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\nE-ISSN 3025-4892 Vol. 7, No. 2 (2026), Page 20-29  \nFrom KUD, BUM Desa to KDMP: The Persistence of StateCentric Institutionalism in Rural Economic Development  \nEmy Kholifah Rachmaningsih  \n1 Muhammadiyah University of Jember, Jember, Indonesia  \n*Corresponding Author: Emy Kholifah Rachmaningsih ([emykholifah@unmuhjember.ac.id](emykholifah@unmuhjember.ac.id))  \nAbstract  \nThe evolution of rural economic institutions in Indonesia-nnnnfrom Village Unit Cooperatives (Koperasi Unit Desa/KUD) during the New Order era, to Village-Owned Enterprises (BUM Desa) under the Village Law, and most recently Red and White Village/Subdistrict Cooperatives (Koperasi Desa/Kelurahan Merah Putih/KDMP) is commonly portrayed as a series of institutional innovations responding to changing political and developmental contexts. This article argues, however, that these institutional transformations represent continuity rather than paradigm change. Drawing on a critical literature review and historical policy analysis, the study demonstrates that these three institutional models embody statecentric institutionalism, a policy paradigm that positions the state as the primary architect of rural economic institutions. This paradigm is operationalized through institutional engineering, whereby organizational forms are centrally designed, nationally standardized, and reproduced across different political regimes. Such an approach has generated institutional monoculture, reducing the rich diversity of local institutions into uniform organizational templates despite the heterogeneous social, cultural, ecological, and economic characteristics of Indonesian villages. In response, this article develops the Seeing Like a Village paradigm by advancing two complementary concepts: institutional diversity and institutional endogenous capacity. The proposed framework argues that rural communities possess historically embedded institutional capabilities that enable them to organize collective action, govern local resources, manage economic risks, and sustain community welfare through locally legitimate institutions. Consequently, rural development policies should move beyond creating standardized organizations toward recognizing, strengthening, and adapting endogenous institutions that have evolved within village societies. The article contributes to the literature on rural development and institutional governance by offering a new theoretical framework that explains Indonesia's decentralization paradox: while political and administrative authority has become increasingly decentralized, the institutional design of rural economic development remains largely centralized.  \nKeywords: KUD, BUMDesa, KDMP, State-Centric Institutionalism, Rural Economic Development  \n1. Introduction  \nFor more than five decades, rural economic development in Indonesia has exhibited a remarkably consistent policy pattern in which the state has continuously established new economic institutions as the primary instruments of rural development. During the New Order era, the government introduced the Village Unit Cooperative (Koperasi Unit Desa / KUD) as the principal institutional vehicle for agricultural modernization, the distribution of agricultural inputs, rural credit provision, and agricultural marketing. Following the democratic reforms, the enactment of Law No. 6 of 2014 on Villages shifted the institutional focus toward Village-Owned Enterprises (Badan Usaha Milik Desa / BUM Desa), which were expected to stimulate local economic development, manage village assets, and increase village-source revenue. More recently, the government has introduced the Red and White Village/Subdistrict Cooperatives (Koperasi Desa/Kelurahan Merah Putih / KDMP) as a new organizational model intended to strengthen rural economic resilience, food security, and local logistics networks.  \nAlthough these institutional arrangemen","cbCaipwhROBYjQi1","https://ap.wps.com/l/cbCaipwhROBYjQi1","pdf",222693,"English","# Abstract\n# Keywords\n# 1. Introduction\n## Institutional transitions across policy regimes\n## Academic debates on KUD and BUM Desa","[{\"question\":\"What does the article argue about the shift from KUD to BUM Desa to KDMP?\",\"answer\":\"It argues the transition represents continuity rather than paradigm change, because the institutions are conceived and standardized through state policy.\"},{\"question\":\"How does the paper explain institutional monoculture in rural development?\",\"answer\":\"By describing statecentric institutional engineering, where organizational forms are centrally designed, nationally standardized, and reproduced across different political regimes.\"},{\"question\":\"What framework does the article propose to respond to this problem?\",\"answer\":\"It develops the Seeing Like a Village paradigm, emphasizing institutional diversity and institutional endogenous capacity grounded in locally embedded capabilities.\"}]","From KUD, BUM Desa to KDMP - The Persistence of StateCentric Institutionalism in Rural Economic Development - Article | PDF",25]