THE EFFECT OF VILLAGE FUNDS ON RURAL POVERTY: EMPIRICAL EVIDENCE FROM JAVA ISLAND

Agus Hermawan, Istiqomah Istiqomah, Abdul Aziz Ahmad

Abstract


The function of fiscal decentralization from the central government to regional governments with a number of village funds is for infrastructure development and community empowerment whose ultimate goal is the welfare of the community and a decrease in the number of poor people. This study aims to analyze the effect of the implementation of fiscal decentralization in the form of village funds on the amount of poverty in rural areas at the provincial level in Java. The data used in this research is penel data. The analysis tool used is simple linear regression with panel data and the method used is the Fixed Effect Model (FEM) which is supported by data collection during 2015 - 2018 taken from 5 provinces in Java. This study found that village funds had a negative and significant effect on poverty on Java. Thus, the central and regional governments need to increase village funds accompanied by monitoring and evaluation so that village funds can have a significant impact on the village, especially the decline in the number of poor people.

 

Keyword: 1 Fiscal Decentralization · 2 Rural Poverty · 3 Java Island

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