Abstract
This study aims at determining the effectiveness of the distribution and use of the Village Funds and their impacts on the increase in capital accumulation in Bondowoso Regency. This research is a quantitative research with a confirmatory approach because the researchers confirm the relationship between the research variables and test the hypotheses previously formulated. The analytical tool used is Structural Equity Modeling with the help of Lisrel 8.8 software. Respondents in this research amount to 75 villages in Bondowoso Regency that are selected based on purposive sampling (to select the subdistricts) and simple random sampling (to select villages/respondents). The results of research state that the effectiveness of the use of village funds has a significant influence on capital accumulation and empowerment of rural communities in Bondowoso Regency. Whereas capital accumulation has no significant influence on the empowerment of rural communities in Bondowoso Regency.
Highlights
Economic development in a region is an activity that must be conducted together and continuously either by the government, society, or private parties to realize the fair and equitable community welfare
In order to find out what kinds of factors influencing the Capital Accumulation and the Community Empowerment, the questionnaires are distributed to the existing villages in Bondowoso
The results indicate that the greater the amount of village funds is given for the village development, it may increase the capital accumulation that can be seen from the growth of investment, production, income and savings in villages in Bondowoso Regency
Summary
Economic development in a region is an activity that must be conducted together and continuously either by the government, society, or private parties to realize the fair and equitable community welfare. Economic development is conducted as a step to realize the equitable development and the economic growth in a region to be better. Economic growth is one indicator frequently used in measuring the development level of a region. Decentralization is limited in the level of Regency or City and Village as the legal community unit that has regional boundaries authorized to regulate and manage the interests of the local community, based on the local origin and customs recognized and respected in the government system of The Unitary State of the Republic of Indonesia (Government Regulation No 72 of 2005)
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