Policy Strategy in Developing the Capacity of Cooperatives and MSMEs: A Case Study of Indonesia-Timor Leste
Keywords:
Public Policy, Capacity Development, Cooperatives, MSMEs, Bilateral Cooperation.Abstract
Capacity development of cooperatives and Micro, Small, and Medium Enterprises (MSMEs) is a strategic agenda in promoting inclusive and sustainable economic development in developing countries. However, various cooperative and MSME development policies still face limited effectiveness due to weak policy design and mismatches between objectives, instruments, and implementation context. This study aims to analyze policy strategies in developing the capacity of cooperatives and MSMEs through a case study of bilateral cooperation between Indonesia and Timor Leste using Public Policy and Policy Design Theory as an analytical framework. This study uses a qualitative approach with a policy case study design. Data were collected through analysis of policy documents, memorandums of understanding (MoUs) on bilateral cooperation, international organization reports, and relevant scientific literature published since 2020. Data analysis was conducted using qualitative content analysis with a focus on policy objectives, policy instruments, policy actors, and implementation context. The results show that the policy strategy has adopted a capacity-building approach through training, mentoring, and strengthening cooperative institutions. However, policy design still faces challenges in the form of normative policy objectives, weak policy mix coherence, and gaps between policy design and the capacity of implementing actors. This study concludes that developing the capacity of cooperatives and MSMEs requires a coherent, adaptive, and contextual policy strategy to have a sustainable impact.
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