VILLAGE GOVERNMENT DECISSION MAKING ON THE USE OF VILLAGE FUND IN DESA LEMBANG KABUPATEN BANDUNG BARAT (A CASE STUDY USING MULTIPLE PRINCIPAL AGENT THEORY)

• Main Author: Mahardhika, Shabrina
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/62373
• Institution: Institut Teknologi Bandung

Undang-Undang 6/2014 about Desa extend the decentralization in Indonesia to the village. Village fund program (Program Dana Desa), a fund allocated from national level budget (APBN). It is an annual intragovernmental transfer to every village to fund the increasing amount of task and responsibility as the consequences of village decentralization policy. Upon receiving significant amounts of responsibilities and funding following the implementation of the Law 6/2014, village governments need to accelerate their capacity in a short period of time. This research aims at understanding how a village government makes decisions on how to use Dana Desa based on delegation of tasks and responsibilities given by the central trough local government (kabupaten) and by the community in the village itself. This research employed a qualitative research approach using a case study of Desa Lembang. It explored contract arrangements of delegated tasks dan responsibilities received by a village government and analysed the type of programs chosen by a village government based on the total control it received. To understand the complexity of village decision making on the use of Dana Desa, this study used principal agent theory, and extended with the multiple principal agent theory (MPAT) framework to allow better understanding on how the total control of a village government affected its decision on Dana Desa. In MPAT, a village government is viewed to follow the principal’s interests under strict principal’s supervision and control. This research found that supervision and control from the community is stronger and therefore the allegiance of the village governments are more likely to moves towards the community instead of the Government. This is caused by: (1) village decentralization mechanism itself puts the community as the subject of village development by implementing community participation in village decision making process; and (2) incentive given by the community through votes in election is one that determines the career of a head village (and also their constituents) while on the other hand incentives offered by the Government are no longer relevant for Desa Lembang KBB as a desa mandiri based on IDM from Kementerian Desa PDTT. Yet the village community have limitation upon understanding its right and responsibility as a principal to the village government,iv which resulted in them handing the responsibility to determines their goal over to the village governments. Since village communities are an unorganized group, village governments also assigned to lead the community and therefore had the power to stir the decision making to their own purposes. Therefore, the village government allegiance sided with the community bu tend to be more independent. The sets of rules that came with the village decentralization policy have not yet able to raise the capacity of the village community upon delegating task to village government. This research found that the village government make decision on programs funded by Dana Desa based on how many people received its benefit, the more the better. Second, is based on the programs ability to keep the good impression village governments had manage to receive from the village community for the past years. The type of programs that’s able to fulfil these conditions is infrastructure project. This is because infrastructure projects are easier to do, easier to assess, and monumental to shows village government result. Second most favourable is non-physical projects related to social-religion welfare, this is because almost everyone in Desa Lembang KBB have similar social-religious condition and therefore have similar needs and wants. This is different to projects done to enhance the economic condition, because the diverse condition cause different needs. It will be too expensive for the village government to fulfil all of them.