Village Funds and Resilience in Rural Areas: Evidence from Indonesia Post-Covid Pandemic

Abstract

This research strives to prove whether village funds can effectively increase resilience in rural areas in the post-pandemic period, especially in alleviating rural poverty. There are two objectives in this study, namely: (i) to estimate the impact of village funds on poverty levels in rural areas; and (ii) to identify factors that influence growth. The Year 2021 is assumed to be the post-pandemic period because of improvement in economic growth. The analytical model applied in this research is three-stage least squares (3sls). This study has two endogenous variables: economic growth and poverty in rural areas. The results showed no effect of village funds on rural poverty. In addition, village funds have also not affected economic growth. The policy of refocusing the use of village funds in overcoming the covid pandemic is thought to be the most potent cause of the absence of village funds on poverty and economic growth.