An Empirical Study on The Impact of Village Fund on Economic Growth and Poverty Alleviation

Abstract

This study examines the impact of village funds on economic growth and poverty reduction in Enrekang Regency, Indonesia. Using a qualitative descriptive approach, the authors collected data from government reports and interviews with 15 village heads across 12 Sub-districts. The findings show that village funds have contributed to reducing poverty rates and creating jobs through labor-intensive infrastructure projects and support for agricultural and entrepreneurial activities. In 2022, village funds amounting to IDR 115.95 billion were allocated to 112 villages, benefiting over 8,800 poor households. The agriculture sector, which received substantial village fund investments, remains the largest contributor to the regency's gross regional domestic product. However, challenges remain in optimizing the use of village funds, as indicated by the regency's budget deficit and limited growth in village-level revenues. The study highlights the need for improved planning, implementation, and evaluation of village fund programs to maximize their impact on inclusive and sustainable rural development.