Department of Economics, Faculty of Economics and Business, Universitas Airlangga, Surabaya, Indonesia.
This study analyzes Village Fund as a government policy concerning impoverished communities and cooperatives as a financial institution producing capital in East Java Province. The study used the district and city panel data of East Java Province in 2010-2018. It utilized panel data regression with the Fixed Effect Model (FEM). Estimation results show that village funds and the number of cooperatives have a negative impact on the number of poor people. This means that the higher the Village Fund and the number of cooperatives in districts and cities of East Java Province, the decreased the number of poor people in the region. Therefore, those instruments can be used to support the program of the local government in reducing the poverty.