Village Development: Spatial Effect VS The Performance Of The Village Government

Village funding in the amount of Rp 257.2 trillion in the past five years (2015-2019) uses a scheme that shares funding equitably. This is evident from the proportion of village funds (90 percent) that was divided equally (2015-2017) (Ministry of Finance, November 2017). This study aims to prove that the achievements of village development are not only due to the impact of the Village Fund Program, but are also based on government policies from the central government to the village. Seeing village development only from the perspective of the Village Fund is a relative undertaking. It is necessary to analyze the performance of village development to determine whether village development is inclusive at the village level (own effect) or there are other impacts outside the village (neighborhood effect) that have an effect on village development performance. The methodology used in this study is spatial econometrics. Testing was conducted on all villages in Indonesia (75,436 villages) sourced from Podes 2018 data. The findings show that village development by the local village government did not have a significant impact on the progress of village development. Development in neighbouring rural areas has a significant impact on the progress of village development. Village development undertaken on the basis of government policy at a level above the village administration has a significant impact on the progress of village development.