<![CDATA[Village fiscal decentralization in Indonesia has transferred substantial resources to the local level, yet the relationship between fiscal capacity and substantive governance quality remains underexplored in peri-urban villages. This study examines whether institutional decoupling occurs in the budgeting practices of a fiscally independent peri-urban kalurahan in Sleman Regency, Yogyakarta, generating over IDR 4.2 billion in own-source revenue from a total budget of IDR 14.8 billion in 2025. Using a qualitative single-case study, data were collected through semi-structured interviews and budget document analysis, then analyzed using Miles, Huberman, and Saldaña's interactive model. Unlike prior studies attributing governance weaknesses to limited local capacity, this study reveals that decoupling is structurally induced rather than intentionally ceremonial. Strong administrative compliance and fiscal innovation coexisted with constrained substantive governance, including limited deliberation, one-way transparency, and vertical-dominant accountability, all of which were driven by central policy volatility, bureaucratic complexity, and unpredictable fund disbursement. These structural conditions persisted regardless of fiscal strength, indicating that resource sufficiency alone does not guarantee meaningful participatory governance at the village level. Improving village governance therefore requires simplifying the regulatory and fiscal transfer architecture rather than intensifying oversight alone, as the root constraint lies in systemic complexity rather than insufficient local capacity.]]>
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