Village fund asymmetric information in disaster management: Evidence from village level in Banda Aceh City

Abstract

The Village Fund in Indonesia is one of the instruments for budgetary decentralization to accelerate development and community empowerment at the village level. Under the regulation of the Minister of Village and Development of Disadvantaged Regions and Transmigration No. 16, the year 2019, one of the priorities for the use of the village funds is for disaster management. In the implementation, however, asymmetric information and misperception towards the regulation allegedly caused the management of village funds not to be connected with disaster risk reduction programs. This study aims to identify priorities for allocating village funds related to disaster management programs. Furthermore, this study will also determine the factors that cause information asymmetry at each level of policymakers. This research was conducted in 7 villages located in three sub-districts, which were severely affected by the 2004 tsunami in Banda Aceh City. The results of this study show the asymmetry of perceptions exists among the policymakers from the city to the village levels. This asymmetry has led to disaster management programs not being a priority in the use of village funds. The absence of regulation in the city levels hinders village leaders to use of village funds for disaster management.