Improving the Contributions of Indonesia's Third Sector to Socio-Economic Development: The Case of Waqf Administration

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Sugarman, Berry (2021) Improving the Contributions of Indonesia's Third Sector to Socio-Economic Development: The Case of Waqf Administration. PhD thesis, Victoria University.


Third sector organisations (TSOs) play a substantial part in filling the gap left by a government in delivering public services. A TSO usually functions as a complementary institution and alternative system for promoting development. In the Islamic economic system, the concept of TSO has been known in the form of Waqf. Since Waqf has the characteristic of perpetual benefit, it provides sustainable outcomes to society and eventually helps achieve an equal distribution of economic outcomes. Given that potential, its contribution to the economy is surprisingly neglected. Many empirical studies have addressed the importance of developing and reconceptualising the Waqf sector, but limited studies have addressed the inter-relationship dimension in Waqf administration in their analysis. Working with TSO analytical frameworks derived from Weisbrod (1975), Anheier (2005), Najam (2000), and Young (2000), this study explores the role of participants in Waqf administration, specifically in utilising Waqf assets for public services provision. Therefore, this study aims at improving the contribution of Waqf, as an Islamic TSO, to the Indonesian socio-economic development by proposing possible future directions for the Waqf sector. This study used Waqf administration in Indonesia as a case study. The data were gathered from in-depth interviews with 28 participants from government agencies, Waqf institutions, donors, and beneficiaries. Employing content or thematic analysis on the interview results, the study yielded several significant findings. The lack of systematised working relationships between government and Waqf institutions, the absence of an integrated Waqf database, and an unsupportive regulatory framework are among the factors that potentially limit the development of the Waqf sector. It is also argued that Waqf institutions complement the government by using Waqf assets to deliver public services, which outweighs its substitutive function. This finding is consistent with the Najam (2000) and Young (2000) government-TSOs relationships model. The study will conclude by proposing recommendations on future directions for the Waqf sector in Indonesia, including revising the Waqf Law, establishing a nationwide Waqf database, aligning Waqf–government social programs, and incorporating Waqf programs into the government’s annual workplan. The outcome of this study indicated that the government failure, public services provision, and interrelationships theories may provide an appropriate analytical framework to understand the functioning of Waqf administration.

Item type Thesis (PhD thesis)
Subjects Current > FOR (2020) Classification > 4404 Development studies
Current > Division/Research > Institute for Sustainable Industries and Liveable Cities
Current > Division/Research > VU School of Business
Keywords third sector organisations; TSOs; Waqf; Indonesia; socio-economic development agents; public service delivery
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