THE EFFECT OF VILLAGE FUND ALLOCATION AND GROSS DOMESTIC PRODUCT ON THE INCREASE IN THE VILLAGE DEVELOPMENT INDEX AT THE PROVINCIAL LEVEL IN INDONESIA

Abstract

This study aims to analyze the effect of Village Fund allocation and Gross Regional Domestic Product (GRDP) on the improvement of the Village Development Index (IDM) at the provincial level in Indonesia. The data used is secondary data from the Village Information System (SID) of the Ministry of Villages, Development of Disadvantaged Regions, and Transmigration, and the Central Bureau of Statistics (BPS), which includes data on the allocation of Village Funds and GRDP in 2023, as well as data on the increase in IDM scores in 2024. This study was conducted in 36 provinces in Indonesia. Data analysis used multiple linear regression methods to test the influence of two independent variables on the increase in IDM scores. The results show a very weak relationship between the Village Fund, GRDP, and IDM score improvement, with a low coefficient of determination (R² = 0.034). Several factors, such as the already high initial condition of IDM, the quality of local leadership, and the implementation of President Jokowi's Nawacita policy for the development of disadvantaged regions, influenced the results. This study suggests improvements in Village Fund governance, strengthening the capacity of local leaders, and optimizing GRDP to support more effective village development.