An Institutional Economics Perspective: Strengthening Sharia Frameworks and Entrepreneurial Culture For Community Empowerment In Palopo City

Abstract

Purpose: This study investigates the institutional dynamics of community empowerment in Palopo City by examining the impact of formal and informal institutions on grassroots socio-economic development.

Design/methodology/approach: Operating within an explanatory quantitative framework, this study utilized primary data gathered through structured questionnaires distributed to a purposive sample of 105 local economic actors in Palopo City. The data, measured on a 4-point Likert scale, underwent rigorous validity, reliability, and descriptive statistical processing before being analyzed using a multiple linear regression model.

Findings/Results: The empirical results reveal that both Sharia economics and entrepreneurial culture exert a positive and statistically significant influence on community empowerment. .

Originality: This research contributes a novel institutional economics perspective to local developmental studies by proving that community empowerment is heavily contingent upon the harmony between formal regulatory frameworks and informal cultural values. The key takeaway and practical implications highlight that policymakers can maximize socio-economic impact not solely through financial injections, but by actively integrating formal Sharia structural fairness with targeted educational initiatives that cultivate a self-sustaining, risk-optimized entrepreneurial mindset at the grassroots level