Polycentric collaborative governance and circular economy in urban waste systems: public value co-creation through CSR community partnerships in Surabaya, Indonesia

Indonesia, a nation of over 270 million people, generates more than 60 million tons of waste each year (SIPSN KLHK, 2024). The surge in waste generation and the scarcity of landfill space have strained infrastructure capacity and tested the effectiveness of national environmental policies. These challenges demand governance innovations that are not solely government-centered but instead engage multiple centers of authority across sectors. Amid these national challenges, Surabaya, Indonesia’s second-largest city, has become an important urban laboratory for waste management. This city, home to more
than three million residents, generates an average of 1,800 tons of waste per day (Dinas Lingkungan Hidup Kota Surabaya, 2025). Surabaya exhibits a clear configuration of polycentric governance: the Environmental Agency (DLH) sets policy direction, local subdistrict offices (kelurahan) facilitate implementation, citizen communities manage hundreds of Waste Bank Units (BSUs), and corporations such as PT PLN support infrastructure through Corporate Social Responsibility (CSR) programs. This layered distribution of authority creates an interactive and adaptive decision-making network the core essence of polycentric governance (Ostrom, 2017), (Carlisle et al., 2019). Polycentric collaborative governance emphasizes the existence of multiple interconnected centers of decision-making operating across different levels (Ansell et al., 2008).

The visualization in Figure 1 presents three primary centers of decision-making: government institutions, economic entities, and community organizations. The government provides policy direction and oversight mechanisms, economic entities contribute resources and market-driven innovation, while community organizations lead participation, provide feedback, and ensure accountability. These centers are connected through two-way coordination flows, indicating that no single actor holds dominant
authority. The model demonstrates how public policy decisions and implementation emerge from continuous dialogue and mutual influence among these centers, creating a governance system that is adaptive, responsive, and resilient to the failure of any single actor (Wang, 2014).

Such a design facilitates horizontal coordination among communities and vertical integration with government institutions, thereby strengthening problem-solving capacity and policy legitimacy. Multi-stakeholder coordination also opens space for the co-creation of public value, where government, the private sector, and citizens collectively generate social and ecological benefits that would be unattainable in isolation (Bryson et al., 2017). The success of the Green Campus program, marked by high student participation, serves as evidence that active engagement accelerates the practice of sustainability (Eprilianto et al., 2022).

Meanwhile, the circular economy emerges as a strategic framework to curb the pace of urban waste generation. Rather than following a linear take make dispose pattern, the circular economy maximizes recycling and resource reuse, allowing the output of one process to become the input for another (Kirchherr et al., 2017). The 3R principles reduce, reuse, and recycle encourage behavioral change while simultaneously generating economic value from waste (Kirchherr et al., 2017). Surabaya translates these principles through its extensive waste bank network. The Surabaya Central Waste Bank (BSIS) partners with hundreds of local Waste Bank Units (BSUs) and targets the sale of 150 tons of dry waste per month (Pemerintah Kota Surabaya, 2024) BSIS’s performance has increased significantly, rising from 211.86 tons in 2016 to 442.88 tons in 2023 (Pemerintah Kota Surabaya, 2024). This increase underscores the role of waste banks as crucial nodes in urban waste reduction and as living laboratories of CSR-based polycentric governance.

source:
https://journal.bappenas.go.id/index.php/jpp/article/view/781