The influence of village spending on the village development index in Indonesia

The Village Law gives authority to the village government to regulate and manage village finances independently. Village financial management in the form of APBDes is mainly used for spending in the Village Development Implementation Sector and Village Community Empowerment Sector. Indicators of village development success are measured by the Village Development Index. The aim of this research is to determine the extent to which village spending has an effect on increasing the village development index. This research analyzes data using Stata software. The research results show that Expenditures in the Village Development Implementation Sector, Expenditures in the Village Community Development Sector, and Expenditures in the Village Community Empowerment Sector have a significant effect on the Village Development Index. The implication of this research is to provide input in formulating village financial management policies.


Introduction
Law Number 6 of 2014 concerning Villages marks a paradigm shift in village regulation.Villages are no longer seen as development objects but are instead positioned as subjects and the forefront of development and community welfare enhancement.The law grants authority to village governments to independently regulate and manage governance, development implementation, community development, and community empowerment.Therefore, village governments are required to be more independent in managing governance and various natural resources, including financial management and village assets, to improve the welfare and quality of life of rural communities.To measure the independence of village governments in managing village finances, the Ministry of Villages, Development of Disadvantaged Regions, and Transmigration measure it using the Village Development Index (VDI) score.The indicator framework developed within the VDI is based on the concept that for villages to advance and be independent, there needs to be a framework of sustainable development where social, economic, and ecological aspects complement and maintain the potential and capabilities of villages for the welfare improvement of rural communities.

Performance of Village Financial Management
Village governance plays a strategic role in regulating communities within its jurisdiction to achieve government development goals and acts as an extension of the central government.The administration of village governance is a subsystem of the government administration system, granting villages the authority to regulate and manage the interests of their communities.
Villages have rights, authority, and obligations to execute all organizational systems in village governance, including legal regulations, financial management, village assets, and human resource development.Regarding village financial management, its implementation depends on the performance of village governments in achieving development and empowerment goals.Performance in government agencies, including village governance, has attracted significant attention due to the increasing public awareness of good governance.
The performance measurement of village financial management is conducted by several relevant technical ministries, mainly by the Ministry of Villages, Disadvantaged Regions Development, and Transmigration, and the Ministry of Finance of the Republic of Indonesia.Every year, the Ministry of Villages, Disadvantaged Regions Development, and Transmigration establish the Village Development Index (VDI) score, while the Ministry of Finance utilizes performance allocation for the allocation of Village Funds.

Village Spending Quality
The main goal in village development planning is to fulfill the needs of rural communities in terms of physical facilities and community empowerment activities.Achieving these goals is inseparable from active community participation facilitated in the village planning process.Based on this, community participation in the village planning process is a mandatory aspect that must be fulfilled in village planning.Community participation is reflected in the implementation process of village deliberations and village development planning deliberations (musdes/musrenbangdes).This is because village deliberations are spaces for community participation in decision-making in village planning and governance.Therefore, the evaluation of the implementation of village deliberations (musdes/musrenbangdes) becomes very important to ensure participatory, transparent, and accountable planning.

The Village Development Index
The Village Development Index (VDI) is designed to strengthen efforts to achieve rural development goals and is useful in analyzing the development status of each village closely related to its characteristics, and it is developed as an instrument to achieve government development targets.The VDI divides villages into five categories: very underdeveloped villages, underdeveloped villages, developing villages, advanced villages, and self-reliant villages.
The Village Development Index (VDI), or IDM in its abbreviation, is a composite figure used to measure the level of development in villages.The VDI serves as a "technocratic" tool to measure the development status of villages through the calculation of composite scores for each indicator established by the authority and functions of the Ministry of Villages, Disadvantaged Regions Development, and Transmigration.In this context, the VDI involves several indicators relevant to village development, such as infrastructure, education, health, economy, and others.The composite measurement of scores for each indicator provides a comprehensive overview of village self-reliance.The results of IDM analysis in determining village status are expected to serve as the basis for village development planning.
The implementation of authority based on local origin rights and village-scale local authority, supported by financing from the Village Fund, can serve as a strong driver for villages to progress and become self-reliant.This paradigm states that villages are subjects of national development.The status of village progress and self-reliance is described by a classification that is expected to facilitate an understanding of the current situation and conditions of villages, as well as how policy steps should be developed to support the improvement of village life to become more advanced and self-reliant.

Methodology
This research is classified as both descriptive and verificative research.Descriptive research aims to systematically, factually, and accurately describe, depict, or portray the characteristics and relationships between investigated variables.On the other hand, verificative research aims to test hypotheses using statistical and field analysis (Sugiyono, 2013).
This study was conducted in villages across Indonesia using a sampling method distributed across 33 provinces.The research samples were randomly selected to represent villages throughout Indonesia.The research period was planned to last for four months, from October 2023 to January 2024.

Research Findings
Descriptive statistical tests were conducted to present an overview and general information regarding the data used in this study.By conducting descriptive statistical tests, the mean value, maximum value, minimum value, and standard deviation of each variable can be determined.Below are the results of the descriptive statistical analysis for each research variable.Based on the results of the testing in the previous panel data regression selection conducted, it was found that the appropriate model to be used in this study is the fixed effect model.

Simultaneous Test (F Test)
The F-statistic test is conducted to determine whether the independent variables in this study, namely Expenditure on Village Development Implementation, Expenditure on Community Development, and Expenditure on Community Empowerment, collectively or simultaneously influence the dependent variables, namely Social Resilience Index, Environmental Resilience Index, and Economic Resilience Index.
The F-statistic test is conducted by considering the probability value (p-value) and also the calculated F-value.If the probability value is less than 0.05, then the independent variables in this study can be declared to have a simultaneous effect on the dependent variables, thus the regression model can be accepted as a whole.Conversely, if the probability value exceeds 0.05, then the independent variables in this study are considered not to have a simultaneous effect on the dependent variables.If there is no simultaneous effect, then the regression model cannot be accepted as a whole.The results of data processing using the F-statistic test are presented in the following table, Table 2

Partial Test (T-Test)
The t-test is conducted to determine the partial (separate) influence of one independent variable on the dependent variable, with the assumption that other independent variables have constant values.The Influence of Village Development Expenditure on the Social Resilience Index Based on Table 3, the test results of the influence of Village Development Expenditure on the Social Resilience Index are positive and significant (coefficient = 0.00000102; p-value = 0.001).Thus, it can be concluded that Village Development Expenditure has a positive and significant effect on the Social Resilience Index.

The Influence of Community Development Expenditure on the Social Resilience Index
The test results of the influence of Community Development Expenditure on the Social Resilience Index are negative and significant (coefficient = -0.000000694;p-value = 0.041).Thus, it can be concluded that Community Development Expenditure has a negative and significant effect on the Social Resilience Index.

The Influence of Community Empowerment Expenditure on the Social Resilience Index
The test results of the influence of Community Empowerment Expenditure on the Social Resilience Index are positive and significant (coefficient = 0.0000302; p-value = 0.000).Thus, it can be concluded that Community Empowerment Expenditure has a positive and significant effect on the Social Resilience Index.

The Influence of Village Development Expenditure on the Environmental Resilience Index
The test results of the influence of Village Development Expenditure on the Environmental Resilience Index are positive and significant (coefficient = 0.00000389; p-value = 0.001).Thus, it can be concluded that Village Development Expenditure has a positive and significant effect on the Environmental Resilience Index.

The Influence of Community Development Expenditure on the Environmental Resilience Index
The test results of the influence of Community Development Expenditure on the Environmental Resilience Index are negative and not significant (coefficient = -0.000000443;p-value = 0.599).Thus, it can be concluded that Community Development Expenditure has a negative and not significant effect on the Environmental Resilience Index.

The Influence of Community Empowerment Expenditure on the Economic Resilience Index
Based on Table 2, the test results of the influence of Community Empowerment Expenditure on the Economic Resilience Index are positive and significant (coefficient = 0.0000394; p-value = 0.000).Thus, it can be concluded that Community Empowerment Expenditure has a positive and significant effect on the Economic Resilience Index.

The Influence of Village Development Expenditure on the Economic Resilience Index
The test results of the influence of Village Development Expenditure on the Economic Resilience Index are positive and significant (coefficient = 0.00000175; p-value = 0.002).Thus, it can be concluded that Village Development Expenditure has a positive and significant effect on the Economic Resilience Index.

The Influence of Community Development Expenditure on the Economic Resilience Index
The test results of the influence of Community Development Expenditure on the Economic Resilience Index are negative and significant (coefficient = -0.00000249;p-value = 0.000).Thus, it can be concluded that Community Development Expenditure has a negative and significant effect on the Economic Resilience Index.

The Influence of Community Empowerment Expenditure on the Economic Resilience Index
The test results of the influence of Community Empowerment Expenditure on the Economic Resilience Index are positive and significant (coefficient = 0.0000412; p-value = 0.000).Thus, it can be concluded that Community Empowerment Expenditure has a positive and significant effect on the Economic Resilience Index.Economic Resilience Index.This is strongly supported by the allocation of village expenditures by villages in Indonesia, which allocate a considerable portion to the field of Community Empowerment in rural areas.
Partially, it can be stated that Expenditure on Community Empowerment in rural areas has a positive and significant effect on the Social Resilience Index.This is aligned with the activities carried out in the field of Village Development Implementation aimed at empowering women, protecting children, and families.In the context of the Village Development Index (VDI), Social Resilience is assessed based on aspects such as social welfare, security, and community participation, and village-level development should strengthen social relationships, build solidarity networks, and ensure social welfare.
Expenditure on Community Empowerment in rural areas has a positive and significant effect on the Environmental Resilience Index.This is related to the allocation of expenditures for activities in sectors such as fisheries, maritime affairs, fisheries, and animal husbandry, which should support the successful preservation of the environment and natural resources in villages to support sustainability.Furthermore, it can be stated that Expenditure on Community Empowerment in rural areas has a positive and significant effect on the Economic Resilience Index.This is related to the allocation of village expenditures for a wide range of community empowerment activities in sectors such as agriculture, animal husbandry, cooperative and SME development, as well as industrial and trade activities.
Based on the discussion above, it can be concluded that Expenditure on Village Development Implementation and Community Empowerment in rural areas plays a role in increasing the VDI score.Both areas of expenditure are largely funded by Village Funds.This is consistent with the findings of a study by Ambarwati (2022) which concluded that Village Funds provided to villages have a significant impact on improving village status, as evidenced by the increased Village Development Index in Pesawaran Regency.
The expected outcome of village expenditures is the welfare of the community.This is in line with the findings of a study by Hidayat (2022), which stated that there is a significant positive relationship between village expenditures and community welfare in rural areas.

Conclussion
Based on the research findings regarding the hypothesis testing related to the formulation of the research problem and objectives above, it can be concluded that Expenditure on Village Development Implementation, Expenditure on Community Empowerment in rural areas, and Expenditure on Community Empowerment significantly influence the Village Index.

Limitations
The time period used in this study is limited to only 3 years, from 2021 to 2023.Additionally, the research sample is limited to 23,200 villages out of 74,962 villages.Subsequent research is expected to have a longer time span so that the relationship between village expenditures and the Village Development Index score can be better depicted.Furthermore, the data used in this study is sourced only from the Financial and Development Supervisory Agency and the Ministry of Villages, Disadvantaged Regions, and Transmigration.Future research is expected to enrich the data sources to make them more comprehensive, thus improving the research outcomes.

Figure 1 .
Figure 1.The Village Development Index Hypotheses Several previous studies have concluded that the utilization of village funds affects the Village Development Index (VDI) score.The difference in this study compared to previous research lies in the variables used, which focus on village spending areas and the research location.Village spending areas are chosen as the research variable because they are related to financial management by the human resources available in the village, specifically concerning expenditure allocation by village officials.
The type of data collected in this study is secondary data.Data were obtained from the Ministry of Villages, Disadvantaged Regions Development, and Transmigration (Kemendesa PDTT) and the Supreme Audit Agency (Badan Pengawasan Keuangan dan Pembangunan).Secondary data were collected through the collection of expenditure transaction data and the performance measurement results of the Village Development Index (VDI).Initial data sourced from the Supreme Audit Agency and the Ministry of Home Affairs amounted to 27,190 villages for expenditure realization data.Meanwhile, the data on IDM score results from the Ministry ofVillages, Disadvantaged Regions Development, and Transmigration amounted to 74,962 villages.This study analyzes data using Stata software.The research tests hypotheses using a multiple linear regression model to obtain an overview of the influence of Village Expenditures, consisting of Expenditures for Village Development Implementation, Community Development Expenditures, and Expenditures for Community Empowerment, on the increase in Village Development Index (VDI) scores.

Table 1 .
Descriptive Statistical Results

Table 2 .
: Results of F-Statistic TestBased on the data processing results presented in the table above, it can be observed that the probability value of the F-statistic in each model is obtained as 0.000.This value is less than 0.05, indicating that Expenditure on Village Development Implementation, Expenditure on Community Development, and Expenditure on Community Empowerment have a significant influence on the Social Resilience Index, Environmental Resilience Index, and Economic Resilience Index.

Table 3 .
Result of T-Test