Village Economies in the Era of Institutional Dualism: The Effectiveness of BUMDes and the Emerging Role of Merah Putih Cooperatives

Darwin Yopie Kefi; Melda Mariana  Poeh; Ronald Enstein  Renoat; Patrisius  Seran; Yessi Susan Intan P. Benu

doi:10.37899/journal-la-sociale.v7i4.5997

Darwin Yopie Kefi Management Science, Universitas Airlangga, Indonesia
Melda Mariana Poeh Public Sector Accounting, Politeknik Negeri Kupang, Indonesia
Ronald Enstein Renoat Business Management, Politeknik Negeri Kupang, Indonesia
Patrisius Seran Business Management, Politeknik Negeri Kupang, Indonesia
Yessi Susan Intan P. Benu Business Management, Politeknik Negeri Kupang, Indonesia

DOI: https://doi.org/10.37899/journal-la-sociale.v7i4.5997

Keywords: Merah Putih Cooperatives, BUMDes, Collaborative Governance, MSMEs, East Nusa Tenggara

Abstract

This study analyzes how Merah Putih Cooperatives (KMP) contribute to demand orchestration and institutional synergy with Village-Owned Enterprises (BUMDes) in several villages in Kupang and South Central Timor (TTS) Regencies. Using a qualitative approach, in-depth interviews were conducted with KMP administrators, BUMDes representatives, village heads, Village Consultative Bodies (BPD), facilitators, MSMEs, and community members. Data were analyzed thematically using institutional arrangements, resource orchestration, and collaborative governance frameworks. The findings show that the KMP pre-order model reduces stock mismatch, improves inventory turnover, minimizes stock-outs, and stabilizes cash flow. Clear role differentiation, in which BUMDes manages assets, operations, and service counters while KMP manages members, markets, distribution, and partnerships, helps transform potential channel conflicts into value-chain collaboration and reduce transaction costs. Simple reporting mechanisms and quarterly KPI monitoring strengthen transparency, participation, operational discipline, and institutional legitimacy. Risks related to dead stock, product returns, and payment terms can be mitigated through supply service-level agreements (SLAs) and concise memoranda of understanding (MoUs). For MSMEs, KMP improves market absorption certainty, product quality and packaging, and distribution scheduling. Contextual differences also shape implementation: TTS prioritizes supply and price stability, whereas Kupang emphasizes market aggregation and quality standardization. Overall, KMP has strong potential to improve village-level economic coordination when role boundaries, performance indicators, transparency, and contractual risk-management mechanisms are consistently maintained.

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