Do village funds have an influence on poverty alleviation in the village?

Master of Economics study program, Department of Economics, Trunojoyo Madura University, Bangkalan, Indonesia
Center for Islamic Development Management Studies (ISDEV), Universiti Sains Malaysia, Penang, Malaysia
Development Economics Study Program, Trunojoyo Madura University, Bangkalan, Indonesia

^* Corresponding author: sutikno@trunojoyo.ac.id

Abstract

The Concept of Inclusive Economic Development is an economic development concept that creates broad access and opportunities for all levels of society as a whole, improves welfare, and reduces disparities between groups and regions. Based on the Inclusive Economic Development Index, regionally the districts on Madura Island are classified as low. Bangkalan Regency is ranked 38th out of 38 districts/cities in the East Java administrative region. Meanwhile, the other 3 districts, namely Sampang, Pamekesan and Sumenep, were ranked 37th, 35th and 34th respectively. Based on this data, it shows that four districts in Madura are classified as underdeveloped areas compared to 38 districts/cities in East Java Province. This study will analyze the factors that influence poverty from the No Poverty Village Index indicator. The research objects were 961 villages in four districts on Madura Island. The data used in this research is secondary data published by the Ministry of Villages, Development of Disadvantaged Regions and Transmigration. The variables that will be tested for their influence on the Village Index Without Poverty include: Amount of Village Funds, Healthy and Prosperous Village Index, Village Education Quality Index, Equitable Village Economic Growth Index, Village Infrastructure Index According to Innovation and Infrastructure Needs, Partnership Index for Village Development, Dynamic Village Institutional Index and Adaptive Village Culture, as well as the Peaceful and Fair Village Index. The results of the regression analysis show that the Village Education Quality Index variable and the Equitable Village Economic Growth Index variable have a significant effect on reducing poverty. Meanwhile, the other six dependent variables, namely: Amount of Village Funds, Healthy and Prosperous Village Index, Village Infrastructure and Innovation Index According to Needs, Village Development Partnership Index, Dynamic Village Institutions Index and Adaptive Village Culture, and Peaceful and Fair Villages, do not have a significant effect on reducing rural poverty on the island of Madura.