Transparency, Accountability, and Public Trust in Indonesian Village Fund Governance: A SmartPLS Investigation with Corruption Risk as a Boundary Condition
Published:
2026-09-14Downloads
Abstract
Purpose, Despite the substantial fiscal decentralisation embodied in Indonesia's Village Fund Programme (Dana Desa), persistent governance deficits continue to erode public trust in village government. This study develops and empirically tests a theoretically grounded model that positions accountability as the mechanism through which transparency of village fund reporting and community engagement translate into public trust, while investigating perceived corruption risk as a boundary condition that attenuates this mechanism.
Design/methodology/approach, A cross-sectional survey was administered to 437 respondents drawn from purposively selected villages in three districts of North Sumatera Province, Deli Serdang, Simalungun, and Mandailing Natal, representing diverse administrative capacities and socio-economic contexts within a single province. Partial Least Squares Structural Equation Modelling (PLS-SEM) using SmartPLS 4 was employed to assess the measurement and structural models, including mediation via bootstrapping and moderation through the product-indicator approach.
Findings, Transparency and community engagement each exert significant positive effects on accountability, which in turn robustly predicts public trust. Mediation analyses confirm that accountability fully mediates the transparency–trust pathway and partially mediates the community engagement–trust pathway. Critically, perceived corruption risk significantly moderates the accountability–trust relationship, such that its salience substantially weakens the trust-generating capacity of accountability, even when accountability practices are formally observed. Digital reporting systems are confirmed as a significant antecedent of perceived transparency.
Research limitations/implications, The cross-sectional design precludes causal inference, and the purposive sampling strategy constrains generalisability beyond the sampled districts. Future longitudinal research should track temporal dynamics and examine inter-village heterogeneity across North Sumatera's diverse adat governance traditions.
Practical implications, Village governments should invest in institutionalising digital reporting platforms and structured participatory budgeting to concurrently raise transparency and community engagement. Anti-corruption communication strategies must accompany accountability reforms, as corruption risk perceptions independently suppress trust-building efficacy.
Originality/value, This study advances public governance and public economics literature by articulating the conditional nature of the accountability–trust nexus within a fiscal decentralisation context, demonstrating that structural accountability reforms are necessary but insufficient when citizens carry entrenched corruption risk beliefs. The findings provide one of the first moderated-mediation examinations of village fund governance using variance-based SEM in a North Sumateran context, extending prior Java-centric research to a province with distinct customary governance traditions.
Keywords:
village fund governance Fiscal transparency accountability public trust perceived corruption risk digital reporting North Sumatera IndonesiaReferences
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