Inequality in development between regions in
Indonesia is still a challenge for the government. The facts
prove that there are still provinces, districts and villages
that are categorized as underdeveloped. Therefore, the
importance of using village funds in reducing
development inequality is an important concern of the
government. In addition, the inconsistency of prior
research findings suggests the importance of this study.
This study aims to examine the effect of the utilization of
village funds on village development expenditures
moderated by village budget stress. The research sample
was all provincial governments using a purposive
sampling method that reported village fund data, village
fund allocations, village development expenditures,
revenue, and expenditures for 2017-2019. This study uses
Partial Least Square (PLS) to test the research
hypothesis. The results suggests that the utilization of
village funds has a positive and significant effect on village
development expenditures, village budget stress has a
negative and significant effect on village development
expenditures. However, village budget stress cannot
moderate the effect of the utilization of village funds on
village development expenditures. The results of the
sensitivity test support the main test results of this study.
The implication of this research is important for the
village government to utilize village funds and village fund
allocations to reduce the village budget stress, so that it
can increase village development expenditures in
achieving the level of prosperity of all village residents.
Keywords : Village Budget Stress, Village Development Expenditures, Utilization of Village Funds.