Legal Uncertainty and Fragmented Governance in Protecting Local MSMEs

Abstract

Micro, Small, and Medium Enterprises (MSMEs) play a strategic role in supporting local economic development and social resilience, particularly in tourism-based regions. However, in many tourism areas, local MSMEs experience structural vulnerabilities due to legal uncertainty, unequal competition, and weak governance practices. This study examines legal issues and government roles in protecting local MSMEs operating in the Puncak tourism area, Indonesia. Employing a socio-legal research approach, this study integrates normative legal analysis with empirical, perception-based data obtained from questionnaires distributed to 49 local MSME actors. The findings indicate that although legal frameworks formally recognize MSMEs as strategic economic actors, their implementation in practice remains weak. Regulatory complexity, limited enforcement, and fragmented government roles undermine effective legal protection, resulting in persistent inequality between local MSMEs and larger business actors. This study highlights the gap between legal norms and empirical realities, emphasizing the need for more integrated, enforceable, and context-sensitive governance mechanisms to ensure sustainable protection for local MSMEs in tourism areas.