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The allocation of village funds are needed because of the decentralization and delegation of authority of village autonomy is to provide public services and the implementation of village governance in accordance with regulations-regulations applicable. This allocation is expected to improve development and socio-economic progress of society. The purpose of this study is to examine the effect of the allocation of village funds on the level of poverty. The variables used are village funds allocation and the number of poor peoples. Data used time-series and cross-sectional data from all districts and cities in Indonesia during the period 2012 to 2015. Used purposive sampling, this research samples is 409 districts and cities from total 516 districts and cities in Indonesia. The statistical method used is quantitative. Chow test, Hausman test, and Lagrange multiplier test in this study showed that fixed effect is the best models in regression. The data used in this research is processed using Eviews 9 to get the result of linear regressions. The result showed that village funds allocation has an effect on poverty but the effect insignificant.

Village funds, village, district, poverty