (Boeke, Greenberg, 1980: 143, Santos, 1979: 51). Thus, the challenge of legal development in postcolonial countries is said to be to shape laws and legal institutions that overcome dualism and its consequences (Seidman and Seidman, 1994: 45-52).

The orthodox Western response to legal dualism is" modern" law-an autonomous system of purposive rules applied universally and uniformly by specialised state agencies (Trubek, 1972: 5). Proponents argue that this best offers the transparency, predictability and rationality necessary for a modern industrial economy (id: 5; Greenberg 1980: 130). But this orthodoxy has been much questioned: some argue that western-style modern law simply perpetuates the exploitation of colonial dualism (Wallerstein, 1974; Leys, 1975); others point out that legal rules and institutions transplanted from the West rarely have similar or predictable effects in developing countries (Seidman and Seidman, 1994: 44-45); others again argue that legal pluralism, not unitary state law, is the only path to broad-based sustainable development (Franz von Benda-Beckmann, 1989). Indeed, calls for a new typology to describe the relationship between law, development and dualism in postcolonial countries are a hallmark of contemporary law and development debate (eg Trubek, 1972: 3; Seidman and Seidman, 1994: 2-3; Greenberg 1980: 129).