Building Region from Village: Koperasi Desa Merah Putih as a Community Empowerment Instrument in Indonesia

Abstract

Village cooperative formation raises questions about how new institutions can generate community empowerment rather than merely expand organizational coverage. This study aims to develop a conceptual understanding of how the KDMP may function as a community empowerment instrument and contribute to endogenous-participatory regional development. Using a literature review and thematic synthesis of publications from 2015–2026, the research develops a conceptual capital–governance–empowerment pathway. Findings indicate that KDMP functions beyond an economic entity as a village-level institutional mechanism operating through collective resource coordination, member agency and accountability, complementary relations with BUMDes, and digital inclusion. The study enriches the endogenous-participatory development framework by positioning empowerment as an intermediate process linking community capitals, cooperative governance, and regional outcomes, and offers three testable propositions. Practically, the KDMP can reduce the rural–urban divide and build rural economic resilience, provided it is implemented through democratic governance, sustained managerial capacity building, financial literacy, and clear institutional collaboration.