Welfare and Conflict: Policy Failure in the Indonesian Cash Transfer

Welfare policy may promote social integration and reduce social conflicts in communities. However, this study finds that the Indonesian unconditional cash transfer program stimulated multifaceted conflicts, which were accompanied by harmful social unrest. The government failed to lessen such conflicts, but community leaders successfully minimized the conflicts through informal redistribution. This redistribution reflects problematic informal-formal layering and nesting, which lead to a complicated policy failure. Employing social conflict and institutional change theoretical frameworks, this article aims at using the Indonesian cash transfer as a lens to understand how and why welfare policy causes social conflicts in communities and how the conflicts stimulate policy distortion and modification, resulting in policy failure. This policy failure reveals important theoretical implications on the nexus of conflict and institutional change.