Managing social policy in the emerging welfare regime of governance: What Indonesia can learn from South Korea’s experience

Abstract

Although Indonesia and South Korea have parallel narratives concerning their political-economic order that influenced social welfare arrangements, they have had different welfare outcomes. The main purpose of this study is to survey the possibility for Indonesia to adopt key features from Korea that can be applied to catch up in terms of its welfare outcome improvements. We argue that the key to the success of Korean social welfare development is closely related to the adaptive and responsive capacity of existing political institutions in responding to global changes, leading to a collaborative model of governance in welfare service.

Keywords

Collaborative governance East Asian welfare regimes inclusive institution social services welfare politics

Introduction

The article revisits the ‘welfare governance’ in Indonesia and South Korea (hereafter, referred to as Korea). By tending to focus on Indonesia, the main purpose of this study is to survey the possibility for Indonesia to adopt key features from Korea that can be applied to catch up in terms of its welfare outcome improvements. Indonesia has periodically launched numerous initiatives and innovations on social policy programs, yet it has suffered from unorganized, fragmented, and overlapping policy implementations (Aspinall, 2014; Harjanta, 2018; Masúdi and Hanif, 2011; McCarthy and Sumarto, 2018; Sumarto, 2017). This issue has eventually contributed to poor and vague welfare outcomes (Murphy, 2019). Some notable examples of the welfare outcomes can be found in the education and health sectors as most of the country’s welfare budget is allocated to those sectors.

An empirical study by Sari (2019) demonstrates that even though the educational spending of the government tripled from 2000 to 2013 and a series of educational assistance programs – such as the School Operational Assistance (BOS), scholarships for the poor (BSM), and cash transfers for children integrated with the Family Cash Transfer Program (PKH) – have been implemented, evidence of the impact of educational assistance shows,

slow progress in improving education quality . . . the secular decline in returns to schooling between 1993 and 2007 reflects the fact that quality of education does not respond well to market demand . . . [and] learning outcomes have also been on a downward trajectory compared with global outcomes. Of 70 countries surveyed . . . Indonesia ranked 62nd in PISA science scored. (Sari, 2019: 6)

However, in the health sector, Silva and Sudarmo (2018) posited in their research that the current major issue still revolves around the wasting, underweight, and stunting among children below 5 years; the rates are 12.1 percent, 19.6 percent, and 37.2 percent, respectively. Given those figures, Indonesia’s stunting rate ranks the fifth highest in the world. According to the World Bank (2015), losses due to stunting and malnutrition are estimated to be equivalent to about 2 percent to 3 percent of Indonesia’s gross domestic product (GDP). This circumstance was followed by the increase in the obesity trend from 18.8 percent in 2007 to 26.6 percent in 2013. In terms of poverty, although Indonesia has made an enormous effort in poverty reduction – cutting it by more than half since 1999 to 9.4 percent in 2019 – approximately, 20.19 percent of the whole population are vulnerable to poverty, as their incomes are only slightly above the national poverty line. All of these factors contribute to the high rank of Indonesia’s Human Development Index (HDI) (0.781 in 2019), compared to Korea, which has achieved the ‘very high category’ (0.916 in 2019) (UNDP, 2019). The HDI value has positioned Indonesia at 107 out of 189 countries and territories, while Korea stands at 23 (UNDP, 2019).

This condition raises a critical question of why Korea and Indonesia have had different welfare outcomes. As we already know, Korea has relatively similar pre-conditions of political-economic trajectory with Indonesia as an emerging country that has experienced a gradual change from the productivist welfare model to the more welfare-oriented model (Gough, 2013; Lin and Wong, 2013; Mok et al., 2021; Yuda, 2019a, 2019b). Also, the national independence of Korea and Indonesia was achieved at almost the same time (15 August 1945 and 17 August 1945, respectively).

Given the background, Korea is relevant to choose as a role model for Indonesia (and other Asian countries), since it represents Asian countries that have succeeded in managing their social policy and becoming an OECD member in a situation ‘where democratic institutions, in the western sense, are rudimentary’ (Walker and Wong, 2005: 4) – even though both Korea and Indonesia are classified as democratic countries by Polity IV. Based on the concept introduced by renowned political-economy theorist Chalmers Johnson, a ‘rudimentary democratic institution’ refers to a plan-rational developmental state, [which] contrasts to the market-rational regulatory state of Western democracies and the plan ideological state of socialist countries’ (Heo and Lee, 2017: 649).

This article contributes to the growing literature on the political aspect of East Asian social policy studies by using a desk review of peer-reviewed literature and reports to shed more light on how collaborative governance has enormously contributed to the social policy development in the country examined. Collaborative governance refers to ‘a governing arrangement where one or more public agencies directly engage non-state stakeholders in a collective decision-making process that is formal, consensus-oriented, and deliberative and that aims to make or implement [social] policy or manage [social] programs or assets’ (Ansel and Gash in Kim, 2010: 166). The inspiration for our topic came from the critical contribution of Acemoglu and Robinson (2012) that has succeeded in providing an alternative perspective to conservative theories of development by giving more emphasis to geographical issues as inhibiting factors of development. They contend that instead of geographical factors, institutions play a more dominant role in social development. They further explain the reason development failure can be linked to the existence of extractive institutions in governance. An extractive institution is a term used to describe chronic oligarchical elites that arrange the political-economic system of the state in their favor, followed by centralized governance with plenty of illiberal public policies. Building on that perspective, this article will focus on the legitimate arrangement of state–society relationships in connection to welfare development in a particular society by comparing Korea and Indonesia (Croissant, 2004; Ramesh, 2004).

We argue that the key to the success of social policy development is closely related to the adaptive and responsive capacity of existing political institutions in responding to global changes, leading to a collaborative model of governance in welfare service. This argument is supported by our findings confirming that Korea has a high elasticity in responding to and adopting collaborative governance in the form of mutual cooperation with stakeholders and the tripartite system in social policymaking matters of which Indonesia is still far from achieving. It is widely assumed that inclusive governance could ‘ensure that [non-state] actors can freely organise themselves and “insider[s]” advocate for the causes they represent’ (Henninger and Römer, 2021: 3).

To gain further understanding of this topic, two research questions are proposed, which are as follows:

Why is Indonesia lagging behind in terms of social welfare development?

Second, how did Korea manage their welfare configurations?

The answer to the first question is provided in the section ‘The failure of collaborative governance in Indonesia: The impact for the welfare distributional system’, where a brief analysis of how the patrimonial legacy of the New Order has continued and curtailed the collaborative governance tradition in social policymaking. The analysis includes how the New Order legacy has undermined the existing welfare management system in Indonesia and contributed to low welfare outcomes. The second research question will be answered in the section ‘A form of collaborative governance in Korea over time’, which focuses on how the level of collaborative governance that was already practiced in Korea has been proven as contributing to the augmentation of welfare.

The next section is a brief overview of the development of parallel narratives of welfare regimes in both countries demonstrating the similarity of historical welfare development trajectories with different welfare outcomes.

Asian welfare regime in the making: Focusing on Korea and Indonesia

The welfare regimes of Indonesia and Korea have been described as ‘productivist’ up to the 1980s and ‘inclusive-liberal’ after that decade. The productivist welfare concept is used to portray the interaction of economic growth and social welfare configuration in East Asia (Holliday, 2000; Walker and Wong, 2005). The key contention of the productivist concept is that social policy should be positioned subordinate to economic growth, while the state actively intervenes in economic development and industrialization in order to achieve high economic growth (Goodin, 2001). Consequently, social welfare benefits are only distributed to a productivist population engaged in the industrial economy (Fleckenstein and Lee, 2017), while the family plays a greater role as a welfare provider for those who are not covered by formal social policy (Murphy, 2019). In this sense, ‘the family takes precedence over its individual members. Within the family, a strict hierarchy specifying the order and status between family members is considered very important’ (Lee, 2007: 76). From the cultural approach, the greater role of the family in social welfare provision reflects what Jones argued as Confucian welfare regimes (Peng and Wong, 2010). According to this approach, ‘informal and voluntary welfare was pivotal in East Asia, retarding the development of state welfare’ (Kim, 2019: 3).

Coinciding with the rapid economic growth of both countries, by the late 1970s, Korea and Indonesia began to focus on the process of propelling investments and maintaining economic development (Murphy, 2019). In this period, certain social investment policies, such as education and healthcare, were massively introduced to ensure an adequate supply of workers who were equipped with the skills and knowledge demanded by the labor market (Croissant, 2004). Concerning this, Kwon and Kim (2015) introduced the new regime that emerged during this period as a developmental welfare state. Many observers put it that welfare legislation during this period was used as a political device of the authoritarian regime to strengthen its legitimation and weaken resistance.

After the 1990s, democratization and economic liberalization triggered social policy reforms. These reforms have pushed market mechanisms to the core of welfare provision, and the role of means-tested social assistance policies was expanded as a response to economic crises Kwon and Kim (2015). In Indonesia, social assistance was introduced in the form of healthcare, labor-intensive public work programs, an education scholarship, and subsidized rice for the poor. In Korea, however, the government expanded the scope of existing public assistance programs, known as the National Basic Livelihood Security (NBLS) program. Some new cash allowances were also given to low-income individuals of working age and their families for a limited period of time.

After recovery from the crisis, the welfare regimes in both countries profoundly shifted toward the inclusive-liberal model. The inclusive model itself was marked by the emergence of massive welfare policy expansion for the unproductive portions of the population (the elderly, unemployed, and children) who previously were excluded from welfare expansion (Lin and Wong, 2013). The liberal model, which was demonstrated by the market-conforming role of welfare policy in these countries, was still intentionally maintained (Abrahamson, 2016), and ‘social policy has remained residual in nature’ (Sumarto, 2017: 953). In the context of social insurance, in the said states, together with other East Asian countries such as Japan, Taiwan, Malaysia, and Thailand, ‘the eligibility of the social insurance schemes had been expanded from workers in selected occupations to workers in all occupations as well as those who were self employed’ (Mok and Qian, 2019: 102).

Nevertheless, a small number of exceptions might exist due to several epistemological strengths of claims departing from some perspectives or cases. Identifying the case of China, for instance, Mok associated it with the protective welfare regime. This term is used to recognize a form of social protection system that focuses on protecting workers in overcoming social risks that lead to job losses and instability in economic income (Mok and Hudson, 2014). Some also attributed East Asian welfare regimes to the conservative type, as found in Japan, in which welfare benefits are concentrated among the male breadwinners, and the level of benefits heavily depends on their rank in their companies (Mok et al., 2021).

Other influential scholars like Lin and Wong (2013) proposed the redistributive type to identify the political commitment of some East Asian governments. Those governments, such as the Chinese and Taiwanese governments, are said to have left the productivist thinking behind and are now moving to welfare regimes comparable to the European model, leading to social-democratic orientation in terms of ‘welfare benefits’ (Abrahamson, 2016). Contrary to the aforementioned countries, the city-states of Hong Kong and Singapore share common characteristics as countries that remain subject to the productivist welfare system in nature although the need for social risk management is changing and increasing (Lee and Qian, 2017). The summary of the evolving welfare regimes in East Asia is provided in Table 1.

Table 1.

The model of welfare regime in East Asia.

Regime model	Productivist	Developmental	Redistributive	Inclusive	Protective
Criterion	Productivist	Developmental	Redistributive	Inclusive	Protective
Social policy instrument priority	Limited social protection that was designated for the productive population in formal sector	Social investment in forms of health and education	Universal basic income policy/universal care	Massive universal social insurance	Comprehensive social protection that was designated for the productive population
Main targeted beneficiaries	Formal worker	Formal worker and productive age group	All citizens	All citizens	Formal worker
Orientation of social policy goals	Propelling worker productivity and economic growth	Propelling investment and balancing the supply and demand curve of a labor market	Income redistribution	Creating social inclusion and social solidarity	Protecting workers in overcoming social risks that lead to the loss of a job and instability in economic income

Sources: Croissant (2004); Gough (2004); Holliday (2000); Kwon and Kim (2015); Lin and Wong (2013); Mok and Hudson (2014); Yuda (2019a).

The impact of welfare regime changes on welfare improvement is closely related to the ‘degree of involvement’ of stakeholders in the social policy formulation. Concerning this, Estévez-Abe and Kim (2014) argue based on the selected cases of Japan and Korea that the degree of involvement of stakeholders depends on the country’s political opportunity structure, which is divided into two models, namely a closed structure and an open structure. The former is a political institution in which the government tends to be unresponsive to the social needs of the concerned groups, while the second is the opposite. It is the system that ensures that the existing political institutions can respond to the social needs of the whole population. Hence, they argue that a more open structure of political opportunities will enable the government to respond more quickly to the need for welfare improvement.

From this view, we can assume that rapid welfare quality improvement in Korea is related to the responsiveness and the adaptiveness of the political regime in adopting collaborative governance in welfare outcomes. Also, much literature associated it with the idea of the graduation quota program in 1981 by President Chun’s regime, where it became a starting point for college education to dramatically expand through the 1980s and afterwards (Midgley and Tang, 2008; Shin and Shaw, 2003). The highly educated new generations produced by the policy have asked for more freedom and democracy (Kim, 2019). They are part of a self-confident civil society in South Korea which gave birth to the political foundation for welfare state development. As Henninger and Römer (2021) put it, ‘civil society is often described as giving voice to the marginalised and assisting vulnerable groups . . . exert[ing their] influence in the policy-making process’ (p. 2).

The Indonesian political regime of that period, by contrast, lacked responsiveness and the adaptiveness in accommodating welfare improvements. Authoritarian politics during years of Soeharto presidency (1966–1998) used repressive strategies to prevent the Central Statistics Office (CSO) to fully engage in the policymaking process. This configuration led to embedded norms ‘which do not easily perish, even after . . . major recalibration to bring them into line with new [political] circumstances’ (Heo and Lee, 2017: 648). The succinct review of the Indonesian case in the subsequent part could prove this argument.

The failure of collaborative governance in Indonesia: The impact for the welfare distributional system

It is argued that the key to the success of social policy development is closely related to the adaptive and responsive capacity of existing political institutions in responding to global changes, leading to a collaborative model of governance in welfare service. Concerning this, it can be assumed that social welfare problems, for instance, education, health, and poverty, emerged due to the absence of collaborative governance in the process of policymaking (Raper, 2008). Collaborative governance here refers to the involvement extensively of the concerned groups in the policy formulation, which then inhibits the effective social policy development and results, followed by rather vague outcomes. Hence, tracing its historical context, this section concerns the causation of the failure of Indonesia’s social policy formulation.

Patrimonial legacy and collaborative governance

Although the long period of authoritarian rule under President Soeharto’s New Order regime formally ended in 1998, the Indonesian governance remained closely associated with the patrimonial politics of the New Order legacy, which was strongly characterized by features such as oligarchic politics, rampant corruption, and patron – client relationships in a series of public goods configurations. During this period, a political decision ‘depend[ed] explicitly upon personal considerations: upon the attitude toward the . . . applicant and his concrete request, and upon purely personal connections, favours, promises, and privileges’ (Weber in Yuda, 2019a: 8). This situation inhibits the reformation spirit that greatly emphasizes collaborative governance in public service.

Based on some influential scholars (Abdulbaki, 2008; Hadiz and Robison, 2017; Weber, 2006), we sought to identify major causes of why the New Order legacy in the Indonesian governance continued after democratization. Most observers believed that Indonesian’s political-economic reform in 1998 was only a reactive response to the failure of the authoritarian government under the New Order of Soeharto in tackling inflation, and not followed by an assertive civil society base and cohesive working-class organizations (Fukuoka, 2013). It provides the government with less control, leading the democracy to merely run at the electoral level rather than at a substantial level. Consequently, Indonesia’s path to social welfare development was not primarily determined by the socio-political interests of the concerned groups and failed to shape favorable conditions for substantial political changes in welfare improvements. This situation was eventually favorable for the continuation of a fragmented approach to welfare governance which has more in common with clientelism and corporatism than societal democracy (Aspinall, 2014; Murphy, 2019; Yuda, 2019).

It was quite unlike South Korea, where the voice of an increasingly assertive civil society was raised in support of democracy, dismantling the state-centered governance, while leading to vibrant collaborations between the state, non-governmental organizations (NGOs), and businesses – in other words, the tripartite mechanism of policymaking (Estévez-Abe and Kim, 2014). As such, there is no wonder that when the wave of democratic transition and globalization came about in Korea, the more broadly collaborative initiative in and after 1997 was established, laying the basis for the constructive state – society relationship and curtailed the patron – client relationships which were typically found in countries where ‘poverty rates are [relatively] high, the middle class is small, and urbanization limited’ (Berenschot, 2018: 1565).

Neo-patrimonial governance in current social policy administration: Local and national contexts

The historical origins of social welfare development in Indonesia were formed during Soeharto’s New Order regime. The bulk of the social policies was integrated into community development programs such as the program for left-behind villages and micro-credit schemes within a highly centralized governance. Meanwhile, the social insurance program was distributed for civil servants (TASPEN) and the military (ASABRI) to gain political support and loyalty.

Since the enactment of the decentralization policy in 1999, initiatives and innovations of social policy in Indonesia rapidly exploded, especially at local levels. Some of the popular local social policies – for example, Jembrana Health Insurance in Bali, free health and education programs in Belitung Timur, classless hospital policy in Kulon Progo – were among the famous examples of various social policies initiated by local governments. Unfortunately, the welfare implications remained vague (Masúdi and Hanif, 2011). This occurred because local governments in charge of providing social services had seen political opportunities in their welfare provision and formed ‘patronage and clientelistic network[s]’ in order to increase popular support for the general election (Aspinall, 2014; Harjanta, 2018; Masúdi and Hanif, 2011). As a result, plenty of social policies at the local level were designed only to ensure constituents’ loyalties as well as stability for the political order, while decentralization became a mechanism for reorganizing and repositioning the New Order-style authoritarian political networks (Aspinall, 2014).

A similar condition took place at the national level. Some of the flagship conditional cash transfers such as the National Program for Society Empowerment (PNPM Mandiri), Prosperous Family Program (PKH), and unconditional cash transfers such as the direct cash transfers for the poor (BLT) and Rice for the Poor (Raskin) became turning points in the development of social policies in Indonesia. Notably, under President Yudhoyono, the sheer number of social programs grew ‘from five in 1998 to more than fifty in 2008, with many spread across all ministries’ (McCarthy and Sumarto, 2018: 227). In addition, Indonesia has also expanded its social security coverage, administered under the National Social Security System (SJSN), for the entire society.

Although efforts to expand large-scale social protection initiatives have been made, the welfare outcome of these initiatives was also doubtful. After extensive research, Sumarto (2017) found that the extremely pro-poor social assistance program was loaded with political intrigue, used by the government to build loyalty and patron – client relationships, as well as to make political transactions for maintaining political stability. In his collaboration with McCarthy (2018), the author further argues that the rapid expansion of social assistance under Yudhoyono was politically motivated to ‘give his ministers discretionary power over the funding and management of social protection programs. This social protection budget may also have served as a source of largesse for the political parties to which a particular minister was affiliated’ (McCarthy and Sumarto, 2018: 227). Consequently, the social assistance programs were not well-coordinated and overlapping in their distributional process. This situation was compounded by the inaccurate datasets of beneficiaries, thus undermining the effectiveness of programs to promote social citizenship. As a result, instead of promoting social cohesion, the social assistance programs created social conflicts and undermined the social capital in the community.

Also, it is worth noting here that the depiction of neo-patrimonial governance in contemporary social welfare policy in Indonesia is a reflection of the legislative process of Law No. 11/2009, which is a blueprint for the social welfare system in Indonesia. It is because the process of the legislation has overlooked the voice and involvement of labor unions, the private sector, and other public entities during the formulation process. The law also clearly states that the social welfare delivery system was mandated by the government to retain control over the social welfare provision in terms of policy formulation and welfare provider. Meanwhile, non-state actors, that is, social and community organizations, are encouraged to deliver social welfare on the condition that their work will not change the nature of the initiative, and they must operate fully under the government’s supervision (Masúdi and Hanif, 2011).

A study by Masúdi and Hanif (2009) demonstrated that this legislation has suffered from the intervention of the interests of politicians largely affiliated with the nationalist party circle (Partai Demokrasi Indonesia Perjuangan [PDIP], Golkar, and Partai Demokrat). They contended non-state organization involvement would not bring political benefit in terms of electoral politics. This attitude arose as they ‘have no solid networks of mass-based social organisations as do the Islamic parties. [As such] it is politically much more advantageous for [politicians for the] state to provide social welfare directly’ (Masúdi and Hanif, 2009: 111).

Unfortunately, for over two decades after the democratization transition period, the nationalist parties associated in general with a conservative view controlled the major institutions of the state, thus preserving control over the social welfare distribution system. It was illustrated by Yudhoyono’s successor, Joko Widodo from PDIP, who tried to get himself elected by portraying himself as a populist leader, yet it turned out that the patrimonial politics remained during his presidency (Yuda, 2019). To reinforce his platform as a populist leader, by 2014, Jokowi introduced many new welfare programs that fundamentally had no substantial differences from the existing ones. For example, the Indonesia Health Card (KIS) became a substitute for previous similar programs (BPJS) with similar benefits. Nonetheless, his leadership changed at the end of his first term (2014–2019) to the undemocratic model, and it could even be closely associated with an authoritarian imagination in a soft fashion. This statement was confirmed by Power in his recent important contribution where he argued that the ‘Jokowi government took an authoritarian turn in 2018, making more concerted use of powerful state institutions – particularly instruments of law enforcement and security – for narrow, partisan purposes, including the suppression of constitutionally legitimate democratic opposition’ (Power, 2018: 308). The attempt to take the democratization spirit away from the public indicates the need for requestioning the value of what is being taught as the democratization of Indonesia.

A form of collaborative governance in Korea over time

Several studies have acknowledged Korea as an example of the best practices in delivering collaborative governance in the context of welfare service in East Asia due to its impact on the social welfare policy expansion (which was integrated under economic development policy). Results have shown remarkable outcomes such as the decline of poverty from 40.9 percent of all households by 1965 to 7.6 percent in 1991, bringing Korea out of absolute poverty. Besides, Korea’s Human Development Index’s value for 2018 belongs to the very high human development category, positioning it at 22 out of 189 countries and territories – a 24.5 percent increase from 0.728 in 1990 to 0.906 in 2018. Therefore, this section elaborates on the collaborative initiative taken in Korea in its historical path.

The development of the Korean welfare state was driven by economic growth combined with multi-stakeholder collaboration in the development process since the authoritarian government of Park Chung Hee, particularly in the 1970s when Korea achieved progressive economic growth by emphasizing the heavy chemical industry and exports (Holliday, 2000). A high priority of the government was industry policy, yet it generated a social disparity among rural and urban-industrial living standards. Given this, dissatisfaction toward Park’s regime rose among rural inhabitants and caused the decline of Park’s legitimacy in the 1969 national election. These factors eventually contributed to the regime’s effort in improving rural population living standards by introducing the Saemaul Undong movement which started in the mid 1970s. It was quite similar to what happened in Indonesia. The introduction of a program for left-behind villages (Inpres Desa Tertinggal – IDT) and micro-credit schemes (Kredit Usaha Keluarga Sejahtera – KUKESRA) during the 1970s to 1980s that were designed to build a structured clientelistic network from governors to village heads. They were in charge of mobilizing villagers to vote for the authoritarian government of Soeharto in each presidential election (Hadiz and Robison, 2017).

The basic framework of the Saemaul Undong movement was to build cooperation among cross elements of society, the government, community, and private sector, to achieve the shared goals. In its implementation, the government allocated initial stimulus assistance for developing village roads, bridges, electricity storage warehouses, and other kinds of necessary infrastructure to increase the basic welfare of empowered communities. While the Saemaul Undong began to develop at the grassroots level, the government encouraged the Chaebol, large business conglomerates, to boost income levels of the rural population by providing employment opportunities. The continuing collaboration of the government, community, and Chaebol drove the level of Korean economic growth to above 9 percent and created favorable conditions for social policy expansion.

Some influential scholars believed Saemaul Undong was a good example of collaborative governance that provided the basis for achieving sustainable development. This is mainly because of pivotal features like self-help and self-reliance community development as well as the role of Chaebol in providing job creation, which contributed to the key success of Korea to transform into a medium level global power after the 1990s (Lee and Kim, 2019). From 1965 to the 1990s, the Korean economy grew with an average annual growth rate of GNP of around 10 percent. This changed the South Korean economy to one almost equivalent to Congo in 1960 to become an Organisation for Economic Co-operation and Development (OECD) member with the 12th largest economy in the world in 1996 (Minns, 2010). Also, it is interesting to note that despite the limited public assistance program in this period, poverty incidence in Korea was drastically reduced from 40.9 percent of all households by 1965 to 9.8 percent in 1980 and 7.6 percent in 1991 (Kwon and Yi, 2009).

After the Gwangju Uprising movement of 1980 and the second democratic movement of 1987 took place, Korea began to enter ‘the transition period’ from an authoritarian government into a more democratic state despite its rudimentary form. Many social policy observers like Kwon noted that the process and struggle for democratization in the mid 1980s brought great progress in establishing universal welfare policy. This is mainly because the democratization process opened a wider access for the involvement of civil society and the labor movement in policymaking (Kim, 2010).

The definitive step toward collaborative governance in the Korean welfare system was taken during the administrations of Kim Dae-Jung and Roh Moo-Hyun. Responding to the economic crisis in 1997, Kim Dae-Jung’s administration immediately formed a Tripartite Commission, which consolidated representatives of labor, which were mainly from the Korean Confederation of Trade Unions (KCTU) and the Federation of Korean Trade Unions (FKTU), business, civil society, and the government to devise the social policy reform agenda in Korea (Ku, 2007; Lee and Kim, 2019). In 1998, the pro-welfare community alliance consisting of more than 20 civic organizations and labor unions submitted a petition for total welfare reform (Lee and Kim, 2019). As a result, the Korean government expanded the scope and coverage of the existing public assistance program, known as the NBLS program.

[T] he cash benefit, combined with in-kind benefits and recipients’ earned incomes, should guarantee an income equal to the corresponding poverty line . . . [while] the eligibility of this program was extended to all the poor, including able-bodied adults, although able-bodied adults must comply with work requirements in order to receive full cash benefits. (Ku, 2007: 25)

In addition, President Kim Dae-Jung through the Ministry of Government Affairs and Home Affairs expressed a strong will to implement contracting out social services programs to NGOs and private organizations, in order to expand the welfare benefits to cover the entire population during the crisis (Yuda, 2020b). Responsibility for this scheme was mandated to a number of government institutions as supervision. For example, at the central level, the initiative of contracting out social services was managed under the Ministry of Health and Welfare, while the bureau of Women and Family Affairs, the Health and Welfare Bureau, and the Self-Governing Bureau of each local government were mandated to supervise the program at the local level (Kim and Kaneko, 2011).

Kim and Kaneko (2011) stated that

social service contracting-out [was] conducted by the Ministry of Public Administration and Security of Korea . . . over 2,700 public services had been contracted out as of 2008. Social welfare services with nonprofits (about 30%) are the most contracted-out form in Korean local governments. (p. 158)

A number of social services were contracted out by local government, among others, daycare centers, centers for the homeless, centers for the elderly, centers for the handicapped and rehabilitation institutes.

In the early 2000s, Kim Dae-Jung introduced the New Public Management (NPM) to encourage an expanding collaboration with civil society and the labor movement in policymaking by providing ‘access to seats in the National Assembly; hence they could build policy coalitions and expand their organizations openly and could pressure the government on individual policy issues’ (Heo and Lee, 2017: 649). This vibrant initiative was built under the slogan ‘productive welfare’. It represents the vision of the Korean welfare state which was based on the principle that social spending must be aimed at supporting market productivity. This can be seen in the introduction of child-related care policies in the form of daycare, paternity leave, and maternity leave, all of which are directed to support work – family reconciliation for dual earner families.

In addition, the introduction of NPM also gives greater possibilities to the private and civil society organizations to take part in delivering social services. Moreover, the implementation of NPM received legitimacy as Korea faced a financial crisis in 1998. Interestingly, the collaboration continued in the Roh Moo-Hyun era under the slogan ‘participatory welfare’ (Kim, 2010), in which the spirit of decentralization, civic participation, and administrative innovation was spotlighted as policy goals during his presidency. One example of his collaborating policy initiative is ‘Hope Korea 21: Collaborative Welfare program’, which was proposed to build public–private partnerships to enhance the quality of welfare services in Korea. An example is ‘civic participation in welfare production and delivery includ[ing] the Food Bank and Hope Start programs and Local Councils on Social Welfare’ (Kim, 2010: 181). The Food Banks, which were run by volunteer activists and religious groups, delivered surplus food to the handicapped, the aged, unemployed, homeless, and low-income families across the country. In December 2006, 278 Food Bank facilities were operating in Korea, a near fourfold increase compared to January 1998.

Meanwhile, the Hope Start program is designated to eradicate the intergenerational perpetuation of poverty. This program was run and financed through collaborations between government, private organizations, and citizen donations to help young children living in the villages to have as fair a start in life as that enjoyed by children from higher income families (Kim, 2010). In this program, beneficiaries have free access to the education services provided by NGOs. Other beneficiaries are pregnant women of low-income households and individuals from low-income families, who could enjoy abundant welfare facilities, including social care centers, and hospitals and health clinics. All in all, the participatory policy became a determinant factor in promoting co-management, co-production, and co-governance.

Although productive welfare initiatives have successfully proven to meet the labor demand after the economic crisis, they received heated critiques from many observers because they did not pay holistic attention toward employment issues. A notable example of this is the collaborative integrated redistributive pension model which was protested by the unemployed who could not pay the full contribution for pension programs. Unfortunately, after almost 10 years of being implemented, the welfare productivist idea proved unsustainable, especially after the conservative-liberal party took control after Roh’s presidency ended.

The collaborative welfare governance took a solid form once the progressive leadership of Moon Jae-In came to power in 2017, replacing the two periods of the conservative regime of Lee Myung Bak and Park Khun Hee. Under Moon’s administration, the labor unions got a favorable bargaining position in policymaking (Yuda, 2020b). This could be seen in the emergence of pro-worker policy initiatives aimed at promoting full employment, job expansion, and improving welfare benefits to be more generous following the Scandinavian model (Yuda, 2020a). Surprisingly, President Moon Jae-In was also now in a position to introduce a policy initiative for Korean workers to work less, while the minimum wage would be increased as a means for addressing the work – life imbalance problem that was leading to ultra-low fertility rates and delay of the average age for first marriages of Koreans (to 30.1 years for women and 32.8 years for men in the time span 1990–2016), which are all becoming serious demographic problems in contemporary Korea (Baek et al., 2011; Jones, 2019). To accelerate the welfare expansion benefits (especially childcare services) as the welfare demand increased, Moon Jae-In also applied a mixed-welfare distributional scheme. In this sense, the government established the provision, including monitoring, supervising, and funding, while non-profit organizations were in charge of running the scheme, especially in the areas of social care.

Importantly, our research demonstrated that the key success of Korea’s delivery of social services is a political will to make cooperation part of the policymaking process, especially with civil society and the labor unions that share the same vision (Yuda, 2020b). In areas of policy implementation, Korea’s government also welcomes cooperation with non-state actors in order to synergize the aims of the welfare regime initiative.

From this story, this section concludes that Korean welfare governance is based on a collaborative model which has been consolidated in recent times by the leaderships of Kim Dae-Jung (1998–2003), Roh Moo-Hyun (2003–2008), and Moon Jae-In (2017–present). This pattern is different from Indonesia as the governance approach to social policy development is more based on clientelism and corporatism than societal democracy (Masúdi and Hanif, 2009; Murphy, 2019; Power, 2018).

What can Indonesia learn from Korea?

Generally speaking, this article succeeded in explaining the hidden narrative of the Korean welfare system pathway that, of course, has a different sense from the Anglo-Saxon welfare state in terms of political governance and social order as the important policy input (Gough, 2013). The success story of Korea may provide fruitful insights for Indonesia and other developing countries in Asia to follow its path. Many social policies implemented came to fruition due to the involvement of the concerned groups in the decision-making process, even if the final decision remains centered on the politicians. In addition, the high elasticity in terms of responsiveness and adaptiveness of the political regime to adopt collaborative governance in welfare management also had a great impact on the welfare outcome. All these factors have come into play in bringing the society out of chronic poverty (Shin and Shaw, 2003) and contributing to the achievement of Korea’s high HDI ranking.

Furthermore, the case of Korea reminds us of Acemoglu and Robinson’s (2012) argument in their seminal contribution of Why Nations Fail: The Origins of Power, Prosperity, and Poverty. They contend that centralized political institutions might be able to provide comprehensive social welfare in situations where economic growth is at an optimum level. While in a situation of stagnant or low economic growth, inclusive institutions are needed to encourage welfare innovation and stimulate sustainable development growth. As evidenced earlier, we have pointed out that once the economic growth slowed down during a post economic crisis period, South Korea immediately reformed their welfare management by expanding the non-state collaboration system toward a more inclusive one. Meanwhile, by contrast, Indonesia’s existing collaboration in the welfare arrangements is still limited and policy decisions tend to be centralized. This argument is also confirmed by Raper (2008) in his research on the comparative social security system in Indonesia and Australia: ‘there does not appear to have been a tradition or consultation with or involvement of Civil Society Organization (e.g. trade union, charities, advocacy bodies, business associations) in the development of major social policies in Indonesia’ (p. 137).

From the succinct analysis earlier, we found that the weak collaborative governance tradition in welfare development Indonesia can be linked to the failed economic development of the authoritarian government of Soeharto in the past or in facilitating the growth of an assertive civil society. It provides the government with less control and eventually became fertile ground for the continuity of the patrimonial governance of the New Order in a new fashion in the democracy era. Interestingly, as explained earlier, even the legislation of Welfare Vision of Law 11/2009, which is a blueprint for the development of the Indonesian welfare system, was intentionally designed to eliminate the authority of the non-state actors in social service distribution. The main consideration was the political pragmatism of it being advantageous for ‘conservative politicians’ during an electoral period if social welfare is directly channeled to targeted groups. South Korea, in contrast, provides a model of an East Asia country in the region that has been relatively successful in developing a wide range of social policies anchored in civil society and tripartite mechanisms similar to Europe despite the rudimentary form. We assume that this historical background has laid the basis for the constructive state – society relationship and collaboration and eventually curtails the patron–client practice in the welfare distributional process.

It is worth noting here that although the stakeholders collaboration model that was implemented has influenced the management of the Korean welfare state, ‘economic bureaucrats significantly influenced state actors in the policy-making process and successfully resisted [or controlled] change’ (Heo and Lee, 2017: 650). As a result, the welfare outcome resulting in the Korean welfare state differs from that found in Indonesia, because ‘state autonomy does not result in rent-seeking or looting’ (Heo and Lee, 2017: 649).

By drawing on that comparison, the analysis inevitably focuses attention on the very different paths to modernity of the two countries. The explanation of difference between Indonesia and South Korea ultimately seems to be path dependence: the former developing a wide range of social welfare policies and programs anchored in the political-structure which are more particular to the historical legacy influence; meanwhile, the latter, trying to embrace democracy and modernity sufficiently to respond to wider socio-political forces impacting the country’s welfare arrangement.

Overall, the findings of this article corroborate Migdal’s study on state and society relationship showing that state-building’s success depends on societal actors’ strategies. State-building is not only a top-down process of implementing institutional blueprints, but also a bottom-up process involving the daily role of numerous ‘ordinary’ actors in ‘the ongoing struggles among shifting coalitions over the rules for daily behaviour’ (Migdal, 2001: 10).

In the context of social work research, collaborative governance’s conceptual framework has been essential for comparing the social work model in different political-economic contexts. To study this, the researcher may cast light on the most essential institutional attributes to produce favorable conditions for social workers’ actions. A series of questions emerge. These include the following: Does political reform increase the power of its social workers within its intermediary position (bridging state – family and individual relationships)? and to what extent would adoption of genuinely inclusive institutions increase the influence of social workers in advocating for a set of policies for better social services provision? Indeed, more research is needed to come to a firm answer. Regardless of this, we believe that the equal position of a social worker in the policymaking process would lead to a better service management strategy.

Footnotes

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iDs

Tauchid Komara Yuda

Kafa Abdallah Kafaa

Author biographies

Tauchid Komara Yuda is a lecturer at Department of Social Development & Welfare, Universitas Gadjah Mada, Indonesia. He has published extensively in social policy with particular reference to East Asia.

Pinurba Parama Pratiyudha is a researcher at the Department of Social Development and Welfare, Universitas Gadjah Mada, Indonesia. His research is primarily focused on social development, social policy, and citizenship.

Kafa Abdallah Kafaa is a lecturer at the Department of Social Development and Welfare, Universitas Gadjah Mada, Indonesia. His research centers on social development and social policy.

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