Conditions of Sustainable Welfare: A Cross-Case Empirical Analysis of 22 Locality-Based Welfare Systems in Decentralised Indonesia

Abstract

The existing body of knowledge underpinning welfare state theory suggests that most welfare systems depend on growth. It signifies that the state–market mechanism is a prerequisite for achieving welfare. However, the current ecological crisis highlights the detrimental effects of unchecked economic growth, which often exploits human and natural resources. This phenomenon calls for a countermovement that protects society and natural resources through social and public policies. Within the domain of sustainable welfare, an argument points towards the need to gain an empirical understanding of sustainable welfare policies and gather qualitative evidence that explains the conditions and mechanisms of “better” eco-social performance. This article aims to identify conditions leading to achieving sustainable welfare outcomes and discern under which conditions sustainable welfare outcomes are attainable or fail, especially in the context of the Global South. It draws on empirical data to analyse the locality-based welfare systems of 22 villages across decentralised Indonesia using a conditions-oriented approach of the crisp-set Qualitative Comparative Analysis. The findings shed light on the institutional setting and policy mix leading to sustainable welfare outcomes in less-industrialised, informal economy-based, and highly decentralised country contexts. The evidence points to the presence of sustainable welfare outcomes when a substantial level of subsidiarity, self-governance, and meaningful community participation, and a policy mix covering basic needs, services for vulnerable groups, a functioning local economy, and innovative ecological practices are in place. While past research predominantly leans towards a statist-focused approach to sustainable welfare, this study proposes a society-focused perspective. It argues that transforming both modes of production and relational dynamics among society, state, and market in the Global South context is necessary, where an empowered society serves as a prerequisite for sustainable welfare outcomes.

1. Introduction

This research presents the first case study of Indonesia, exploring sustainable welfare outcomes in less-industrialised and highly decentralised contexts, aiming to shed light on the eco-social performance of low-tax-base and informal employment-based welfare systems prevalent in Global South contexts that are often underrepresented in sustainable welfare discourse. It contributes to the discourse by emphasising the intricate interplay of empowerment, institutional settings, and local policy mixes towards sustainable welfare outcomes. While past research predominantly leans towards a statist-focused approach to sustainable welfare, we propose a society-focused perspective. We employ a conditions-oriented approach of the Qualitative Comparative Analysis method to analyse the locality-based welfare systems of 22 villages across decentralised Indonesia.

Over the decades, contemporary civilisation has evolved within a welfare paradigm where the state–market mechanism holds centrality. This premise suggests an ongoing imperative to accelerate production, generating a surplus surpassing the national growth threshold for welfare objectives. Such an imperative leads to the detrimental effects of unchecked economic growth, which tends to exploit both human and natural resources—an aspect often overlooked by scholars of growth-dependent welfare states [1].

Central to the discourse on the welfare state is Karl Polanyi’s argument [2]. He contends that economic liberalism and social protection function as dual organising principles driving societal progress that coexist, analogous to a “double movement”, under the condition that the market should be subservient to society, not vice versa [3]. This argument challenges uncontrolled growth hegemony, recognising that, unlike humans and labour, land as a production element resists commodification without endangering the well-being of the social and natural environment [4]. It stays relevant in contemporary political ecology, prompting a reconsideration of the core argument and measurement of sustainable development achievement that is relying on the effectiveness of market mechanisms to address various social and environmental challenges [4]. This perspective implies that the economy should be intertwined with the natural ecosystem, societal relationships, and the interplay between the state, society, and the market. These relationships arguably play a pivotal role in shaping the sustainable welfare trajectory, providing the conditions for its realisation. Essentially, the inclination of the state, market, or society to self-regulate [2,3] purportedly influences progress or stagnation in advancing sustainable welfare agendas.

Polanyi’s concept of a self-regulating market is analogous to the notion of market liberalisation, where minimal state intervention characterises market operations. On the other hand, a centrally directed state redistribution system holds the potential to regulate itself autonomously, detached from the society it intends to serve [2,3]. As Godbout points out, Polanyi recognised that the democratic and communitarian aspects of the state could subdue the market’s subjugation to society [2]. He suggested that community reciprocity and social networks facilitate the exchange of “goods, services, and emotions” [5] alongside state-driven redistribution [6], prompting us to consider the significance of a self-regulating society [3].

In our view, the policy implications of transforming the relational dynamics between the state, society, and market, while aligning the economy with the natural ecosystem for sustainable welfare outcomes, involve the consideration of rectifying power imbalances, fostering the state and society synergy, and transforming modes of production. The former necessitates efforts to empower society, while the latter entails redefining the reciprocal relationship between humans and nature. Consequently, the reciprocity mechanism should encompass intra-societal exchanges and nurturing human–environment relationships [7]. This approach underscores the need for a holistic transformation in our socio-economic systems to attain sustainable welfare outcomes.

This article integrates research on social policy, the welfare state, social development, and sustainable welfare theories. The studies by Hirvilammi (2020) and Kuehn et al. [8] inspire and guide the design, methodology, and presentation standards of the QCA findings and interpretation. It aims to contribute to the sustainable welfare discourse by uniquely venturing into less-industrialised and highly decentralised contexts, shedding light on the eco-social performance of low-tax-base and informal employment-based welfare systems prevalent in the Global South—contexts often underrepresented in sustainable welfare discourse.

2. Defining Welfare and Sustainable Welfare and Conceptualising Locality-Based Welfare System

Spicker [9] and Midgley [10], along with the dominant growth-productivist-centric welfare theories [11,12,13,14], contend that economic growth, among others, is a primary precondition of welfare. While the first seeks to harmonise social and economic development objectives, the latter contends with maintaining economic development hegemony. In his notion of social development, Midgley [10] contends that welfare is the ultimate goal of social development. In contrast, Simeon, Butterfield, and Moxley expand on this understanding by connecting the concept of social development with the notion of wellbeing that includes the quality of the environment, bridging the concept of welfare with an ecological perspective [15].

The discourse on sustainable welfare intertwines with two major debates: growth-focused and sustainability-focused. Growth-focused debates emerged after the 1962 Club of Rome Report released by experts at the Massachusetts Institute of Technology (Meadows et al., 1972 in [10]), “warning about the serious consequences of not taking measures to manage the process of development, control population, and limit the impact of economic growth on the environment for all humankind” [10]. As political strategies, the growth-focused debates are categorised into proponents advocating growth, those opposing it, a-growth proponents, and a group on the outskirts, post-capitalism advocates [16]. While these groups align in acknowledging the limitation of growth and the need for political responses, they differ in proposed measures ranging from systemic, measurement to policy instruments.

Proponents of “green or sustainable growth”, including international bodies and the private sector, pursue strategies for sustainable growth to garner political support, relying on GDP-based economic and political metrics. Conversely, anti-growth or “degrowth” advocates, including Latouche (2004), Hickel (2020), and Kallis (2017, 2018) [17,18,19,20], argue against sustainable GDP growth, emphasising the inability to dematerialise production and environmental impacts. They propose deliberate GDP reduction or “degrowth” as a remedy, asserting that “no advanced nations have curbed their environmental impacts for sustainable outcomes” [16]. A-growth or post-growth proponents, including Van-den Bergh (2011), Raworth (2017), Jackson (2019, 2021), Petschow et al. (2020), and OECD (2020) [21,22,23,24,25,26], contend that any level of economic growth does not necessarily link to social benefits or environmental impacts. They advocate a “growth-agnostic” approach, aiming to design economies that prioritise environmental and social objectives irrespective of economic growth [16]. The call for a fundamental overhaul in economic mechanisms is central to the post-growth perspective. Meanwhile, post-capitalism proponents (Klein, 2014; Varoufakis, 2021; Mason, 2015) [27,28,29] prioritise radical transformation of economic institutions rather than engaging in the growth debate. These proposed changes frequently face challenges in garnering political support to advance the agenda.

In sustainability-focused debates, three approaches centre on growth-centric development, with interpretations of “sustainability” [30] and “wellbeing”. The term “sustainability’’ was popularised by the Brundtland Commission in the 1980s, urging the adoption of sustainable development as a new development strategy [10]. However, this framework is not narrowly concerned with environmental protection. Midgley further argues against punitive measures on environmental regulations for lower-income countries, which tend to harm the livelihoods of millions of people and punish the weakest sections of the population.

Nevertheless, Laruffa (2022) recategorises growth-focused groups based on their views of the required transformation for sustainability. They range from a pragmatic, growth-oriented approach (green growth or sustainable growth and sustainable development frameworks) to fundamental transformative agendas (degrowth, post-growth, and sustainable welfare) and an intermediate framework (the “wellbeing economy” movement). Essentially, while proponents of degrowth, sustainable welfare, and the wellbeing economy converge on the need for a holistic and systemic transformation to address economic, social, and ecological challenges, their perspectives diverge on the nature of this transformation [30,31].

The sustainable development goals agenda advocates for inclusive green or sustainable growth while maintaining a growth-centric economic model. Degrowth, post-growth, and sustainable welfare advocates prioritise reducing economic activities for a fundamental socio-economic system transformation [32,33,34]. In contrast, proponents of the wellbeing economy question the political promise of “green” or sustainable growth and propose a wellbeing economy model as an alternative beyond green growth [35]. This model extends beyond industrialised countries to include less-industrialised nations, emphasising innovative community-based efforts for sustainable welfare outcomes. They note that prioritising a deeper socio-economic system may not inherently ensure sustainable welfare outcomes, advocating for a transformation in modes of production and a shift towards technology and participatory innovations [35]. Overall, the political responses and support for these policy proposals vary.

United Nations member states globally adopted sustainable development goals and incorporated them into policies and practices. Meanwhile, the wellbeing economy approach has gained momentum in recent years among governments, businesses, and civil society movements due to its adaptable language and concepts applicable to various contexts, including less-industrialised countries. Fioramonti et al. [31] further argue that a wellbeing economy is a suitable paradigm for mainstream post-growth policies. In recent years, many policymakers and countries in the Global North, including the European Union, Nordic countries, and New Zealand, have sought to apply both sustainable welfare and wellbeing economy approaches [35]. In the Global South, Bhutan sets an example as a country that places wellbeing as a political priority through gross national happiness (GNH) [36]. While the country saw increased records of the Human Development Index and became carbon neutral [37], inequality remains a significant issue, especially under a centralised welfare system [38] and a fragile economy, partially due to a high level of youth unemployment and the effects of climate change.

The sustainable welfare literature originates from a critique of post-war industrialised-based welfare state theory that posits an ecological perspective on welfare systems and highlights “the need to respect the regeneration capacity of the environment” (Fitzpatrick and Cahill in [33]). Sustainable welfare scholars contend that sustainable welfare is an integrated policy idea that seeks to address social, economic, and ecological crises simultaneously [32,33,34,39]. While it seeks to explain how to satisfy human needs within ecological limits and finance welfare institutions, it emphasises the shift in political priority towards pursuing ecological sustainability and increasing social equality beyond economic growth alone [32].

Contributing to the sustainable welfare discussion is the concept of a sustainable welfare society, influenced by the context of the Global South, notably the Japanese case study [40]. It argues the importance of factoring in the juxtaposition between state–society–market relations from the agency–structure perspective and sustainability. Hiroi [40] suggests an appropriate transformation of policy orientations from developmental to social quality that includes the role of the local community as a basic welfare provider. He further suggests creating community policies that include a redistributive mechanism at the supra-national level in Asia. In a parallel vein, an analysis of the post-growth literature envisions a future welfare system that is local, preventative, and relational [41,42]. As argued by some progressive post-war welfare state scholars [42,43], a locality-based welfare system can provide an alternative to an unreachable and centralised welfare state while potentially facilitating an arena supportive of a “virtuous circle of sustainable welfare” [32]. Such a system is akin to the locality-based welfare system that is resilient and thrives during the most challenging crises in Indonesia.

3. Socio-Economic, Political Economy Context, and Welfare System Characteristic of Indonesia

In the Indonesian context, a discernible trace of institutional path dependency, rooted in the growth-dependent paradigm hegemony, permeates the nation’s historical trajectory. Historical analyses suggest that the country’s political economy maintains a close and intertwined relationship between the state and economic elites representing the market [44,45,46,47,48,49,50,51]. This relationship, akin to two sides of a coin, operates on similar logic but manifests differently, as argued by Polanyi [52]. Such logics exhibit characteristics akin to institutional extractive logic [53], wherein economic growth hinges on the extractive and excessive use of natural resources. The direct impact of such growth on societal welfare outcomes remains a subject of ongoing debate. While striving for industrialisation dating back to the colonial era, Indonesia has yet to reach a level of industrial development comparable to highly industrialised nations. Despite a 5.17 percent year-on-year growth rate in Q2 2023 that exceeds market expectations [54], the informal economy remains a significant portion of the labour force. This condition hinders the establishment of a comprehensive formal welfare system that could benefit the entire population. Recent years, however, show an increasing state interest in progressive social policies, challenging Wilensky’s (1975) [55] welfare state convergence theory and suggesting that industrialisation alone might not spur the establishment of a formal welfare state.

While commendable efforts have been made to decommodify access to education and healthcare, along with the generous tendency of social transfer programmes in Indonesia, the democratic trajectory appears to be charting a divergent course [56]. Karl Polanyi’s notion of the double movement may seem less pertinent due to the potential amplification of detrimental effects from the close nexus between the market and the state. This is exacerbated by prevailing asymmetrical power dynamics between the state and society and the market and society, as confirmed by the study of Filler, Mahanty, and Potter [4]. As a result, society’s role diminishes, becoming subservient to welfare providers. Contemporary evidence of the implementation of welfare policies underscores a discernible gap between these policies and the prevailing social context [57]. It accentuates the presence of a highly centralised and technocratic welfare system, characterised by the proliferation of centrally designed and administered social assistance programmes that may not address the root causes of poverty and socio-economic conditions, indicative of a self-regulating state tendency [3]. These phenomena culminate in a thin redistribution of welfare, plagued by errors of inclusion and exclusion, thereby impeding the efficacy of social policy in delivering substantial welfare outcomes [58,59,60].

Nonetheless, the dynamic between natural resources and society within Indonesia holds a distinctive character. Indigenous communities dispersed across the rural and remote areas of this archipelago nation rely heavily upon natural resources as their primary source of wellbeing. Their cultural beliefs and welfare perceptions underscore a profound reliance on a nurturing and symbiotic relationship with natural resources. Such a relationship is embodied in the local wisdom of the Balinese, known as “Tri Hita Karana.” Thus, the heavy reliance on exports of mineral resources that permeate the country’s growth-dependent state–market political economy often triggers ecological crises [61] and relational issues, including discontentment and disharmony among market forces, the state, and local communities. These issues primarily arise from disputes concerning the legal ownership, governance, and rightful utilisation of natural resources. These situations often culminate in the marginalisation and infringement of the rights of indigenous populations and the broader local communities [62,63,64]. These phenomena underscore the necessity to reconfigure the interplay among the state, society, the market, and natural resources more equitably and responsibly, as present practices carry inherent risks to human wellbeing, social integration, political stability, and environmental preservation.

Polycrises characterise post-normal times as these carry multidimensional risks and demand simultaneous policy responses [65]. The recent COVID-19 pandemic and ecological crises have debilitated economies, constrained environmental carrying capacity, and worsened problems of poverty and inequality. In Indonesia, the pandemic has brought forth some noteworthy phenomena highlighting the promising role of a locality-based welfare system. First, it has precipitated de-urbanisation, prompting individuals to return to their villages for economic survival [66]. Second, when the capacity of both the market and the state to deliver direct welfare services has weakened, locality-based welfare systems have flourished.

Indonesia has taken significant strides in paving the way to institutionalise a locality-based welfare system through the promulgation of Law No. 6/2014 on Village. This legislative framework aims to establish arenas for localised development attuned to the unique requisites of village communities. The law marked a profound transformation in the administrative fabric of villages, transitioning from symmetric decentralisation rooted in residual principles to asymmetric decentralisation grounded in the principle of subsidiarity. At the core of this principle lies the vision for the emancipation and empowerment of village society to attain their welfare. Each village receives an annual unconditional cash transfer of approximately USD 100,000 under this law. This financial endowment serves as a recognition and authority vested in the village government and communities, empowering them to harness and transform the latent potential of natural resources into tangible services to address the community’s welfare exigencies. It is worth noting that locality-based and state welfare systems rely less on tax revenue and function in a low-tax-base environment.

A decade after the promulgation of the Law on Village, diverse locality-based welfare policies are being implemented by village administrations, offering valuable avenues for empirical inquiry. This study aims to provide an empirical analysis of the locality-based welfare system in 22 villages across Indonesia, using insights from social development theory. It attempts to meet the need for qualitative research evidence to identify and explain the conditions and strategies leading to sustainable welfare in the Global South. It offers insights into institutional settings and the policy mix required for attaining sustainable welfare outcomes.

4. The Model: Insights Drawn from Social Development Theory

The ramifications of globalisation and ecological crises of developed and developing economies have prompted discussions regarding the sustainability and relevance of the welfare state. In response to these multifaceted challenges, scholars have proposed diverse strategies. Karl Polanyi suggests a solution to amplify the reciprocity mechanism and livelihood-based political economy. Quilley and Zywert [52] propose an exploration of the potential of a hybrid livelihood–market–state survival unit (a hypothetical triptych survival unit). Hence, a livelihood-based political economy “can act as a disruptive ‘third leg’ and a countermovement to capitalist modernisation and globalisation” [52]. Some have opted for the Japanese welfare model, distinguished by its emphasis on cost-efficient social expenditure, while others have envisioned locality-based welfare systems [39,67,68].

The concept of a locality-based welfare system as an alternative to the welfare state has been advocated by scholars, including Ife [43] and Mendes [69]. Ife [43] contends that community-based development seeks to position the community as a locus of development whereby community members can meet their own needs as a parallel solution to dependence on the larger and less accessible structures of the welfare state. In a parallel vein, Midgley [10] contends that the communitarian approach to social development is grounded in the belief that people and communities possess an inherent capacity to organise themselves, ensuring the fulfilment of basic needs, resolution of problems, and creation of opportunities for advancement. He argues that “community action represents a more effective means of achieving social development goals”.

4.1. Strategies for Achieving Sustainable Welfare Outcomes

Social development is perceived across various societal tiers, encompassing individual, community, and organisation, although its activities often unfold within societal and community contexts where deep-seated poverty persists. It encompasses a comprehensive and integrated approach, addressing economic but also political, social, cultural, and ecological dimensions of society [67]. From this perspective, the constituents contributing to the overarching welfare outcome encompass various facets, including the quality of the environment, the standard of living, the quality of daily life, and the quality of life [67].

Social development theory links economic and social development while incorporating an ecological perspective [67]. To achieve welfare outcomes of social development, Pandey (1981) offers a framework comprising four distinct strategies: distributive strategy, participative strategy, human development strategy (economic empowerment), and social integration strategy (social empowerment). The distributive strategy places a significant emphasis on the equitable distribution of resources and wealth with an overarching aim of promoting social justice through social development [68]. This approach directly impacts quality of life by enabling individuals to access critical resources, opportunities, roles, and identities that contribute to their wellbeing within the community [15].

Furthermore, a participative strategy underscores the active involvement of all segments of society and an enhancing of their capacity to partake in the processes of social change and social development [68] to enhance the quality of daily life wherein individuals, groups, and communities are involved in activities that can support productivity and self-fulfilment. This strategy is inherently community-driven, targeting poverty-stricken, vulnerable, and marginalised populations [70]. It acknowledges the community’s inherent knowledge and self-awareness of its conditions, assets, available resources, strengths, capabilities, and developmental constraints. Central to the participatory strategy is recognising local knowledge’s potency and promoting democratic practices and diverse knowledge acquisition methods.

The human development strategy seeks to increase productivity and the capacity to generate income for the workforce [68], and is also closely related to the focus on improving standards of living, namely how people live their lives and meet the needs of households, families, and groups that must not depart from the quality of the environment [15]. The ecological economic empowerment condition underpins the human development strategy where village communities are empowered to achieve economic benefits that can be distributed fairly [71,72], while preserving the environment. Meanwhile, Polanyi argues for the existence of diverse modes of provisioning [5] that support for human development, including the local market mechanism, redistribution, and reciprocity [6].

The reciprocity mechanism can be observed through mutual care among community members to support each other, especially during crises. Sangha et al. [7] argue that reciprocity involves nurturing a relationship between humans and nature to support human development and conservation of nature. In this context, such reciprocity is an enabling environment for manifesting the livelihood political economy. The redistribution mechanism is manifested through basic service provision, which includes health, education, water, sanitation, and roads to improve living standards, inter alia. Finally, the effective functioning of the local market mechanism as an arena to facilitate economic exchange among community members under the local price-making market mechanism is expected to contribute to the sustainability of their livelihood, thereby supporting human development.

The social integration strategy involving communities and areas that are neglected in development [68] is closely related to the goal of achieving quality of life [15], where people participate in social interactions that connect them with essential resources, opportunities, roles, and intensity, which support self-development and experiences in their daily lives. This strategy requires the presence of social empowerment conditions where social integration is recognised and realised through the presence and support of community groups and their involvement in social interactions.

Self-governing or the principle of subsidiarity provides local-scale power, delegated authority, and decision-making structures that align with their interests and achieve their welfare through the policy instrument of the Village Fund. This principle signifies the state’s recognition of the village as a legally recognised societal unit whose existence predates the establishment of Indonesia as a nation-state. Additionally, the principle of subsidiarity embodies an emancipatory spirit and empowerment, defining empowerment as a mechanism that empowers individuals, organisations, and communities to exercise control over their lives. It fosters independence, choice, dignity, control, and the capacity to manage their lives and interactions with their environment [73,74]. The causal relationship involving self-governing and local self-government suggests that state acknowledgement and recognition of the village’s right to independently manage its assets, encompassing natural resources, human capital, and social modalities, can enhance the welfare and overall quality of life within village communities.

These strategies embody the four essential principles of sustainable welfare [42] The distributive strategy corresponds to the fair distribution principle, aiming for the equitable allocation of resources and opportunities in society. The participative strategy aligns with the principles of needs satisfaction and democratic governance, emphasising democratic rights, equal opportunities, and the fulfilment of human needs for autonomy and freedom [2]. The human development and social integration strategies align with the principles of needs satisfaction and compatibility with the planetary boundary, incorporating the concepts of wellbeing, welfare, and environmental preservation. Additionally, the concept of a strong connection between improving living standards and environmental quality in social development theory underscores the importance of maintaining what Hirvilammi [32] terms “virtuous” human development. It involves reframing the policy concept of the virtuous circle of sustainable welfare.

4.2. Operationalising the Conditions of Locality-Based Sustainable Welfare

Building on our interpretation of Polanyi’s theory on transforming the dynamics of the state, society, and market, as discussed in Section 1, we employ an empowerment approach [43] to identify conditions conducive to sustainable welfare outcomes. Contrary to the traditional development paradigm, which often portrays men, women, and children as passive beneficiaries (commonly seen in Indonesia), the empowerment approach prioritises community action, collective ownership, capacity building, and meaningful participation [43,75]. This approach aims to attain better welfare outcomes [10].

Our model encompasses five conditions underpinning strategies leading to sustainable welfare outcomes. The operationalisation of these conditions, drawn from synthesising theoretical assumptions and primary data sources, is outlined as follows:

(i) Referring to the theoretical conceptualisation of self-governing and local self-government, the condition of self-governing encompasses several components, including robust leadership that is capable of effectively translating authority and regulatory practices, initiatives that align with the values, culture, and preferences of local communities, and collaboration with social networks, institutions, central, regional, and other government entities. This collaboration reflects the pivotal role of the village as a local institution responsible for distributing essential life support resources, enhancing life opportunities, fostering local capacity building, facilitating the fulfilment of basic needs such as health and economic opportunity and enabling job creation to advance collective wellbeing [15].

We operationalise the self-governing (or denoted as “SelfG”) condition as an index of three components: (1) the perceived presence of strong leaderships of village government as witnessed and acknowledged by the community or supervisory body of the village coordination under the Ministry of Village; (2) the presence of innovative initiatives including policies that reflect the values, interests, and preferences of communities; and (3) the presence of strong social networks or collaborations of the village government with a higher level governmental body or external entities or organisations. We assign the membership value of 1 to index scores > or equal to 0.6 and 0 to index scores < 0.6.

(ii) Political empowerment is a condition underpinning the operational effectiveness of the participative strategy, primarily focusing on improving the daily quality of life within village communities. According to the elaboration of Sultan and Yahaya (2018) [76] on various dimensions of empowerment, this dimension catalyses the engagement and active participation of all segments of society, particularly marginalised groups, including ethnic minorities, women, and economically disadvantaged groups in decision-making processes such as village development planning and oversight [71,72].

Upon comprehensive review of the participative strategy concept and its concentration on daily quality improvements, the components inherent to political empowerment must demonstrate the participation of vulnerable and marginalised groups in village development planning, indicated through the presence of women’s groups or groups for people with disabilities, and the presence of institutions or entities that carry out political empowerment activities in the community as well as evidence of community participation, especially from women’s groups and vulnerable and marginalised groups, in the village’s deliberation process.

We operationalise the political empowerment (denoted as “PolEmp”) condition as an index of three components, including (1) the presence of functioning women’s groups, (2) the presence of other institutions providing political empowerment activities, and (3) the community, especially women and members of vulnerable groups, actively participating in the village planning process. We assign the membership value of 1 to index scores > or equal to 0.6 and 0 to index scores < 0.6.

(iii) Improving living standards, according to Simeon, Butterfield, and Moxley [15] must not depart from environmental quality, which is an essential goal of social development. The theoretical conceptualisation of ecological economic empowerment suggests critical components, including the presence of village economic institutions that strive for a fair distribution of economic benefits, such as village-owned enterprises (BUMDES), the existence of initiatives that transform local modes of production, for example, organic farming, the integration of economic activities and environmental conservation such as through circular economy, including community-based waste management applying Reduce, Reuse, Recycle (TPS 3R) principles, waste upcycling initiatives, or a local economic ecosystem that is designed to promote a shorter value chain, and the presence of economic empowerment activities through varied forms of entrepreneurship, BUMDES, small, medium, and micro-community enterprises and other institutions. Notably, this framework incorporates tangible economic empowerment outcomes, such as increased BUMDES turnover or gross annual village revenues (PADES).

We operationalise ecological economic empowerment (denoted as “EconEmp”) condition as an index of five components, including (1) the presence of a village economic institution or cooperative with more than one business unit; (2) the presence of a community waste management facility (using Reduce, Reuse, Recycle principles); (3) the use of renewable energy sources or a functioning circular economy or local modes of production (e.g., organic farming); (4) the presence of economic empowerment activities or a varied form of entrepreneurship; and (5) tangible results through increased village revenues or job creation. We assign the membership value of “1” to the index score of > or equal to 0.8 and the membership value of “0” if the index score < 0.8.

(iv) Theoretical conceptualisation of social empowerment comprises components, including village activities, that promote social interaction, cooperation (gotong royong) activities, or social forums, services for disabilities and vulnerable people, and access to knowledge such as skill improvements, village libraries, literacy programmes, or the internet. We operationalise the social empowerment (denoted as “SocEmp”) condition as an index of three components, including (1) community solidarity or social forum activity more than six times a year; (2) services for vulnerable groups; and (3) access to the internet for the village community and literacy or vocational training. We assign the membership value of “1” to the index score of > or equal to 0.6 and the membership value of “0” if the index score < 0.6.

(v) The post-growth literature suggests the need to ensure access to basic goods and services for all through decommodification of basic services, including health care, education, and housing or measures to guarantee a minimum level of wellbeing for all through universal basic services (UBS) schemes, among other things [42,77]. The universal basic services underpinning the distributive strategy may involve the provision of healthcare, education, sanitation, electricity, and transportation facilities that enhance the community’s quality of life. For example, the National Health Insurance (JKN) exemplify the redistribution function through a risk pooling mechanism to achieve social welfare and social justice. Similarly, progress in universal basic education in Indonesia suggests significant progress in access to primary education for all (it is worth noting that the term “universal basic services” is not commonly known or used in the operational context of Indonesian policies). This study is limited to universal basic services (UBS) only, as a centrally administered conditional cash transfer targeting vulnerable and the lowest income households is implemented uniformly in all villages across Indonesia. Such uniformity prohibits variations required for comparative analysis.

Based on the theoretical conceptualisation of the UBS and the analysis of the primary data drawn from the FGDs and interviews, we operationalise the UBS condition as an index of five components, including (1) membership in the National Health Insurance of Indonesia (JKN); (2) the availability and accessibility of community health facilities and medical personnel (doctors and nurses); (3) access to clean water; (4) scholarship programmes, school-fees assistance, or priority to education and higher education; (5) and the availability of public transport or good village or district road conditions. We assign the membership value of “1” to the index score of > or equal to 0.8 and the membership value of “0” if the index score < 0.8 (

Table 1. Summary of conditions for sustainable welfare.

Conditions	Expected Direction of Causality for Sustainable Welfare Outcome
	All conditions (a holistic approach) are needed to work in unison to achieve sustainable welfare [15].
Self-governing	Self-governing is an autonomy to address community welfare, needs and realise the community’s vision towards well-being and sustainable welfare, making it indispensable in its absence.
Political empowerment	Its presence empowers people to exercise their civic rights to advocate for the fulfillment of their well-being and the environment, thus strongly affecting the achievement of sustainable welfare.
Ecological economic empowerment	The presence of the economic empowerment condition should be accompanied by ecological policies/practices to achieve sustainable welfare [15]. It emancipates people from poverty and vulnerability.
Social empowerment	The absence of social empowerment weakens social cohesion networks, and solidarity, thus, strongly affecting the achievement of sustainable welfare. Its presence accumulates social capital.
Universal basic services	The presence of universal basic services could guarantee a minimum wellbeing for all. UBS has the potential to contribute to sustainable welfare [42,77]

Source: author compilation.

).

A theoretical model derived from combined theories provides a structured framework for causal factors, and the agency of relevant actors applied in this study. Per the elaborated theoretical model, sustainable welfare is operationalised as an index of four components: (1) environmental quality (ENV); (2) economic and universal basic services (UBS) performance (POV); (3) the absence of social conflict (SCON); and (4) policies favouring vulnerable groups at the village level (PVG). These components are assumed to reflect observable outcomes of the aforementioned conditions, though not necessarily their aggregated value. They align with the four essential principles of sustainable welfare: compatibility with planetary boundaries, needs satisfaction, fair distribution, and democratic governance [42].

We use various data sources, including focus group discussions, in-depth interviews, reports, documentation, and the Village Annual Survey data to assess the presence or absence of sustainable welfare outcomes. The Village Annual Survey (IDM) serves as primary data for evaluating environmental quality (ENV), the absence of social conflict (SCON), and policies favouring vulnerable groups. While this survey might lack rigorous scientific tools for environmental quality assessment, it relies on direct observations of water, soil, and air pollution occurrences in the area.

We utilise the provincial poverty indicator or the percentage of district poverty sourced from the National Statistics Office’s biannual surveys for economic and basic services’ performance. These surveys measure household expenditures on food and nonfood items (health, education, housing, and clothing), providing insights into economic aspects and basic services’ provision. The poverty indicator is given twice the weight of the other components due to its integration of economic and universal basic services components based on available data.

Therefore, the formula for the overall membership value in the set “sustainable welfare outcomes” is as follows:

$$SustainableWelfare\left(W\right)=\frac{2POV+ENV+SCON+PVG}{5}$$

(1)

5. Methods

The Qualitative Comparative Analysis (QCA) method is employed in this study to address the research question: “Under which conditions would sustainable welfare outcomes be achieved, and under which conditions would they fail?” This question aims to unravel the causes of complex causation, such as sustainable welfare outcomes, employing the conditions-oriented approach of QCA. Grackhamer et al. highlighted that this approach relies primarily on cross-case inference and relations between sets, emphasising conceptual relationships over individual case studies [78]. Critics argue that reliance on cross-case inference may limit the depth of insights provided by individual case studies.

The rationale for selecting the Qualitative Comparative Analysis (QCA) method in an archipelagic and heterogeneous context such as Indonesia, where levels of development and perceptions of modernity vary among its numerous islands, lies in the inherent challenges associated with the diverse socio-economic and ecological landscape. The archipelagic nature of Indonesia, in contrast to land-locked countries, introduces unique complexities due to the vast array of cultural, developmental, and modernity perceptions across its more than 17,000 islands.

Given this heterogeneity, an individual in-depth case study would inevitably fall short of capturing the nuanced and varied conditions that influence sustainable welfare progress across the country. While employing a “process tracing” approach can offer compelling evidence at the within-case level regarding causal mechanisms, “it needs more robustness for making comprehensive statements at the cross-case level” [8], given the considerable heterogeneity and complexity across Indonesia. Having identified robust evidence supporting strategies for realising sustainable welfare from social development theory and primary data, we test the theoretical argument through a systematic cross-case analysis. As Kuehn et al suggests, this systematic analysis involves two key steps: firstly, identifying causal conditions and their relationships contributing to sustainable welfare outcomes; secondly, selecting cases from the cross-case results for detailed studies to conduct additional tests on the proposed causal mechanism [8]. The scope of this article encompasses only the first step, with the second step addressed in a separate study.

Qualitative Comparative Analysis (QCA) is a cross-case-based qualitative method used to analyse various causal configurations or conditions that lead to specific outcomes. It enables researchers to model causal complexity by analysing whether a variety of causal configurations of conditions are a necessary or sufficient condition for an outcome based on a small to large number of cases. QCA, seen as an approach, represents a research stage aiming to develop a truth table [79]. This table compiles empirical data acquired by researchers, often gathered through extensive and meticulous efforts over time [79]. An essential aspect of set-theoretic methodologies such as QCA and their effectiveness rests on the iterative creation of this truth table, often described as a continual exchange between concepts and evidence (Ragin, 1987 in [79] p. 91). Following completion, the truth table underwent validation to ensure accuracy in scoring followed by the truth table analysis using QCA for R software version 3.1.9 [80].

We employ a crisp-set variant of QCA, categorising cases as either members or nonmembers with set membership scores of “1” or “0”, respectively. This distinction is essential for determining explanatory power-set relations, indicating whether a configuration produces the desired outcome. However, critics may argue that this binary classification oversimplifies the complexity of real-world conditions [79]. The study incorporates a robust approach to address these concerns by considering different raw consistency thresholds, including 0.8, 0.85, or 0.90, in the truth table analysis. This robustness test aims to enhance internal validity by addressing potential errors in model specifications for the conditions-oriented approach of QCA (Skaaning, 2011) [78].

We use the graphical visualisation of XY plots to test the robustness and validity of necessary and sufficiency analysis generated by complex and intermediate solutions. We generate complex, intermediate, and the most parsimonious solutions during the truth table analysis. We rely on the intermediate solutions to reduce the complexity of the complex solution [81]. It involves specifying assumptions about the expected effect of individual conditions on the outcome [8]. Subsequently, we reflect on the complex solution to confirm whether the presence of all conditions leads to the presence of the outcome and our intention to “reduce making assumptions about any logical remainder and to be guided by empirical information at hand exclusively” [79].

Case Selection

The case selection process was carefully designed to comprehensively represent villages’ development progress and eco-social performance, capturing socio-economic and ecological variability across the vast expanse of 74,953 villages in decentralised Indonesia. The case selection process unfolded in three stages. First, six provinces were selected based on the National Statistics Office’s poverty, inequality, and economic vulnerability data. These provinces, including Papua, East Nusa Tenggara, Gorontalo, Aceh, Bali, and Daerah Istimewa Yogyakarta, represent a spectrum of development and inequality profiles. The second stage involved interviews with Provincial Coordinators of the Ministry of Village and regional governments to identify villages demonstrating solid or weak performance in the conditions leading to sustainable welfare outcomes. This stage ensures a nuanced understanding of local dynamics and performance variations. Third, the preselected villages were clustered using the Village Development Index (IDM) data [82]. These data comprise an annual assessment of the village’s economic, social, and ecological resiliency. This clustering process resulted in 22 villages representing different levels of development progress—well developed (45 percent), developed (22 percent), less developed (22 percent), and least developed (9 percent) (

Table 2. Categories of villages and their coverage in the case selection.

Progress of Development	Village (Province)
Well developed	Panggungharjo, Bejiharjo, Tridadi (DIY) Grong-Grong, Deah
	Glumpang (Aceh), Koya Koso (Papua), Lamuhu, Talulobutu (Gorontalo)
Developed	Jatirejo, Sumberarum (DIY), Tanjong (Aceh), Sidan (Bali)
	Sabronsari, Holtekamp (Papua), Bismarak (NTT)
Less developed	Seuriweuk (Aceh), Dosay (Papua), Mata Air, Mio, Noelmina (NTT)
Least developed	Tuakole (NTT), Pangeya (Gorontalo)

Source: Village Development Index (Indeks Desa Membangun/IDM) of the Ministry of Village of Republic of Indonesia, 2022 [82].

).

Regarding the progress of basic services, the 2022 IDM data highlight disparities in National Health Insurance (JKN) memberships, with well-developed islands, including Java and Sumatra, outpacing others. However, most villages lack health, education, and clean water services, particularly in Papua, NTT, and Maluku provinces. Notably, challenges persist in providing basic health services due to a shortage of doctors in most villages, impacting 77.57 percent of the total. Despite policy reforms, a gap between low- and high-performing students persists in basic education services, equivalent to six years of schooling [83]. The IDM data also point to challenges in clean water services and public transportation, unexpectedly in well-developed islands.

6. Results of the Empirical Analysis

This section presents the crisp-set analysis of 22 locality-based welfare systems in decentralised Indonesia using QCA. Following Schneider and Wagemann’s [79] recommendation, we conducted independent analyses for the outcomes of “sustainable welfare” and “absence of sustainable welfare”. The QCA algorithm within R software version 3.1.9 [80] was employed for data analysis. The empirical focus of the argument is on understanding the conditions under which sustainable welfare outcomes would be achieved and under which conditions they would fail in the context of a less-industrialised, highly decentralised, and predominant state–market political economy.

6.1. Conditions for Sustainable Welfare (Welfare)

We initiated QCA analysis for sustainable welfare outcomes by conducting a parameter of fit (pof) test to identify conditions falling under the “Necessary” category. The presence of an outcome hinges on these necessary conditions and vice versa. A condition qualifies as a “Necessary” condition or prerequisite if the value of RoN (Relevance of Necessity) is “1.000”. According to the pof test for the “Necessary” condition, none of the five individual conditions qualify as an independent “Necessary” condition for achieving the outcome. It implies that no single condition could explain the attainment of sustainable welfare outcomes (“Welfare”) in highly decentralised Indonesia. Instead, a combination of institutional settings and policy mix can lead to sustainable welfare outcomes. The truth table analysis identified “Sufficient” conditions or pathways leading to sustainable welfare outcomes. As depicted in

Table 3. Truth Table of 22 cases under 5 conditions leading to sustainable welfare.

Type	SelfG	EconEmp	PolEmp	UBS	SocEmp	OUT	(n)	Incl	PRI	Cases (Villages)
1	0	0	0	0	0	0	2	0.000	0.000	Mio, Tuakole (NTT)
2	0	0	0	0	1	0	4	0.000	0.000	Grong-Grong (Aceh), Pangeya (GTO), Dosay, Sabron Sari (Papua)
6	0	0	1	0	1	0	1	0.000	0.000	Sumberarum (DIY)
10	0	1	0	0	1	1	1	1.000	1.000	Talulobutu (GTO)
17	1	0	0	0	0	0	2	0.000	0.000	Seuriweuk(Aceh), Noelmina (NTT)
18	0	0	1	0	1	0	1	0.000	0.000	Holtekamp (Papua)
23	1	0	1	1	0	0	1	0.000	0.000	Tanjong (Aceh)
26	1	1	0	0	1	0	1	0.000	0.000	Deah Glumpang (Aceh)
27	1	1	0	1	0	1	1	1.000	1.000	Bismarak(NTT)
29	1	1	1	0	0	0	2	0.000	0.000	Bejiharjo(DIY), Lamuhu (GTO)
32	1	1	1	1	1	1	6	1.000	1.000	Jatirejo, Panggungharjo, Tridadi (DIY), Bali (Sidan), Mata Air (NTT), Koya Koso (Papua)

QCA output using QCA for R version 3.1.9 [80] in R package version 4.2.3.

, 22 cases are distributed among 11 out of the 32 possible configurations of conditions (2k).

Several conclusions can be drawn from the truth table analysis (Table 3) First, the findings indicate that achieving sustainable welfare outcomes is challenging in less- and least-developed villages. Nevertheless, it occurred in one less-developed village and 43 percent of the developed and well-developed villages where adequate empowerment is met. The fact that 57 percent of the total of developed and well-developed villages do not achieve sustainable welfare outcomes suggests that the progress of development does not necessarily mean adequate empowerment and robust institutions are in place, nor does it align with eco-social performance. Hence, it implies that more than the village’s annual survey is needed to support policymaking.

Second, as theorised, no single condition emerges as a necessary and sufficient condition for attaining sustainable welfare outcomes (

Table 4. Intermediate solution of sufficient conditions for sustainable welfare (Welfare): ~SelfG*EconEmp*SocEmp + SelfG*EconEmp*UBS <-> Welfare.

Sufficient Combination	inclS	PRI	covS/covU	Cases
~SelfG*EconEmp*SocEmp	1.000	1.000	0.125/0.125	Talulobutu (GTO)
SelfG*EconEmp*UBS	1.000	1.000	0.875/0.875	Bismarak, Mata Air(NTT), Jatirejo, Panggungharjo, Tridadi (DIY), Sidan (Bali), Koya Koso (Papua)

Intermediate solution consistency: 1.000; intermediate solution coverage: 1.000; inclS = inclusion value or sufficiency index; PRI = necessity index or proportion of case which is absent where outcome is also absent; covS = coverage index that computes coverage of cases that produce outcome; covU = coverage unique index that estimates coverage of cases that do not produce outcome where conditions are absent. SelfG = self-governing; EconEmp = ecological economic empowerment; SocEmp = social empowerment; UBS = universal basic services; + denotes logic relation between configurations whereas * denotes logic relation between conditions.

). While a pathway of the complex solution suggests the presence of all conditions for achieving sustainable welfare outcomes, the intermediate solution offers a “middle path”. It reveals two pathways leading to sustainable welfare. In the first pathway, the set of conditions (SelfG*EconEmp*UBS —> Welfare) exhibits a high consistency (PRI) value, encompassing 87.5 percent of cases resulting in sustainable welfare (Bismarak, Jatirejo, Panggungharjo, Tridadi, Mata Air, Sidan, Koya Koso villages). The reasons behind the prevalence of this pathway in most sustainable welfare cases remain unclear. However, empirical evidence points to cases characterised by the presence of self-governing (robust leadership and institutions), ecological economic empowerment, and the provision of universal basic services.

The self-governing condition manifests in various forms, often characterised by inspiring, visionary, and proactive village leaders and institutions capable of translating community aspirations into tangible actions and initiatives and the presence of robust institutions. By law, the Village Fund is crucial for the functioning of the self-governing condition, enabling locally grown policies to address the welfare exigencies of communities. At least three key factors influence the operationalisation of this condition. First, the effective functioning of deliberative and participatory democracy is essential for overseeing the management of village resources. Second, central directives, such as budget repurposing during the COVID-19 pandemic, disrupt local policy implementation due to conflicting priorities. Third, national priority programmes and centralised control over land and natural resources for state-sponsored economic activities, including extractive industries, impact village policy implementation and society’s life in various ways [84].

These activities have notable effects on local communities, primarily due to limited community engagement and the need for more adaptability to address diverse needs characterising centralised policy implementation. Secondary data indicate a regulatory framework that delineates the authority of village government over extractive activities, both in issuing licenses or benefiting from these activities [85]. The prevalent state-sponsored extractive activities highlight the need for empowering village consultative bodies and local multistakeholder forums to mitigate the social, economic, and environmental impacts of these activities. These bodies play a crucial role in shaping the community’s vision and plan for future development through dialogues, consultations, negotiations, devising concrete agreements, joint strategies, and making mutual decisions among community groups [84,86]. While Indonesia has committed to international safeguard principles and initiatives, including EITI (The Extractive Industries Transparency Initiative), the UN Declaration on the Rights of Indigenous People, and the FPIC (Free, Prior and Informed Consent) principle, the adaptation of these norms to the decentralised context, especially within the village governance framework, seems elusive.

Third, the eight villages achieving sustainable welfare outcomes excelled in ecological and economic indicators (line 2 Table 4). Ecological indicators encompass various strategies, including transforming local modes of production such as organic farming, community-based waste management aligned with the Reduce, Reuse, Recycle (TPS 3R) principles, community waste upcycling initiatives, fostering a functional circular economy, and the use of renewable energy sources. These approaches have effectively addressed local landfill issues and fertilisation crises and created employment opportunities.

Empirical evidence indicates that the nascent local eco-tourism initiatives (Tridadi, Panggungharjo, Mata Air, Talulobutu, Jatirejo, and Sidan villages) alongside organic farming (Sidan and Bismarak villages) and circular economy (Panggungharjo, Talulobutu, Mata Air, and Sidan villages) suggest the presence of a regenerative economy, fostering inclusive economic opportunities and absorbing locally produced goods and services, aligning with Hirvilammi’s proposal. These initiatives seek to transform local modes of production through innovations, including community-based waste management and waste upcycling initiatives (Panggungharjo, Sidan, Mata Air, Talulobutu villages), renewable energy utilisation (Koya Koso village), localising and customising production and consumption that promotes shorter value chains (Bismarak, Tridadi, Jatirejo, Sidan villages), and providing inclusive economic opportunities through varied forms of entrepreneurship (Panggungharjo, Sidan, Jatirejo, Talulobutu, Mata Air villages), thereby setting the stage for the building of a virtuous circle of sustainable welfare at the local level, as Hirvilammi [32] proposed. This form of solidarity economy [87] functions distinctively from the disruptive political economy conceptualised by Quilley and Zywert [52]. Instead, it serves as an embodiment of cultural tradition and the intrinsic values of the Indonesian people, particularly the value of solidarity, known as “Gotong Royong”. It profoundly influences social and economic behaviours, including livelihood. As initially discussed, the pandemic revealed that a solidarity economy is the economy people turn to, especially during crises, recovery, and even post-recovery periods. This, however, confirms the proposition of Quilley and Zywert [52] that a livelihood-based survival unit and its associated political economy could serve as a third leg in the predominant state–market political economy.

Fourth, the second pathway (~SelfG*EconEmp*SocEmp —> Welfare) to sustainable welfare indicates the absence of self-governing alongside the presence of ecological economic and social empowerment conditions (line 1 Table 4). This unique configuration is observed in a single case (Talulobutu village), suggesting that the combination of ecological economic and social empowerment conditions alone is sufficient to achieve sustainable welfare outcomes. This configuration deviates from theoretical expectations, requiring a thorough case study analysis to explain the anomaly. Nevertheless, the significance of the social empowerment condition is more prominent in one of the complex solution’s pathways compared to the intermediate solution.

To test the robustness and validate these findings, XY plots visually illustrate how cases align with an intermediate solution leading to welfare outcomes. Figure 1 shows this graph, where a diagonal line represents the 0.5 threshold for membership in two sets, indicating a necessary and sufficient solution. Cases above this line ensure a consistent solution. The vertical axis represents membership in welfare outcomes, and the horizontal axis represents membership in intermediate solutions [8]. The graph consistently shows the intermediate solution’s sufficiency for the outcome, with all case members above the diagonal line. Additionally, the four cases at the top right can be considered typical cases of the solution (Schneider and Rohlfing, 2013 [8]).

6.2. Conditions for the Absence of Sustainable Welfare (~Welfare)

In line with the QCA for the sustainable welfare outcomes (~Welfare), we conducted a parameter of fit (pof) test to identify conditions falling under the ‘Necessary’ category. A condition qualifies as a “Necessary” condition or prerequisite if the RoN (Relevance of Necessity) is “1.000”. According to the pof test of the “Necessary” condition for negation of sustainable welfare outcomes (~Welfare), none of the five individual conditions qualify as a “Necessary” condition for achieving the negation of sustainable welfare outcomes. It implies that only a set of conditions could explain the failure of attaining sustainable welfare outcomes (~Welfare).

We conducted truth table analysis to uncover the conditions or pathways that result in the absence of such outcomes.

Table 5. Truth table of 22 cases under 5 conditions leading to the absence of sustainable welfare.

Type	SelfG	EconEmp	PolEmp	UBS	SocEmp	OUT	(n)	Incl	PRI	Cases (Villages)
1	0	0	0	0	0	1	2	1.000	1.000	Mio, Tuakole (NTT)
2	0	0	0	0	1	1	4	1.000	1.000	Grong-Grong (Aceh), Pangeya (GTO), Dosay, Sabron Sari (Papua)
6	0	0	1	0	1	1	1	1.000	1.000	Sumberarum (DIY)
10	0	1	0	0	1	0	1	0.000	0.000	Talulobutu (GTO)
17	1	0	0	0	0	1	2	1.000	1.000	Seuriweuk(Aceh), Noelmina (NTT)
18	0	0	1	0	1	1	1	1.000	1.000	Holtekamp (Papua)
23	1	0	1	1	0	1	1	1.000	1.000	Tanjong (Aceh)
26	1	1	0	0	1	1	1	1.000	1.000	Deah Glumpang (Aceh)
27	1	1	0	1	0	0	1	0.000	0.000	Bismarak(NTT)
29	1	1	1	0	0	1	2	1.000	1.000	Bejiharjo(DIY), Lamuhu (GTO)
32	1	1	1	1	1	0	6	0.000	0.000	Jatirejo, Panggungharjo, Tridadi (DIY), Sidan (Bali), Mata Air (NTT), Koya Koso (Papua)

QCA output using QCA for R version 3.1.9 [80] in R package version 4.2.3.

demonstrates the dispersion of 22 cases among 11 of the 32 possible configurations of conditions (2k). The truth table analysis indicates that 14 of the 22 cases (Type 1–29 on Table 5) investigated fail to attain sustainable welfare outcomes. The causal configuration model derived from the QCA analysis provides an alternative explanation for conditions or causal patterns leading to the absence of sustainable welfare outcomes.

The findings suggest several conclusions. First, as shown in

Table 6. Intermediate solution of sufficient conditions for the absence of welfare (~ Welfare): ~EconEmp + SelfG*PolEmp*~UBS + SelfG*~UBS*SocEmp <-> ~ Welfare.

Sufficient Combination	inclS	PRI	covS/covU	Cases
~EconEmp	1.000	1.000	0.786/0.714	Mio, Tuakole, Noelmina (NTT), Grong-Grong, Seuriweuk, Tanjong (Aceh), Dosay, Sabronsari (Papua), Sumberarum (DIY) Pangeya (GTO)
SelfG*PolEmp*~ UBS	1.000	1.000	0.143/0.143	Bejiharjo(DIY), Lamahu (GTO)
SelfG*~UBS*SocEmp	1.000	1.000	0.143/0.071	Holtekamp(Papua), Deah Glumpang(Aceh)

Intermediate solution consistency: 1.000; intermediate solution coverage: 1.000; inclS = inclusion value or sufficiency index; PRI = necessity index or proportion of case which is absent where outcome is also absent; covS = coverage index that computes coverage of cases that produce outcome (Welfare); covU = coverage unique index that estimates coverage of cases that do not produce outcome (Welfare) where conditions are absent. SelfG = self-governing; EconEmp = ecological economic empowerment; SocEmp = social empowerment; UBS = universal basic services; + denotes logic relation between configurations whereas * denotes logic relation between conditions.

, the first pathway covers 78 percent of cases where welfare is absent in the absence of the ecological economic empowerment condition (~ EconEmp —> ~ Welfare). It is unknown why QCA only reduces a great deal of complexity by pointing to one condition. Nevertheless, it implies that ecological economic empowerment alone is a sufficient condition leading to the absence of sustainable welfare outcomes in 78 percent of cases. The substantiation of this condition suggests that the ecological transformation required for achieving sustainable welfare outcomes is yet to occur in these cases. While local economic development might be absent or present, it has yet to incorporate an ecological perspective or apply sustainable principles.

Primary data suggest that the absence of sustainable welfare outcomes in the fourteen villages is aligned with subpar performance in ecological indicators or the local economic ecosystem (or the absence of it). They either lack community-based waste management facilities and initiatives to transform local modes of production, such as the circular economy and organic farming, or do not utilise renewable energy sources. Moreover, environmental pollution is evident in eight of these fourteen villages. They include Tuakole (line 1), Pangeya, Grong-Grong, Dosay, and Sabronsari (line 2), Seuriweuk dan Noelmina (line 17), and Holtekamp (line 18) as shown in Table 5. While the conditions-oriented approach of QCA does not factor into the specific context of each case, the ten villages falling within the pathway where the ecological economic empowerment condition (~EconEmp—> ~Welfare) is lacking (as shown in the first line of Table 6) are empirically situated in regions with poverty rates ranging from 18 percent to 77 percent, exceeding local district or national poverty levels. The absence of basic services and the ecological economic empowerment condition are evident in the majority of these villages, which we suspect is primarily due to geographical challenges.

Second, a perfect consistency of 14.3 percent (2 of 22 villages) is shown in the second pathway (SelfG*PolEmp*~UBS —> ~Welfare), where welfare is absent despite the presence of the required institutional setting due to inadequate universal basic services’ provision (line 2 Table 6). It underscores the importance of basic services’ provision. Third, the third pathway (SelfG*~UBS*SocEmp —>~ Welfare) mirrors the second one, emphasising the significance of universal basic services’ provision. In this pathway, 14.3 percent (2 of 22 villages) of cases experience a lack of welfare when universal basic services are inadequate, despite the presence of social empowerment and the required institutional setting (line 3 Table 6). These findings point to the absence of the universal basic services condition despite development progress of these villages. Contrary to these cases, villages that excelled in providing universal basic services are characterised by initiatives to improve access to national health insurance, healthcare services, clean water (Bismarak case), and pre-primary and higher education (i.e., the “one family, one bachelor degree” initiative in the case of Panggungharjo). Additional services encompassed the improvement of village road conditions and local transportation. It is worth noting that the state plays a crucial role in ensuring the availability and adequacy of universal basic services. Concurrently, village governments are delivering basic services to ensure accessibility to these services. This points to overlaps and complexity in the delivery mechanism arising from the coexistence of locality-based and national welfare systems. It necessitates coordinated support from regional and central governments and partnerships with social organisations and the private sector, underscoring the importance of polycentric governance. Primary data support these conclusions.

The significance of the political empowerment condition is evident in the case of Mata Air, showcasing substantial progress in delivering basic services through the meaningful involvement of women in policymaking and monitoring. Women actively participate in the Women’s Community School initiative, supported by a civil society organisation and a development partner, enabling them to engage meaningfully in formal decision-making forums. In the Panggungharjo case, the village community has access to a social accountability mechanism, including a direct consultation and redress mechanism. It empowers communities to voice concerns or grievances, prompting swift responses from the village government and exemplifying the functionality of a feedback loop mechanism. It suggests that, with the necessary institutional setting, including self-governance and political empowerment conditions, efforts can be directed towards creating, supporting, or advocating for the required policy mix to achieve sustainable welfare outcomes.

To test the robustness and validity of these findings, Kuehn et al. [8] suggest the usefulness of visually inspecting the distribution of cases in an XY graph that plots the membership of each case in the solution term against its membership in the outcome set. For the solution term to be a consistently sufficient solution, all cases must be situated above the diagonal; for a consistently necessary condition, they need to be below the bisecting line. The visualisation of the XY plot graph with 0.085 jitter sizes (Figure 2) below depicts that the majority of cases (17 of 22 cases) in the intermediate solution are situated above the diagonal line (X > 5). The following graph illustrates cases that are part of consistently sufficient intermediate solutions for the negation or absence of welfare.

All solutions affirm a causal asymmetric relationship between conditions leading to sustainable welfare outcomes and those contributing to failure. It indicates that the conditions or pathways for achieving sustainable welfare may differ from conditions leading to its failure. While the absence of ecological economic empowerment alone leads to the failure of outcomes, it does not guarantee its attainment. These findings emphasise the necessity of meeting the required institutional setting (self-governance and political empowerment) and policy mix (ecological economic empowerment, social empowerment, and universal basic services (UBS)), forming the ideal pathway toward sustainable welfare outcomes.

Primarily, the state, through the Ministry of Villages, assumes a crucial role in village empowerment, overseeing activities from local to provincial levels. Key personnel, such as facilitators or village empowerers, play a vital role in guiding village governments and local communities through complex development processes. Their responsibilities include facilitating Village Fund planning and evaluation, and ensuring alignment with Ministry-set principles. The empowering roles of facilitators extend to provide suggestions in developing social services, economic enterprises, infrastructure, and natural resource utilisation. They contribute to the people-centred development of the village, enhance the capacity of village government and community institutions, and organise community groups, all within the overarching goal of promoting community welfare.

Hence, the efficacy of village facilitators depends on their capacity, the multidimensional challenges present in the villages and communities they serve, and the extent to which the village government and communities accept their presence and functionality. Consequently, facilitators play a pivotal role in advancing sustainable welfare outcomes by leveraging their skills and qualifications, while respecting the autonomy, strength and full potential of the village communities and the environment.

7. Discussion, Policy Implications and Conclusions

This study presents the first case study of Indonesia, exploring sustainable welfare outcomes in less-industrialised and highly decentralised contexts. It contributes to the sustainable welfare discourse by uniquely exploring less-industrialised and highly decentralised contexts, shedding light on the eco-social performance of low-tax-base and informal employment-based welfare systems prevalent in the Global South contexts often underrepresented in sustainable welfare discourse. The study delves into the necessary institutional framework and policy mix, aligning with prior research’s four proposed sustainable welfare criteria [42]: compatibility with planetary boundaries, needs satisfaction, redistribution, and democratic governance. Our sustainable welfare model emphasises the critical role of empowerment across all conditions, contending that empowerment reshapes power dynamics and serves as a prerequisite for achieving sustainable welfare outcomes. The following subsections elaborate on the key findings, policy implications, positioning, and suggestions for future research.

7.1. The Ideal and the Middle Path to Sustainable Welfare Outcomes

The complex solution reveals a pathway where the theorised set of conditions is predominantly present in cases of sustainable welfare outcomes. It represents an ideal pathway, indicating the necessity for comprehensive empowerment across institutional, social, economic, ecological, and political dimensions. Conversely, the intermediate solution suggests a middle path emphasising the importance of meeting the required institutional settings and the policy mix of ecological economic empowerment and universal basic services (UBS) as a middle path to sustainable welfare outcomes. While this path does not emphasise social and political empowerment as theoretically expected, the complex solution does. It implies that the presence of self governing (autonomy) enables the village communities to create an economy and institutions that serve the real needs and interests of the people. In other words, a fundamental shift in the balance of power and access to the local economic system in favour of the communities are evident. Nonetheless, understanding the specific role of social empowerment in achieving sustainable welfare outcomes requires further exploration. It involves examining the aggregate impact on the following components on sustainable welfare outcomes: services for vulnerable groups, the contribution of village solidarity activities or social forums in building social capital, and access to public information, or how its absence hinders the outcomes.

Unexpectedly, QCA findings reveal two sets of conditions where the absence of basic services impedes sustainable welfare outcomes despite the presence of robust institutions, meaningful participation, and social empowerment. Primary data indicate that the adequacy of universal basic services remains a concern, particularly in regions with medium to high poverty rates due to geographical challenges. It further indicates that developed and less-developed villages face distinct challenges. While developed and well-developed villages encounter significant issues related to the quality and adequacy of these services, less-developed and least-developed villages grapple with even more significant challenges, including concerns about accessibility, availability, and adequacy. It suggests that achieving sustainable welfare outcomes is challenging in less- and least-developed villages, emphasising that progress in development does not necessarily indicate the presence of adequate empowerment, robust institutions, or alignment with eco-social performance. However, villages can offer universal basic services through collaboration with social organisations, service providers, and state support. This indicates the coexistence of a locality-based welfare system alongside the national welfare system, forming an interdependent relationship. The overlaps and complexities in delivering universal basic services highlight the need to consider polycentric governance to guarantee the availability, accessibility, and sufficiency of universal basic services, especially in the least-developed, impoverished, and marginalised villages where inadequacy is most prevalent.

7.2. Convergence and Divergence in Relation to Past Research on Sustainable Welfare

Past sustainable welfare research theorised the concept of a virtuous circle of sustainable welfare [32], envisioning a welfare system embedded in a regenerative and distributive economy towards sustainable welfare outcomes. Our findings suggest that the essential conditions for this virtuous circle of sustainable welfare manifest locally. The nascent local eco-tourism initiatives, alongside organic farming and a circular economy, indicate the presence of a regenerative economy. They foster inclusive economic opportunities and incorporate locally produced goods and services, aligning with Hirvilammi’s proposition. It suggests that transforming the institutional settings and relational dynamics of the state, market, and society should coincide with transforming the modes of production. It could be facilitated by locally grown policy innovations, including community-based waste management, a functioning circular economy, the utilisation of renewable energy, the localisation and customisation of production and consumption to encourage shorter value chains, or diverse forms of entrepreneurship. While the presence of a regenerative economy at the local level does not necessarily indicate the state’s shift from a growth-centric model, its establishment across Indonesia’s potentially 74,953 villages could make a compelling case for advocating a virtuous circle of sustainable welfare to address society’s economic vulnerability, climate, and inequality crises.

In the Indonesian context, the significance of ecological economic empowerment indicates the presence of a livelihood-based survival unit, as proposed by Quilley and Zywert [52]. However, it functions distinctively from the disruptive political economy they conceptualised. The COVID-19 pandemic revealed that a solidarity economy is the economy people turn to, especially during crises, recovery, and even post-recovery periods. The value of solidarity deeply rooted in cultural traditions and intrinsic Indonesian values across diverse communities notably influences social and economic behaviours. It also confirmed that a livelihood-based survival unit has become crucial in the predominant state–market political economy.

7.3. Significance of Ecological Economic Empowerment

The significance of ecological economic empowerment, as discussed, underscores the necessity and success of transforming modes of production through locally grown policy innovations. Establishing a functioning regenerative economy across a potential 74,953 villages in Indonesia could make a compelling case to advocate for a virtuous circle of sustainable welfare addressing society’s economic vulnerability, climate, and social inequality crises. Unexpectedly, QCA findings suggest that the absence of the ecological economic empowerment condition alone impedes villages from achieving sustainable welfare outcomes. The substantiation of this condition suggests that the absence of sustainable welfare outcomes is aligned with subpar performance in ecological indicators or the absence of local economic institution. These villages either lack of local economic ecosystem or community-based waste management and initiatives to transform local modes of production, such as the circular economy and organic farming, or do not utilise renewable energy sources. In cases where local economic ecosystem are present, they have yet to incorporate an ecological perspective or apply sustainable principles. Evidence of environmental pollution is prevalent in the majority of these cases.

These findings emphasise the diverse ways in which ecological economic empowerment is crucial. Its presence signifies a fundamental shift within the local economic ecosystem and success in transforming local modes of production. Hence, it has the potential to establish a functioning and (contextualised) regenerative economy nationwide, providing a compelling rationale for advocating a virtuous circle of sustainable welfare. Conversely, the absence of this condition hinders the achievement of sustainable welfare outcomes at the village level. It implies that the significance of ecological economic empowerment necessitates aligning local efforts with broader environmental, social and economic goals. It entails integrating the contributions and roles of 74,953 villages into the country’s broader agenda or roadmap for sustainability and energy transition to further advance the sustainable welfare agenda. While the shift in local economic system is apparent in some cases, a crucial question requiring further substantiation is the extent to which the ecological economic empowerment condition has emancipated women, men, and communities from economic vulnerability, not to mention the poverty that entangles them.

7.4. Transforming the Relational Dynamics among the Society–State–Market and Local Transitioning

In shaping the understanding of a sustainable welfare society, we contend that an empowered society is a prerequisite for reshaping relational dynamics among society, the state, and the market. Within this transformative process, an empowered society possesses the capability to adeptly design innovative policies, thereby fostering sustainable welfare outcomes. The Village Fund marks the genesis of an eco-social transformation by recognising villages’ autonomy in shaping policies aligned with their basic needs and aspirations. This recognition catalyses an institutional framework conducive to democratic processes and autonomy, both integral for achieving sustainable welfare outcomes. It necessitates collaborative efforts to strengthen village leadership and democratic institutions, especially the village consultative body. Moreover, the presence of a robust feedback loop mechanism, as demonstrated in Panggungharjo’s case, characterised by society’s meaningful involvement in formal decision making and use of social accountability tools (i.e., direct consultation, redress mechanism), is crucial.

Concurrently, in support of deliberative and participatory democracy, empowering community members, including women, men, and vulnerable groups, is vital for meaningful participation in village planning and policy monitoring. Expanding and sustaining initiatives that empower women politically, such as the Women’s Community School in the case of Mata Air, supported by a civil society organisation and development partners, plays a significant role. Empowering civil society movements to advocate for sustainable welfare and enhancing the community’s capacity in policy monitoring or engaging with state, supra-state entities, and corporations are equally essential in this transformation process.

Fundamentally, the state is expected to protect its people, especially the most vulnerable, and the environment while enabling the integration of the economy within societal relationships—both between the state and its people, as well as with the environment—by incorporating four sustainable welfare principles into its policies and practices. This entails providing flexibility and general guidance in planning and utilising the Village Fund, aligning with the community’s basic needs and aspirations towards sustainable welfare outcomes. Substantial state support is crucial to ensure the adequacy and accessibility of primary health facilities at the village level, national health insurance (JKN), and improved access to higher education, requiring collaboration among intergovernmental bodies. In an effort to support the village robust institutions and oversight, the state should consistently enhance and monitor the quality and alignment of village facilitators’ competencies and qualifications with the multidimensional challenges inherent in the villages and communities they serve, as their role is crucial for advancing the progress of sustainable welfare outcomes. Primarily, the state is anticipated to safeguard the rights of indigenous and village communities to land and natural resources through formal means. This includes constructive public consultation with host communities during the planning phase of any state-sponsored economic (extractive) activities and national priority programmes, upholding the rule of law regarding the translation of international safeguard standards and norms, such as the EITI Standard, the United Nations Declaration on the Rights of Indigenous People, and the FPIC principle. Adapting these standards and norms to the decentralised context by recognising the village governance framework and alliances of indigenous communities in the country may require further consideration.

In reshaping the market and society relations, local markets’ creation has fostered an inclusive, collectively owned economic ecosystem, prompting a transition in local or indigenous modes of production towards environmental preservation practices in cases attaining sustainable welfare outcomes. Although not uniformly applicable across Indonesia’s 74,953 villages, this success illustrates the achievable extent of sustainable welfare outcomes when the necessary institutional settings and policy mix are in place. To rectify the power dynamics between society and the state–market mechanism, especially in extractive and state-sponsored economic activities, functional village consultative bodies, local multistakeholder councils, and community forums play a crucial role. The state is expected to provide an enabling environment for meaningful civic engagement for the respective aforementioned groups, supporting effective feedback loop mechanisms and fostering partnership building between the state and society, as well as between host communities and corporations.

While adopting Bhutan’s approach to prioritising ecological sustainability in all policies may pose challenges in the Indonesian context, embracing locally suitable win-win solutions is feasible, as evidenced in cases that achieve sustainable welfare outcomes. It underscores the potential for local transitions within the complex and decentralised administrative structure, facilitating innovative policy implementation for sustainable welfare outcomes. The transition process could involve the gradual pilot utilisation of a sustainable welfare metric introduced in this study (or its adaptation), enabling a comparative analysis of the performance of 74,953 villages in sustainable welfare outcomes. When used with other national indicators and garnering political support, this analysis has the potential to reshape policy planning, enabling state and regional governments to facilitate concerted efforts in supporting villages towards achieving sustainable welfare outcomes. Organising such efforts necessitates a form of polycentric governance and adherence to sustainable welfare principles to ensure the accountability of the Village Fund towards the needs and aspirations of the village’s communities and, eventually, sustainable welfare outcomes.

We acknowledge that the 22 investigated cases may not represent villages where disputes over natural resource ownership and exploitative use might occur. Limited autonomy and self-governing—indicating the absence of a self-regulating society—could pose challenges to sustainable welfare outcomes, especially in contexts where an interventionist state solely prioritises economic growth over people’s rights and aspirations.

7.5. The Study’s Positioning, Contribution, and Limitations

This research presents the first case study of Indonesia, exploring sustainable welfare outcomes in less-industrialised and highly decentralised contexts, aiming to shed light on the eco-social performance of low-tax-base and informal employment-based welfare systems prevalent in Global South contexts often underrepresented in sustainable welfare discourse. It contributes to the discourse by emphasising the intricate interplay of empowerment, institutional settings, and local policy mixes necessary towards sustainable welfare outcomes. While past research predominantly leans towards a statist-focused approach to sustainable welfare, this study proposes a society-focused perspective. This perspective envisions a society aspiring to enhance its wellbeing and preserve the environment for the benefit of future generations through collaborative means with the state without assuming objectives beyond these. By positioning between post-growth (including wellbeing economy), post-capitalism, and sustainable welfare arguments, it argues that achieving sustainable welfare outcomes requires transforming the logic and principles underpinning the national and local economic systems as well as the relational dynamics among the state, society, and market. In the context of the Global South, these two aspects are deemed essential, where an empowered society serves as a prerequisite for alignment with planetary boundaries, basic needs fulfilment, facilitating redistribution, and fostering democratic governance.

This study proposes a phased approach to local transitioning, suggesting a pilot utilisation of the sustainable welfare metric introduced in this research (or its adaptation) to monitor progress in Indonesia. When used in conjunction with other national indicators and with political support, this analysis has the potential to reshape policy planning, serving as a policy tool to position the contributions and roles of 74,953 villages in the country’s larger agenda for energy transition and sustainability. This strategic alignment and positioning are crucial for progress in sustainable welfare outcomes, necessitating the gradual integration of sustainable welfare principles into policies and practices. Essentially, a sustainable welfare society envisions an empowered society and a state that prioritises its relation with its society, primarily to protect its people and enable a fundamental shift in the economic system that integrates societal relationships among the state, society, and the natural environment. It involves careful consideration in translating the adaptation of international safeguard standards and norms (EITI Standard, the United Nations Declaration on the Rights of Indigenous People, and the FPIC principle) to the decentralised context. This entails recognising the village governance framework and alliances within the broader indigenous communities in the country.

Future research could address the limitations of this study. The systematic cross-case analysis necessitates in-depth case studies to trace and validate the theorised causal mechanisms thoroughly. Hence, employing a within-case analysis using process tracing method would be advantageous for cases exemplifying sustainable welfare outcomes and investigating the extent to which the ecological economic empowerment condition has emancipated women, men, and communities from economic vulnerability and poverty.

The theoretical framework presents a limitation by focusing solely on the societal aspect of the state–society–market relation concerning village welfare systems. Additionally, the unexplored aspect of the village’s political economy, vested interests, and social conflict that may influence the village’s policymaking could be worth exploring. Future studies may derive value from a comparative study of countries in the Global South or Global North. A case- or conditions-oriented approach of Qualitative Comparative Analysis (QCA) could help identify country-level conditions leading to sustainable welfare outcomes. An in-depth case study that delves into the extent to which the village’s political economy, vested interests, and social conflict influence village policymaking, thereby the progress of sustainable welfare outcomes, would be valuable.

Furthermore, this study does not delve into the unexplored facets of women’s agency in transforming the local modes of production or influencing ecological practices. Therefore, conducting an in-depth analysis of women’s agency and political empowerment in shaping local and indigenous ecological practices would offer valuable insights for achieving sustainable welfare outcomes.