Padang City faces serious waste problems, including a 500-ton increase in daily waste generation to 500 tons and an annual accumulation of 236,296 tons (2023). Waste from the Final Processing Site is predicted to exceed its maximum limit by 2026; waste composition mainly comprises organic materials (62.53%) and plastics (13.6%), which have not been sufficiently managed through the Reduce, Reuse, and Recycle (3R) paradigm. This study analyzes the institutional, technical, regulatory, financial, and participatory barriers to waste management in Padang, as well as the policy implications from collaborative governance and circular economy perspectives. Using qualitative-descriptive methodology, with document analysis and policy evaluation, this study offers a unique contribution by combining polycentric governance defined as multi-level coordination and activity among government, private sector, and community actors with responsive regulation that situates punitive enforcement in the context of observed social behaviour and institutional capacity. The results indicate that institution fragmentation, under-enforcement of established laws, unsustainable funding mechanisms, and low community participation undermine the waste management practices in Padang. Integrated Waste Processing Place 3R and waste banks have, so far, not achieved optimal scale in terms of effectiveness. Contextualizing these outcomes through the lenses of polycentric governance, responsive regulation, circular economy, and community-based social marketing shows the role that cross-sectoral collaboration, participatory mechanisms, and adaptive regulatory tools played in building resilient urban waste systems. Theoretically, this study contributes to environmental governance scholarship by integrating governance design and regulatory innovation in the Global South context, while offering practical recommendations for performance contracts among stakeholders, as well as the adoption of Extended Producer Responsibility (EPR), decentralized technologies for organic waste, and digital-based incentives at the community level. Therefore, this study not only highlights the need for structural reforms but also contributes to establishing inclusive, adaptive, and sustainable waste management systems in Indonesia’s urban areas.