Institutionalized Social Entrepreneurship in Indonesia: A report on the challenges of state-driven social entrepreneurship promotion within the Five Cities' social assistance program

The landscape of social entrepreneurship has undergone rapid evolution within business and non-profit sectors in recent years. However, there is a more recent trend in Indonesia, where social entrepreneurship is formally practised in public policy. This new approach represents an initiative related to what we call Institutionalized Social Entrepreneurship (ISE). In this article, we investigate the challenges faced while implementing experimental measures to transform cash transfers into social entrepreneurship programs based on 43 interviews with key stakeholders and end-users spreading over five regions. Our research findings indicate a lack of shared understanding among stakeholders when implementing social entrepreneurship programs. Furthermore, the beneficiaries face difficulties distinguishing between social entrepreneurship programs and regular cash transfers, leading to ineffective program outcomes and significant challenges in achieving community development objectives. This issue is exacerbated by an unbalanced power distribution between government and non-government actors involved in program implementation, which can potentially limit the program’s effectiveness and efficiency. Its unfolding transformation of social assistance and the application of social entrepreneurship in Indonesia highlight a new deal for welfare that responds to uncertain post-pandemic circumstances. This study adds to the literature on social entrepreneurship by highlighting the complexities of the state-society relationship in ISE.