Analysis of the Effect of Village Funds on Village Independence Level and Community Welfare Level in Mojogedang District, Karanganyar Regency

Abstract

The implementation of fiscal decentralization through Village Funds in Indonesia aimed to increase the independence and welfare of the people in the regions and reduce the level of inequality between rural and urban areas. This study aimed to analyze the effect of Village Funds on village independence level and community welfare level in Mojogedang District, Karanganyar Regency in 2016-2020 by using one independent variable, namely Village Funds, and two dependent variables, namely IDM and TKS. Furthermore, the data were analyzed based on the panel data regression method. The results obtained from the panel data regression analysis showed that Fixed Effect Model (FEM) was the most appropriate approach to explain the effect of the dependent variable on the independent variable in this study.