The Role of Good Village Governance Implementation Towards Reducing Fraud Potential and Ensuring Effective Government Performance

Purpose of the study: This research aimed to examine the effect of Good Village Governance (GVG), external supervision, and citizen participation on the fraud potential in village funds management and its consequent impact on village government performance. Methodology: The population studied involved 60 respondents including village officials in Demak Regency, Central Java, Indonesia. The data was collected through the use of questionnaires and analyzed using Path analysis. Main Findings: The results showed the implementation of GVG did not have a significant effect on the fraud potential in fund management while external supervision and citizen participation have a negative and significant effect. Furthermore, the GVG implementation and citizen participation were found not to have a significant influence on village government performance while external supervision and fraud have a negative and significant effect. Moreover, fraud has a very strong influence and it is the most dominant determinant of village government performance, therefore, it should be handled with serious attention. Application of this study: External supervision of village fund management is needed to reduce fraud and improve performance. In addition, the implementation of GVG can also support improved village government performance. Novelty/Originality of This study: This research builds a model and examines the GVG concept model that can be a solution to the problem of fraud and the low performance of local governments in Indonesia

Business · Corporate governance · Novelty · Originality · Political science · Population · Financial Literacy and Behavior · Local Governance and Development · Psychology · Taxation and Compliance Studies · Finance