Local Wisdom-Based Risk Governance in Infrastructure Business Operations: An Abductive Multiple-Case Study with Grounded Theory-Informed Coding
Keywords:
local wisdom, risk governance, sustainable business operations, infrastructure projects, abductive case study, grounded theory-informed coding, community monitoring, elite capture
Abstract
This article discusses the role of local wisdom-based risk governance in sustainable infrastructure business operations. While some understanding of the importance of formal risk controls has emerged from existing studies on business sustainability, project governance, stakeholder engagement, and infrastructure delivery, there remains a lack of understanding of how informal local authority governs operational disruptions when business operations are subject to community claims at the project level. The design of this study is an abductive multiple-case study with grounded theory-informed coding across 20 infrastructure cases in North Sulawesi. The results reveal five mechanisms: community monitoring, local labor absorption, customary mediation, religious authority, and elite capture. The most frequently mentioned mechanism is community monitoring, which suggests that local actors can do more than engage in symbolic participation; they can also discipline the operation of infrastructure. However, the same informal power can turn into coercion when project-related rents, opaque compensation, and monopolized brokerage result in elite capture of local legitimacy. The article contributes to the fields of economics, business, and innovation by conceptualizing local wisdom as a situated risk-governance innovation that can support business continuity when coupled with transparency, plural representation, and accountability safeguards.
References
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Helmke, G., & Levitsky, S. (2004). Informal institutions and comparative politics: A research agenda. Perspectives on Politics, 2(4), 725–740. https://doi.org/10.1017/S1537592704040472
Hickey, S., & Mohan, G. (Eds.). (2004). Participation: From tyranny to transformation? Zed Books.
Kampilong, J.K. (2026). Digital operational capability for circular value creation in project-based supply chain operations: A conceptual framework. Asian Journal of Management, Entrepreneurship and Social Science, 6(1), 1–25.
Kampilong, J.K., Rattu, A. E., & Mandagi, N. W. J. (2025). Sustainable Construction Integration Theory (SCIT): A triple-layer approach: An empirical study of technical, operational, and organizational integration. World Development Sustainability, 8, 100232. https://doi.org/10.1016/j.wds.2025.100232
Kampilong, J.K., Karauwan, W., Suatan, M., Merentek, T. C., & Korua, S. R. N. (2025). Sustainable leadership innovation capability (SLIC): Enhancing organizational sustainability performance in the construction industry. Sustainable Futures, 10, 101016. https://doi.org/10.1016/j.sftr.2025.101016
Larkin, B. (2013). The politics and poetics of infrastructure. Annual Review of Anthropology, 42, 327–343. https://doi.org/10.1146/annurev-anthro-092412-155522
Lehtinen, J., & Aaltonen, K. (2024). Community stakeholders' online engagement in infrastructure projects: A theory-testing single-case study. Construction Management and Economics, 42(8), 758–786. https://doi.org/10.1080/01446193.2024.2326558
Li, T. M. (2007). The will to improve: Governmentality, development, and the practice of politics. Duke University Press.
Locatelli, G., Mariani, G., Sainati, T., & Greco, M. (2017). Corruption in public projects and megaprojects: There is an elephant in the room! International Journal of Project Management, 35(3), 252–268. https://doi.org/10.1016/j.ijproman.2016.09.010
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Mansuri, G., & Rao, V. (2013). Localizing development: Does participation work? World Bank.
Moffat, K., & Zhang, A. (2014). The paths to social license to operate: An integrative model explaining community acceptance of mining. Resources Policy, 39, 61–70. https://doi.org/10.1016/j.resourpol.2013.11.003
Moeremans, B., & Dooms, M. (2021). An exploration of social license to operate measurement in the port industry: The case of North America. Sustainability, 13(5), 2543. https://doi.org/10.3390/su13052543
Mok, K. Y., Shen, G. Q., & Yang, J. (2015). Stakeholder management studies in mega infrastructure projects: A review and future directions. International Journal of Project Management, 33(2), 446–457. https://doi.org/10.1016/j.ijproman.2014.08.007
North, D. C. (1990). Institutions, institutional change, and economic performance. Cambridge University Press.
OECD. (2024). Responsible business conduct for sustainable infrastructure in Indonesia. OECD Publishing.
OECD. (2025). Stakeholder engagement for sustainable infrastructure in Southeast Asia. OECD Publishing.
Ostrom, E. (1990). Governing the commons: The evolution of institutions for collective action. Cambridge University Press.
Ostrom, E. (2005). Understanding institutional diversity. Princeton University Press.
Platteau, J.-P. (2004). Monitoring elite capture in community-driven development. Development and Change, 35(2), 223–246. https://doi.org/10.1111/j.1467-7660.2004.00350.x
Prno, J., & Slocombe, D. S. (2012). Exploring the origins of social license to operate in the mining sector. Resources Policy, 37(3), 346–357. https://doi.org/10.1016/j.resourpol.2012.04.002
Reed, M. S. (2008). Stakeholder participation for environmental management: A literature review. Biological Conservation, 141(10), 2417–2431. https://doi.org/10.1016/j.biocon.2008.07.014
Rodgers, D., & O'Neill, B. (2012). Infrastructural violence: Introduction to the special issue. Ethnography, 13(4), 401–412. https://doi.org/10.1177/1466138111435738
Song, J., Munyinda, M., & Adu Sarfo, P. (2025). Examining the impact of risk management practices on sustainable project performance in the construction industry: The role of stakeholder engagement. Frontiers in Built Environment, 11, 1575827. https://doi.org/10.3389/fbuil.2025.1575827
Stake, R. E. (1995). The art of case study research. SAGE.
Suranto, S., & Darumurti, A. (2024). Informal local authority-based policy innovation in Indonesia during 2018-2021. Journal of Governance and Public Policy, 11(1), 60–70.
Timmermans, S., & Tavory, I. (2012). Theory construction in qualitative research: From grounded theory to abductive analysis. Sociological Theory, 30(3), 167–186. https://doi.org/10.1177/0735275112457914
Transparency International Indonesia and Transparency International Australia. (2023). Infrastructure corruption risk assessment in Indonesia. Transparency International.
UNOPS. (2021). Infrastructure for climate action. United Nations Office for Project Services.
Vanclay, F. (2017). Project-induced displacement and resettlement: From impoverishment risks to an opportunity for development? Impact Assessment and Project Appraisal, 35(1), 3–21. https://doi.org/10.1080/14615517.2017.1278671
Wolff, E., French, M., Ilhamsyah, N., Sawailau, M. J., & Ramirez-Lovering, D. (2021). Collaborating with communities: Citizen science flood monitoring in urban informal settlements. Urban Planning, 6(4), 351–364. https://doi.org/10.17645/up.v6i4.4648
Yin, R. K. (2018). Case study research and applications: Design and methods (6th ed.). SAGE.
Anand, N. (2017). Hydraulic city: Water and the infrastructures of citizenship in Mumbai. Duke University Press.
Ansar, A., Flyvbjerg, B., Budzier, A., & Lunn, D. (2016). Does infrastructure investment lead to economic growth or economic fragility? Oxford Review of Economic Policy, 32(3), 360–390. https://doi.org/10.1093/oxrep/grw022
Appel, H., Anand, N., & Gupta, A. (Eds.). (2018). The promise of infrastructure. Duke University Press.
Arnstein, S. R. (1969). A ladder of citizen participation. Journal of the American Institute of Planners, 35(4), 216–224. https://doi.org/10.1080/01944366908977225
Babaei, M., Locatelli, G., Sainati, T., & Brookes, N. (2023). Local community engagement as a practice: An investigation of local community engagement issues and their impact on transport megaprojects' social value. International Journal of Managing Projects in Business, 16(4), 755–781. https://doi.org/10.1108/IJMPB-10-2022-0224
Bardhan, P., & Mookherjee, D. (2006). Decentralization and accountability in infrastructure delivery in developing countries. The Economic Journal, 116(508), 101–127. https://doi.org/10.1111/j.1468-0297.2006.01049.x
Berkes, F. (2018). Sacred ecology (4th ed.). Routledge.
Bice, S. (2014). What gives you a social license? An exploration of the social license to operate in the Australian mining industry. Resources, 3(1), 62–80. https://doi.org/10.3390/resources3010062
Boutilier, R. G. (2014). Frequently asked questions about the social license to operate. Impact Assessment and Project Appraisal, 32(4), 263–272. https://doi.org/10.1080/14615517.2014.941141
Charmaz, K. (2014). Constructing grounded theory (2nd ed.). SAGE.
Cleaver, F. (2012). Development through bricolage: Rethinking institutions for natural resource management. Routledge.
Cooke, B., & Kothari, U. (Eds.). (2001). Participation: The new tyranny? Zed Books.
Dare, M., Schirmer, J., & Vanclay, F. (2014). Community engagement and social license to operate. Impact Assessment and Project Appraisal, 32(3), 188-197. https://doi.org/10.1080/14615517.2014.927108
Dasgupta, A., & Beard, V. A. (2007). Community-driven development, collective action, and elite capture in Indonesia. Development and Change, 38(2), 229–249. https://doi.org/10.1111/j.1467-7660.2007.00410.x
Derakhshan, R., Turner, R., & Mancini, M. (2019). Project governance and stakeholders: A literature review. International Journal of Project Management, 37(1), 98–116. https://doi.org/10.1016/j.ijproman.2018.10.007
Eisenhardt, K. M. (1989). Building theories from case study research. Academy of Management Review, 14(4), 532–550. https://doi.org/10.2307/258557
Esteves, A. M., Franks, D., & Vanclay, F. (2012). Social impact assessment: The state of the art. Impact Assessment and Project Appraisal, 30(1), 34–42. https://doi.org/10.1080/14615517.2012.660356
Flyvbjerg, B. (2006). Five misunderstandings about case-study research. Qualitative Inquiry, 12(2), 219–245. https://doi.org/10.1177/1077800405284363
Flyvbjerg, B. (2014). What you should know about megaprojects and why: An overview. Project Management Journal, 45(2), 6–19. https://doi.org/10.1002/pmj.21409
Fritzen, S. A. (2007). Can the design of community-driven development reduce the risk of elite capture? Evidence from Indonesia. World Development, 35(8), 1359–1375. https://doi.org/10.1016/j.worlddev.2007.05.001
Fung, A. (2006). Varieties of participation in complex governance. Public Administration Review, 66(s1), 66–75. https://doi.org/10.1111/j.1540-6210.2006.00667.x
Gioia, D. A., Corley, K. G., & Hamilton, A. L. (2013). Seeking qualitative rigor in inductive research. Organizational Research Methods, 16(1), 15–31. https://doi.org/10.1177/1094428112452151
Glaser, B. G., & Strauss, A. L. (1967). The discovery of grounded theory: Strategies for qualitative research. Aldine.
Harvey, P., & Knox, H. (2015). Roads: An anthropology of infrastructure and expertise. Cornell University Press.
Helmke, G., & Levitsky, S. (2004). Informal institutions and comparative politics: A research agenda. Perspectives on Politics, 2(4), 725–740. https://doi.org/10.1017/S1537592704040472
Hickey, S., & Mohan, G. (Eds.). (2004). Participation: From tyranny to transformation? Zed Books.
Kampilong, J.K. (2026). Digital operational capability for circular value creation in project-based supply chain operations: A conceptual framework. Asian Journal of Management, Entrepreneurship and Social Science, 6(1), 1–25.
Kampilong, J.K., Rattu, A. E., & Mandagi, N. W. J. (2025). Sustainable Construction Integration Theory (SCIT): A triple-layer approach: An empirical study of technical, operational, and organizational integration. World Development Sustainability, 8, 100232. https://doi.org/10.1016/j.wds.2025.100232
Kampilong, J.K., Karauwan, W., Suatan, M., Merentek, T. C., & Korua, S. R. N. (2025). Sustainable leadership innovation capability (SLIC): Enhancing organizational sustainability performance in the construction industry. Sustainable Futures, 10, 101016. https://doi.org/10.1016/j.sftr.2025.101016
Larkin, B. (2013). The politics and poetics of infrastructure. Annual Review of Anthropology, 42, 327–343. https://doi.org/10.1146/annurev-anthro-092412-155522
Lehtinen, J., & Aaltonen, K. (2024). Community stakeholders' online engagement in infrastructure projects: A theory-testing single-case study. Construction Management and Economics, 42(8), 758–786. https://doi.org/10.1080/01446193.2024.2326558
Li, T. M. (2007). The will to improve: Governmentality, development, and the practice of politics. Duke University Press.
Locatelli, G., Mariani, G., Sainati, T., & Greco, M. (2017). Corruption in public projects and megaprojects: There is an elephant in the room! International Journal of Project Management, 35(3), 252–268. https://doi.org/10.1016/j.ijproman.2016.09.010
Mandagi, N. W. J., & Kutu'Kampilong, J. (2025). Implementation of Triple Bottom Line principles in infrastructure projects in North Sulawesi. Sosioedukasi: Jurnal Ilmiah Ilmu Pendidikan dan Sosial, 14(1), 1–15.
Mansuri, G., & Rao, V. (2013). Localizing development: Does participation work? World Bank.
Moffat, K., & Zhang, A. (2014). The paths to social license to operate: An integrative model explaining community acceptance of mining. Resources Policy, 39, 61–70. https://doi.org/10.1016/j.resourpol.2013.11.003
Moeremans, B., & Dooms, M. (2021). An exploration of social license to operate measurement in the port industry: The case of North America. Sustainability, 13(5), 2543. https://doi.org/10.3390/su13052543
Mok, K. Y., Shen, G. Q., & Yang, J. (2015). Stakeholder management studies in mega infrastructure projects: A review and future directions. International Journal of Project Management, 33(2), 446–457. https://doi.org/10.1016/j.ijproman.2014.08.007
North, D. C. (1990). Institutions, institutional change, and economic performance. Cambridge University Press.
OECD. (2024). Responsible business conduct for sustainable infrastructure in Indonesia. OECD Publishing.
OECD. (2025). Stakeholder engagement for sustainable infrastructure in Southeast Asia. OECD Publishing.
Ostrom, E. (1990). Governing the commons: The evolution of institutions for collective action. Cambridge University Press.
Ostrom, E. (2005). Understanding institutional diversity. Princeton University Press.
Platteau, J.-P. (2004). Monitoring elite capture in community-driven development. Development and Change, 35(2), 223–246. https://doi.org/10.1111/j.1467-7660.2004.00350.x
Prno, J., & Slocombe, D. S. (2012). Exploring the origins of social license to operate in the mining sector. Resources Policy, 37(3), 346–357. https://doi.org/10.1016/j.resourpol.2012.04.002
Reed, M. S. (2008). Stakeholder participation for environmental management: A literature review. Biological Conservation, 141(10), 2417–2431. https://doi.org/10.1016/j.biocon.2008.07.014
Rodgers, D., & O'Neill, B. (2012). Infrastructural violence: Introduction to the special issue. Ethnography, 13(4), 401–412. https://doi.org/10.1177/1466138111435738
Song, J., Munyinda, M., & Adu Sarfo, P. (2025). Examining the impact of risk management practices on sustainable project performance in the construction industry: The role of stakeholder engagement. Frontiers in Built Environment, 11, 1575827. https://doi.org/10.3389/fbuil.2025.1575827
Stake, R. E. (1995). The art of case study research. SAGE.
Suranto, S., & Darumurti, A. (2024). Informal local authority-based policy innovation in Indonesia during 2018-2021. Journal of Governance and Public Policy, 11(1), 60–70.
Timmermans, S., & Tavory, I. (2012). Theory construction in qualitative research: From grounded theory to abductive analysis. Sociological Theory, 30(3), 167–186. https://doi.org/10.1177/0735275112457914
Transparency International Indonesia and Transparency International Australia. (2023). Infrastructure corruption risk assessment in Indonesia. Transparency International.
UNOPS. (2021). Infrastructure for climate action. United Nations Office for Project Services.
Vanclay, F. (2017). Project-induced displacement and resettlement: From impoverishment risks to an opportunity for development? Impact Assessment and Project Appraisal, 35(1), 3–21. https://doi.org/10.1080/14615517.2017.1278671
Wolff, E., French, M., Ilhamsyah, N., Sawailau, M. J., & Ramirez-Lovering, D. (2021). Collaborating with communities: Citizen science flood monitoring in urban informal settlements. Urban Planning, 6(4), 351–364. https://doi.org/10.17645/up.v6i4.4648
Yin, R. K. (2018). Case study research and applications: Design and methods (6th ed.). SAGE.
Published
2026-06-21
How to Cite
Kampilong, J., Saerang, D., Soepeno, D., & Wenas, R. (2026). Local Wisdom-Based Risk Governance in Infrastructure Business Operations: An Abductive Multiple-Case Study with Grounded Theory-Informed Coding. International Journal of Economics, Business and Innovation Research, 5(04), 2038-2060. https://doi.org/10.63922/ijebir.v5i04.4493
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