This paper examines Indonesia's experience with neo-liberal higher education reform. It argues that this agenda has encountered strong resistance from the dominant predatory political, military, and bureaucratic elements who occupy the state apparatus, their corporate clients, and popular forces, leading to continuation of the centralist and predatory system of higher education that was established under the New Order. The only areas in which neo-liberal reform has progressed have been those where the neo-liberal agenda has aligned well with that of popular forces and there has been little resistance from predatory elements. In presenting this argument, the paper illustrates the role of domestic configurations of power and interest in mediating global pressures for neo-liberal higher education reform. It accordingly suggests that Indonesia needs to construct a model of higher education that simultaneously fits with the reigning political settlement and produces better research and teaching outcomes than the present model.