Are Village Funds Effective in Improving Social Welfare in East Indonesia?

Abstract

This study aims to analyze the effectiveness of village funds on social welfare of the district society in Maluku, North Maluku, Papua, and West Papua Provinces based on 2015-2018 data. The Village funds began to be distributed to all villages in these four provinces and other provinces in Indonesia in 2015. The data collection technique uses documentation technique, so that it produces secondary data in the form of a village funds, the Government Regional Budget, Gross Regional Domestic Product, and Human Development Index reports in four provinces which have been published on the official website of the Indonesian Statistics Agency. The sampling technique uses purposive sampling method with considerations in accordance with the objectives of the study. Based on the results of the regression analysis, it shows that village funds have not been able to influence on social welfare of the district society even though this has been accompanied by an allocation of capital expenditures and economic growth variables. There is a possibility that the size of the area in the villages in the four provinces and the quality of human resources for managing village funds in districts is an obstacle.

Impact of economic growth, village funds, and poverty on human development in Indonesia: An analytical study from 2015 to 2022

“…The greater the HDI, the more successful the village administration has been in improving human quality through village funding (Badrudin et al, 2021). The same study was carried out by Badrudin et al (2021), Yusuf and Afendi (2020), Nawawi et al (2021), Joetarto et al (2020), and Angin et al (2023, with the results indicating that village money allocation had a favorable influence on HDI. The higher the village funds, the wealthier the community.…”

“…Village funds are stage budget funds obtained from district/city local government budget expenditures that are transferred to villages and can be used to finance government management, development, community development, and to improve rural welfare (Badrudin et al, 2021;Yusuf and Afendi, 2020).…”

“…Marpaung et al (2020) concluded that village funds were used to improve community welfare, development planning, and budgeting at the village level in community empowerment, as well as increase development infrastructure and services to the community in the context of developing social and economic activities in the community, using multiple regression analysis using secondary data and primary data obtained from filling out questionnaires with the community. Badrudin et al (2021) obtained different results based on regression analysis, showing that village funds cannot influence the social welfare of district communities despite being accompanied by variable capital expenditure allocations and economic growth. The size of the village area in four provinces and the quality of human resources handling village money in the districts could be hurdles.…”

The Role of Village Fund Allocation (ADD) in Improving Community Welfare Through Village Potential

“…It has been proven that the community's welfare has improved. However, Badrudin, Dewanti, and Siregar (2021) reveal that the village fund has not been able to benefit the community mainly because of the area in the sampled four provinces and the quality of human resources that affect the management of the village fund have not been effective.…”