Social value logic in village-owned enterprises: embedding theory of change within a dual SROI framework

This study examines how Village-Owned Enterprises (VOEs) in Indonesia generate and institutionalize social value through rural tourism by integrating the Theory of Change (ToC) within a Dual Social Return on Investment (SROI) framework. Using a qualitative single-case design, the analysis draws on interviews, field observations, and verified financial documentation. The Dual SROI–ToC framework differentiates between proxy-based projected valuation and realized reinvestment-based valuation, enabling distinction between stakeholder-perceived outcomes and institutionalized surplus allocation. While SROI monetizes multidimensional economic, social, and environmental outcomes, ToC clarifies the causal pathways and governance mechanisms through which these outcomes emerge and stabilize over time. The study conceptualizes surplus reinvestment as a reinforcement mechanism embedded within the causal structure, linking valuation to participatory governance and institutionalized impact. By integrating mechanism-based explanation with differentiated valuation pathways, the study advances social impact evaluation theory and provides a governance-sensitive framework for assessing hybrid community enterprises in decentralized development contexts.