Downloads: 3
Research Paper | Public Administration | Volume 15 Issue 3, March 2026 | Pages: 1660 - 1664 | Indonesia
Therapeutic Governance and the Ladder of Institutional Capacity: A Multi-Aspect Framework for Transforming Village-Owned Enterprises in Developing Indonesia
Abstract: This study examines institutional governance challenges affecting Village-Owned Enterprises in Eastern Indonesia, where uneven performance reflects differences in legal integrity, social trust, and managerial capacity. Using a qualitative comparative case study of three enterprises representing collapsed, latent, and resilient trajectories, data were collected through 26 interviews, observation, and document analysis, and analysed using thematic cross-case synthesis. The findings show that economic interventions fail when legal accountability and community trust are absent. Transparent governance practices in post-failure settings function as mechanisms of institutional trust restoration, conceptualised as Therapeutic Governance. The study proposes the Institutional Triad typology and the Ladder of Institutional Capacity model, demonstrating that economic viability depends on prior consolidation of legal and social capacity. The integrated framework offers a maturity-sensitive approach to the design of rural enterprise policy. The results contribute to institutional governance theory and provide actionable guidance for differentiated development interventions in fragile governance contexts.
Keywords: Therapeutic Governance, Institutional Capacity, BUMDes, Village-Owned Enterprise, Institutional Triad, Ladder of Institutional Capacity, New Institutionalism, Indonesia, Qualitative Comparative Study, Rural Governance, Institutional Transformation
How to Cite?: Wulandari E. Djogo, Petrus Kase, William Djani, Ajis Salim Adang Djaha, "Therapeutic Governance and the Ladder of Institutional Capacity: A Multi-Aspect Framework for Transforming Village-Owned Enterprises in Developing Indonesia", Volume 15 Issue 3, March 2026, International Journal of Science and Research (IJSR), Pages: 1660-1664, https://www.ijsr.net/getabstract.php?paperid=SR26324194418, DOI: https://dx.dx.doi.org/10.21275/SR26324194418