Economic outcomes and community participation in rural waste bank initiatives: A study from Indonesia

Type of the article: Research ArticleAbstractWaste banks have emerged as a community-driven strategy that encourages households to sort and trade recyclable waste, generating economic value while reducing environmental burdens. This study examines the economic contribution of waste banks in rural areas and evaluates the level of community participation in their management. Data were collected through an online survey conducted from April to May 2024, involving 118 rural decision-makers, village heads, officials, village-owned enterprises’ (BUMDes) directors, and members of the village consultative body across Indonesia. Respondents represented from Java (34%), Sumatra (33%), Sulawesi (13%), Bali and Nusa Tenggara (7%), Kalimantan (5%), and Papua (3%), providing broad geographic coverage. A logit model was used to identify determinants of economic impact. Results show that routine waste bank operations, combined with training or socialization programs, significantly enhance economic benefits at the 1% level. Community participation in waste collection also makes a positive contribution. Overall, 70.3% of respondents reported improved village economic conditions, and 66.1% observed increased BUMDes revenue from waste bank initiatives. Participation analysis using Arnstein’s ladder reveals that most residents remain at the consultation stage, with limited decision-making power. Strengthening community empowerment and expanding capacity-building programs are, therefore, essential to maximize the social and economic potential of rural waste banks.AcknowledgmentsWe would like to thank PT Bank Rakyat Indonesia (PT BRI) and Universitas Sebelas Maret [Sebelas Maret University] for the funding support and all the respondents who participated in this research. PT Bank Rakyat Indonesia (PT BRI) funded this research with Number 273.1/UN27.22/HK.07.00/2024 and Universitas Sebelas Maret [Sebelas Maret University] with Number 371/UN27.22/PT.01.03/2025.