Welfare in Transition The Political Economy of Social Protection Reform in Indonesia Maryke van Diermen Thesis submitted for the degree of Doctor of Philosophy in the Department of Anthropology and Development Studies School of Social Sciences, Faculty of Arts University of Adelaide December 2017 Declaration I certify that this work contains no material which has been accepted for the award of any other degree or diploma in my name in any university or other tertiary institution and, to the best of my knowledge and belief, contains no material previously published or written by another person, except where due reference has been made in the text. In addition, I certify that no part of this work will, in the future, be used in a submission in my name for any other degree or diploma in any university or other tertiary institution without the prior approval of the University of Adelaide and where applicable, any partner institution responsible for the joint award of this degree. I give permission for the digital version of my thesis to be made available on the web, via the University's digital research repository, the Library Search and also through web search engines, unless permission has been granted by the University to restrict access for a period of time. I acknowledge the support I have received for my research through the provision of an Australian Government Research Training Program Scholarship. Signature of candidate: Date: 10/07/18 ii Acknowledgements This thesis would not have been possible without the support I have received from many people. I am thankful to them all but I wish to mention some in particular. Foremost, I would like to express my sincere gratitude to my supervisors, Andrew Rosser and Susan Hemer, for their encouragement and immense knowledge. Andrew’s guidance and knowledge has helped me enormously in the research and writing of this dissertation. I am deeply grateful for Andrew’s generosity: he has regularly spent hours discussing issues or ideas with me. Susan’s advice on conducting fieldwork was extremely helpful and, whilst writing up, her encouragement was often what kept me going. I had additional support from Kanishka Jayasuriya in my first year, and I’m also grateful for his advice. Furthermore, this thesis could not have been completed without the financial assistance provided through the Australian Postgraduate Award and ongoing support from the Department of Anthropology and Development Studies at the University of Adelaide. I would also like to thank Alison-Jane for proofreading the dissertation. My sincere thanks to the SMERU research institute. During my fieldwork, their kindness and friendship was extensive. I was privileged to meet and learn from many remarkable researchers during this time. In particular, I would like to thank, Pak Asep, Ibu Hestuti, Ibu Nuning, and Isma. I would also like to thank the international researchers who I had the pleasure of getting to know during this time, including Sarah, Ranjan, and Laura. In addition, to the many people who allowed me to interview them, thank you for giving up your time and sharing your insights. To the wonderful people I have shared an office with over the last few years, thank you for sharing your coffee, stories, knowledge, and smiles. In particular, I would like to thank Tess and Rupananda for patiently listening to my ideas and issues and for their friendship. I would also like to thank Dave, Concetta, Elise, Anthony, Shoshannah, Mustafa, Paloma, Tait, Margy, Bill, and Henrike for their friendship and support. I was so lucky to share this experience with such a knowledgeable and friendly group of fellow post-graduate students. iii Moving beyond the world of academia, I would like to thank my friends for the fun times over the last few years. Thank you for making sure I was still my very social self. I am also very thankful to my housemates and boyfriend. I enjoyed coming home to shared dinners, endless banter, and tea towel whipping competitions. Last but not the least, I would like to thank my wonderful family. My parents, Carina and Peter, who provided me with endless encouragement and love. I am deeply grateful. My Mum has been a great emotional support, a wonderful sounding board, and often sent me home with several meals for the week (sorry about your missing Tupperware containers). I am very grateful for my Dad’s advice, enthusiasm, and always knowing how to lift my spirits. I would like to thank my sisters, Aimee and Bianca, who have also been great emotional supports, and always make me laugh. iv Abstract There has been significant reform in social protection systems in developing countries in recent years. The extent, nature, and timing of such reform has varied significantly both between countries and within countries between sectors. Most scholars have explained these developments in terms of technical issues of design, implementation, finance or administration rather than political dynamics. However, recognition is growing that these varying patterns of reform and their implications for improving social protection need to be understood in terms of the underlying political context. This dissertation aims to contribute in this respect by examining the political dynamics surrounding social protection reform in Indonesia. I begin the dissertation by advancing a framework for analysing the politics of social protection reform in developing countries, drawing on ‘social conflict’ theory. Applied to social protection reform, this approach entails identifying the actors, interests, and agendas at work in relation to social protection; assessing the relationships of power between them; analysing the way these shift over time; and how this translates into differing levels of ability to influence policy and its implementation. Having developed this analytical framework, I examine the politics of social protection in Indonesia during the New Order (1965-1998) and post-New Order periods (1998-the present), focusing on three sectors: food security, social security and income support. I put forward two broad arguments. First, I argue that the nature of Indonesia’s social protection system has changed slightly over time. Specifically, I argue that the country’s social protection system has gone from being productivist, particularist, unequalising, informal and predatory in nature under the New Order, to remaining productivist and predatory, but becoming more universalist, equalising, and formal in nature during the post-New Order period. The principal change has been the expansion of rights and coverage of social protection in Indonesia, a shift relevant to the particularist-universalist dimension of social protection. Yet, change has varied across different sectors. Reform has been strongest in the case of income support and social security, and weakest in the case of food security. v Second, I argue that the above continuities and shifts in the nature of Indonesia’s social protection system are a product of the country’s political and social order. Specifically they have reflected: i) continued control by predatory political, bureaucratic and corporate elites nurtured under the New Order over the state apparatus in the post-New Order period; ii) the increasing power of donors and technocrats in policy-making between 1997-2003, during which their advice and funding were required to ease the crisis; iii) the increased power of politicians and political parties to promote social protection policies to help them foster political support and, in turn, secure votes at election time following democratisation; and iv) the expanding power of popular forces to access, contest, and influence social protection policy following democratisation. I conclude by discussing the implications of this analysis for proponents of social protection reform in the developing world. In this respect, I make four recommendations. First, proponents of social protection reform should focus their activities on areas where the prospect of change is greatest. Second, international organisations should provide increased funding and intellectual support to NGOs and unions. Third, proponents of social protection reform should coordinate their efforts as their influence has been greatest when they have acted collectively. Fourth, supporters of social protection reform should pursue strategies for ensuring that social protection programs circumvent bureaucratic involvement. vi Table of Contents DECLARATION .................................................................................................................... II ACKNOWLEDGEMENTS ...................................................................................................... III ABSTRACT ........................................................................................................................ V LIST OF FIGURES ................................................................................................................X LIST OF TABLES ................................................................................................................. XI GLOSSARY ....................................................................................................................... XII CHAPTER 1: INTRODUCTION ...............................................................................................1 Purpose of the Dissertation ........................................................................................................................ 5 Argument .................................................................................................................................................