Good Governance and SDG Performance: Assessing the Mediating Role of Accountability in Rural Areas

Abstract

This research investigates the relationship between the implementation of Good Corporate Governance (GCG), accountability, and the performance of Sustainable Development Goals (SDGs) in Village-Owned Enterprises (BUMDes) in the Yogyakarta region. Yogyakarta was selected as the research site due to the significant development and variety of BUMDes operations, representing a crucial model for rural development in Indonesia. The study aims to analyze the direct effect of GCG principles on SDG performance and to assess the mediating role of accountability in this relationship. Control variables such as BUMDes size, location characteristics, and years of operation are included to strengthen the analysis. A quantitative approach was employed, utilizing survey data collected from 135 BUMDes. The data were analyzed using the Structural Equation Modeling - Partial Least Squares (SEM-PLS) technique to test the direct and mediating effect hypotheses. The findings indicate that the implementation of GCG principles has a significant positive effect on SDG performance, particularly contributing to goals related to decent work and economic growth (SDG 8), reduced inequalities (SDG 10), and peace, justice, and strong institutions (SDG 16). Furthermore, the results confirm that accountability acts as a crucial mediating variable, where effective governance practices enhance accountability mechanisms, which in turn strengthens SDG performance. This research contributes to the literature by providing empirical evidence on the governance-accountability-SDG nexus in the context of community-based enterprises, offering valuable insights for policymakers and BUMDes managers to strengthen accountability as a strategic tool for achieving sustainable development.