The Politics of Path-Creation: Theory-Building of Social Policy Reform in Post-Economic Crisis Indonesia

Institutional scholarship highlights policy as a frozen landscape, explaining its reluctance to depart from the predetermined trajectories. However, this argument needs to be reassessed to better capture the reality of the Indonesian social policy reform, most notably in healthcare. The reform involved sudden and radical changes from a segmented and decentralized model to a more integrated and inclusive one—outside the critical juncture of the 1998 economic crisis—creating a patchwork of old and new ideas and features within policy institutions. Empirical interview data show that path-creation changes in healthcare reform are characterized by a deviation from the path followed as an institutionally embedded principle. This deviation was made possible due to the considerable influence of academics-turned-senior bureaucrats (policy entrepreneurs), who capitalized on the widespread distrust of the ruling government to drive the desired reform. In addition, the success of Obamacare as a populist healthcare program amid the capitalist US system also undermined the legitimacy of policy actors’ previous attempts to reject reform. This article helps clarify the development and application of the path-creation theory, comparing it to established theories to reduce ambiguity.