西南交通大学学报

第 57 卷 第 3 期 Vol. 57 No. 3
JOURNAL OF SOUTHWEST JIAOTONG UNIVERSITY June 2022
2022 年 6 月

ISSN: 0258-2724 DOI：10.35741/issn.0258-2724.57.3.38

Research article

Social Sciences

VILLAGE FUND MANAGEMENT, QUALITY OF LIFE AND COMMUNITY

WELLBEING: EVIDENCE FROM LEBAK REGENCY, INDONESIA

乡村基金管理、生活质量和社区福祉：来自印度尼西亚勒贝克摄政
的证据

Viverita Viverita *, Rifelly Dewi Astuti, Fanny Martdianty, Ratih Dyah Kusumastuti
Department of Management, Faculty of Economics and Business, Universitas Indonesia
Depok, Indonesia, vivеrita.d@ui.аc.id

Received: April 27 , 2022 ▪ Reviewed: June 3, 2022

▪ Accepted: June 20, 2022 ▪ Published: June 30, 2022

This article is an open-access article distributed under the terms and conditions of the Creative Commons
Attribution License (http://creativecommons.org/licenses/by/4.0)

Abstract
There is an intense debate on the effectiveness of the village fund program initiated by the Indonesian
government. This paper examines the program's effectiveness in improving the quality of life and
community well-being in rural areas from the villagers' perspective. Few studies have investigated the
program's impacts from an individual perspective using primary data. Thus, this is the first study that
analyzes the influence of the perceived management of the village fund program and community trust on
community engagement and individuals' perceptions of the quality of life and community well-being.
This study collected primary data by surveying 200 households in four sub-districts of the Lebak Regency
in Banten Province in Indonesia. The survey data were analyzed using partial least squares structural
equation modeling (PLS-SEM) with SmartPLS software. Results show that the perceived management of
a village's funds directly affects the villagers' perception of quality of life and community well-being. The
perceived village fund management also provides a significant path to community engagement. The paper
concludes that the government should consider including the community in its village development
program, thus increasing the residents' perceived quality of life and ensuring the program's success. This
study contributes to the recent literature by providing new evidence about the impact of the village fund
program on quality of life and community well-being using primary data at the household level.

Keywords: Perceived Village Fund Management, Community Trust, Community Engagement, Quality of Life,
Community Wellbeing

摘要 关于印尼政府发起的乡村基金计划的有效性存在激烈的争论。本文从村民的角度检验了该计
划在改善农村地区生活质量和社区福祉方面的有效性。很少有研究使用原始数据从个人角度调查
 Viverita et al. Village Fund Management, Quality of Life and Community Wellbeing: Evidence from Lebak Regency, Indonesia,
469
该计划的影响。因此，这是第一项分析乡村基金项目的感知管理和社区信任对社区参与和个人对
生活质量和社区福祉的看法的影响的研究。本研究通过调查印度尼西亚万丹省勒巴克县四个分区
的 200 户家庭收集了原始数据。使用“智能偏最小二乘”软件，使用偏最小二乘结构方程建模（
偏最小二乘结构方程建模）对调查数据进行分析。结果表明，村庄资金的感知管理直接影响村民
对生活质量和社区福祉的感知。感知到的村庄基金管理也为社区参与提供了重要途径。该论文的
结论是，政府应考虑将社区纳入其村庄发展计划，从而提高居民对生活质量的感知并确保该计划
的成功。这项研究通过使用家庭一级的原始数据提供有关乡村基金计划对生活质量和社区福祉的
影响的新证据，为最近的文献做出了贡献。
关键词: 感知村庄基金管理、社区信任、社区参与、生活质量、社区福祉
I. INTRODUCTION
In 2014, the Government of Indonesia issued
Law Number 6 regarding villages, addressing the
village funds program. According to the law,
"village funds are funds allocated in the state
budget (APBN), which are intended for villages,
and should be used to finance governance,
development, community development, and
community empowerment." The program was
implemented in 2015, and the number of village
funds disbursed by the government increased
significantly from 20.7 trillion IDR
(approximately1.725 billion USD) in 2015 to 72
trillion IDR (approximately 4.965 billion USD)
in 2020. On average, each village received
funding of 280 million IDR in 2015 and 960
million IDR in 2020. The increased funds were
essential to improve the economy and the
community's welfare. In addition, the program
results for the last three years have shown an
increase in the construction of facilities and
infrastructure in the villages [1].
Lebak Regency is one of the regencies in
Banten province. It contains 1,386,797 people,
representing a population growth rate of 1.88% in
2021 from 0.52% in 2019. The population of the
Lebak Regency is dominated by people of
productive age (> 15 years). Unfortunately, this
demographic bonus has not contributed
significantly to the region's economy, given the
increasing unemployment rate. In 2020, 9.63% of
the productive age population was unemployed,
compared to 8.05% in 2019. As a result, the
percentage of people living in poverty also
increased from 8.30% in 2019 to 9.24% in 2020.
However, with government assistance in the form
of village funds, there was an increase in the
gross regional domestic product (GRDP) from
IDR 28,756.881 in 2019 to IDR 29,076.694 in
2020. An increase also occurred in the Human
Development Index from 63.88 in 2019 to 63.91
in 2020 [2].
However, the village funds program receives
Vol. 57 No. 3 June 2022
significant criticism because of its design and
implementation. For example, [3] posited that the
village funds program tends to cause corruption
due to unclear assignments, relatively large
budget funds, inadequate public financial
management procedures, and control where the
accountability mechanism is still unclear. Since
the village fund program was launched, several
issues related to the implementation have been in
the public spotlight, especially acts of corruption
by the leaders of villages. Sixty-one of these
leaders were arrested in 2016 for misusing village
funds. The village fund involves many funds;
however, it is still unknown whether the program
has positively contributed to improving the well-
being of the residents of the various communities
[4]. Thus, it is necessary to investigate whether
the program has indeed improved the conditions
of the villages.
Many studies have proved that various forms
of assistance, when managed properly, positively
impact communities. The impacts of these
programs are measured by various methods and
success standards, such as community welfare [5],
[6], and economic impact [7], including
expenditures and consumption both at the
individual level and the village level as a
community. However, for the most part, the
measurement of the impacts has been based on
secondary data (i.e., data taken through national
surveys or censuses). Furthermore, using primary
data, few studies have investigated the program's
impacts from an individual perspective.
Therefore, this study aimed to analyze the
influence of the perceived management of the
village fund program on individuals' perceptions
of the quality of life and community well-being.
The community's quality of life consists of
various dimensions, such as income, work and
employment, education, health, housing, physical
safety, and involvement [8]. Therefore, the
perception of quality of life in this study is the
quality of life that individuals feel in society

regarding affection, provision of daily life needs,
services, and the future of individuals in society
[9]. This study also measures the perceived
community well-being built based on community
perceptions of the impact of community services
and conditions in various life domains, including
the family, social, leisure, health, financial,
cultural, consumer, work, spiritual, and
environmental domains [10].
An aid program's effectiveness is also
inseparable from various community
engagements and participation. However, studies
of 100 projects in 20 countries have shown that
community engagement may produce positive
and negative outcomes [11]. For example,
community engagement has proven to be
successful in infrastructure development but less
useful in meeting the needs of the poor [12].
Therefore, it is also necessary to measure the
perception of community engagement in
influencing the success of the village funds
program in improving the quality of life and
community well-being of village communities.
Ideally, the village fund program provides
opportunities for community involvement in
planning, implementing, and supervising the
implementation of programs for the common
good. However, in practice, community
involvement is often neglected. Therefore, this
study elaborates on the community's perception
of the impact of community involvement in
village fund programs on community well-being.
Thus, this study offers new ideas regarding
community perceptions of their involvement in
village fund programs and their perceptions of
improving quality of life and well-being. To
achieve this objective, we include community
engagement variables in the model.
To the best of our knowledge, no study has
examined the community has perceived village
funds management improves the quality of life
and the community's well-being. In general,
previous studies were conducted by looking at
the impact of the village funds program on the
reduction of poverty at the macro-level [13]; the
effect on financial access to finance [14], [15];
financial literacy [16]; and employment [16].
However, studies have rarely been conducted at
the household level. Thus, the role of village
funds in improving the quality of life and
community well-being at the household level has
not yet been examined. Based on the high
number of poor people in the Lebak Regency,
this study aimed to investigate whether village
funds can improve the quality of life and
community well-being by using primary data
from households. Specifically, we aim to answer
470
the following research questions:
RQ1: Does perceived village fund
management affect the quality of life and
community well-being?
RQ2: Does community trust affect the quality
of life and community well-being?
RQ3: What is the role of community
engagement in improving quality of life and
community well-being?
It is expected that this study will provide new
insights into the impact of the village funds
program on quality of life and community well-
being, as well as provide recommendations
concerning implementing the programs.
The remainder of the paper is organized as
follows. Relevant literature and the development
of hypotheses are discussed in Section 2, the
research methodology is discussed in Section 3,
the findings and discussion are presented in
Section 4, and the conclusions are presented in
Section 5.
II. LITERATURE REVIEW AND
HYPOTHESES DEVELOPMENT
A. Village Fund Program and Perceived
Village Fund Management
There are two types of village development
initiative models: 1) the model that originated
from the village (bottom-up) led by local village
leaders, or the Community Based Model (CBM),
and 2) the model that was initiated by the central
government (top-down), or the Government-Led
Model (GLM) [17]. In addition, [17] introduced
the Hybrid Governance Structure (HGS) model,
which is a village development program that
originates from the central government but
requires greater participation by volunteers from
the village community to improve program
performance by integrating community desires
with government goals.
Governments have launched village-specific
development programs in various countries.
Examples include village funds in the form of
working capital in Thailand [18-20], rural
residential land circulation programs in China [5],
conservation incentives in Kenya [21],
microfinance in China [22], other infrastructures
in Africa and India [23], [24], and prizes for
competitions in Denmark [25]. Meanwhile, in
Indonesia, the program known as the Village
Fund program is listed in Village Law 6/2014
[13], [26], [27].
A study by [13] that assessed the
government's programs to improve social welfare,
including the village funds program, found that
the programs are insufficient to improve the
 Viverita et al. Village Fund Management, Quality of Life and Community Wellbeing: Evidence from Lebak Regency, Indonesia,
471
economy of the poor residents.
However, according to [28], development
programs are successful if they satisfy the
requirements of the targeted beneficiaries. Hence,
it is important to evaluate the program's impact
[29], and such an evaluation can be conducted by
investigating the villagers' perceptions
concerning whether the village fund program is
managed properly to enhance the village's
condition (perceived management of village
funds).
B. Quality of Life
[30] concluded that there are several
indicators of a community's quality of life. For
example, individual goals in life, such as home,
education, work, owning a small business, having
money, and traveling, are categorized as
indicators of one’s quality of life [31]. In addition,
in the regional scope, the quality of life indicators
include income, work and employment,
education, health, housing, physical safety, and
bonds/ties [8]. In addition, [32] developed five
domains of the quality of life: urban issues,
family and personal welfare, community welfare,
way of life, and community awareness and
facilities. Likewise, from the government's
perspective, it is hoped that they can create and
implement a program that can provide
community welfare by improving the quality of
life in the community.
C. Community Wellbeing
In order to improve people's well-being and
increase their quality of life, a good program
should be created and supported by society [33].
Various terms describe improvements in the
conditions of society related to welfare and well-
being. The discussion of welfare is focused more
on the past and present, whereas well-being also
focuses on the future. Using four comprehensive
studies, [34] indicated seven dimensions of
community well-being: services and facilities,
environmental, economic, social, political, health,
and attachment (attachment to a place and a
community).
D. Community Engagement
Community engagement is the reciprocal
communication and deliberation between the
government and citizens, enabling citizens to
participate together in formulating policies and
providing government services [35]. In addition,
the interaction between the community and the
government is a two-way cycle with equal
standing, shared commitment, and shared
responsibility. It is believed to maintain the
Vol. 57 No. 3 June 2022
results of development programs more effectively
[12]. [35] described the type of participation or
community involvement from the lowest level,
namely participating in elections and passive
participation, followed by participation by
conducting consultations, active participation,
and interactive participation until the community
is mobilized to engage with various government
programs at the highest level. In addition, [7]
found that higher community participation in
managing village funds through village-owned
enterprises may help improve BUM Desa.
E. The Effects of Perceived Village Fund
Management
A study by [14] examines the impact of
village funds in improving sustainable
communities, especially the direct impact of
infrastructure development in the form of village
roads on the economy of Cihideung Village in
the West Java Province. This study found that
using village funds through infrastructure
development in the form of village roads could
improve the economy of rural communities
through increased income per capita.
Furthermore, a study done by [36] in the Lebak
District found that village funds significantly
reduced poverty and income inequality. Based on
the above explanations, we developed the
following hypotheses:
H1: Perceived village fund management
positively affects the perceived quality of life.
H2: Perceived village fund management
positively affects perceived community well-
being.
Community engagement contributes to the
achievement of sustainable development goals
[12], and communities are willing to be involved
in a government program (such as the village
funds program) if they perceive that the program
is transparent and properly managed [37]. Based
on this explanation, we developed the following
hypothesis:
H3: Perceived village fund management has a
positive effect on community engagement.
F. Community Trust and Community
Engagement
Trust in government relates to various
attitudes and behaviors at the individual level.
For example, trust can encourage individuals to
pay taxes, have a positive attitude towards
government spending, and believe in the various
roles undertaken by the government [38]. In
addition, previous studies have confirmed that
trust in the government will support various
programs, such as the development of health
 472

technology, emergency programs, infrastructure, H. Quality of Life and Community Wellbeing

and welfare programs [38].
Likewise, community involvement in
government programs is driven by the knowledge
of the members of the community about a
program, positive relationships, and trust in the
government or its leaders. Hence, in the context
of the village fund program, community trust
may enhance community involvement, leading to
an enhanced program outcome. [39] found that
community trust is associated significantly with
community engagement. Therefore, we
hypothesize:
H4: Community trust has a positive effect on
community engagement.
G. Community Engagement, Quality of Life,
and Community Wellbeing
Regarding the village funds program, several
problems often occur at the implementation at the
village level, leading to misuse of the village’s
budget fund. For example, problems with the
implementation of village funds may occur due to
the lack of community participation in planning,
the monitoring process, the limited capacity of
village leaders and village officials, suboptimal
village institutions, and the politicization of the
use of village funds as a means of getting votes
for a village leader [40].
There is evidence that community
engagement is key to improving the quality of
life and the community's well-being [39].
Therefore, it can be concluded that the chances of
the village's funds' success in improving the
community's quality of life and welfare will
increase if the community participates or is
engaged in managing the village's funds.
Therefore, the following hypotheses were
formulated:
H5: Community engagement has a positive
effect on the quality of life.
H6: Community engagement has a positive
effect on the community's well-being.
The concept of well-being has been used
interchangeably with quality of life, happiness,
and life satisfaction. Researchers have focused on
understanding and measuring well-being at the
individual, community, regional, and national
levels [34]. At the community level, well-being
means the satisfaction of a group of people in
their residence related to the social and physical
environment, services, and facilities [41].
Measurements related to community well-being
commonly are built based on community
perceptions of the impact on individual quality of
life of community services and conditions in
various life domains (e.g., family, social, leisure,
health, financial, cultural, consumer, work,
spiritual, and environmental domains) [10].
Hence, we hypothesize as follows.
H7: Individual quality of life has a positive
effect on community well-being.
III. METHODS
A. Measurement and Survey Instruments
In this study, a quantitative method was used,
and surveys were used to collect data. First, the
survey questionnaire was developed based on
previous studies (Table 1). Then, the items were
translated into Bahasa Indonesia and double-
checked by our fellow bilingual researchers to
ensure the validity of the overall translations.
Then, the questions were reviewed by field
researchers to determine whether the items would
be understood easily by the villagers, who are the
target respondents. According to the field
researchers, the questionnaire has good
readability. Finally, field surveyors conducted the
survey. It was stated in the questionnaire and by
the surveyors that the survey was voluntary, and
the respondents remained anonymous. It was also
stated that the data would be kept confidential
and used only for academic purposes.

Table 1.
Summary of items
Variables Code Item content References
Perceived VF1 Our village officials have used village funds for various development in the [42]
effectiveness of last three years
village fund VF2 Our village officials have provided information regarding village fund use
management in the last three years
VF3 Our village officials have managed the village fund for the community
welfare
VF4 Our village officials have a specific program for managing the village fund
VF5 In my opinion, the management of village funds where I live has been
carried out in the right and proper way
VF6 In my opinion, the management of village funds where I live has involved
the community well
Community CE1 Everything related to the village fund catches my eyes [25][41][43][44]
 Viverita et al. Village Fund Management, Quality of Life and Community Wellbeing: Evidence from Lebak Regency, Indonesia,
Vol. 57 No. 3 June 2022
473
engagement Continuation of Table 1
CE2 I enjoy learning about village funds and their management
CE3 I am enthusiastic about being involved in managing village funds where I
live
CE4 I will devote my time to being involved in managing village funds where I
live
CE5 I am happy if I am involved in managing village funds where I live
CE6 I enjoy being involved in managing village funds and interacting with
village officials and village communities
CE7 Being involved in managing village funds is fun for me
Quality of life QOL2 I can fulfill my daily needs better after having village funds where I live [43]
QOL3 I get better community service after having village funds where I live
QOL4 Overall, I have a better quality of life after having village funds where I
live
QOL5 I can achieve a better future after having village funds where I live
Community CWB The village where I live now is improving after the village fund program [10]
well-being 2 was implemented.
CWB I feel satisfied living in this village after the village fund implemented
3
CWB My village has a better future after the village fund implemented
4
Community CT1 I believe in the management of village funds carried out by my village [45]
trust officials
CT2 I believe my village officials will keep their promise regarding the
management of village funds
CT3 I believe the programs that come from village funds are beneficial for the
village where I live

The study is cross-sectional, and the survey C. Data Analysis

data are analyzed using a partial least squares The profile of respondents is presented in
structural equation model (PLS-SEM) with Table 2. The majority of the respondents are
SmartPLS 3.0 software. PLS-SEM is suitable for female (68%), more than half of the respondents
a complex model with small sample size and are 36 years old, or older (56.5%), and the most
makes almost no assumptions concerning the common education level is primary/secondary
data [46]. Therefore, a two-step approach was school (54%). Regarding the occupation, 45.5%
used to analyze and interpret the results [47]. of the respondents are homemakers, and 72%
First, the outer (measurement) model was have less than 35 USD monthly income.
assessed, and then the inner structural model was
tested. Table 2.
Respondents’ characteristics
B. Participants and Procedures Characteristics n %
A sample of 200 villagers in the Lebak Gender
Male 63 32%
Regency was surveyed using the questionnaire Female 137 68%
that had been developed. In addition, the Age Range
prospective respondents were asked several 18-25 23 11.5%
26-35 64 32%
screening questions before they could continue 36-50 80 40%
participating. For example, whether they were at Over 50 33 16.5%
least 18 years old, whether they had a permanent Education
Basic (primary and secondary) 108 54%
residence in the village, and whether they had High school 89 44.5%
lived in the village prior to 2015 until the time of Diploma and bachelor’s degree 3 1.5%
the survey (2020); 2015 is the year the village Post-graduate degree 0 0%
Occupation
funds program was implemented nationally. The Farmer/Breeder/Fisherman 38 19%
surveys were conducted at the respondents' Self-employed 26 13%
homes to ensure they were comfortable and Government officers and private sectors
10 5%
thoughtful when answering the questions. The employees
Unemployed 10 5%
data were collected by field researchers Homemaker 91 45.5%
experienced in collecting data in the Lebak area. Others 25 12.5%
They were adequately informed and briefed Monthly Income
Less than 500,000 IDR (around 35 USD) 144 72%
about the objective of the survey and the > 500,000 - 1,000,000 IDR (35-70 USD) 27 13.5%
questionnaire. > 1,000,000 - 3,000,000 IDR (70-210 USD) 25 12.5%
> 3,000,000 - 6,000,000 IDR (210-420 USD) 4 2%
 474

We used two approaches to measure the

D. Measurement Model
The evaluation of the measurement model
ensured that the reliability and validity of
measurement scales were confirmed. The
Cronbach’s alpha and composite reliability were
above the minimum values of 0.7 [47].
Furthermore, the convergent validity of the scales
was supported (Table 3) since the values of the
average variance extracted (AVE) of all variables
were greater than 0.50, and all of the item
loadings were greater than 0.7.
discriminant validity of the scales (Tables 3 and
4) as recommended by [47]. First, the cross-
loading of the indicators was examined, and the
results showed that one indicator (QOL1) had to
be removed due to a discriminant validity
problem. Table 3 summarizes the validity and
reliability tests after the removal of QOL1.
Second, all variables were assessed based on the
criterion proposed by [47], in which the square
root of each AVE is higher than its correlations
with other constructs (Table 4).

Table 3.
Measurement model
Constructs Items Outer loadings Cronbach’s alpha Composite AVE
reliability
Perceived effectiveness of village fund VF1 0.884 0.930 0.945 0.741
management
VF2 0.836
VF3 0.872
VF4 0.881
VF5 0.879
VF6 0.811
Community engagement CE1 0.753 0.889 0.913 0.599
CE2 0.719
CE3 0.790
CE4 0.793
CE5 0.801
CE6 0.800
CE7 0.759
Quality of life QOL2 0.804 0.851 0.899 0.691
QOL3 0.804
QOL4 0.881
QOL5 0.831
Community wellbeing CWB1 0.916 0.909 0.937 0.788
CWB2 0.919
CWB3 0.916
CWB4 0.792
Community trust CT1 0.907 0.880 0.926 0.807
CT2 0.919
CT3 0.869

Table 4. used to generate standard errors and t-values [47].

Discriminant validity The results showed that none of the VIF
CE CT CWB QOL VF values was below 0.2 or above 5; therefore, the
CE 0.774 predictor constructs are free from collinearity
CT 0.741 0.899 issues. The estimated path relationships between
CWB 0.525 0.473 0.887
QOL 0.654 0.583 0.738 0.775
the latent variables also were assessed by
VFM 0.612 0.570 0.546 0.498 0.861 evaluating the path
coefficients along with their signs and
E. Structural Model magnitudes. Figure 1 summarizes the results of
In this study, the structural model was the estimation for the proposed structural model.
evaluated using the approaches recommended by The coefficient of determination (R2) values
[48]: (1) assessing collinearity by checking the ranged from 0.381 to 0.622, and they were
variance inflation factor (VIF) values, (2) considered moderate in measuring the predictive
evaluating the coefficient of determination of accuracy of the model [47]. In addition, we used
latent variables, (3) calculating and evaluating the the blindfolding method to calculate the Q2
predictive relevance (Q2), and (4) assessing the values. All of the Q2 values were greater than
path coefficients and the size of the effect. In zero, ranging from 0.262 to 0.484, indicating a
addition, a resampling bootstrap method was medium to large predictive relevance for
 Viverita et al. Village Fund Management, Quality of Life and Community Wellbeing: Evidence from Lebak Regency, Indonesia,
Vol. 57 No. 3 June 2022
475
endogenous constructs [47].

Figure 1. Results of the structural model

Table 5.
Path coefficient and the result of significance testing
Path Path coefficient T Value P-Value Notes
H1: VFMQOL 0.151 1.993 0.046 Supported
H2: VFMCWB 0.258 3.787 0.000 Supported
H3: VFMCE 0.281 4.391 0.000 Supported
H4: CTCE 0.581 10.133 0.000 Supported
H5: CEQOL 0.518 6.686 0.000 Supported
H6: CECWB -0.042 0.598 0.550 Not supported
H7: QOLCWB 0.667 11.396 0.000 Supported

The empirical evidence from this study shows
that the perceived village fund management
(VFM) also positively affects the perceived
community well-being (CWB) and community
engagement (CE), so H2 and H3 are supported.
This study also confirmed that the perceived trust
of the villagers (CT) concerning their local
leaders' management of their village fund
positively influences community engagement
(CE); thus, H4 is supported. Community
engagement (CE) also was found to have a
relationship with the villagers' perceived quality
of life (QOL); thus, H5 is supported. However,
there is no evidence that community engagement
(CE) is related directly to perceived community
well-being (CWB); thus, H6 is not supported.
Finally, having a good perception of quality of
life (QOL) leads to a positive perception of well-
being (CWB); thus, H7 is supported. In particular,
the more the villagers feel that they have a good
quality of life after their village receives the
village fund, the stronger the effect will be on
their perception of the community's well-being.
Based on the endogenous variables, the results
showed that community engagement is
influenced significantly by the perceived
community trust (coefficient = 0.581) rather than
the village fund's perceived management
(coefficient = 0.281). Therefore, to enhance the
people's engagement, the residents must perceive
that the village leader is trustworthy. The
perceived quality of life is affected significantly
by the residents' engagement (coefficient =
0.581) rather than whether the fund is managed
properly (coefficient = 0.151). This likely is
because the residents are not directly involved in
managing the funds. However, when the
residents are actively involved, they will feel
more connected with the programs and positively
perceive their lives. Regarding the well-being of
the community, the finding proves that the
perceived quality of life (coefficient = 0.667) is
connected strongly with the community's well-
being compared to the perceived village fund
(coefficient = 0.258). However, the result also
shows that community engagement cannot

directly involve the perceived well-being of the
community. It means that the residents will
perceive greater well-being after they become
actively engaged, and being engaged causes them
to perceive that they have a better quality of life.
IV. DISCUSSION
A. The Effects of Village Fund Management
As explained earlier, the perceived
management of the village's funds directly and
positively affects individuals' quality of life.
These results are in agreement with the results of
[36]. That means that when the community
members perceive that the village's funds are
being managed properly, they feel that they have
a better quality of life compared to their
condition before the initiation of the village fund
program. As mentioned by [4], one of the
objectives of the village fund program was to
improve the development of the village (e.g., by
improving the village's facilities, infrastructure,
and services). When the village is in good
condition, the villagers can receive better services
(e.g., administrative and health services), and this
leads to a better quality of life.
We also found that the perceived management
of the village's funds has a direct and positive
effect on the community's feeling of well-being.
These results are similar to the results of [48],
and it seems that the better the community
perceives the management of the village's funds
to be, the better the community members feel
about their well-being. Similar to previous
explanations, a village fund that is managed
properly will result in better services, facilities,
and infrastructure for the village, in turn leading
to better living conditions and a better future for
the villagers.
The results also indicated that the perceived
management of the village’s funds positively
affects the engagement of the community in
managing the funds. These results are similar to
the results of [37]. It indicates that the
communities in the villages studied are willing to
be engaged in managing the village's funds when
they perceive that the funds are managed
properly by the officials of the village. The
sampled communities considered that ensuring
that the village's funds are used for various
development activities is the most important part
of managing the village's funds.
B. The Effects of Community Trust
We also found that community trust has
positive and significant effects on community
engagement. The results support the results of
476
previous studies that found that the higher the
level of the community's trust in an institution or
a program, the higher their engagement will be in
government programs [38], [39], and in private
institutions [49]. It seems that the perceived trust
of the community that their local leader will
manage the village's funds appropriately has a
positive effect on the engagement of the members
of the community. This finding indicates that
when people trust their local government, they
are willing to support and be involved in the
development program because they believe the
program will provide benefits for them. The
community trust concerning the village funds
program can still be improved by showing that
the program has been implemented as promised
and by regularly providing adequate information
concerning how funds are being used.
C. The Role of Community Engagement
This study found that community engagement
directly affects the quality of life in the Lebak
Regency, and the effect is positive and significant.
This finding indicates that involving the
community in managing the village's funds will
increase the individual quality of life of the
residents. This finding is consistent with the
findings [50] that the partnership between the
government and the community ensures the
sustainability of the health promotion program
and increases the residents' quality of life [51].
An intriguing result was found concerning the
effects of community engagement on the well-
being of the community. The negative impact
implies that the community's participation in
managing the village's funds worsens the
community's prosperity. This finding is probably
due to the implementation of a village fund
program that has yet to reach all villagers, some
of whom are not well-informed about the
program's benefits. This result is aligned with the
construal-level theory that suggests people will
behave according to their perception of what will
happen in the future [52].
One interesting finding of this study is that
community engagement partially mediates the
relationship between the perceived village fund
and quality of life. This result indicates that
community engagement is crucial in supporting
the village development program in enhancing
people's quality of life. Furthermore, this result
strengthens the role of community engagement in
the program's success.
The results also showed that the community
positively perceives its involvement in the village
funds program. Thus, due to the resident’s
interest in the program, they are willing to
 Viverita et al. Village Fund Management, Quality of Life and Community Wellbeing: Evidence from Lebak Regency, Indonesia,
477
allocate time to be involved. However, the data
show that less than half of the respondents were
involved in the village funds program in their
villages (Table 6).
Table 6.
Community member’s knowledge of and involvement in the
village fund program
Questions N %
Do respondents know about the village fund?
Yes 183 91.5%
No 17 8.5%
Do respondents know about the usage of village funds?
Yes 148 74%
No 52 26%
Are respondents involved in managing the village fund?
Yes 84 42.5%
No 116 57.5%
Hence, the village officials must engage the
community in managing the village funds
program. Previous studies, such as [35], have
shown that five elements can improve
community engagement in government
programs: (1) a sincere motivation to encourage
the involvement of the community, (2) trust and
the relationship that is built by communicating
continuously and consistently, (3) collaborative
leadership supported by the leaders' good
attitudes and behaviors, (4) inclusive
involvement of the community without any
discrimination, and (5) implementation of a
program that is transparent and accountable.
V. CONCLUSION
A. Main Findings of the Present Study
This study examined the perceived
management of a village's funds on an
individual's quality of life and community well-
being in the Lebak Regency. Also, we evaluated
the effect of community trust on community
engagement in enhancing the quality of life and
community well-being and the role of community
engagement in improving quality of life and
community well-being. The findings of this study
revealed the critical role of perceived village fund
management in developing the community's
quality of life and well-being. The results also
show that the perceived village fund management
provides a significant path to community
engagement. Also, we found that community
trust affects community engagement significantly,
and community engagement also provides a
significant path to quality of life. Thus, it was
confirmed that community engagement partially
mediates the relationship between the perceived
management of the village's funds and quality of
life and the relationship between community trust
Vol. 57 No. 3 June 2022
and quality of life. Since we found a significant
role of community engagement as a mediator
between perceived village fund management and
quality of life and between community trust and
quality of life, we can conclude that the
government should consider including the
community in its village development program.
Doing so will increase the residents' perceived
quality of life and ensure the program's success.
B. Strengths, Limitations, and
Recommendations for Future Research
Two of the objectives of the village funds
program are improving the public service and
improving the development of the village. In
contrast to previous studies, which looked at the
impact of the village funds program on the
reduction of poverty at the macro level, the
household level was rarely considered. This study
offers a new approach by conducting a survey of
individuals at the household level, which can
better reflect the community's perception of
village fund program management, trust in
village government, involvement in the program,
and its impact on quality of life and welfare. In
addition, it can assist the government in
increasing the effectiveness of implementing the
village fund program by embracing the
community.
The indicators in the village community
reveal that the community members were happy
to be involved in managing village funds. Thus,
community engagement can begin during village
fund management planning by providing
opportunities for the community to provide input
on what is needed through various discussion
forums with community representatives.
Community engagement can also be carried out
at the implementation stage through the "gotong
royong" principle, which refers to working with
the community village to build physical facilities
and infrastructure. The community could also act
as a supervisor, providing suggestions and
criticisms and reporting if things are not
following the mutual agreement through the
community's representative who is part of the
committee. Direct participation and engagement
from the community is the most effective way to
increase the success of development programs,
especially at the village level [53].
Several limitations of our study provide
potential directions for future research. First, we
included only four villages in the Lebak Regency
area, whereas the village fund program applies to
every village in the country. Thus, future studies
must be conducted to expand the available data to
reach a general conclusion. Second, this study is

cross-sectional, and thus our findings can only
imply rather than prove. Therefore, accurate
analysis of the results requires careful
consideration and an accurate interpretation.
Third, our results only reflect the program's
current effect, and such a program must be given
adequate time to reach its goals. Thus, a
longitudinal study might be more beneficial in
investigating the long-term effect.
ACKNOWLEDGMENT
This study was funded by the Directorate of
Research and Community Engagement,
Universitas Indonesia, contract number NKB-
1778/UN2.RST/HKP.05.00/2020.
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