This blog is based on an article in Social Policy and Society by Tauchid Komara Yuda and Rizqi Ashfina. Click here to access the article.
The Indonesian healthcare system has significantly evolved throughout the years. After it was initiated in 2004 through National Social Security Law, the utilisation remained low, exacerbated by its underdeveloped and partial system. But in 2014, Indonesia achieved its milestone to reform its fragmented healthcare system and expand its universal healthcare, reaching out to more than 260 million beneficiaries across the country. Indonesia’s healthcare evolution raises one fundamental question: what is the determining factor that drives policy makers to expand social policy?
As we delved into the social policy literature, we found contrasting standpoints with groups defending a single factor that is solely responsible for change. One perspective (industrialization group theorists) links social policy expansion with economic growth and urbanisation, while the other perspective (interest group theorists) emphasises the role of labour unions, working-class groups, international organisations, and donors advocating for improved and equitable access to healthcare services.
This ongoing scholarly debate leads to several questions: is there a single or myriad of determining factors that contribute to social policy expansion? If there are multiple factors, do they have a certain degree of interrelatedness? To better understand this, we studied the healthcare system in Indonesia and used the push and pull factors model to investigate different mechanisms at play in social policy expansion.
One group of scholars believe that healthcare policy is essential for a healthy economy, which motivates the government to create or expand social policy. During Indonesia’s early industrialisation phase, the Public Agency for Healthcare Funds (Badan Penyelenggara Dana Pemeliharaan Kesehatan, BPDPK) was responsible for providing healthcare access, but it was exclusively available to civil servants and the military. However, a decade later healthcare benefits were extended to broader groups, including industrial and retired public sector workers, urban formal workers, and their families.
When crude oil production remained steady, the government initiated the Community Health Fund and Community Health Maintenance (JPKM) scheme to extend healthcare access to the poor, whilst anticipating the negative impacts of declining oil revenues on social spending and allocating funds to help citizens pay for healthcare costs. However, there was still a gap in health benefits between government employees and the general population, causing persistent health inequality. The expansion of social policy during this time was not solely driven by industrialisation, but rather motivated by political reasons to legitimise the authoritarian regime. This sheds light on why industrialisation alone cannot fully explain the limited social policy features in the Global South compared to European countries.
Social policy diffusion through policy entrepreneurs and centre-right political parties
Another contributing factor to the expansion of social policy in Indonesia is policy diffusion, which involves the exchange of information between government officials and epistemic communities with specialised policy expertise. The first wave began when a group of key healthcare policy architects went to attend an executive short course to learn best practices in healthcare policy hosted by the University of California, Los Angeles (UCLA). During the short course, they discovered that the prerequisite for implementing the JPKM was to provide equitable access to healthcare for the entire population, not just government officials and military personnel. When the first JPKM faced criticism from experts for being too market-oriented, they began exploring alternative frameworks. They attended a second short course in Germany, where they were introduced to the concept of compulsory government-managed social insurance for the entire population, offering more comprehensive benefits than the JPKM.
When the socioeconomic impacts of the Asian Financial Crisis in 1997 struck, many Indonesians were left without healthcare insurance. In response, the government decided to expand healthcare coverage nationwide. This move prompted key policy achitects to return to Germany to learn the social insurance schemes as part of the healthcare insurance projects by the Deutsche Gesselschaft fur Internationale Zusammenarbeit (GIZ).
There are two mechanisms that were utilized by key policy architects to promote healthcare reform and expansion. The first mechanism involved University of Indonesia scholars negotiating with the government to incorporate the welfare state concept in the constitution. However, due to political obstacles from political parties, private entities, and anti-leftist sentiments, the implementation was unsuccessful. The second mechanism involved prominent individuals from scholarly communities affiliated with political parties advocating for the National Insurance System (SJSN), which was eventually passed after rounds of negotiations.
International organisation influences
During the political unrest caused by the Asian Financial Crisis in 1998, international organisations attempted to intervene in Indonesia’s healthcare policy through financial and technical assistance. For instance, the International Monetary Fund (IMF) provided conditional loans requiring macroeconomic reform, while the World Bank (WB) provided loans of $600 million for social protection expansion and technical as well as financial support for non-contributory health insurance programmes. The World Health Organization (WHO) provided support in developing regulations for the Social Security Law (JKN) legislation process, and GIZ aided in developing the basic content, features, design transfer, and technical expertise. Moreover, as its mandate focuses on the protection of workers, the International Labour Organization (ILO) supported policy models and data collection for uninsured individuals. It is noteworthy, however, that the political interests of politicians and decentralisation limited the substantial influence of these international organisations in the policy-making process.
The development of social policy in Indonesia is indispensable from clientelist or political motives. For instance, the healthcare plan was originally created as a political strategy to gain public trust for the Golkar party. When the National Social Security Law faced obstacles, the Indonesian Democratic Party of Struggle (PDI-P) saw it as an opportunity to support the creation of the National Social Security System Law to gain popularity among the poor and informal sector. This support was crucial for the party to win the 2004 presidential election. However, it took 10 years for the Jaminan Kesehatan Nasional (JKN) programme to be implemented due to political reasons. The ruling Democrat Party perceived JKN as not politically lucrative, and the public resisted the idea of participatory-based healthcare. As a result, the ruling government created a few non-contributory healthcare schemes for the poor and near-poor, such as Jamkesmas, which was more favourable on their side. Local politicians also saw this situation as an opportunity to win the local election.
Limited vertical alliances
Another factor to consider is the role of labour unions, leftist political groups, and other civil society organisations as they played a part in pushing for healthcare reforms in Indonesia through exerting pressure on the government. However, their efforts did not necessarily translate into policy changes. The alliance between these groups was newly formed and lacked a clear agenda for social policy reform, particularly in the case of healthcare policy expansion. Some of these emerging alliances exploited the Susilo Bambang Yudhoyono (SBY) administration’s second term, which faced numerous issues related to corruption and abuse of power by its cadres. Furthermore, their advocacy agenda was often muddled by mixing social and healthcare policy with other priorities, such as reducing fuel prices.
To conclude, there are multiple factors at play that contribute to social policy expansion. In our research, the push and pull model helped us determine which factors had a more substantial impact and how far each factor influenced policy makers, as elucidated in the rings of influence figure above. In the case of Indonesia, the interplay between factors on the push side is particularly noteworthy, as policy entrepreneurs, consisting of members of epistemic communities and political parties, took a leading role and had direct access to the policy-making process, enabling them to influence the design the healthcare policy in the country.
Our research suggests that epistemic communities leveraged public declines in government support, resulting from the high-profile corruption scandals involving members of the government-led centre-right party between 2010 and 2014, to advance their advocacy efforts. They used this strategy to pressure the government to meet the social demands and improve its reputation, which had been tainted by corruption and pro-business scandals. Indeed, international organisations possess some degree of influence, but they have limited access to policy making process, which is why they rely on the epistemic community to promote and advocate for universal healthcare. Likewise, labour unions and civil society organizations have some degree of influence by exerting pressure on the government, but they do not have direct access to the policy making process.
The findings from our study adds a substantial contribution to the emerging discourse of social policy dynamics in developing countries. We found that social policy expansion is more likely to occur through the interplay between policy entrepreneurs and centre-right parties, rather than a single determining factor.
About the authors
Tauchid Komara Yuda is Assistant Professor of Politics and Policy of Social Welfare, Universitas Gadjah Mada
Rizqi Ashfina is a researcher based in Jakarta and an alumnus of Department of International Relations, Universitas Indonesia