Abstract
Improving community economic well-being based on community empowerment plays an important role in rural development. This study aims to determine the ability of social enterprises in Indonesia (Village-Owned Enterprises/BUMDes) to improve the community's economic well-being through empowerment programs and the role of social capital in rural community development. At social conditions at the basic level, very little attention is paid to the development of deprived communities. Starting from the experience of rural community economic empowerment programs through the establishment of Village-Owned Enterprises (BUMDes) in Indonesia, this study will test three hypotheses: (1) whether there is an effect between community empowerment and the economic well-being of rural communities; (2) is there an effect between social capital and the economic well-being of rural communities; and (3) is the effect between community empowerment and economic well-being mediated by social capital? Multiple regression analysis is used to examine the effect between community empowerment and community economic well-being. This analysis highlights the central role of social capital in mediating the effect between community empowerment and economic well-being. Community empowerment is significantly related to social capital. These effects between social capital, community empowerment, and economic well-being apply to theories and measures of rural community empowerment.
Highlights
Social capital can be a useful concept for practitioners, researchers, and policymakers in bringing about the lost social sense
By selecting participants from community members who are already members of one of the community empowerment programs through BUMDes, this study finds several findings that expand the literature on rural development, those related to empowerment and the role of social capital in rural community development
Improving community economic welfare based on community empowerment plays an important role in rural development
Summary
Social capital can be a useful concept for practitioners, researchers, and policymakers in bringing about the lost social sense. The most important feature of social capital is that trust, norms, and reciprocal effects arise from repeated and regular interactions limited by space and time in a community (Kay, 2005). Social capital with an interactional approach to community development can be a useful alternative (Bridger & Alter, 2006)). In line with Theodori (2008), like society, the element of sustainable community development is social interaction. The success of the rural community development process relies heavily on the willful actions of people in local meetings and social interactions to solve their local problems, improve their quality of life, and shape their future. Trigillia (2001) states that social capital is an important aspect of local economic development
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