Social Science and Human Research Bulletin

Normatively, village cooperative is positioned as an instrument for empowering the community and strengthening the local economy. However, in practice, the establishment of a cooperative is often inseparable from the intervention of state actors and the dominance of local and/or supralocal elites. This qualitative study employed a case study design to analyze the relationships between the state, the elite, and the village community in the establishment of Merah Putih Village Cooperative as part of village-based economic development policy. Data were collected from in-depth interviews, observations, and document analyses. The analytical framework adopts the perspective of political economy and the concept of elite capture to examine power dynamics in the policy-making process. The results show that the state-elite-village relations in the establishment of Merah Putih Village Cooperative tend to be top-down, with state actors dominating the initiation and institutional development processes. Meanwhile, local elites serve as mediators and actors who can potentially shape policies in line with their interests. Village community participation in this process is relatively limited and rather symbolic. This condition indicates a tendency toward elite capture, which weakens the principles of economic democracy within cooperatives. In conclusion, the establishment of Merah Putih Village Cooperative has not fully reflected the values of cooperatives as a means of community economic movement, but rather demonstrates a power configuration between the state and the elite that potentially distorts the objectives of village empowerment. Thus, a more participatory, transparent, and accountable institutional design is essential to ensure that the established cooperatives truly serve as a tool to foster the well-being of the village community.

village cooperative, state relation, local elite, elite capture, political economy, village governance.

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