The Impact of Institutions on Health Care Reform in Indonesia and Thailand

THE IMPACT OF INSTITUTIONS ON

HEALTH CARE REFORM IN INDONESIA

AND THAILAND

Master’s Thesis

MSc Public Administration: International and European Governance

Leiden University

Name: Maria Sarah

Student Number: s2721899

Date: 08/01/2021

Table of Contents

1.

Introduction ... 3

1.1 The Asian financial crisis and universal health care ... 3

1.2 Research question... 4

1.3 Academic and social relevance ... 4

1.4 Thesis outline ... 5

2.

Theoretical framework ... 7

2.1 Theories of welfare reform... 7

2.2 The role of institutions ... 9

2.2.1 Policy feedback ... 9

2.2.2 Political institution ... 11

2.2.3 Veto player theory ... 13

2.2.4 Democracy ... 15

3.

Research methodology ... 17

3.1 Case selection ... 18

3.2 Operationalization of variables ... 19

3.3 Data analysis & collection ... 23

3.4 Validity & reliability ... 25

4.

Case Description... 27

4.1 The case of Indonesia ... 27

4.1.1 Historical context: development of social security system in Indonesia ... 27

4.1.2 Political context of health care reforms ... 29

4.2 The case of Thailand ... 34

4.2.1 Historical context: development of social security system in Thailand ... 34

4.2.2 Political context of health care reforms ... 36

5.

Data analysis ... 39

6.

Conclusion ... 50

7.

Bibliography ... 53

1. Introduction

1.1 The Asian financial crisis and universal health care

The onset of the 1997 Asian Financial Crisis triggered a series of adverse social impacts across Southeast Asia (Knowles et al., 1999). Prior to the crisis, many Southeast Asian countries were on track towards higher economic growth, however, this progress was quickly reverted during the financial crisis (Ramesh, 2009). The crisis resulted in a significant decline of gross domestic product (GDP); in Indonesia, the economy contracted by 13% while in Thailand, its economy shrunk by 10.5% (Ramesh, 2009). This led to negative social consequences, including increased unemployment and poverty levels, and ultimately negatively impacting education and health outcomes (Ramesh, 2009). The severe impacts that followed after the crisis are the consequence of the absence of sufficient social protection programs to cushion the impact (Ramesh, 2009). This thesis will particularly focus on the impact of the crisis on the health sector.

Waters et al. (2003) found that the financial crisis led to the deterioration of health status in Indonesia due to the steep increase of food prices and a decline in the use of health care facilities. The authors suggest two potential reasons for why health care services were used less in Indonesia. First, the quality of the health facilities worsened due to the crisis (Waters et al., 2003). Second, the crisis instigated inflation and an increase in unemployment, which led to the weakening of household purchasing power and ultimately, led to households spending less on health (Waters et al., 2003). In total, the demand for health care services decreased but increased the overall level of morbidity and malnutrition rates in Indonesia (Waters et al., 2003). The adverse social effects of the crisis revealed that the social security programs that were present in 1997 were unsuccessful at providing sufficient social protection (Dostal & Naskoshi, 2017). This was especially because health insurance schemes were only extended to civil servants and formal sector employees (Waters et al., 2003). Similarly, Thailand’s currency also experienced a heavy devaluation due to the crisis, which also resulted in an increase in health services and negatively impacted the ability for households to spend on health (Waters et al., 2003). Overall, the crisis exposed the gaps and dysfunctions of existing health care programs during the time that it was needed the most (Knowles et al., 1999).

After the financial crisis and the ensuing negative social impacts which revealed the gaps in the social welfare system, Indonesia and Thailand began to put forth the idea of universal health care (UHC), a system that gives everyone the ability to access health care services without financial constraints (Reich et al., 2015; WHO, 2018). At this point, Indonesia and Thailand were relatively on the same socio-economic position and had a similar history of health insurance coverage, however, the process that followed after the introduction of the health care reform varied in the two countries. In the case of Thailand, the

parliamentary process of the National Health Security (NHS) Act to support the 30-baht health care scheme, began in 2001 and completed in 2002 (Pitayarangsarit, 2005). On the other hand, the planning and deliberation for Indonesia’s universal social security system was drawn out over almost a decade, beginning in 2001; the first National Social Security law (SJSN) to outline the basic framework of the new system was passed in 2004, whereas the second Social Security Administering Agency (BPJS) law to establish the agency needed to implement the new system was only passed in 2011 (Pisani et al., 2017).

1.2 Research question

This leads to the formulation of my research question. The main analytical puzzle that my thesis seeks to explore is Why was Thailand able to reform its health care system faster than Indonesia after the Asian Financial Crisis? I have developed three sub-questions to answer the main research question:

1. What explains Thailand’s success in health care reform following the Asian Financial Crisis? 2. What explains Indonesia’s failure in health care reform following the Asian Financial Crisis? 3. How can institutions account for the variation in the pacing of health care reforms in Indonesia and

Thailand?

1.3 Academic and social relevance

Over the past years, many Southeast Asian countries have made it their goal to achieve UHC (Reich et al., 2015). Thailand has been praised as one of the most successful cases of UHC among developing countries (Harris, 2015a). What makes Thailand’s case even more intriguing to analyze is that it was able to successfully achieve an ambitious health care plan only a few years after the financial crisis when the economy was still recovering (WHO, 2018). Therefore, it is worth examining the process of health care reform in Thailand to get a more complete understanding of what made it so successful and provide other countries with best practices on how to achieve universal coverage. Several scholars have conducted single-case studies to provide in-depth analysis to explain the success of the 30-baht health scheme (e.g. Selway, 2011; Kuhonta, 2008). Selway (2011) attributes the success of the health scheme to the electoral reform in 1997 and similarly, Kuhonta (2008) argues that the combination of constitutional reform, financial crisis and the involvement of civil society actors, created the conditions that made the health care scheme successful. A single case study provides a comprehensive analysis of the success of Thailand’s health care scheme, but the findings cannot be applied to other cases because it is specific to the country studied. As King et al. (1994) explain, “We always do better (or, in extreme case, no worse) with more observations as the basis of our generalization” (p. 212). Other scholars have done large-N comparative studies of countries

to analyze the different progress towards UHC and to generate lessons for other countries (e.g. Reich et al., 2015), however, the cases that were compared were distinct in terms of geographical, economic, and cultural context. The ability for a large-N study to conduct an in-depth analysis is limited due to a large number of cases, whereas a small-N study can achieve this as it deals with a smaller number of cases. To identify the relevant variables that can explain why some countries are more successful in reforming their health care system than others, it is important to control other confounding variables that may affect the outcome, and this can be achieved by conducting a small-N comparative study. Comparative analysis can show that the differences between cases that are similar in social and political context can result in contrasting policy outcomes (Toshkov, 2016, p.283). By conducting a comparison and controlling confounding variables, it will shed light on the relevant variables that can result in successful reform. Therefore, it is theoretically relevant to compare the success of Thailand with one contrasting case, such as Indonesia, in order to gain a fruitful and in-depth explanation for why the road towards UHC is so different for countries that started with similar socio-economic conditions. Overall, this research builds on previous research on health care reforms in Southeast Asia by expanding the scope of research from a single-case study to a two-cases comparative study. In addition, an abundance of literature on welfare state and welfare reforms largely focus on rich industrialized countries with a long democratic history (e.g. Maioni, 1997; Huber et al., 1993; Immergut, 1992), while studies on explaining welfare change in Southeast Asia, where democracy is still relatively new, are limited. As Munck & Snyder (2007, p. 10) highlight, despite the merits of comparative research, there is still a lack of comparative study on Southeast Asia and South Asia regions compared to Western Europe, Latin America, and North America. Therefore, this thesis aims to fill this gap in the literature and contribute by providing a comparative analysis of welfare change that covers a region that is previously understudied.

1.4 Thesis outline

The first chapter has dealt with the introduction of the research question and its academic and social relevance. In chapter two, I will present the relevant literature that explore different variables to explain welfare reform and specifically, the role of institutions in welfare reform. The purpose of this section is to develop a theoretical basis for the thesis and formulate hypotheses according to the theories presented, which will be used to answer the research question. In addition, I will also develop a clear conceptualization of the terms that are relevant to this study. The third chapter will describe the research methods that I will employ to answer the research question. It will begin with an overview of the research design used, which is followed by a data collection section, where I explain which data I intend to collect and from where. In the fourth chapter, I will present two case descriptions, one for Indonesia and the other for Thailand. In the fifth chapter, I will apply the theoretical framework on the evidence and present a systematic analysis.

Finally, in the last chapter, I will conclude with a summary of the results, describe the limitations of the research and possible avenues for future research.

2. Theoretical framework

This chapter will focus on reviewing existing theories and researches that are relevant to answer the research question: Why was Thailand able to reform its health care system faster than Indonesia after the Asian Financial Crisis? The theoretical framework will begin by presenting a brief overview of the main theoretical approaches developed by different scholars to explain welfare reform. This is followed by a focus on the role of institutions, which is broken down into two parts. First, policy feedback, how past policy choices can influence the process of future policy change. Second, the constraining and enabling effect of political institutions in policy change. On the basis of these theories, I derive a set of hypotheses which will be tested in the analysis section.

2.1 Theories of welfare reform

There have been numerous studies to investigate welfare state reform, some focusing on the expansion (Huber & Stephens, 2008; Haggard & Kaufman, 2008; Korpi, 1989; Wilensky, 1975) and others on the retrenchment (Pierson, 1996; 1994). In the literature, ‘welfare reform’ is generally understood to mean “change, in any direction, in the organization and implementation of the amalgam of social policies (benefits and services) that make up a nation’s welfare arrangements and that are to enhance welfare and offer protection” (van Kersbergen & Vis, 2014, pp. 2-3). One of the first theories of welfare state expansion follows the ‘logic of industrialization’ and functionalist approach, which emphasizes that industrialization and capitalism are the drivers of welfare state development. Kerr et al. (1960, p. 152) observe that in the initial phase of industrialization, the state did not have the role to protect the labor force from risks, and as a consequence, workers were dependent on their families whenever they became ill, unemployed or too old for work. As industrialization advanced, workers began to demand more protection from the state and businesses because they believed that they should not bear the full risk of being part of the industrial labor force (Kerr et al., 1960). These demands led to the creation of formal programs such as accident compensation, sickness benefits, unemployment insurance, and old-age pensions for industrial workers (Kerr et al., 1960, p.153). Similarly, Cameron (1978) and Katzenstein (1985) theorize that as economies become increasingly open, the economic insecurity faced by workers increases and this generates a greater demand for more social protection, which leads to larger welfare states. In essence, welfare state development is a response to the increased risk that workers are confronted with, and the programs are designed to alleviate the consequences of a growing economy. At the same time, economic growth also brought about new wealth for countries, strengthening its fiscal capacity, which made it possible for the government to expand its welfare programs (Myles & Quadagno, 2002; Wilensky, 1975; Goldthorpe, 1969). Wilensky (1975) attributes economic growth facilitated by demographic change as the central reason

for welfare state development. In the postwar economic boom, incomes surged due to high government revenues and this allowed the state to collect taxes while simultaneously, still giving workers large compensations (Myles & Quadagno, 2002). This led to the belief that only countries that are at a certain social and economic position can have mature welfare states (Pryor, 1968; Cutright, 1965).

The aforementioned theories of welfare state development are based on the belief that the welfare state is the mere outcome of economic pressures. The latter theories that developed emphasized that politics matters in how welfare states grow and are organized (Korpi, 1980). This led to the development of the power resource theory (PRT), which highlights the role of politics and class distribution in shaping welfare states (Korpi, 1980). According to PRT, welfare states are strongest in countries with strong labor power (Olsen & O’Connor, 1998). The power of the working class and their ability to mobilize it depends on the political sources it can gather, such as trade-union organizations, electoral support, and parliamentary and cabinet posts acquired by left or labor parties (Esping-Andersen, 1990, p.16). In turn, the political resources used can result in larger welfare states (Esping-Andersen, 1990). Drawing on PRT, Huber & Stephens (2012) find a positive relationship between partisan ideology and welfare state development. In their analysis of Latin American countries, the findings show that the presence of left parties in government (legislative and executive) is key to the growth of social policies, especially health and social security spending (Huber & Stephens, 2012).

Overall, scholars theorize that economic growth (industrialization), fiscal capacity, and social mobilization lead to the expansion of welfare state programs. While variables such as economic growth and fiscal capacity can explain the reasons why a country would introduce or expand social programs, it does not explain the ability to change the status quo and adopt the new policy change. In addition, Indonesia and Thailand were both at the same level of economic and social development when they introduced the health care reforms, which means that these variables are not sufficient to explain the variation of the reform trajectory. Furthermore, while strong labor movements can promote more generous welfare programs, their ability to translate their demands into policies and reforms is ultimately through parliaments (Esping-Andersen, 1990). This indicates that the role of institutions is key in explaining how a policy can be translated into tangible welfare state policies. Therefore, this thesis will focus on the role of institutions in explaining the variation of the reform outcome in Indonesia and Thailand. In the next section, I will review the main theoretical arguments put forth by several scholars (e.g. Pierson 2002; 2001; 1996; 1994; Myles & Pierson, 2001; Huber et al., 1993) to explain how institutions can influence the welfare state expansion.

2.2 The role of institutions

A growing body of literature has examined the role of institutions in influencing the trajectories of welfare reform. The role of institutions in welfare state reform is often perceived as a barrier to welfare reform. First, past policy choices that created existing welfare state institutions can constrain an actor’s ability to reform the welfare state because of path-dependency (Pierson, 1996; 1994). Second, political institutions can either constrain or enable an actor’s capacity to achieve welfare reform (Pierson, 1996;1994). The two dynamics are interlinked, while path-dependency can hinder policy change from happening, certain arrangements of political institutions can help actors change the status quo. This will be elaborated later in the section. Finally, I will present an alternative explanation that could explain why reform was stalled in Indonesia by drawing on the relationship between democratization and welfare state expansion.

2.2.1 Policy feedback

The works of literature regarding institutions and welfare reform indicate that the trajectories of policy change are constrained by the path-dependent processes in existing welfare state institutions (Pierson, 2002; 2001). As defined by Starke (2006, p.109), welfare state institutions are the arrangements of existing social programs, which include the benefit levels, the degree of universalism, selectivity, financing structure, and its governance arrangements.

The current literature on path-dependency and welfare reform draws on historical institutionalism (HI) to argue that policies are hard to change because the decisions made in the early stages will constrain the available options for future policy developments (Pierson, 2002; 2001; 2000; Myles & Pierson, 2001). HI is an institutional theory that takes the importance of history into account and emphasizes that existing institutional arrangements are the results of processes that occurred over time (Pierson, 2000). History is crucial to study institutions because decisions made earlier will constrain the options available for future policy developments (Pierson, 2000). In his seminal work, Pierson (2002; 2001) analyzes the politics of permanent austerity and develops the argument that policy reform can be inhibited by “institutional stickiness”. Pierson (2002) argues that once policies are introduced and consolidated, they will be hard to reverse. This inertia, whereby institutions are hard to change is due to path-dependency. Path-dependence refers to “the causal relevance of preceding stages in a temporal sequence” (Pierson, 2000, p.252). In other words, what has occurred at an earlier point in time influences the subsequent sequence of events to come. Another definition of path-dependency was proposed by Levi (1997) “once a country or region has started down a track, the costs of reversal are very high. There will be other choice points, but the entrenchments of certain institutional arrangements obstruct an easy reversal of the initial choice” (p.28). The production

of path-dependency is due to ‘increasing returns’, which is when once a path is chosen, the likelihood of moving further down the same path is high because the benefits of remaining on the same path are high compared to alternative choices (Pierson, 2000). This is because when a certain path is chosen, investments in that path have been made over time, which makes the cost of switching to an alternative path higher (Pierson, 2000). As more steps are taken in a particular direction, the decision is “locked-in” because the cost of exiting is too high (Pierson, 2000). This is because individuals and organizations have made choices based on existing arrangements, which will make the cost of changing to another alternative high and makes exiting unattractive (Pierson, 2002; 2001). Policies create their own supporters and can shape interest groups that have a strong preference for maintaining or expanding the current programs, which makes it more difficult for the government to introduce change (Pierson, 1994). A prime example of path-dependency processes in welfare reform is in pension reform (Myles & Pierson, 2001). In their comparative research between two groups of countries such as the UK and the US, the authors find that the options for pension policy change were constrained by the previous decisions made for the structure of the initial pension system (Myles & Pierson, 2001). The process of changing from the status quo, pay-as-you-go pension system into a funded system posed a challenge because it would create a double-payment problem, whereby current workers are required to pay for their pension and the previous generation’s retirement (Myles & Pierson, 2001). The authors conclude that some countries were more successful in reforming their pension system because their pay-as-you-go pension system has not been in place for a long time, and thus allowed for faster reform (Myles & Pierson, 2001). In this example, even if the new proposed pension scheme is better and more sustainable, it is difficult to change it because the support for the initial system grew over time, which makes the cost of exit increasingly high (Pierson, 2000). To conclude, institutions are ‘sticky’ because over time, the current arrangements have created supporters that favor the maintenance of the status quo. This leads to the first hypothesis:

H1: Indonesia’s past policy choices limited their ability to change existing policy more than it did in Thailand

One of the biggest critics for HI is that the theory mostly explains the reasons why it is so difficult to change existing institutional arrangements and explains policy stability (Mahoney & Thelen, 2012). However, HI also proposes that change can occur through critical junctures. Institutional continuity is interrupted by critical junctures, which are short moments of uncertainty where institutional change can occur before institutions stabilize again following a new path (Capoccia, 2016; Hall and Taylor, 1996). The new path after the critical juncture will generate self-reinforcing processes, creating path-dependency again (Capoccia & Kelemen, 2007). For example, during critical junctures, a country can select an option from a

several options available, and this choice can move the country towards a new path and determines the future direction of the country (Mahoney & Schensul, 2006, p. 263). Following this definition, HI predicts that institutional change can only occur rapidly. However, Mahoney & Thelen (2012) argue that institutions do not always change suddenly because of exogenous factors or “critical junctures”, rather institutions change in incremental and gradual ways over a period of time. They predict that institutions can change if disadvantaged groups place pressure on existing institutional structures (Mahoney & Thelen, 2012). They also describe the different modes of institutional change, for example, institutional layering, which is when new institutional rules are initiated in conjunction with existing ones (Mahoney & Thelen, 2012). This process of institutional change occurs when oppositions of the status quo do not have enough capacity to change the existing rules, therefore, instead of introducing a completely new set of institutions, they slightly alter the original rules or add new rules to it (Mahoney & Thelen, 2012). The small changes that occur through layering can become a big change in the long-run (Mahoney & Thelen, 2012). In their framework, they predict that the varying levels of veto possibilities of a country can impact the modes of institutional change that are likely to occur (Mahoney & Thelen, 2012).

Overall, the positive feedback mechanisms that create path dependency can act as an obstacle to change because over time, existing institutional arrangements have gained supporters that prefer to maintain the status quo. The literature shows that even if there is path-dependency change is still able to happen. However, the ability of these supporters to hinder change is influenced by the political institutions it is in. In the next section, the role of political institutions and welfare reform will be discussed.

2.2.2 Political institution

The relationship between political institutions and welfare state reform has been analyzed by several scholars (Tsebelis, 2002; Bonoli, 2001; Pierson, 1996; Huber et al., 1993; Immergut, 1992). The literature suggests that the arrangement of political institutions can influence actors’ ability to shape and implement welfare state reform (Tsebelis, 2002; Pierson, 1996; Huber et al., 1993; Immergut, 1992). This is referred to as ‘New Institutionalism’, which focuses on how the arrangements of political institutions can constrain or enable the actor’s behavior in political processes (Pierson, 1994). Political institutions are defined as the “rules of the game of political conflict including the institutions of federalism, bicameralism, judicial review, a powerful president” (Starke, 2006, p. 109). In other words, it is how the political institutions and decision-making process are organized. The arrangement of political governance includes the existence of federalism, parliamentary vs. separation of powers, the structure of parliament (unicameral vs. bicameral), electoral system (PR vs. SMD) and an option for a referendum (Starke, 2006; Bonoli, 2001; Pierson 1996. Fragmented political systems are ones that have federalism, separation of powers, bicameral, proportional

representation voting system and an option for a referendum (Starke, 2006; Bonoli, 2001; Pierson 1996). Pierson (1994) argues that in a parliamentary system, governments are more likely to achieve policy change if the party has a majority. In contrast, in a presidential system where there is a separation of powers and power is dispersed, social programs are more likely to change gradually because there are more veto points to block the change (Pierson, 1994). Several scholars have carried out studies to analyze the impact of political institutions on welfare state reform (Bonoli, 2001; Maioni, 1997; Pierson, 1996; Huber et al., 1993; Immergut, 1992). In his analysis, Pierson (1996) finds that when political governance is fragmented, it is harder to pursue radical policy reform because the chances for opposition groups to block the change is higher. Similarly, Bonoli (2001) finds that countries with fragmented political systems where power is not concentrated have more veto points in the policy-making process, which will more likely result in smaller welfare states. He underlines that in a fragmented system, opponents of welfare change have more prospects to hinder the passing of new policies (Bonoli, 2001). Opponents will also be able to engage in negotiations and force the government to accommodate their demands, which leads to a compromised policy outcome (Bonoli, 2001). In reverse, governments are more likely to be successful in welfare reforms when their power is centralized because they can control the ultimate decision for policy-making (Bonoli, 2001). Overall, he concludes that political institutions matter and welfare reforms are more likely to be adopted and implemented in centralized political institutions (Bonoli, 2001). In another study conducted by Huber, Ragin, and Stephens (1993), it was concluded that aspects of constitutional arrangements including federalism, presidential government, strong bicameralism, single-member-district electoral systems and an option for a referendum will hinder welfare reforms because it provides multiple points for opposition groups to influence the policy-making process. As a result, the interest of small and exclusive groups can stop policies that benefit the greater good from being adopted (Huber et al., 1993). In her seminal work, Immergut (1992) conducts comparative research on how political institutions influence the ability of interest groups to participate and influence the policy-making process of health care. By studying Switzerland, France, and Sweden, Immergut (1992) finds that major welfare changes are more likely to occur in political systems that are more centralized and have strong executive power. This is because if political systems are decentralized, small interest groups, who are proponents of the status quo can prevent reform legislation or delay the reform so only incremental change occurs (Immergut, 1992). A side effect of having a fragmented political institution that has many veto points is that reforms can be challenged and be drawn-out for years (Immergut, 1992). This is because, each time reform is introduced, it clashes with the structures of the political institutions and will result in a delay in reforms. For example, in the case of Switzerland, the law for national health insurance was repeatedly challenged using a referendum by voters, which made it impossible to pass legislation unless it was fully supported by interest groups (Immergut, 1992, pp. 142-143). This led to the conclusion that interest groups are more likely to be intransigent because

they are aware of their strong veto power (Immergut, 1992). Overall, while past policy choices can create path-dependency, certain arrangements of political institutions (fragmented) can provide access for proponents of the status quo to block policy change.

H2: The variation in the pacing of health care reform was because of the different political institutions in Indonesia and Thailand

2.2.3 Veto player theory

The theory that has been used by many scholars (e.g. Hacker, 2004; Maioni, 1997; Huber et al., 1993; Immergut, 1992) to explain how political institutions can influence policy outcome is the veto player theory by George Tsebelis (2002; 1995). This is because fragmented political institutions have more veto points than centralized political institutions (Bonoli, 2001). This thesis will draw on the theory to develop several hypotheses to answer the research question.

Tsebelis (2002) explains that the structure of political institutions (regime types, numbers of chambers of parliaments, or number, cohesion and ideological positions of parties) or decision-making rules of all these actors, will determine the number of veto players that exist and consequently, the stability of policies. Therefore, this approach gives insight into the different institutional settings that are conducive or unfavorable for policy change. Tsebelis (1995) defines veto players as “individual or collective actors whose agreement (by majority rule for collective actors) is required for a change of the status quo” (p. 289). Therefore, if veto players have reasons to stop change then a shift from the status quo will not happen. The central argument of veto player theory is that policy outcomes are influenced by veto players. Policy outcomes depend on the preferences of veto players and the political institutions they are in (Tsebelis, 2002, p. 17). Policy outcomes will differ contingent on where political power is concentrated and where the status quo is placed (Tsebelis, 2002, p. 17). Overall, veto player theory is the best framework to study policy change because it treats political institutions as the independent variable and can predict a government’s capacity for policy change. Thus, this framework will provide the basis to analyze whether political institutions had a role in Thailand’s ability to move away from the status quo faster than Indonesia. In the next section, I will outline the key variables that determine policy stability, which I will use to generate a set of hypotheses for the analysis.

Key variables

Tsebelis (1995) argues that policy stability depends on three variables: the number of veto players, their congruence, and their cohesion. Policy stability is when it is impossible to move away from the status quo and in other words, to change the existing policy (Tsebelis, 2002). It is also the inability to adjust to exogenous shocks (Tsebelis, 1999). Overall, Tsebelis (1995) argues that policy stability increases with the number of veto players, their lack of congruence, and their cohesion. Thus, when more of these conditions are met, policy stability increases (Tsebelis, 1995).

The number of veto players

The number of veto players is the number of actors who can block policy change; as the number of veto players increases, the likelihood of policy change decreases (Tsebelis, 1995). There are two types of veto players: institutional and partisan. Institutional veto players are those generated by the constitution, whereas partisan veto players are those that are generated by the political game (Tsebelis, 2002).

H3: Indonesia has more veto players than Thailand, which makes it harder to achieve policy change

The congruence of veto players

The congruence of the veto players refers to the policy positions between veto players (Tsebelis, 1995). If there is a lack of congruence, this indicates that the policy positions among veto players are distinct, which means that policy change is not likely to happen (Tsebelis, 1995). Overall, Tsebelis (1995) proposes that as the distance between the veto players increases along the same lines, policy stability increases. In other words, when the ideological distances between two veto players increase, then policy stability will increase, which means a shift away from the status quo is not likely (Tsebelis, 1999).

H4: The ideological distance between the veto players in Indonesia is bigger than in Thailand, which makes it harder to achieve policy change

The internal cohesion of veto players

The third variable, internal cohesion refers to the “similarity of policy positions among the constituent units of each veto player” (Tsebelis, 1995, p. 289). There are a number of factors that affect cohesion: the size of

veto player, electoral system, and institutional structure (Tsebelis, 1995). Tsebelis found that a single veto player such as the president or a party with an inspirational leader has the highest cohesion, a proportional representation system stimulates strong parties and a parliamentary system encourages party discipline because voting against one’s own government leads to a negative effect e.g. new elections (Tsebelis, 1995, p. 312). Overall, when a veto player is cohesive, there is a strong consensus within the veto player and a few diverging opinions. In this study, if a veto player is more cohesive, that means they support the policy change. This leads to the development of the following hypothesis:

H5: The veto players in Indonesia are less cohesive than in Thailand, which makes it harder to achieve policy change

Overall, Tsebelis (1995) argues that the policy stability of a political system will increase when the number of veto players increases, their congruence decreases, and their cohesion increases. In other words, a policy is not likely to change when there are many players blocking their policy, their policy positions are divergent from one another and veto players are cohesive.

2.2.4 Democracy

Another political institution that can influence welfare reform is democracy. Korpi (1989; 1980) highlights the significance of political democracy in managing different interests in society. Wong (2004, p.14) argues that democratization influences what policy proposals are addressed, how social issues are identified, and how decisions are taken in. For political actors, democratization brought about political uncertainty because they now have to compete for power in elections (Wong, 2004). By looking at Taiwan and South Korea, Wong (2004) argues that this political uncertainty encouraged political actors to use universal health care to win elections. For citizens, democratization allowed them to influence social policies (Wong, 2004). Democratization determines which actors participate in the policy process and how competing interests are taken into account (Wong, 2004, p.14). In Taiwan and South Korea, democratization was central in the move towards universal health care (Wong, 2004). With democracy, groups that are normally excluded from the policymaking process can now participate and promote the expansion of social programs (Wong, 2004). For example, with democracy, labor unions, left parties and other supporters of welfare state expansion, can exert pressure on governments to develop more welfare programs (Wong, 2004). While democratization gives an opportunity for pro-welfare groups to influence policy-making, this also endows anti-welfare groups with the power to hinder welfare state expansion. If the latter is the case, then opponents have the opportunity to oppose change and block expansion. As Wong (2004) discusses, the receptiveness

of political actors to the demands of interest groups differs depending on the level of democracy. Therefore, political structures that are not as responsive to the will of citizens (e.g. less democratic regimes), will remove the incentives for political actors to take the demands of citizens into account. For example, Wong (2004, p.14) finds that when Korea and Taiwan had authoritarian regimes, policy-making was exclusively controlled by a small and politically insulated group. In addition, the legislative bodies never or rarely disagreed with the leader, and civil society groups were suppressed. This shows that less democratic countries are less likely to acknowledge different societal interests, which can facilitate reforms. Therefore, an alternative explanation that can account for the variation in the pacing of the health care policy processes in Indonesia and Thailand could be the differences in democracy levels. This leads to the development of the alternative hypothesis:

H6: The variation in health care reform was because of the different levels of democracy in Indonesia and Thailand

3. Research methodology

This chapter aims to present the research methodology that is employed to answer the following research question: why was Thailand able to reform its health care system faster than Indonesia after the Asian Financial Crisis? The section will begin with the research design chosen, which is followed by the conceptualization and operationalization of the main variables. Then, an explanation of the case selection will be given. This is followed by a discussion on the data collection and analysis method. Finally, the section will conclude with the validity and reliability of the research.

This thesis will conduct a small-N comparative analysis, specifically the most similar systems design (MSSD), complemented with a within-case analysis to answer the research question. In essence, my research question asks what explains Thailand’s ability to reform its health care system faster, while Indonesia’s reform was stalled? Thus, the goal is to find the relevant independent variables that can account for this outcome (Anckar, 2006). This research question asks for an inductive study because it aims to find out what accounts for the different outcomes. Anckar (2006) notes that MSSD can be used for inductive study, but as opposed to deductive study, the variation of the dependent variable in similar systems is already known at the research design stage. Similarly, Toshkov (2016) explains that when MSSD research is conducted following an inductive logic, both the control and outcome variables are considered when cases are selected. The goal of a MSSD research is to isolate the main explanatory variable as much as possible to identify if it produces a causal difference to the outcome (Toshkov, 2016). In this thesis, the main explanatory variable is political institutions, however, it will also consider the level of democracy as an alternative explanation. The dependent variable and outcome of interest is the policy stability in Indonesia and Thailand, which is how difficult it is to move away from the status quo. According to Przeworski & Teune (1970, p.39), MSSD research design is based on the assumption that several important variations will exist in similar systems and that these variations can be used to explain the outcome. Similarly, a comparative study can show that variations in cases that are comparable in political or economic environments can result in very different policy outcomes (Toshkov, 2016, p.283). There are several shortcomings to the MSSD approach. First, Anckar (2006) points out the problem of ‘causal complexity’ which arises because there is a limited number of case studies and it is impossible to account for all possible combinations of the independent variables. However, MSSD is a suitable research method because it can exclude confounding variables from the analysis by carefully matching the cases (Anckar, 2006). Toshkov (2016) also raised several problems with MSSD, including measurement error, confounding, and reverse causation. To address the aforementioned problems, Toshkov (2016) suggests that researchers should employ a within-case analysis to delve into each case instead of adding more cases. According to Toshkov (2016), small-N comparative research is usually a hybrid as it draws on within-case analysis to focus on the

causal mechanisms of the hypothesis. Therefore, this thesis will also conduct process-tracing to analyze whether the causal mechanisms that were hypothesized in the theoretical chapter can be observed within cases. Process-tracing is a within-case analysis method that uses evidence from each case to draw conclusions regarding the causal mechanisms of interest (Bennett & Checkel, 2014, p.4). Essentially, it allows researchers to identify how X causes Y by looking at the causal chain of steps between the two variables (Toshkov, 2016). By using a within-case analysis to complement comparative analysis, this study will provide an in-depth analysis of the causal mechanisms between institutions and policy stability for each case by testing each hypothesis against the evidence. For example, for H1 to be confirmed, then there should be evidence that actors in favor of the status quo attempted to block the policy change because it would reduce their benefits. Overall, the ability for small-N comparative research to provide comparative insight is limited, however, a within-case analysis can strengthen the findings by showing that there is a strong causal relevance between the two variables tested (Lange, 2014).

3.1 Case selection

As mentioned in the previous subsection, in a MSSD research design based on an inductive study, the case studies are similar in control variables and different in the outcome of interest. My research question is why was Thailand able to reform its health care system faster than Indonesia after the Asian Financial Crisis? Thailand and Indonesia possess similar characteristics but experienced a different health care reform trajectory after the crisis. Anckar (2006) outlines that cases must be selected that have common variables that can be controlled but differ in the outcome (dependent variable) and in the main explanatory variable (independent variable). So far, I have attempted to identify the plausible determinants to explain the health care reform outcomes by means of theoretical reasoning. As previously mentioned, economic development, fiscal capacity, social mobilization, can explain the demands for welfare state expansion (universal health care), however, these theoretical reasonings do not seem to explain how the demands are translated into real policies. An alternative explanation is political institutions because the ability for actors to introduce such reforms and the potential for interest groups to influence the legislative process is influenced by the political institutions it operates in (Pierson, 1996; 1994). Different political institutions can determine an actor’s chance for success in the legislative process. For that reason, I have chosen political institutions as the main explanatory variable. Therefore, Indonesia and Thailand are appropriate case studies for this research design for two reasons. First, because they differ in the main explanatory variable (political institutions). During the period when health care reforms were introduced, the political institutions of both countries were different. In Thailand, the party that introduced the reform had a majority, whereas in Indonesia, the party that introduced it, did not (Pitayarangsarit, 2004; Singh, 2003). Additionally, while Thailand has a parliamentary system, Indonesia has a presidential system (Kingdom of Thailand, 1997;

Republic of Indonesia, 1945). This means that Indonesia’s political institution is more fragmented than Thailand’s. This will be further elaborated and justified in the case description and analysis. Another independent variable that differs between Indonesia and Thailand is the level of democracy and as discussed in the theoretical framework, it could have an effect on how much influence external groups have on the policy-making process. Therefore, it is important to consider the level of democracy as another explanatory variable. The dependent variable, which is the outcome also differs in both cases. Thailand’s health care policy stability was low because they were able to reform its health care system drastically within one year, which signals that it was easy to change the status quo. In contrast, Indonesia’s health care policy stability was high because they weren’t able to reform its health care system fast and the process took almost a decade. As for the control variables, Indonesia and Thailand are similar in terms of their geographical location (Southeast Asia), cultural characteristics, and socio-economic levels. In 2001 when Thailand initiated the 30-baht health care scheme, its GDP per capita was at 1,893.264 (US$) and GDP was 120.296 billion (US$) (World Bank, 2020a; World Bank, 2020b). Similarly, when Indonesia initiated the universal social security system in 2004, the country’s GDP per capita was at 1,150.261 (US$) and GDP was at 234.772 billion (US$), slightly higher than Thailand’s (World Bank, 2020c; World Bank, 2020d). The similarity in economic standing indicates that economic growth or fiscal capacity does not explain the variation in the health care reform process. In addition, both countries experienced common events, the Asian Financial Crisis. The crisis had similar impacts on both countries, which induced them to introduce social security reforms to universalize health care access (De Meur & Berg-Schlosser, 1996). According to Anckar (2006), when the researcher chooses countries that are located in the same region and possess similar cultural characteristics, most of the theoretically relevant variables are taken into account and will not interfere with the causal mechanism between the independent and dependent variables.

3.2 Operationalization of variables

Independent variables

The main explanatory variable is the political institution. As defined earlier, political institutions are “rules of the game of political conflict including the institutions of federalism and bicameralism, judicial review, a powerful president” (Starke, 2006, p. 109). Political institutions can be described to be fragmented or centralized. Political institutions that are fragmented possess the characteristics of federalism, presidential system, strong bicameralism, referendum (Pierson, 1996). In a fragmented state, it is harder to pursue radical policy reform because the chances to block the change is higher due to multiple veto points (Tsebelis, 2002; Pierson, 1996). To measure this variable, this thesis will draw on the variables that Bonoli (2001) and Lijphart (2012) used to determine whether a political institution is fragmented or not. The

variables that this thesis will focus on are the following: Presidential vs. parliamentary system, the structure of parliament, electoral system (single-member district (SMD) vs. proportional representation (PR)).

i. Presidential vs. parliamentary system

Whether a country has a presidential or parliamentary system determines the level of power concentration because it establishes how much influence the government has over the parliament (Bonoli, 2001, p.241). According to Bonoli (2001), power concentration is stronger in parliamentary systems because of three reasons. First, the head of government (Prime Minister (PM)) is elected by a parliamentary majority, which means that the executive and legislative will most likely be controlled by the same party (Bonoli, 2001). On the other hand, presidents are elected by the people, which means that the president might belong to a different party than the majority party in the parliament (Lijphart, 2012). Second, members of parliament can challenge the government without the risk of being dissolved (Bonoli, 2001). Third, in a parliamentary system, the government has leverage over the parliament because the PM can dissolve the parliament and call an election, which can be used to convince parliamentarians to support a bill (Bonoli, 2001). Overall, the government’s ability to control the outcome of parliamentary votes is less in a presidential system compared to a parliamentary system, which makes power more centralized in the parliamentary system (Bonoli, 2001).

ii. Strength of Bicameralism

The structure of parliament determines power concentration because it establishes how much control actors in the legislature have on decision-making (Bonoli, 2001). A unicameral legislature only has one chamber of the house, which makes it easier to pass legislation because only a single approval is required (Bonoli, 2001). On the other hand, in a bicameral legislature, there is an upper and lower house, in which the purpose of the upper house is usually to act as a check on the lower house (Lijphart, 2012). In Thailand and Indonesia, the parliaments have a bicameral structure, therefore in this thesis, I will focus on the strength of bicameralism, which can either be strong or weak. The two factors that influence the strength of bicameralism are constitutional power and democratic legitimacy (Lijphart, 2012). Constitutional power refers to the houses’ ability to veto, whereas democratic legitimacy is whether the members are directly elected or not (Lijphart, 2012). Lijphart (2012) argues that if the upper house has little power to veto and lacks democratic legitimacy, then it can be described as an asymmetrical bicameralism, which implies a weak one. Therefore, in this thesis, a strong bicameralism is when the upper house has the constitutional power to veto and can operate as a strong check on the lower house (Lijphart, 2012). If the upper house has

no constitutional power to veto and cannot serve as a strong check on the lower house, then it has a weak bicameralism.

iii. Electoral system – SMD vs. PR

The type of electoral system can determine the number of parties, the type, and stability of governments (Bonoli, 2001, p. 242). SMD voting is based on the majority principle, in which the candidate with the most votes will win. This type of voting system is more likely to result in a smaller number of parties in parliament and produce a single-party majority (Bonoli, 2001). On the other hand, with a PR electoral system, parties will get seats in the legislative in proportion to how many votes they receive, and thus are more likely to produce a higher number of political parties in parliament (Bonoli, 2001). According to Bonoli (2001), a government that is controlled by a single-party majority is more likely to be capable of controlling policy outcomes. This is because the government’s association with the same party indicates that the members hold similar ideological views and backgrounds and this cohesion increases power concentration (Bonoli, 2001). In contrast, governments that are made up of multiple parties with no majority are more likely to be each other’s rivals at the next election and this creates the incentive for the party to support different policies that are different from the other parties (Bonoli, 2001). Overall, this thesis predicts that the PR electoral system will lead to a fragmented political institution because it is more likely to produce more parties represented in parliaments than SMD.

The aforementioned institutional features influence the level of power concentration that governments can have when reforming their welfare system. In this research, if the country has most of the following characteristics: a parliamentary system, weak/no bicameralism, and/or SMD voting that produces single-party majority in parliament, its political institution is centralized. If the country has most of the following characteristics: a presidential system, strong bicameralism, PR electoral system that produces a coalition of parties with no majority, its political institution is fragmented.

The level of democracy

The other explanatory independent variable that this thesis will look at is the level of democracy. For this, I will draw on the liberal democracy index from V-Dem data produced by Coppedge et al. (2020). The liberal democracy index measures the extent to which the ideals of liberal democracy are achieved (Coppedge et al., 2020). The principles of liberal democracy aim to safeguard individual rights from state repression or the majority (Coppedge et al., 2020). According to this index, the quality of democracy is contingent on the limits placed on the government that aim to restrict the exercise of executive power,

which are: the constitution, rule of law, an independent judiciary, strong checks and balances. The scale of this index is measured from low to high, low being 0 and high being 1 (0-1) (Coppedge et al., 2020). A country that is closer to 1 is considered to be closer to achieving the ideals of liberal democracy.

Dependent variable

The dependent variable is policy stability, which is defined as “the difficulty for a significant change of the status quo” (Tsebelis, 2002, p.37). Therefore, policy stability can be either low or high and it is contingent on the number of veto players and their ideological distance (Tsebelis, 2002). Policy stability increases when the number of veto player increases and their ideological distance increases (Tsebelis, 2002). When policy stability is high, it is difficult to change the existing status quo, which is the existing policy. On the other hand, when policy stability is low, it is easier to move away from the status quo. In this thesis, there is high policy stability when policy reforms are protracted due to deadlocks and impasses during the legislative process.

Other variables

The other variables that will be operationalized and measured are veto player and policy preferences to determine the congruence and cohesion of veto players. A veto player is any individual or collective actor whose agreement is required for a change of the status quo and they can be institutional or partisan (Tsebelis, 1995). In this thesis, an institutional veto player is any player whose agreement is required for policy change to occur as outlined by the constitution (e.g. the lower house) and a partisan player is the parties in the government (Tsebelis, 1995). Therefore, a partisan player is measured by counting the number of parties in the government. However, only partisan veto players that diverge in policy preference are relevant and an institutional veto player is only considered relevant if it has a different policy preference from the other veto players, otherwise, it is ‘absorbed’ (Immergut, 2010). For example, if the House is controlled by one party that gains a majority, then the House is ‘absorbed’ and the only relevant veto player is the partisan one (Immergut, 2010; Tsebelis, 2002). As Tsebelis (2002, p.19) explains, this is because if a single party with party discipline has a stable majority in the House, the only legislation that is passed is the one that is supported by the party, thus, the real veto player is the party rather than the institutional player. On the other hand, if different majorities exist in the House, the House is not just one veto player (Tsebelis, 2002, p.19). The congruence and cohesion of the veto player depend on the veto player’s policy preferences. Toshkov (2016) argues that the policy positions of political parties can be “expressed by words (for example, in official documents or interviews)” (p.12) or “revealed in actions (for example, in

supporting a legislative bill or sabotaging its implementation)” (p.120). Therefore, in this thesis, the policy preferences of actors will be determined by analyzing what they have said about the health care reform and their actions.

3.3 Data analysis & collection

This thesis aims to analyze why Thailand was able to reform its health care system faster than Indonesia after the Asian Financial Crisis. Specifically, the role of political institutions will be examined to see if it can explain the variation of policy stability between both countries. To do this, it is important to look at the legislative process during the health care reforms to see if the outcome was influenced by political institutions. As mentioned above, the method to do this is by doing a small-N comparison of Indonesia and Thailand and a process-tracing method to identify the causal mechanisms in each case. Before I explain how and where I will collect my data, it is important to clarify the empirical evidence that I aim to collect. To showcase the causal mechanism within the cases using process-tracing, three types of empirical evidence will need to be collected: comprehensive storylines, smoking-guns, and confessions (Blatter & Haverland, 2012). Comprehensive storylines give a full picture of the overall causal process and pinpoint the most critical steps that brought about the end result (Blatter & Haverland, 2012). In this thesis, I attempt to provide a comprehensive storyline that connects the independent variable, political institutions, with the outcome of interest, which is policy stability or for the alternative explanation, the connection between the level of democracy and policy stability. To show the causal relationship, it is important to collect ‘smoking gun’ observations, which are key evidence that gives a high level of certainty that there is a link between the cause and effect (Blatter & Haverland, 2012). In this thesis, a smoking gun observation would be, for example, a fragmented political institution such as a parliamentary system created many veto points and resulted in strong policy stability, therefore it is hard to change the status quo. Lastly, smoking gun observations should be complemented with confessions, which show the “perceptions, motivations, and anticipations of important actors” (p.143), which essentially reveals the reasons why an actor did something and strengthens the evidence (Blatter & Haverland, 2012). Overall, these three types of causal process observations will provide insight into whether the independent variable is sufficient to explain the outcome (Blatter & Haverland, 2012).

This thesis will use a qualitative data approach to collect empirical evidence that I stated above. I will conduct a content analysis, which involves collecting and examining qualitative data. According to Collier, Brady & Seawright (2004), this method allows the researcher to collect a rich description of the actors involved, choices made, events that occurred, and processes, which is suitable because I would like to gather information on the decision-making process, the main actors involved and to identify the causal

mechanisms between the independent and dependent variables. Thies (2002) emphasizes the importance of triangulation in research by gathering different types of primary and secondary sources to minimize bias and get a comprehensive picture of the process. Thus, I will collect a variety of sources, which includes secondary sources, which are journal articles, books, and reports, and for primary sources, I will collect news articles and government documents. I will also draw on the country’s respective constitution as a reference point to describe the political institutions of each country.

To create a narrative of events related to the historical development of social programs in Indonesia and Thailand, I will draw on peer-reviewed journal articles and published books written by scholars who have researched welfare development in Indonesia and Thailand and also reports by well-known organizations. For Indonesia, this includes Sumarto (2017), Suryahadi et al. (2017), Pisani et al. (2017), Aspinall (2014). For Thailand, this includes Kuhonta (2008), Harris (2015a; 2015b), Pitayarangsarit et al. (2005), Pitayarangsarit (2005). For the decision-making process in Indonesia, I need to gather data between 2004 and 2011. This is because the first legislative process for the social security system (SJSN bill) occurred in 2004 and the second one (BPJS bill) in 2011. For this, I will consult the House of Representative website (http://www.dpr.go.id/en) to find documents that summarize the legislative meetings. On the website, there is a publication section that archived the Parliamentaria Magazine and Bulletin, which are media sources produced by the Parliament. The bulletin is published after every session of the House and provides an overview of the legislations that are being discussed and progress made in the meetings, therefore this bulletin will give insight into the legislative process. Unfortunately, the Magazine and Bulletin did not exist in 2004, so these resources are only useful for the collection of data for the 2011 legislative meetings. In total there are 32 Parliamentaria Bulletins and 9 Magazines in 2011. I analyzed all of them and only selected the ones that covered the social security legislation process. To find it, I reviewed the documents by looking for the term ‘BPJS’, which is the name of the bill. Due to data unavailability for 2004, I have to rely on secondhand accounts of what occurred in the Parliament during the negotiations, therefore I draw on a number of scholarly articles to get a full picture of the 2004 legislative process. From the Parliamentaria, Bulletin, scholarly articles, and news sources, I can identify the main actors involved in the decision-making process, those who blocked reforms, their power to do so and in general, what occurred during the meetings. For Thailand, I need to collect data between 2001 and 2002 for Thailand because this is when the legislative process for the NHS Act occurred. The data collection for Thailand was limited because of language barriers, therefore I relied on scholarly articles, and English news sources to gather data on the decision-making process. I will collect newspapers from English ProQuest. News articles provide insights into the national affairs and coverage of the political scene such as which parties won in that year. This is useful to understand the actors that were involved in the legislative process. I will limit my newspaper and news

source research to a specific timeframe. In Thailand, I will limit it to January 2001- December 2002 because 2001 was when health care reforms were first initiated and 2002 was when it was implemented. I selected ‘Historical newspapers’ with the custom date range and the search terms I used were ‘Thaksin Shinawatra’, and ‘Thai Rak Thai Party’, and this resulted in 30 results. I would have used the National or Bangkok Post, but I was not able to acquire the archives for these newspapers. Therefore, I used The Korea Times and the Washington Post, which are available on ProQuest and provides news coverage on Thailand’s election in 2001. For the newspapers, I will disregard the author’s opinion and I will only extract factual information that gives insights into the political scene in Thailand.

3.4 Validity & reliability

The evaluation of a study’s validity and reliability is crucial to determine the quality of the findings. First, there are two types of validity that I will focus on: internal and external. Internal validity is an evaluation of how the research provides strong evidence for the relationship between the independent and dependent variables (Toshkov, 2016). This validity can be addressed by blocking confounding variables, ensuring that there is no reverse causation, and presenting evidence that there is a causal mechanism that connects the independent and dependent variables (Toshkov, 2016, p. 173). In this research, internal validity is ensured by selecting cases that are similar as possible to eliminate any confounding variables that would impact the relationship between the political institution and policy stability. Additionally, internal validity is guaranteed by combining comparative research with a within-case analysis. The within-case analysis provides the possibility to closely inspect each case and the causal mechanisms between the main explanatory variable and the outcome. As Gerring (2007) highlights, by following the process from the cause to the outcome, the internal validity of the claim that the independent variable matters is heightened. Moreover, I triangulate the data collection by gathering both primary and secondary sources, and by doing this, I capture different dimensions of the same events, which increases the validity of this research. The second type is external validity, which refers to the generalizability of the results beyond the cases studied (Toshkov, 2016). This thesis ensures external validity by conducting a cross-case comparison to show whether the causal mechanisms found in each case through process tracing are generalizable across cases or not (Lange, 2014). This thesis examines the dominant relationship theory between political institutions with welfare reform, which has been greatly researched by other scholars. If the empirical evidence found in this thesis supports the theories, then the findings can be generalized to other cases.

The reliability of research refers to the ability of other researchers to reach similar results when they employ the same measurement techniques (Toshkov, 2016, p. 117). I have operationalized the relevant variables and provided clear criteria on how to measure the variables in order for other researchers to be able to

replicate my study. To ensure the trustworthiness of the findings, I have collected data from a variety of reliable sources such as government documents, peer-reviewed journals, and reputable news sources. The data collection method has also been provided in the previous section in order for other researchers to replicate the study and reach the same conclusions.

4. Case Description

In this chapter, the development of welfare policies in Indonesia and Thailand, and the political process of the health care reforms in the respective country will be given. There will be two case studies (Indonesia and Thailand) and each case study is divided into three subsections. The first subsection will outline the historical development of the social security system in the country, which is followed by the introduction of health care reform. Then, the political context of the reform will be explained, which includes a description of the country’s political institutions, the actors that were involved in the decision-making process, and the happenings during the legislative meetings.

4.1 The case of Indonesia

4.1.1 Historical context: development of a social security system in Indonesia

In this section, the history and development of Indonesia’s social security system will be provided and will predominantly focus on the health care service. The development of health care can be divided into four periods: the Sukarno period (1945-66), the Suharto era (1966-98), the Asian Financial Crisis period (1997 – 1999), and post-crisis (2000 – onwards).

The Sukarno period (1945 – 1966)

In the initial stages of post-independence, the state remained relatively inactive in social welfare provision because the development priorities were focused on independence and government consolidation (Suryahadi et al., 2017). In 1947, President Sukarno initiated the first health care program, which provided sickness benefits to state-owned enterprise (SOE) and private-sector workers (Sumarto, 2017). In 1963, two social policy programs were introduced: The Civil Servants’ Welfare Fund (Dasperi), a compensation fund for families of civil servants in the event of natural disasters, and the Civil Servant Insurance Savings (Taspen), which provided retirement benefits for retired civil servants and its dependents (Suryahadi et al., 2017). Despite the developments of social security programs, the majority of Indonesians still primarily relied on informal networks for their social security (Dostal & Naskoshi, 2017). Sukarno’s regime was succeeded by the Suharto regime.

The Suharto era (1966 – 1998)

During the Suharto regime that was also widely known as the ‘New Order’ regime, social protection was subordinate to economic growth and social protection only covered the public and private sector workers. In 1968, the Suharto government initiated the establishment of health centers, known as Puskesmas, in order to provide cheap, affordable health services for all (Pisani et al., 2017). However, the program only