The Effect of Village Funds on Inclusive Village Development in Indonesia

Abstract

This study analyzes the effect of local revenue and village funds on inclusive village development with capital expenditure and economic growth as intervening variable in Indonesia. The research was conducted because the allocation of village funds since 2015 until now has not been able to realize inclusive village development. Inclusive village development is indicated by poverty, social welfare, and income inequality variables. Data source used is data secondary. Analysis method using Klassen Typology and Partial Least Square (PLS). Before doing the analysis of PLS will be done Klassen Typology, the districts in Indonesia are grouped into four quadrants namely Quadrant I (Emerging Region), Quadrant II (Prima Region), Quadrant III (Potential Area) and Quadrant IV (Rear Areas). The success of inclusive village development is influenced by independent variables and the position of the district in the four quadrants in the Klassen Typology. The conclusion of this research is that the success of village funds is dependent on the quality of village government officials which is shown in the position of each village in the 4 quadrants in the Klassen Typology.

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