2. De Soto's Theory of the Extralegal Economy (1989)
Hernando de Soto offers a vital corrective by arguing that the informal economy is not disorganized or chaotic but rather structured by informal rules, relational contracts, and extralegal norms. The primary problem, he suggests, is the lack of formal documentation---not the absence of rationality or productivity.
De Soto's insights are highly relevant for understanding Indonesia's first two economic layers, where productive but undocumented micro-enterprises often operate outside the purview of formal financial systems, regulatory databases, or digital platforms. In the context of Layer 4---the AI-augmented economy---De Soto's critique takes on a new dimension: what is undocumented is increasingly not just unbanked but "unseen" by algorithms, leading to data invisibility traps. AI systems that rely on digital traces, legal registration, and structured metadata fail to recognize informal economic actors---even when their output is critical to supply chains.
3. Amartya Sen's Capability Approach (1999)
Sen's framework shifts focus from economic growth metrics to individual and collective capabilities---what people are actually able to do and be. Economic justice, in this view, is defined not by income alone but by access to real opportunities for well-being, choice, and agency.
In Indonesia's stratified economy, many workers and entrepreneurs in Layers 1 and 2 exhibit high productivity and deep local knowledge, yet they lack the technological capabilities and infrastructural access needed to expand markets or stabilize income. Sen's approach thus justifies a development paradigm that enhances agency across all layers, rather than enforcing linear transitions from "low" to "high" technology sectors. It also underscores the need for context-sensitive interventions that prioritize enabling conditions over imposed metrics.
4. Sociotechnical Systems Theory
Sociotechnical theory posits that economic and organizational performance is the result of an interdependent relationship between social systems (people, norms, networks) and technical systems (tools, platforms, infrastructures). Innovations fail when one domain evolves faster than the other.
This framework is critical for interpreting Indonesia's digital transformation. The introduction of Layer 3 (digital platforms) and Layer 4 (AI systems) has not yielded universal inclusion, precisely because social structures---education, trust, transaction norms---have not co-evolved at the same pace. For instance, the mere availability of QRIS does not imply its uptake among warung owners or peddlers whose trust networks rely on cash and face-to-face reciprocity. Similarly, AI-based lending systems fail to accommodate informal creditworthiness embedded in kinship or community dynamics.
Sociotechnical theory enables us to see each economic layer as not merely a "stage of development," but as a configuration of social and technical interdependencies---each with its own internal logic, vulnerabilities, and potential for cross-layer complementarity.
Together, these four theoretical pillars highlight both the promise and the pitfalls of economic transformation. They also reveal the analytical gap this paper seeks to address: the absence of a model that treats multi-layered economies not as transitional anomalies, but as structural realities in need of adaptive and integrative frameworks. This gap gives rise to the 4-Layer Asymmetric Economy Model, introduced in Section 3.
