Good Governance and Trust in Village Fund: The Role of Accountability and Community Participation

Luh Komang Merawati; I Dewa Made Endiana; Ni Made Sunarsih

Luh Komang Merawati Faculty of Economic and Business Universitas Mahasaraswati Denpasar https://orcid.org/0009-0006-1093-6891
I Dewa Made Endiana Faculty of Economic and Business Universitas Mahasaraswati Denpasar https://orcid.org/0000-0001-7318-4996
Ni Made Sunarsih Faculty of Economic and Business Universitas Mahasaraswati Denpasar

Keywords: accountability, community participation, corruption, trust, village fund

Abstract

This study examines the role of good governance in village governments, focusing on community participation and accountability in managing village funds. Public trust has been under strain, largely due to widespread corruption, particularly in the use of village funds. Although accountability has been widely studied, its direct link to public trust remains unclear. Since the implementation of Indonesia’s Village Law (Law No. 6 of 2014), which granted greater autonomy and funding to villages, concerns have grown over the risk of corruption in the absence of strong oversight. The findings reveal a paradoxical outcome: higher levels of accountability do not necessarily enhance trust and may even reduce it. This suggests that accountability mechanisms, when perceived as procedural or symbolic, can fuel public disappointment rather than strengthen legitimacy, particularly when concerns about fund misuse remain prominent. In contrast, community participation demonstrates a consistently positive association with trust. When citizens are actively engaged in planning, decision-making, and oversight, they feel included and represented, which enhances confidence in village governments. Perceptions of corruption emerge as a key factor explaining these dynamics. Substantive accountability and genuine participation reduce corruption suspicions and, in turn, foster greater trust. Conversely, when governance practices are perceived as symbolic, they fail to dispel doubts. This study underscores that building trust requires more than compliance with formal procedures. Village governance must be transparent, responsive, and genuinely participatory. Strengthening both accountability and community involvement is essential for restoring public trust and ensuring the effective management of village funds.