Rise Together: Social Capital, Collective Governance, and the Sustainability of Community Market Innovation in Semi-Urban Lampung, Indonesia

Abstract

Over 70 percent of community-based initiatives in developing countries are either stagnant or regress within three to five years of their inception, especially once initial funding structures are no longer available. But Pasar Yosomulyo Pelangi, or Payungi as it is known locally, is an outlier to this tendency. Payungi has been running since October 2018 in Kelurahan Yosomulyo, Kota Metro, Lampung, without the support of structured government programs or sustained external donor funding. Now entering its seventh year of operations, Payungi is estimated to have an annual market turnover of nearly Rp 4.8 billion across 20 business units, while at the same time bringing about measurable improvements in social cohesion, cultural preservation, and the economic position of traders, who are predominantly women in a multi-ethnic setting. This paper examines the specific mechanisms explaining this trajectory. The analysis identifies three mechanisms: (1) Payungi’s founders drew concrete lessons from the failure of a previous initiative, the Damraman project, and translated them into specific institutional design inputs rather than treating such lessons as abstract reflections; (2) Payungi built three sources of legitimacy in parallel, namely grassroots, cultural, and political legitimacy, so that no single source became a fragile point of collapse; (3) Payungi developed a social capital architecture that purposely constructed and maintained bonding, bridging and linking capital in a mutually reinforcing rather than competing configuration. The paper ends with the identification of principles that might be transferable to other semi-urban communities, and with policy implications for the Indonesian context.