The Dynamics of Institutional Change: A Comparative Analysis of Port Governance in Indonesia

Little attention has been paid to analysing the ports sector as an important economic and development catalyst in Indonesia from the institutional approach. In fact, not only technical problems of dwelling time and port congestion exacerbate port performance, but also complex institutional problems seriously contribute to poorly functioning ports. Recent debates of institutional change concerning how and why it take places can be used as a theoretical framework to help unfold the complex situation in Indonesian port governance. This research examines institutional change as occurred in two cases of port governance by using the institutional change model of Buitelaar et al. for the Port of Tanjung Perak and the Port of Lamongan Integrated Shorebase, East Java. Both cases are thus used to reflect on the ability of institutional change model by Buitelaar et al. to explain institutional changes in port governance. By employing a case-study design, the study attempts to investigate institutional problems in two distinctive ports between 1992 and 2015. A combination of field observation and in-depth interviews with various port actors were undertaken for data collection. It is revealed that political lock-in and stalemates depict interactions among port actors. Strong pressures at the national and local levels inhibit institutional change from becoming effective. While both port operators tend to maintain the ‘status quo’ of port ownership and concessions, the Ministry of Transportation proposed a hegemonic discourse of the landlord port model that does not seem to be functionally implemented in Indonesia. Furthermore, parallel paths of sectoral and decentralization legislation have led to institutional incoherence in terms of clashing between the sectoral and territorial dimensions. Thus, path plasticity by restructuring the composition of Port Authority can be proposed as a solution. These findings enhance the understanding of institutional change process whereby power struggle strongly influence institutional change. It reflects the need of institutional political economy approach to examine institutional change in port governance.