VILLAGE FUND MANAGEMENT, QUALITY OF LIFE AND COMMUNITY WELLBEING: EVIDENCE FROM LEBAK REGENCY, INDONESIA

Abstract

There is an intense debate on the effectiveness of the village fund program initiated by the Indonesian government. This paper examines the program's effectiveness in improving the quality of life and community well-being in rural areas from the villagers' perspective. Few studies have investigated the program's impacts from an individual perspective using primary data. Thus, this is the first study that analyzes the influence of the perceived management of the village fund program and community trust on community engagement and individuals' perceptions of the quality of life and community well-being. This study collected primary data by surveying 200 households in four sub-districts of the Lebak Regency in Banten Province in Indonesia. The survey data were analyzed using partial least squares structural equation modeling (PLS-SEM) with SmartPLS software. Results show that the perceived management of a village's funds directly affects the villagers' perception of quality of life and community well-being. The perceived village fund management also provides a significant path to community engagement. The paper concludes that the government should consider including the community in its village development program, thus increasing the residents' perceived quality of life and ensuring the program's success. This study contributes to the recent literature by providing new evidence about the impact of the village fund program on quality of life and community well-being using primary data at the household level.