Abstract :

This study investigates how good village governance enhances community trust in Village-Owned Enterprises (BUMDes) in Indonesia by employing a qualitative approach involving in-depth interviews, field observations, and document analysis across selected high-performing BUMDes. The findings reveal that transparency, accountability, participation, and responsiveness are central to shaping cognitive, relational, and institutional trust, with community confidence strengthened when governance processes are open, inclusive, and consistent. Conversely, mismanagement, elite capture, and political interference undermine trust and institutional legitimacy. The study contributes to theoretical perspectives on institutional trust, rural social capital, and participatory governance, while offering practical recommendations for strengthening nationwide BUMDes governance models through improved financial transparency, community-based monitoring, and participatory planning. Although limited by its site-specific context and qualitative scope, the research provides a foundation for future comparative, mixed-method, and longitudinal studies on governance–trust dynamics in rural development institutions.

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Keywords :

BUMDes, Community trust, good village governance, participatory governance

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References :

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9. Corte-Real, M. Oliveira, A. P. (2025). Local governance in rural Portugal: evolution and impact of LEADER program–a qualitative approach. European Planning Studies, 1–22.
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40. Shortall, S. (2008). Are rural development programmes socially inclusive? Social inclusion, civic engagement, participation, and social capital: Exploring the differences. Journal of Rural Studies, 24(4), 450–457.
41. Siddiqi, S. Jama, M. A. (2009). Framework for assessing governance of the health system in developing countries: gateway to good governance. Health Policy, 90(1), 13–25.
42. Spanuth, A., & Urbano, D. (2024). Exploring social enterprise legitimacy within ecosystems from an institutional approach: A systematic literature review and research agenda. International Journal of Management Reviews, 26(2), 211–231.
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44. Valerio, M. A. Turner, B. J. (2016). Comparing two sampling methods to engage hard-to-reach communities in research priority setting. BMC Medical Research Methodology, 16(1), 146.
45. Van Belle, S., & Mayhew, S. H. (2016). Public accountability needs to be enforced–a case study of the governance arrangements and accountability practices in a rural health district in Ghana. BMC Health Services Research, 16(1), 568.
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47. Adams, N. P. (2018). Institutional legitimacy. Journal of Political Philosophy, 26(1), 84–102.
48. Ahmad, A. Daryono, D. (2025). Social Construction: The Role of Community Empowerment Institutions (LPM) in the Village Fund-Based Development Process (Qualitative Study in Gunung Sari Ilir Village). Journal of Governance and Local Politics (JGLP), 7(2), 313–329.
49. Amin, M. E. K. Desselle, S. P. (2020). Establishing trustworthiness and authenticity in qualitative pharmacy research. Research in Social and Administrative Pharmacy, 16(10), 1472–1482.
50. Bebbington, A. Guggenheim, S. (2006). Local capacity, village governance, and the political economy of rural development in Indonesia. World Development, 34(11), 1958–1976.
51. Berndtsson, J. (2017). Combining semi-structured interviews and document analysis in a study of private security expertise. In Researching non-state actors in international security (pp. 81–95). Routledge.
52. Bovaird, T., & Löffler, E. (2003). Evaluating the quality of public governance: indicators, models and methodologies. International Review of Administrative Sciences, 69(3), 313–328.
53. Byrne, D. (2022). A worked example of Braun and Clarke’s approach to reflexive thematic analysis. Quality & Quantity, 56(3), 1391–1412.
54. Celestin, M., & Vanitha, N. (2016). Building trust: The power of community in cooperative financial management. International Journal of Computational Research and Development (IJCRD), 1(2), 175–180.
55. Corte-Real, M. Oliveira, A. P. (2025). Local governance in rural Portugal: evolution and impact of LEADER program–a qualitative approach. European Planning Studies, 1–22.
56. Dawes, S. S. (2010). Stewardship and usefulness: Policy principles for information-based transparency. Government Information Quarterly, 27(4), 377–383.
57. Durston, J. (1998). Building social capital in rural communities (where it does not exist). Latin American Studies Association Annual Meetings, Chicago, 24–26.
58. Eversole, R. (2011). Community agency and community engagement: re-theorising participation in governance. Journal of Public Policy, 31(1), 51–71.
59. Fitriani, D. Shahbudin, A. S. M. (2024). Exploring the role of village head in empowering sustainable village economy: A multiple-case study in Indonesia. Global Business and Management Research, 16(4s), 1016–1040.
60. Fitriani, D. Shauki, E. R. (2024). Exploring BUMDES accountability: Balancing expectations and reality. Cogent Business and Management, 11(1). https://doi.org/10.1080/23311975.2024.2402083
61. Ghofar, A. Kusumadewi, A. W. (2022). Agency problem, intellectual capital and good corporate governance model for village-owned enterprises (BUMDes) in Indonesia. International Journal of Business and Systems Research, 16(4), 484–512.
62. Gorodensky, A. Kohler, J. C. (2023). Shared health governance, mutual collective accountability, and transparency in COVAX: A qualitative study triangulating data from document sampling and key informant interviews. Journal of Global Health, 13, 4165.
63. Gray, S. Jordan, R. (2012). Understanding factors that influence stakeholder trust of natural resource science and institutions. Environmental Management, 49(3), 663–674.
64. Gustafson, P., & Hertting, N. (2017). Understanding participatory governance: An analysis of participants’ motives for participation. The American Review of Public Administration, 47(5), 538–549.
65. Hsin-Chi, K., & Siu-Kai, L. (2002). Traditional orientations and political participation in three Chinese societies. Journal of Contemporary China, 11(31), 297–318.
66. Huhe, N. Tang, M. (2015). Social trust and grassroots governance in rural China. Social Science Research, 53, 351–363.
67. Indrawanto, C. Ermiati, E. (2025). Determinant factors of BUM Desa (village-owned enterprises) performance in Indonesia: a partial least squares structural equation models approach. Cogent Business & Management, 12(1), 2580028.
68. Kania, I. Alamanda, D. T. (2021). A new approach to stimulate rural entrepreneurship through village-owned enterprises in Indonesia. Journal of Enterprising Communities: People and Places in the Global Economy, 15(3), 432–450.
69. Khodyakov, D. (2007). Trust as a process: A three-dimensional approach. Sociology, 41(1), 115–132.
70. Kosack, S., & Fung, A. (2014). Does transparency improve governance? Annual Review of Political Science, 17(1), 65–87.
71. Legood, A. van Knippenberg, D. (2023). A critical review of the conceptualization, operationalization, and empirical literature on cognition‐based and affect‐based trust. Journal of Management Studies, 60(2), 495–537.
72. Lindkvist, L., & Llewellyn, S. (2003). Accountability, responsibility and organization. Scandinavian Journal of Management, 19(2), 251–273.
73. MacKinnon, D. (2002). Rural governance and local involvement: assessing state—community relations in the Scottish Highlands. Journal of Rural Studies, 18(3), 307–324.
74. Maher, C. De Eyto, A. (2018). Ensuring rigor in qualitative data analysis: A design research approach to coding combining NVivo with traditional material methods. International Journal of Qualitative Methods, 17(1), 1609406918786362.
75. Menzel, S. Schulz, T. (2013). Forming social capital—Does participatory planning foster trust in institutions? Journal of Environmental Management, 131, 351–362.
76. Pawitan, G. Diyanah, M. C. (2025). Empowering Rural Communities through Strengthening Village-Owned Enterprises (BUMDes) for Sustainable Socioeconomic Development: A Case Study of Mekarsari Village, Garut Regency. Society, 13(1), 256–274.
77. Pero, L. V, & Smith, T. F. (2008). Institutional credibility and leadership: critical challenges for community-based natural resource governance in rural and remote Australia. Regional Environmental Change, 8(1), 15–29.
78. Rahayu, M. J. Mulyanto, M. (2024). Social capital-based strategy of sustainable village-owned enterprises (BUMDes) development. International Journal of Social Economics, 51(3), 297–312.
79. Ramanujam, N., & Farrington, F. (2023). Market-Engaging Institutions: The Rule of Law, Resilience and Responsiveness in an Era of Institutional Flux. Hague Journal on the Rule of Law, 15(2), 329–352.
80. Ramcilovic-Suominen, S., & Kotilainen, J. (2020). Power relations in community resilience and politics of shifting cultivation in Laos. Forest Policy and Economics, 115, 102159.
81. Rivera, M. Afonso, A. (2019). The role of social capital in agricultural and rural development: lessons learnt from case studies in seven countries. Sociologia Ruralis, 59(1), 66–91.
82. Sabet, N. S., & Khaksar, S. (2024). The performance of local government, social capital and participation of villagers in sustainable rural development. The Social Science Journal, 61(1), 1–29.
83. Sadeli, Y. A. (2025). The Dynamics of Small Business Owners’ Experiences in Managing and Growing Their Enterprises: A Subjective Perspective in Indonesia’s MSME Sector. Journal of Business, Management, and Accounting, 1(3), 129–136.
84. Sangnak, D. Chanthothai, S. (2025). Agritourism as a catalyst for sustainable rural development: Innovations, challenges, and policy perspectives in the post-COVID-19 era. Infrastruct. Policy Dev, 9, 11185.
85. Schoorman, F. D. Davis, J. H. (1996). Organizational trust: Philosophical perspectives and conceptual definitions. In Academy of Management Review (pp. 337–340). JSTOR.
86. Shortall, S. (2008). Are rural development programmes socially inclusive? Social inclusion, civic engagement, participation, and social capital: Exploring the differences. Journal of Rural Studies, 24(4), 450–457.
87. Siddiqi, S. Jama, M. A. (2009). Framework for assessing governance of the health system in developing countries: gateway to good governance. Health Policy, 90(1), 13–25.
88. Spanuth, A., & Urbano, D. (2024). Exploring social enterprise legitimacy within ecosystems from an institutional approach: A systematic literature review and research agenda. International Journal of Management Reviews, 26(2), 211–231.
89. (2017). Islamic Finance and the SDGs.
90. Valerio, M. A. Turner, B. J. (2016). Comparing two sampling methods to engage hard-to-reach communities in research priority setting. BMC Medical Research Methodology, 16(1), 146.
91. Van Belle, S., & Mayhew, S. H. (2016). Public accountability needs to be enforced–a case study of the governance arrangements and accountability practices in a rural health district in Ghana. BMC Health Services Research, 16(1), 568.
92. Yu, Y. Adu-Poku, K. A. (2024). Integrating rural development, education, and management: Challenges and strategies. Sustainability, 16(15), 6474.