Seeking Prosperity Through Village Proliferation: An Evidence of the Implementation of Village Funds (Dana Desa) in Indonesia

Through Law No. 6 of 2014 concerning Villages, the government of Indonesia carries out a significant evolution by giving higher authority to the lowest level of regional government, namely the village level. This law also serves as a legal basis for the government of Indonesia to allocate village funds (dana desa) sourced from the Indonesian national budget (APBN) that are intended for villages to finance governance, development, community development, and village community empowerment. After almost five years of implementing this policy, the great euphoria over the high amount of village funds provided (approximately 1 billion rupiahs per village) caused a harsh polemic about the increasing rate of village proliferation in Indonesia. This proliferation at the micro-level not only increases the burden on the central government but also its shows that the welfare of many communities at the regional level is still questionable. Therefore, using spatial analysis and descriptive statistics, this study aimed to identify patterns of village proliferation in Indonesia from the perspective of the number of villages, the amount of village funding, poverty levels, and village development, and their impact on regional development. The results showed that 60.56% of regions that experienced village proliferation were able to reduce poverty levels in their area, but not all of these regions were able to reduce the percentage of underdeveloped villages and increase development at the village level. Then, related to village funding, 25.35% of regions that experienced proliferation got a significant rise in village funding, but were still unable to reduce poverty rates.