Overcoming Conflict of Interest-Based Local Culture Values in Management of Village Fund Institution

Abstract

The purpose of this study is to uncover the principal-agent behavioural problem caused by conflicts of interest. The focus of this research is to find answers to behavioural problems that occur between principal and agent in the village fund management institutions. The method design uses an interpretive paradigm approach by applying a principal-agent theory based on interests. Research approach through qualitative methods by conducting in-depth interviews with several competent speakers on village fund management institutions and Sumbawa cultural experts. The research shows that there are conflicts of interest in the use of village fund by agent who behave opportunistically and weaken the agent confidence in him, leading to self-behaviour, legalized fraud and conscience and powerlessness of agent in fund management institution. The solution of the problem of use can be overcome by the Sumbawa approach of cultural value, namely the behaviour of the improvement village in terms of mutual respect value and mutual trust value. It is also strengthened by the goal to safety value and value of justice and value of balance in the value system of balancing cultural Sumbawa to improve institutionally the relations between village communities and village leader. The conclusion of this research shows that the problem of conflict of interest in the management of village fund facility can be overcome by using the Sumbawa cultural value in strengthening the role of the village fund management institution.