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Abstract
Tourism Villages (Desa Wisata) are pivotal to Indonesia's rural development strategy, yet their success in achieving sustainable and inclusive growth is highly variable. The mechanisms through which local leadership translates into tangible development outcomes remain empirically underexplored. This study develops and tests a structural equation model (SEM) to examine the serial pathway from Community-Based Transformational Leadership (C-TL) to Local Governance (LG) quality, and subsequently, its impact on Poverty Reduction (SDG 1) and Decent Work (SDG 8). A cross-sectional, quantitative study was conducted. Data (N=500) were collected from community members (tourism awareness groups, village officials, SME owners) across 50 tourism villages in five major Indonesian provinces using a multi-stage cluster sampling technique. The proposed model, specifying LG as a mediator between C-TL and the SDG outcomes, was tested using covariance-based SEM. The measurement model confirmed the reliability and validity of the four latent constructs. The structural model demonstrated an excellent fit to the data (CMIN/DF = 2.74, CFI = 0.958, RMSEA = 0.051). Results indicated that C-TL has a robust, significant positive effect on LG (β = 0.78, p < 0.001). In turn, LG strongly and positively influenced both Poverty Reduction (β = 0.52, p < 0.001) and Decent Work (β = 0.47, p < 0.001). Mediation analysis confirmed that LG fully mediates the relationship between C-TL and Poverty Reduction and partially mediates the relationship between C-TL and Decent Work. In conclusion, Local Governance is the primary mechanism through which the vision of transformational leaders is converted into equitable development outcomes in Indonesian tourism villages. A leader's good intentions are insufficient for poverty reduction without the parallel development of transparent, accountable, and effective governance structures.