Rehabilitation policy relies heavily on local governments to manage the complex, underlying urban social dynamics. This research analysed the social rehabilitation policy implementation regarding women in prostitution as a form of urban poverty case study location being Banjarmasin City, about institutional capacity, local powers and inter-agency collaboration. This research used a descriptive qualitative approach, with data collection methods including in-depth interviews with social affairs officials, social workers (SWs), rehabilitation analysts, and beneficiaries; non-participant observations at Baiman Shelter; and document review. Thematic analysis was informed by policy implementation frameworks and street-level bureaucracy theory. Results show an implementation strategy characterized by reactiveness, with triggers flowing from enforcement rather than vision; scarce capacity within the institutions meant to deliver stability, while significant discretion at ground level skewed the policy process towards short-term social control and away from long-term empowerment. Interagency collaboration is largely informal, while gender-sensitive approaches have not been meaningfully integrated into program design. The paper contributes a contextual model of social rehabilitation policy implementation in which frontline discretion operates amid the ambivalences of reactive governance dynamics shaped by an inter-institutional environment, characterized by both institutional constraints and informal coordination. It shifts street-level bureaucracy theory by showing that discretion is not just individual but also structurally determined (by institutional and/or socio-political forces), directly impacting the effectiveness/trajectory of the restoration policy analyzed in urban governance.
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