The research evaluates the impact, if at all, of democracy in Indonesia on the level of economic and social welfare of Indonesian population in general and the underprivileged urban and rural dwellers in particular. The research question that guided the research effort was to determine the extent to which democratization of Indonesian society been translated into substantial improvement in social and economic well-being at the macro (the general population) and workers, and micro (urban and rural underprivileged groups. Meanwhile, research objectives are (i) determine the impact democratization has had on socio-economic well-being of the Indonesian society in general; (ii) determining the impact democratization process has had on socioeconomic well-being of workers; and (iii) determining the impact democratization process has had on socioeconomic well-being of two relatively underprivileged communities, one in a rural setting, Kampung Laut, Cilacap, Central Java province, and the other in urban setting, Kampung Bali, Tanah Abang, DKI Jakarta (the Indonesian capital city). Using a combination of qualitative and quantitative data collection and analysis methods are used, the research reaches several conclusions. First and foremost, democracy has gained a foothold in Indonesia over the past decade or so, attested by so far four amendments to the 1945 constitution which have spearheaded the conduct of free and fair legislative and direct presidential elections, observance of human and political rights, decentralization of power and authority to deliver public services to regional governments, and holding of direct regional head elections. The establishment of the constitutional court if another monumental achievement of democratization. At the village level, village head elections no longer face state intervention, which has made village administration more democratic hence outcomes in principal reflect interests of the village population. The strengthening of the village development participatory board is another important feature of the democratic era in Indonesian history. In urban areas (Kampung Bali), the establishment of the kelurahan council, representative to which are elected from and by neighborhood residents, is another key feature of democratization. However, unlike in rural areas (Kampung Laut), the kelurahan administration head, continues to be a direct appointee of the provincial government, thwarting fully-fledged public participation in the public policy process. Obstacles that still loom large at the national level include the representation problem, fragmented, increasingly locally focused civil society highly fragmented political party framework, poor finances of most political parties, ‘money’ politics, and small political party membership. The huge cost of decentralization on national government finances and atomization of established units on the basis of ethnicities, religious affiliation or even vested interests of local political elites wishing to carve out their fiefdoms, is another problem that democracy has brought to bear in Indonesia. Meanwhile, at the village level, the truncating of powers of the village representative board, the non involvement of political parties in village politics, ineptness and incompetence of village community participatory development boars still bedevil village democracy in Ujungalang, Kampung Laut. Meanwhile, non representation of the general public both in the kelurahan administration, compounded by absence of representatives at district levels in DKI Jakarta, augment the public woes attributable to poor representation. As regards, the impact of democracy on societal well-being, indicators point to an improvement in education, health, sanitation, economic growth, life expectancy at the national level, and similar indicators of societal welfare at village and kelurahan level. However, improvement in public service provision has been achieved thanks to a surge in both national and regional government subsidies and at the expense of deterioration in quality. All in all, urban dwellers (Kampung Bali) being close to reins of power hence have high expectations show higher disillusionment with the failure of democracy to deliver as much as they would have expected than rural dwellers (Kampung Laut). Democratization has ushered in better working conditions for organized labor in the formal sector that is as far as improving legal framework and ratification of various labor conventions is concerned. Workers right to form trade unions, become members and leaders on trade unions and engage in trade union activities of their choice are guaranteed by law. So are workers’ right to decent working conditions. Moreover, workers have a wide array of dispute settlement mechanisms available to them that range from bipartite institution, to mediation, conciliation, arbitration, to the industrial relations court. However, in reality, fragmentation of workers at both the company and national level; weak organization capacity, due mainly to human resource inadequacies, uncertain financing, low unionization level of Indonesian work force (not all formal sector workers are unionized as becoming a member of a Union is a right and not an obligation, and workers in state owned companies, though unionized, such Unions, do not form part and parcel of the general trade union movement). Consequently, democracy though has elevated workers rights normatively, in practice, have yet to galvanize themselves into a unified force that can negotiate improvements in terms of work that would lead to a greater share in output, which would translate into higher wages, incomes, and higher socioeconomic well-being
